Q4 2023 Phillips 66 Earnings Call

January 31, 2024

Operator: ?? ?? ?? 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. At this time, all participants are in a listen-only mode.

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Emily: 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 at.

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

Operator: Later, we will conduct a question and answer session. 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: Thank you.

Jeff Dietert: Thank you. Welcome to Phillips 66's fourth quarter earnings call. Participants on today's call will include Mark Lashier, President and CEO; Kevin Mitchell, CFO; Tim Roberts, Midstream, and Chemicals.

Jeff: Welcome to Phillips 66 fourth quarter earnings call participants on today's call will include Mark Glazer, President and CEO, Kevin Mitchell CFO Tim.

Jeff: Tim Roberts midstream and chemicals, rich harvests in refining and Brian Mendell marketing and commercial.

Jeff Dietert: Rich Harbison, Refining, and Brian Mandell, Marketing and Commercial. Today's presentation can be found in the investor relations section of the Phillips 66 website, along with supplemental financial and operating information. Slide 2 contains our Safe Harbor Statement.

Jeff: Today's presentation can be found on the Investor Relations section of the Phillips 66 website, along with supplemental financial and operating information.

Jeff: Slide two contains our safe Harbor statement, we will be making forward looking statements. During today's call actual results may differ materially from today's comments factors that could cause actual results to differ are included here as well as in our SEC filings with that I'll turn it over to Mark.

Jeff Dietert: We will be making forward-looking statements during today's call, and actual results may differ materially from today's comments. Factors that could cause actual results to differ are included here as well as in our SEC filing. With that, I'll turn it over to Mark. Thanks, Jeff.

Thanks, Jeff.

Mark E. Lashier: Welcome, everyone, to our fourth quarter earnings call. We delivered a strong quarter and a strong year. In 2023, our total shareholder return was 33%.

Mark Glazer: Welcome everyone to our fourth quarter earnings call.

Mark Glazer: We delivered a strong quarter and a strong year in 2023, our total shareholder return was 33% and we increased our quarterly dividend by 8%.

Mark E. Lashier: And we increased our quarterly dividend by 8%. Today, we're going to cover a few major items, including the reasons why Phillips 66 is an attractive investment opportunity, and we'll highlight the progress we've made on our strategic priorities. Next, we'll discuss our fourth-quarter financial results. And then we look forward to your questions.

Mark Glazer: Today, we're going to cover a few major items, including the reasons why Phillips 66 is an attractive investment opportunity and will highlight the progress we've made on our strategic priorities.

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

Mark Glazer: On slide three we summarize the attributes that make us a differentiated and attractive value proposition.

Mark E. Lashier: On slide three, we summarize the attributes that make us a differentiated and attractive value proposition. Our diversified and integrated portfolio delivers strong returns on capital employed and a high payout ratio supported by dividends. We're on a path to increase mid-cycle adjusted EBITDA by 40% to $14 billion by 2025. In addition, 75% of this growth will be outside of refining.

Mark Glazer: Our diversified and integrated portfolio deliver strong returns on capital employed and a high payout ratio supported by dividend growth.

Mark Glazer: We're on a path to increase mid cycle, adjusted EBITDA by 40% to $14 billion by 2025.

Mark Glazer: In addition, 75% of this growth will be outside of refining.

Mark E. Lashier: We expect this growth and more stable cash flow to support our valuation going forward and contribute to attractive total shareholder returns. Our disciplined approach to capital allocation across our portfolio has contributed to an average return on capital employed of 13% since our formation in 2012, almost double our cost of capital. We're committed to financial flexibility, and our strong investment-grade credit rating remains differentiated relative to our peers.

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

Mark Glazer: Our disciplined approach to capital allocation across our portfolio has contributed to an average return on capital employed of 13% since our formation in 2012.

Mark Glazer: Almost double our cost of capital.

Mark Glazer: We're committed to financial flexibility and our strong investment grade credit rating remains differentiated relative to our peers.

Mark E. Lashier: We are committed to financial flexibility, and our strong investment-grade credit rating remains differentiated relative to our peers. We expect to return in excess of 50% of our growing operating cashflow to shareholders. All of these attributes will support a secure, competitive, and growing dividend, strong share repurchases, as well as debt reduction at mid-cycle margins. Slide four summarizes our achievements to date on our strategic priority. On our last call, we raised our targets and continued to successfully execute our plan to increase mid-cycle adjusted EBITDA and grow shareholder distribution. Since July of 2022, we've distributed $8.3 billion through share repurchases and dividends.

Mark Glazer: We expect to return in excess of 50% of our growing operating cash flow to shareholders.

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

Mark Glazer: Yeah.

Mark Glazer: Slide four summarizes our achievements to date on our strategic priorities.

Mark Glazer: On our last call, we raised our targets and continue to successfully execute our plan to increase mid cycle, adjusted EBITDA and grow shareholder distributions.

Mark Glazer: Since July of 2022, we've distributed $8 $3 billion through share repurchases and dividends.

Mark E. Lashier: We're on track to achieve our $13 to $15 billion target by the end of 2024. The execution of our plan to enhance refining operating performance has resulted in crude utilization rates above the industry average for four consecutive quarters. In fact, we operated at our highest annual rate since 2019. We remain focused on improving performance, increasing market capture, and reducing costs to enhance our earnings per barrel. In midstream, our NGO wellhead to market business continues to exceed our expectations.

Mark Glazer: We're on track to achieve our 13% to $15 billion target by the end of 2024.

The execution of our plan to enhance refining operating performance has resulted in crude utilization rates above the industry average for four consecutive quarters. In fact, we operated at our highest annual rate since 2019.

Mark Glazer: We remain focused on improving performance, increasing market capture and reducing costs to enhance our earnings per barrel.

Mark Glazer: In midstream, our NGL wellhead to market business continues to exceed our expectations.

Mark E. Lashier: The team has done a remarkable job of integrating DCP midstream and captured run rate synergies of $250 million as of year end, and we expect over $400 million of synergies by 2025. Since increasing our ownership of DCP, the midstream annual run rate for adjusted EBITDA has been $3.6 billion. The stable cash generation from our midstream business has grown to a level that covers the company's top capital priorities, Funding Sustaining Capital, and The Dividend. We're delivering on business transformation targets and remain laser focused on further reducing our cost structure in 2024. Kevin will be providing more details.

Mark Glazer: The team has done a remarkable job of integrating DCP midstream and captured run rate synergies of $250 million as of year end.

And we expect over $400 million of synergies by 2025.

Mark Glazer: So it's increasing our ownership of D. C. P. The midstream annual run rate for adjusted EBITDA has been $3 $6 billion.

Mark Glazer: The stable cash generation from our midstream business has grown to a level that covers the companys top capital priorities funding sustaining capital and the dividend.

Mark Glazer: We're delivering on business transformation targets and remain laser focused on further reducing our cost structure in 2020 for.

Mark Glazer: Kevin will be providing more details.

Mark E. Lashier: In addition, we plan to monetize assets that no longer fit our long-term strategy. These asset dispositions are expected to generate over $3 billion in proceeds that will support our strategic priorities, including returns to shareholders. Timing of these dispositions will be subject to satisfactory market conditions and any necessary regulatory approvals.

Kevin J. Mitchell: In addition, we plan to monetize assets that no longer fit our long term strategy.

Kevin J. Mitchell: These asset dispositions are expected to generate over $3 billion in proceeds that will support our strategic priorities, including returns to shareholders.

Kevin J. Mitchell: Timing of these dispositions will be subject to satisfactory market conditions and any necessary regulatory approvals.

Kevin J. Mitchell: Our total adjusted EBITDA in 2023 was $12 $7 billion, reflecting above mid cycle margins in refining and nearly $6 billion contributed by our more stable midstream and marketing and specialties businesses.

Mark E. Lashier: Our total adjusted EBITDA in 2023 was $12.7 billion, reflecting above-mid cycle margins and refining and nearly $6 billion contributed by our more stable midstream and marketing and specialties business. We're focused on disciplined capital allocation, only funding attractive, high-return projects across our portfolio. The Rodeo Renewed Project to convert our San Francisco refinery into one of the world's largest renewable fuels facilities is expected to generate strong returns. The project is progressing well, and we expect it to start up later this quarter. Looking forward, we're well positioned to achieve our targets by capitalizing on the strengths of our diversified and integrated portfolio. We'll do this through continued operating and commercial excellence to deliver significant shareholder value through the economic cycles, as demonstrated by our total shareholder return of 33% in 2023.

Kevin J. Mitchell: We're focused on disciplined capital allocation only funding attractive high return projects across our portfolio.

Kevin J. Mitchell: The rodeo renewed project to convert our San Francisco refinery to one of the world's largest renewable fuels facilities is expected to generate strong returns.

Kevin J. Mitchell: The project is progressing well and we expect to start up later this quarter.

Looking forward, we're well positioned to achieve our targets by capitalizing on the strengths of our diversified and integrated portfolio.

Kevin J. Mitchell: We will do this through continued operating and commercial excellence to deliver significant shareholder value.

Economic cycles as demonstrated by our total shareholder return of 33% in 2023.

Mark E. Lashier: Our commitment to a secure, competitive, and growing dividend has resulted in a 16% compound annual growth rate since 2012. Before I turn the call over to Kevin to review the financial results, I'd like to thank the Phillips 66 team for their continued dedication to safe and reliable operations. Our employees enable us to execute on our strategic priorities and deliver on our mission to provide energy and improve lives. Kevin, over to you.

Kevin J. Mitchell: Our commitment to a secure competitive and growing dividend has resulted in a 16% compound annual growth rate since 2012.

Speaker Change: Before I turn the call over to Kevin to review the financial results I'd like to thank the Philip 66 team for their continued dedication to safe and reliable operations.

Speaker Change: Our employees enable us to execute on our strategic priorities.

And deliver on our mission to provide energy and improve lives.

Speaker Change: Kevin over to you. Thank you Mark I'll start on slide five with an update on our business transformation progress and how we are reducing costs to sustain higher cash generation.

Kevin J. Mitchell: Thank you, Mark. I'll start on slide five with an update on our business transformation progress and how we are reducing costs to sustain higher cash generation. We achieved $1.2 billion in run rate savings as of year-end 2023, comprised of $900 million of cost reduction and $300 million of sustaining capital efficiency. Sustaining capital is one of our business transformation success stories. Our sustaining capital historically averaged about $1 billion per year.

Kevin J. Mitchell: We achieved $1 2 billion in run rate savings as of year end 2023 comprised of $900 million of cost reductions.

Kevin J. Mitchell: $300 million of sustaining capital efficiencies.

Kevin J. Mitchell: Sustaining capital is one of our business transformation success stories.

Kevin J. Mitchell: Our sustaining capital historically averaged about $1 billion per year.

Kevin J. Mitchell: And we added approximately $200 million with the consolidation of DCP-MITS. Despite the additional sustaining capital requirements from DCP, we reduced our sustaining capital spend to under $900 million in 2023. This $300 million benefit is also reflected in our 2024 capital plan. Additionally, through the end of 2023, we realized $630 million in cost reduction. The majority of these cost reductions relate to refining, operating, and SG&A expenses, as well as benefits to equity earnings and gross margins.

Kevin J. Mitchell: We added approximately $200 million with the consolidation of DCP midstream.

Kevin J. Mitchell: Despite the additional sustaining capital requirements from DCP, we reduced our sustaining capital spend to under $900 million in 2023.

Kevin J. Mitchell: This $300 million benefit is also reflected in our 2024 capital plan.

Kevin J. Mitchell: Through the end of 2023, we realized $630 million in cost reductions. The majority of these cost reductions relate to refining operating and SG&A expenses as well as benefits to equity earnings and gross margin.

Kevin J. Mitchell: On slide six we provide more detail on the cost reductions at the total company level.

Kevin J. Mitchell: On slide six, we provide more detail on the cost reductions at the total company level. Adjusted controllable costs were $8.4 billion in 2023 compared with $8.1 billion in 2022. The chart illustrates the main cost drivers year over year, including the impact of a full year of DCP consolidation. We continue to realize cost synergies from the DCP acquisition and subsequent integration. Our successful business transformation has already reduced costs, including our share of WRP costs, by approximately $500 million. And this work continues.

Adjusted controllable costs were $8 4 billion in 2023, compared with $8 1 billion in 2022.

Kevin J. Mitchell: The chart illustrates the main cost drivers year over year, including the impact of a full year of DCP consolidation.

Kevin J. Mitchell: We continue to realize cost synergies from the DCP acquisition and subsequent integration.

Kevin J. Mitchell: Our successful business transformation is already reduced costs, including our share of <unk> costs by approximately $500 million.

Kevin J. Mitchell: And this work continues.

Kevin J. Mitchell: Slide seven provides a breakdown of refining costs.

Kevin J. Mitchell: Slide seven provides a breakdown of refining costs. Refining Adjusted Controllable Costs, including turnaround expense and our proportionate share of WRB and MIRO controllable costs, decreased over $550 million to $5.2 billion in 2023. Business Transformation Savings reduced refining costs by approximately $300 million. Additionally, lower turnaround expense and market impacts primarily from lower utility prices further reduced costs.

Kevin J. Mitchell: Refining adjusted controllable costs, including turnaround expense and our proportionate share of W. R. B and mirror controllable costs decreased over $550 million to $5 2 billion in 2023.

Kevin J. Mitchell: Business transformation savings reduced refining costs by approximately $300 million.

Kevin J. Mitchell: Additionally, lower turnaround expense and market impacts primarily from lower utility prices further reduced costs.

Kevin J. Mitchell: These cost reductions more than offset inflationary impact; on a dollar per barrel basis, adjusted controllable cost was $7.56 or $6.57 per barrel, excluding turnaround expense. This is a fully burdened cost that includes about one dollar per barrel for a refining share of corporate allocations and SG&A expenses. The Business Transformation Savings reduced our 2023 adjusted costs by over 40 cents per barrel. We expect to achieve our full $1 per barrel run rate target by the end of 2024. Additional details can be referenced in the appendix to this presentation.

Kevin J. Mitchell: These cost reductions more than offset inflationary impacts.

Kevin J. Mitchell: On a dollar per barrel basis, adjusted controllable costs were $7 56.

Kevin J. Mitchell: Or $6 57 per barrel, excluding turnaround expense.

Kevin J. Mitchell: This is a fully burdened cost that includes about $1 per barrel for refining share of corporate allocations and SG&A expenses.

Kevin J. Mitchell: The business transformation savings reduced our 2023 adjusted costs by over 40 per barrel.

Kevin J. Mitchell: We expect to achieve our full $1 per barrel run rate target by the end of 2024.

Kevin J. Mitchell: Additional details can be referenced in the appendix to this presentation.

Kevin J. Mitchell: Slide eight summarizes our fourth quarter results.

Kevin J. Mitchell: Slide 8 summarizes our fourth-quarter results. Adjusted earnings were $1.4 billion, or $3.09 per share. We generated operating cash flow of $2.2 billion, including cash distributions from equity affiliates of $226 million. Capital spending for the quarter was $634 million.

Kevin J. Mitchell: Adjusted earnings were $1 4 billion.

Kevin J. Mitchell: Our $3 <unk> per share.

We generated operating cash flow of $2 2 billion <unk>.

Kevin J. Mitchell: Including cash distributions from equity affiliates of $226 million.

Kevin J. Mitchell: Capital spending for the quarter was $634 million.

Kevin J. Mitchell: We distributed $1 6 billion to shareholders through $1 2 billion of share repurchases and $457 million of dividends.

Kevin J. Mitchell: We distributed $1.6 billion to shareholders through $1.2 billion of share repurchases and $457 million of dividends. The net debt to capital ratio was 34% at year end 2023, and return on capital employed was 16% for the year. Slide 9 highlights the change in results by segment from the 3rd quarter to the 4th quarter. During the period, adjusted earnings decreased $708 million, mostly due to lower results in refining and marketing and specialties, partially offset by improved results in midstream.

Kevin J. Mitchell: Net debt to capital ratio was 34% at year end 2023, and return on capital employed was 16% for the year.

Kevin J. Mitchell: Slide nine highlights the change in results by segment from the third quarter to the fourth quarter.

Kevin J. Mitchell: During the period adjusted earnings decreased $708 million, mostly due to lower results in refining and marketing and specialties, partially offset by improved results in midstream.

Kevin J. Mitchell: And midstream fourth quarter adjusted pre tax income of $754 million was a record up $185 million from the prior quarter, reflecting improvements in both NGL and transportation.

Kevin J. Mitchell: In midstream, fourth quarter adjusted pre-tax income of $754 million was a record, up $185 million from the prior quarter, reflecting improvements in both NGL and transportation. The NGL business increased primarily due to higher margins and record volumes at the Sweeney Hub, as well as lower operating costs. Transportation results were also higher, mainly reflecting the recognition of deferred revenue related to throughput and deficiency agreements. Chemicals adjusted pre-tax income increased $2 million to $106 million in the fourth quarter.

Kevin J. Mitchell: The NGL business increased primarily due to higher margins and record volumes at the sweeny hub as well as lower operating costs.

Transportation results were also higher mainly reflecting the recognition of deferred revenue related to throughput and deficiency agreements.

Kevin J. Mitchell: Chemicals, adjusted pre tax income increased $2 million to $106 million in the fourth quarter.

Kevin J. Mitchell: This increase was mainly due to higher margins, mostly offset by lower equity earnings from CPChem's affiliates and decreased sales volumes from lower seasonal demand. Global O&P Utilization was 94%. Refining fourth-quarter adjusted pre-tax income was $797 million, down $943 million from the third quarter. The decrease was primarily due to lower realized margins.

This increase was mainly due to higher margins, mostly offset by lower equity earnings from <unk> affiliates and decreased sales volumes from lower seasonal demand.

Kevin J. Mitchell: Global <unk> utilization was 94%.

Kevin J. Mitchell: Refining fourth quarter adjusted pre tax income was $797 million down $943 million from the third quarter.

Kevin J. Mitchell: The decrease was primarily due to lower realized margins.

Kevin J. Mitchell: Realized margins decreased due to lower market crack spreads, partially offset by inventory hedge impacts, higher Gulf Coast clean product realization. Wiser Heavy Crude Discounts and Strong Commercial Results, market capture increased from 66% to 107%. Marketing and Specialties Adjusted Fourth Quarter Pre-tax Income was $432 million, a decrease of $201 million from the previous quarter. The decrease was mainly due to a seasonal decline in domestic wholesale fuel margins, primarily in the mid-continent, primarily in the mid-continent. Our adjusted effective tax rate was 23%.

Kevin J. Mitchell: Realized margins decreased due to lower market crack spreads, partially offset by inventory hedge impacts higher Gulf coast clean product realizations wider heavy crude discounts and strong commercial results.

Kevin J. Mitchell: Market capture increased from 66% to 107%.

Kevin J. Mitchell: Marketing and specialties adjusted fourth quarter pretax income was $432 million, a decrease of $201 million from the previous quarter.

Kevin J. Mitchell: The decrease was mainly due to a seasonal decline in domestic wholesale fuel margins primarily in the mid continent.

Kevin J. Mitchell: Our adjusted effective tax rate was 23%.

Kevin J. Mitchell: Slide 10 shows the change in cash during the fourth quarter.

Kevin J. Mitchell: Slide 10 shows the change in cash during the fourth quarter. We started the quarter with a $3.5 billion cash balance. Cash from Operations, excluding working capital, was $2 billion.

Kevin J. Mitchell: We started the quarter with a $3 5 billion cash balance.

Cash from operations, excluding working capital was $2 billion.

Kevin J. Mitchell: There was a working capital benefit of $207 million mainly.

Kevin J. Mitchell: There was a working capital benefit of $207 million, mainly reflecting a reduction in inventory that was mostly offset by movements in accounts receivables and payables, which included the impact of declining commodity prices. We funded $634 million of capital spending and repaid approximately $100 million of debt. Additionally, we returned $1.6 billion to shareholders through share repurchases and dividends. Our ending cash balance was $3.3 billion.

Kevin J. Mitchell: Mainly reflecting a reduction in inventory that was mostly offset by movements in accounts receivables and payables, which is <unk>, which included the impact of declining commodity prices.

Kevin J. Mitchell: We funded $634 million of capital spending and repaid approximately $100 million of debt.

Kevin J. Mitchell: Additionally, we returned $1 6 billion to shareholders through share repurchases and dividends.

Kevin J. Mitchell: Our ending cash balance was $3 3 billion.

Speaker Change: This concludes my review of the financial and operating results next I'll cover a few outlook items for the first quarter.

Speaker Change: In chemicals, we expect the first quarter global <unk> utilization rate to be in the mid nineties.

Kevin J. Mitchell: This concludes my review of the financial and operating results. Next, I'll cover a few outlook items for the first quarter. For chemicals, we expect the first quarter global O&P utilization rate to be in the mid-90s.

Speaker Change: In refining we expect the first quarter worldwide crude utilization rate to be in the low nineties and turnaround expense to be between 110 and $130 million.

Kevin J. Mitchell: In refining, we expect the first quarter worldwide crude utilization rate to be in the low 90s and turnaround expense to be between $110 and $130 million. Our turnaround expense guidance excludes costs associated with the conversion and start-up of the Rodeo Renewable Fuels Facility. At our San Francisco refinery, we are executing the Rodeo Renewed Project. The facility operated as a crude oil refinery in January. Thank you. We will now begin the question and answer session. Apologies, everyone; we have lost connection to the speakers. Please stand by while we reconnect them.

Speaker Change: Our turnaround expense guidance excludes costs associated with the conversion and startup of the rodeo renewable fuels facility.

Speaker Change: At our San Francisco refinery, we are executing the rodeo renewed project.

Speaker Change: The facility operated at a crude oil refinery in January.

Speaker Change: Thank you we will now begin the question and answer session.

Speaker Change: Apologies, everyone. We have lost connection to the speakers. Please standby, while we reconnect them.

Speaker Change: The refinery we are executing the rodeo renewed project the facility operated at a crude oil refinery in January and we will shut that include operations in February as we were preparing to startup renewable fuels production by the end of the quarter.

Kevin J. Mitchell: In the refinery, we are executing the Rodeo Renewed Project. The facility operated as a crude oil refinery in January, and we will shut down crude operations in February as we prepare to start up renewable fuels production by the end of the quarter. We anticipate $100 million of decommissioning and startup costs in the first quarter. We anticipate first quarter corporate and other costs to come in between $290 and $310 million.

Speaker Change: Sure.

Speaker Change: We anticipate $100 million of decommissioning and startup costs in the first quarter.

Speaker Change: We anticipate first quarter corporate and other costs to come in between 290 and $310 million.

Operator: Full year guidance for 2024 is provided on slide 11 of this presentation. Now we will open the line for questions, after which Mark will make closing comments. Thank you. We will now begin the question and answer session. As we open the call for questions, as a courtesy to all participants, please limit yourself to one question and a follow-up. If you have a question, please press star and then one on your touchtone phone. If you wish to be removed from the queue, please press star and then two. If you are using a speakerphone, you may need to pick up the handset first before pressing the numbers.

Speaker Change: Full year guidance for 2024 is provided on slide 11 of this presentation.

Speaker Change: Now we will open the line for questions after which mark will make closing comments.

Speaker Change: Okay.

Yes.

Mark Glazer: Thank you we will now begin the question and answer session.

Speaker Change: The open the call for questions <unk> all participants please limit yourself to one question and a follow up if you have a question. Please press star and then one on your Touchtone site. If you wish to be removed from the queue. Please press star and then K Youre using a speakerphone you may need to pick up the handset first before pressing the numbers. Once again, if you have a question.

Operator: Once again, if you have a question, please press star and then one on your touchtone phone. Our first question comes from Brian Todd with Piper Sandler. Please go ahead.

Speaker Change: Please press Star then one on your Touchtone fine.

Speaker Change: Our first question comes from Brian <unk> with Piper Sandler. Please go ahead.

Brian Mandell: Great. Thanks.

Kevin J. Mitchell: Thanks. Maybe starting out on margin, very strong margin capture in the quarter. Can you, I know you talked about some of the things, but can you talk about some of the underlying drivers of that performance in the quarter, what might be seasonal or transient, and maybe, what you would highlight that might be more sustainable going forward in terms of improved performance? Yeah, Ryan, it's Kevin.

Brian: Maybe starting out on margin very strong margin capture in the quarter can you I know you talked about some of the things that can you talk about some of the underlying drivers of that performance on the quarter, what might be seasonal or transient and maybe.

Brian: What you would highlight there might be more sustainable going forward in terms of improved performance.

Brian: Yes, Ryan it's Kevin let me make some additional comments around that so a few a few different drivers to the strong market capture.

Kevin J. Mitchell: Let me make some additional comments around that. So, there are a few different drivers for strong market capture. You'll recall back in the third quarter, we talked about some inventory hedge impacts that were a negative $100 to $150 million and that we expected that to reverse in the fourth quarter, and that is, in fact, what happened. And so you had that benefit, which is a circa close to $300 million swing quarter over quarter. We also had improved feedstock, especially in the central corridor on Canadian crude differentials, and obviously that's really a market-driven item. In the Gulf Coast, we had benefit from product pricing because of the effect of the sort of lagged effect on product pricing for barrels going up colonial, and so that, again, is a bit of a market-driven factor. So that item was a bit of a headwind in the third quarter.

Kevin J. Mitchell: Youll recall back in the third quarter, we talked about some inventory hedge impacts that were a negative $100 million to $150 million and that we expected that to reverse in the fourth quarter and that is in fact, what happened and so you had that benefit which is a circa close to $300 million swing quarter over quarter.

Kevin J. Mitchell: We also had improved feedstock, especially in the <unk>.

Kevin J. Mitchell: In the central corridor on Canadian crude differentials and obviously, that's really a market.

Kevin J. Mitchell: Driven driven.

Kevin J. Mitchell: Item.

Kevin J. Mitchell: In the Gulf Coast, we had benefit from product pricing.

Kevin J. Mitchell: Of the effect on sort of a lagged effect on product pricing for barrels going up colonial and so that again is a bit of a market driven factor. So that that item was a bit of a headwind in the third quarter. It was a tailwind in the fourth quarter and what will happen in the first quarter is going to be depending on dependent on where prices end the quarter at.

Kevin J. Mitchell: It was a tailwind in the fourth quarter, and what will happen in the first quarter is going to be dependent on where prices end the quarter. But we also had strong commercial results, and this is a result of really being able to take advantage of market opportunities as they present themselves to us. So we were able to capture strong pipeline arbitrage and the commercial optimization around that as we optimized those barrels. So it's a bit of a combination; there are certain things that you would say were unique to the market dynamics in the quarter, but some of it is a function of strong operations and strong commercial execution by that organization. [inaudible] As a follow-up to Roger, I appreciate the update that you gave there in terms of some of the timeline that we can expect over the next couple of months.

Kevin J. Mitchell: But we also had strong commercial results and this is a result of really being able to take advantage of market opportunities as they present themselves to us. So we were able to capture strong pipeline arbitrage and the commercial opportunity.

Kevin J. Mitchell: Optimization around that as we optimize those barrels so it's a bit of a combination of there are certain things that you would say were unique to the market dynamics in the quarter, but some of it is a function of strong operations strong commercial execution by that organization.

Speaker Change: Great. Thank you that was that was helpful and then maybe.

Speaker Change: A follow up on <unk> I appreciate the update that you gave there in terms of some of the timeline that we can expect over the next couple of months as we think about start the renewable diesel plant.

Kevin J. Mitchell: As we think about starting the renewable diesel plant... Can you maybe walk through what you would expect in terms of, you know, the first three to six months of operation there in terms of how long it takes to ramp up to full operating capacity? How long does it take the PTU to get up and running? Maybe maybe some of those things in terms of, you know where we go from the end of this quarter until until you have kind of a full run right there. Yeah, Ryan, this is Rich.

Speaker Change: Hi, Don.

Don: Can you maybe walk through.

Don: What you would expect in terms of the first three to six months of operation. There in terms of how long does it take to ramp to full operating capacity.

Don: How long does it take the pizza you to get up and running and maybe maybe some of those things in terms of.

Where we go from end of this quarter until until you have kind of a full run rate there.

Yes, Ryan this is rich ill take that question here to kick it off and maybe somebody else fill.

Richard G. Harbison: I'll take that question here, kick it off, and maybe somebody will fill in for some additional color here. But the way we see the project progression at this point is, as Kevin mentioned in his points, that in February we're going to shut down the facility, and that will allow us then to tie in the common utilities for one of our hydrocrackers, which is currently in the conversion process. We expect that to start up in the March time frame, which will quickly ramp up to about 50% of the stated capacity of the Rodeo Renewed project. In April, we'll finish up the PTU and continue the conversion of the second reactor, HydroCracker's system, and finish that up in April and then start the commissioning process, which will roll into the May time frame, and then we'll continue to optimize performance. And we expect to be up to full rates by the end of the second quarter, which would be the ramp period for that. Does that answer your question, Ryan, or not? Yeah, yeah, that was great.

Speaker Change: <unk> for some additional color here, but.

Rich: The way, we see the project progression at this point is as Kevin mentioned in his points that in February we're going to shut down the facility and that will allow US then to tie in the common utilities for one of our hydro crackers, which is currently in the conversion process, we expect that.

Rich: The startup and.

Rich: In March timeframe, which will.

Rich: Quickly ramp up to about 50% of the stated capacity of the.

Rich: Rodeo renewed project.

Rich: And April well finish up the PTU.

Rich: And continue the conversion of the second reactor hydro crackers system.

Rich: Finished that up in April and then start the commissioning process, which will roll into the may time frame.

And then we will continue to optimize performance up and we expect to be up to full rates by the end of the second quarter would be the ramp ramp period for that.

Speaker Change: Does that answer your question no Ryan or.

Speaker Change: Okay.

Speaker Change: Yes, yes that was great. Thank you.

Richard G. Harbison: Our next question comes from Manav Gupta with UBS. Please go ahead, guys. Congratulations on a very strong quarter and a strong start to the year. Looks like everything is coming together. I just quickly want to focus on the NGL part of the midstream business.

Our next question comes from Manav Gupta with UBS. Please go ahead.

Speaker Change: Okay.

Manav Gupta: Guys. Congrats on a very strong quarter and a strong start to the year. It looks like everything is coming together.

Manav Gupta: Quickly I wanted to focus on the NGL part of the midstream business. There were some concerns that DCP synergies will be delayed or are there. Some degradation of earnings I think you have silenced a lot of critics or bid with this earnings release, which can help us walk through the sequential improvement we saw in the NGL business in the fourth quarter.

Timothy D. Roberts: You know, there were some concerns that DCP synergies would be delayed or there would be some degradation of earnings. I think you have silenced a lot of critics over there with this earnings release. But help us walk through the sequential improvement we saw in the NGL business in the fourth quarter. Yeah, Manav, thanks.

Speaker Change: Yes. Thanks, Thanks for your comments I'm, just going to make some high level.

Timothy D. Roberts: Thanks for your comments. I'm just going to make some high-level comments and then turn it over to Tim, but I appreciate you recognizing that we are delivering on the integration. The integration has been a success.

Speaker Change: <unk> and then turn it over to Tim but I. Appreciate you recognizing that we are delivering on the integration the integration has been a success.

Timothy D. Roberts: The DCP team is fully integrated into Phillips 66 and performing seamlessly, and we're seeing great, really synergies across the whole value chain, even down at the level of communications. Things are happening quicker, better decisions are being made faster, and it's really been something to behold. As we noted in the comments, we did hit $250 million in synergies captured, and we've got a line of sight on another – or getting that up to $400 million-plus. And Tim and his team are hard at work, so I'll let him give you some more color on that. Now, that doesn't all happen by accident.

Speaker Change: The DCP team is fully integrated into Phillips, 66, and performing seamlessly and we're seeing we're seeing great.

Timothy D. Roberts: Really synergies across the whole value chain that even down at the level of communications things happening quicker things better decisions being made faster and it's really been something to behold.

Timothy D. Roberts: As we noted in the comments, we did hit $250 million of synergies captured and we've got a line of sight on another or getting that up to 400 million plus and Tim and his team are hard at work. So I'll, let him give.

Timothy D. Roberts: To give you some more color on that alright, thanks, Mark Yeah, Manav, a couple of things I mean really it's pretty simple when you put the two with the transaction you put the two businesses together.

Timothy D. Roberts: We had improved volumes costs were down we executed well operationally, we executed well commercially and then ultimately what that does is allow you to deliver results and we felt this was more representative of what we're going to see in this business going forward. It really does highlight the strong earnings and free cash flow generation of the midstream segment.

Timothy D. Roberts: It's been a bit of a slog as we've slowly got those folks integrated. We're almost done with the integration completely. We should be done sometime here early in the second quarter once we get all the ERP and IT systems all under one versus still running two in parallel, so we expect to see some additional costs come off. But, really, it's just what I call blocking and tackling.

Timothy D. Roberts: Now that doesn't all happen by accident, it's been bit of a slog as we slowly got those folks integrated we're almost done with the integration completely we should be done sometime here early in the second quarter. Once we get all the ERP and it.

Timothy D. Roberts: It systems, all under one versus still running two in parallel so we expect to see some additional cost come off but really it's just what I call blocking and tackling.

The market Hasnt been overly helpful.

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

Timothy D. Roberts: So we've had to make do with what we can in this environment and I think like I said, you operate well commercially execute well you gave yourself a chance and I think this is representative of that so overall, we like the transaction and we like where it's going and we think it's is getting itself positioned well to go out and compete.

Brian M. Mandell: So, overall, we like the transaction, and we like where it's going, and we think it's getting itself positioned well to go out and compete. Perfect. My quick follow-up is, you always have a very informed view of the refining macro. Help us understand within your system what you're seeing in terms of gasoline, diesel, and even jet fuel demand outside. I'm an avid Brian.

Speaker Change: Perfect and my quick follow up is you always have a very informed view of the refining macro help us understand within your system, what youre seeing in terms of gasoline and diesel and even jet fuel demand out there.

Speaker Change: Hi, Manav, it's Brian I'll take that one.

Brian M. Mandell: I'll take that one. Global gasoline demand finished last year at about 3% over the prior year, we saw about 1% in the US, we expect 2024 global gasoline demand to grow almost 1%, and we're expecting us to remain flat. Gasoline inventories continue at the high end of the five-year average for both US and Europe. We think the majority of the stored gasoline is winter grade, particularly given the current strong octane values. Overall, gasoline stocks we think should move back to the middle of the five-year range with spring turnarounds as we move toward the summer. On the distillate side, distillate demand finished in 2023 about 2% over 2022. And the US was actually down 2%, mostly on the West Coast due to rains and renewable diesel production and imports. Latin America, we saw up 2%.

Global gasoline demand finished last year about 3% over prior year, we saw about 1% in the U S. We expect 2024 global gasoline to grow almost 1% and we're expecting U S to remain flat gasoline inventories continue at the high end of the five year average for both U S and Europe.

Speaker Change: We think the majority of the stored gasoline is winter grade, particularly given the current strong octane values.

Speaker Change: Overall gasoline stocks, we think should move back to the middle of the five year range with our spring turnarounds as we move towards the summer.

Speaker Change: On the distillate side distillate demand finished 2023 about 2% over 2022 in the U S was actually down 2%, mostly in the west coast due to rains and a renewable diesel production and imports Latin America, we saw up 2%, we expect that 2024 global distillate demand to grow about half a percent.

Brian M. Mandell: We expect 2024 global distillate demand to grow about half a, and U.S. distillate stocks are about 14% below the five-year average, and we'd anticipate draws through the spring maintenance season that should take inventories even closer to last year's levels. And finally, on jet demand, last year 17% over the prior year with a total sea count recovering to 2019. In 2024, global jet demand is expected to grow about 6% with continued recovery in international travel, and we've seen cargo flights remain elevated, and we think that'll continue in 2024 as well. Thank you so much, guys. Thanks a lot. The next question comes from Doug Leggate with Bank of America. Please go ahead; your line is open. Thank you. Good morning, everybody.

Speaker Change: In the U S, 2% given the U S is a stronger economy.

Speaker Change: In U S. Distillate stocks are about 14% below five year average and we'd anticipate draws through the spring maintenance season that should take our inventories even closer to last year's levels.

Speaker Change: And finally on jet demand.

Speaker Change: Finished last year, 17% over prior year with a total seat count recovering to 2019.

2024 global jet demand is expected to grow about 6% with continued recovery on international travel and we seen cargo flights remain elevated and we think that will continue in 2024 as well.

Speaker Change: Thank you so much guys.

Thanks, Rob.

Speaker Change: The next question comes from Doug Leggate with Bank of America. Please go ahead. Your line is open.

Doug Leggate: Thank you and good morning, everybody.

Kevin J. Mitchell: Jen, I wonder if I could ask you about the EBITDA number for 2023, the $12.7 billion you mentioned. If you rebase that to mid-cycle, where are we relative to the $14 billion target? It seems to us that you've only got a year to go, basically, to do a very small amount of incremental cost-cutting. It seems you might have some upside to those numbers. So if you could help us rebase that, that would be really helpful. Yeah, Doug, it's Kevin.

Doug Leggate: James I Wonder if I could ask you about the EBITDA number for 2023 to $12 7 billion you mentioned if.

Doug Leggate: If you rebased that to mid cycle with our with you relative to the $14 billion target.

Doug Leggate: It seems to us you've only got a year to go basically two to do.

Doug Leggate: Very small amount of incremental cost cutting it seems you might have some upside to those numbers. So if you could help us re based on that would be really helpful. Last one quick question.

Doug Leggate: Yes.

Doug Leggate: Yes, Doug it's Kevin let me.

Kevin J. Mitchell: Let me try and fill in the gaps on that one for you. There are really a couple of items that are probably a bit more significant in terms of the shift from current to what's the 2025 mid-cycle, the $14 billion target. So for one, remember, the $14 billion is mid-cycle. The chemicals business is not at mid-cycle currently, and that's about an incremental $1 billion to get to mid-cycle. And then on a mid-cycle basis, there's an increment of about $200 million from the mid-cap projects that they have just put into place, most of which happened towards the end of last year. And so an incremental billion in chemicals, really driven by the overall environment.

Kevin J. Mitchell: Try and fill in the gaps on that one for you.

Kevin J. Mitchell: There's a couple of items that are probably a bit more significant in terms of the shift from current to what's.

Kevin J. Mitchell: 2025 mid cycle to $14 billion target so for one remember.

$14 billion as mid cycle, the chemicals business is not at mid cycle currently and Thats about an incremental $1 billion to get to mid cycle and then on a mid cycle basis, those an increment of about $200 million from the mid cap projects that they have just put into place most of which took place happened.

Kevin J. Mitchell: Towards the end of last.

Kevin J. Mitchell: Last year and so.

Kevin J. Mitchell: So about an incremental $1 billion in chemicals really driven by the overall environment.

Kevin J. Mitchell: Rodeo is not reflected in the current numbers, and that's a $700 million mid-cycle impact. And so that's a – between those two, you're at getting close to $2 billion of increment that is still to come. In addition, we talked about the $600 million of additional commercial contribution to the business.

Kevin J. Mitchell: Rodeo is not reflected in current and that's a $700 million mid cycle impact.

Impact and so thats a between those two you're right.

Kevin J. Mitchell: Getting close to $2 billion of increment that is still to come there is some additional on the cost side.

Kevin J. Mitchell: Side of things.

Kevin J. Mitchell: And there is midstream at while we're close to our mid cycle on a run rate basis remember the $12 $7 billion only had our current ownership of Dcp's. Since June of last year. So is that does that incremental step up.

Kevin J. Mitchell: We expect to see that materialize over the next two years, and we're also executing on the refining projects that Rich has talked about in the past. And so those are the items that are going to get us to that $14 billion 2025 mid-cycle level. So, very, very granular and much appreciated. Thanks, Kevin. My follow-up is kind of a question about rodeo, but a different question, perhaps, than you normally get. We're trying to understand what the West Coast would look like if we rebased your capture rate, your historical, you know, relationship with realized margins versus indicators if Rodeo was not in the system. So I guess it's kind of a request and a question at the same time. To the extent that you can give us the history of ex-Rodeo, that would be really helpful.

Kevin J. Mitchell: From an adjusted basis on that risk in that respect in addition.

Kevin J. Mitchell: We talked about the $600 million of.

Kevin J. Mitchell: Additional commercial contribution to the business, we expect to see that materialize over the next two years and we're also executing on the refining.

Kevin J. Mitchell: Projects that Rick Rich rich has talked about in the past and so those are the items that are going to get us to that $14 billion 2025 mid cycle level.

Speaker Change: So very very granular and much appreciate it thanks, Kevin My follow up is is Canada.

Kevin J. Mitchell: On radio, but a different question, perhaps than you normally get.

We're trying to understand what the west coast would look like if we rebase.

Kevin J. Mitchell: Your capture rate your historical.

Speaker Change: The relationship with realized margins versus indicators accrued deal was not in the system. So I guess, it's kind of a request on a question that same time to the extent you can give us the history extra day or that would be really helpful. But order of magnitude.

Kevin J. Mitchell: But by order of magnitude, was Rodeo losing making for most of the last several years? Or how would you characterize the EVADAC contribution? I'll leave it there. Thank you. Yeah, Doug, I understand the request and why you would want that. And we'll, we'll take that under consideration as we think about how we're going to report the go-forward rodeo as a renewable fuels facility, because we do want, we also want to be able to demonstrate that that asset as a renewable fuels facility is generating the kind of financial results that we have been talking about. And so we'll take that under consideration in terms of what we show from a recast basis. I think the question of what Rodeo has done in the past is really a function of the market environment.

Speaker Change: David loss, making for most of the last several years or how would you characterize the EBITDA contribution and I'll leave it there. Thank you.

Speaker Change: Okay.

Speaker Change: Yes, Doug.

Speaker Change: I understand the request and why you would want that and we will take that under consideration as we think about how we're going to report. The go forward rodeo as a renewable fuels facility because we do want we also want to be able to demonstrate that that asset as a renewable fuels facility is generating the kind of finance.

Speaker Change: <unk> results that we have been that we've been talking about.

Speaker Change: And so we'll take that under consideration in terms of what we show from a recast basis I think the question on what <unk> done in the past, it's really been a function of the market environment.

Kevin J. Mitchell: I mean, it has been challenged over the last few years as what was historically a very strong cruise advantage. So it disappears with the declining supplies of domestic feedstocks for this facility and having to rely more on imported barrels. But then you're also in a high-cost area, as you know. So it's although that's typical, that's all of, you know, California is that way.

Speaker Change: It has been challenged.

Speaker Change: Over the last few years as what was historically, a very strong crude advantage.

Speaker Change: So it disappeared with the declining supplies of domestic feedstocks for this facility and having to rely more on imported barrels, but then you're also it's a high cost area as you know so it's all.

Speaker Change: Although thats typical that's all of <unk>.

Speaker Change: California is that way.

Kevin J. Mitchell: And then you're into what the market environment looks like. And so what we've typically seen in California is when there are operating upsets and supply is impacted, then you see a, you know, an increase in margins, and the financials look respectable. But there are times when everything's running well, it's more challenging.

Speaker Change: And then you are into what the market environment looks like and so what we've typically seen.

And California is when there is operating upsides and supply is impacted then you see.

Speaker Change: The increase in margins in the financials look respectable.

Speaker Change: But there are when everything is running well it's more challenged.

Speaker Change: Thanks, very much have you, Kevin we'll look forward to that thanks.

Kevin J. Mitchell: Thanks very much indeed, Kevin. We'll look forward to that. Thanks. The next question comes from the line of John Royall with JPMorgan. Please go ahead, John.

Speaker Change: Okay.

Speaker Change: The next question comes from the line of John Royall with Jpmorgan. Please go ahead John.

Kevin J. Mitchell: Hi, thanks for taking my questions. So my first question is on the balance sheet. You guys were guided to hitting the top end of your leverage range by year-end 23. You're finishing a bit above that, which I think was just driven by the working capital impact of falling prices. So assuming a somewhat stable environment for working capital and price in 24, do you have any updated guidance on when you think you'll get back into that range? Yeah, John. You're right that the working capital tailwind that we expected to see for a variety of reasons didn't quite materialize the way that we thought it would. And that probably impacted us by two to three percentage points on the net debt to capital metric. We expect to make some modest progress on debt reduction in 2024. We have a total of $1.1 billion of maturities in 24 at the Phillips 66 level.

John Edwards: Alright, thanks for taking my questions.

John Edwards: So my first question is on the balance sheet, you guys had guided to hitting the top end of your.

John Edwards: Of your leverage range by year end 'twenty three.

John Edwards: Finishing a bit above that which I think was driven by working capital impact of falling prices.

John Edwards: Assuming a somewhat stable environment for working capital and price in 'twenty four.

Speaker Change: Do you have any updated guidance on when you think you'll get back into that range.

Speaker Change: Yes, John.

Speaker Change: You are right that the working capital tailwind that we expected to see for a variety of reasons didn't quite materialize. The way, we thought they would and that probably impacted us by two to three percentage points on.

Speaker Change: On the net debt to capital met.

The metric we expect to.

Speaker Change: Make some modest progress on debt reduction in 2024, we have a total of $1 $1 billion of maturities in 2004 at the Phillips 66 level and so that gives us some flexibility in terms of how we manage manage this.

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

Speaker Change: I will say, though that the working capital component is always a little bit of a wildcard because it can swing us to the tune of a couple of billion dollars over the course of <unk>.

Speaker Change: Our quarter and that has an impact on the on the stated stated metrics. So I think what I'd say is look we still target the 25% to 30% range, but when you step back and look in aggregate terms, we're very comfortable with where we are.

Kevin J. Mitchell: So I think what I'd say is, look, we still target the 25 to 30% range. But when you step back and look in aggregate terms, we're very comfortable with where we are. And our capital allocation decisions are going to be made with consideration of all the different priorities that we've got out there, of which the balance sheet and debt are one of them.

Speaker Change: And our capital allocation decisions are going to be made with consideration of all the different priorities that we've got the era of which the balance sheet and that is one of them. So I don't want to commit to any sort of rash decisions just to target about one particular metric we want to make sure we make the right overall decisions.

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

Speaker Change: Factoring in all of the different priorities.

Speaker Change: Okay.

Speaker Change: Understood. Thanks, Kevin.

Richard G. Harbison: And my next question is just on the turnaround guide. For the year, you took a pretty big year in 22, or a very big year in 22, which I think was, you know, somewhat of a catch-up year. Last year was a pretty meaningful step down, and the guidance looks like 24 is basically, you know, the same ballpark as 23. So should we think of the average, an average turnaround year from here as being somewhere in that kind of 600 million dollar range? And does the Rodeo conversion change that at all? John, I'll take that. This is Rich.

Speaker Change: My next question is just on the turnaround guide for.

Speaker Change: For the year, you took a pretty big year in 'twenty, two we're a very big year in 'twenty two.

Speaker Change: Which I think was somewhat of a catch up year.

Speaker Change: Last year was a pretty meaningful step down in the guidance. It looks like 'twenty four is basically the same ballpark as 23. So should we think of the average and average turnaround year from here as being somewhere in that kind of $600 million range.

Speaker Change: Does the rodeo conversion changed that at all.

Speaker Change: Paul.

Paul: Hey, John I'll take that this is rich yeah, I think the range that we're at last year and this year is what you would consider an average year for us and the outlook for this year stays stays in that like most companies, we do concentrate our planned maintenance activity activity in the first and fourth quarters.

Richard G. Harbison: Yeah, I think that the range that we were at last year and this year is what you would consider an average year for us, and the outlook for this year stays in that. Like most companies, you know, we do concentrate our plan maintenance activity in the first and fourth quarters of our system in any given year, and we tend to lighten it during the driving season, the second and third quarters of the year. But the way our turnarounds are working, and a huge effort by the organization, which I need to compliment them on, is to really flatten out these heavy peak periods in our turnaround cycles. Now, we will occasionally get a couple of sites that get stacked up on themselves, but what we've really tried to do is push those out, level out the spend on a long-term basis, and work towards this five to six hundred million dollar range as our average So there'll be a few years that are a little bit higher than that, and then there'll be some that may be slightly under that as well, but in a general sense, that's a good number to use. Thank you. The next question comes from Paul Cheng with Scotiabank. Please go ahead, Paul.

Paul: And our system in any given year end and we tend to lighten us during the driving season second and third quarter of the year, but.

Paul: The way our turnarounds are working in a huge effort by the organization, which I need to complement them is to really flatten out. These heavy peak periods in our turnaround cycles now we will occasionally get get a couple of sites that gets stacked up on ourselves, but what we've really tried to do is push those out level out the <unk>.

Then on a long term basis.

Paul: And.

Paul: Work towards this $5 million to $600 million ranges as as our average turnaround cycles. So there'll be a few years that'll be a little bit higher than that and then there'll be some that may be slightly under that as well but.

Paul: In a general sense that that's a good number to use.

Speaker Change: Thank you.

Speaker Change: The next question comes from Paul Cheng with Scotiabank. Please go ahead Paul.

Kevin J. Mitchell: Hey guys, good morning. Um, we're maybe the first ones to be years old. Uh, Kevin, that, uh... Can you tell us what the fourth quarter Rodel was running at and what the course was? [inaudible] So, Paul, what was the first part of the question? I missed that first piece.

Paul Y. Cheng: Hey, guys good morning.

Paul Y. Cheng: Good morning, welcome to the first one yes, Paul Thompson.

Paul Y. Cheng: Yes.

Paul Y. Cheng: Kevin.

Paul Y. Cheng: Can you tell us that what's in the fourth quarter of what was running at and what is the cost associated with that.

In the first quarter, gentlemen, and offset the commission and the commission expense signpost that go into one crew and not being treated as a special item.

Paul Y. Cheng: So Paul what was the first part of the question I missed that.

We're trying to we're trying to understand that with <unk>.

Kevin J. Mitchell: We're trying to understand that. Now, what is the 4.1 rate in the fourth quarter, and what...

Speaker Change: One is we'll put one way.

Speaker Change: In the fourth quarter and what's it cost.

Kevin J. Mitchell: Halls, actually, yes or that if you can tell us what they'll cause in the fourth quarter and what, So, Rodeo performance in the fourth quarter versus the first quarter. Yeah, so, we, I mean, we don't give out that sort of asset-specific level of financial information. What I can say is that when you look at the fourth quarter results and the capture rate, the Rodeo is starting to turn operations down.

Paul: Actually yes, or that you can tell us that what is now <unk>.

Paul: In the fourth quarter and what you want.

Paul: Were you also.

Paul: Rodeo performance in the fourth quarter versus the threat, so I mean.

Speaker Change: We don't.

Speaker Change: That asset specific level of financial information, what I can say is that the the when you look at the fourth quarter results and the capture rates.

Speaker Change: The rodeo starting to come turning operations down we shut down one of the crude units in the fourth quarter that did have a detrimental impact to our fourth quarter results versus if we were just carrying on in the traditional normal pool crude operations at rodeo.

Kevin J. Mitchell: We shut down one of the crude units in the fourth quarter, and that did have a detrimental impact on our fourth-quarter results versus if we were just carrying on in the traditional normal full crude operations at Rodeo. So it did have an impact. In terms of the 100 million dollars of startup and decommissioning costs in the first quarter, we would not treat those as a special item. They will flow through as gap earnings or impact, and that will be how we report the results because they're not. I mean, it's normal for what we're doing. It's not a unique factor now,

Speaker Change: It did have did have an impact in terms of the $100 million.

Speaker Change: Of <unk>.

Speaker Change: <unk> and decommissioning costs in the first quarter, we would not treat those as a special item they will flow through as GAAP earnings are impact and that will.

Speaker Change: That will be how we report the results because they are not I mean.

Speaker Change: It is normal for what we're doing it's not a unique factor now we can talk about it and you can choose to make your own sort of adjustments around it but for us. It will just be part of our normal operating results.

Kevin J. Mitchell: We can talk about it, and you can choose to make your own sort of adjustments around it, but for us, it will just be part of our normal operating results. And, Kevin, if I look at page 23 of your presentation, in terms of the margin captured, in the column talking about $7.11, and here that you have, They call it $200 million of, I think, the swing benefit from the Colonial Pipeline product pricing. So that's translating to about $3.90.

Speaker Change: Good morning.

Speaker Change: And Kevin you've Idaho.

Speaker Change: On your page.

Speaker Change: 'twenty three on your presentation.

In terms of the margin capture.

Speaker Change: Column.

Speaker Change: Talking about seven Golar and <unk>.

Speaker Change: And Ian here that you have.

Speaker Change: They call it $200 million.

Speaker Change: I think the swing benefit from the colonial pipeline.

Speaker Change: Product pricing.

Speaker Change: That's translating to about $3.90.

Kevin J. Mitchell: So where's the other, say, $3 per barrel contributed? Yeah, so I think the bulk of the rest, so that is one factor. You've also got the swing I mentioned in the Gulf Coast product pricing effect; you had a swing there from one quarter to the next. And you also have the benefit of our, we talked about our commercial performance during the quarter, that will also show up in that bar. So all those things get reflected in that part of the representation.

Speaker Change: Westy.

<unk> per barrel.

Speaker Change: <unk> to that.

Speaker Change: Yes, so I think the bulk of the rest so that is one that's one factor on that.

Speaker Change: <unk> also got the swing I mentioned on the.

Speaker Change: Gulf Coast product pricing effect, you had a swing there from one quarter to the next and you also have the benefit in there of our we talked about our commercial.

Speaker Change: <unk> during the quarter that will also show up in that bar. So all those things that get reflected in that part of the representation.

Speaker Change: So I suppose that the Buck.

Kevin J. Mitchell: So I suppose that the bulk of the... [inaudible] by commercial operation, or that just a minor piece of that, you have other things that are even bigger. Yeah, I mean, it's a combination of all of those items. So you see benefit on the product side, you see benefit from commercial contribution, you see benefit from the inventory and hedging items that we talked about, so they all combine to make up the bulk of that $7. Okay, we're good. Thank you. Our next question comes from the line of Matthew Blair with Tudor Pickering Holt. Matthew, please go ahead. Hey, good morning.

Speaker Change: <unk>.

Speaker Change: The gap.

Speaker Change: Yes.

Speaker Change: Commercial operation or that is just minor piece of that you have other things that even the bigger contributor.

Speaker Change: Yes, I mean, it's a combination of all of those items. So you'll see benefit on the product side, you see benefit from commercial contribution you see the benefit from the.

Speaker Change: The inventory hedging items that we talked about so they all combine to make up the bulk of that.

Speaker Change: $7.

Speaker Change: Okay.

Okay. Thank you.

Speaker Change: Okay.

Our next question comes from the line of Matthew Blair with Tudor Pickering Holt Matthew. Please go ahead.

Matthew Blair: Hey, good morning, Thanks for taking my questions here.

Timothy D. Roberts: Thanks for taking my questions here on the Kim side. Sorry, that you provided strong utilization guidance once again for Q1. Could you talk about the recent improvement in PE prices? What's driving that? And then also, could you share any trends on demand that you're seeing either export-related or domestic? Yeah. Hey, Matt, this is Tim.

Matthew Blair: Mckesson side.

Matthew Blair: Alright.

Matthew Blair: On the chemical side you provided.

Matthew Blair: Strong utilization guidance once again for Q1 could you talk about the recent improvement in prices, what what's driving that and then also could you share any trends on demand that youre seeing.

Matthew Blair: Either export related or domestic.

Matthew Blair: Yes, Hey, Matt This is Tim.

Timothy D. Roberts: Yeah, a couple things on that from the Chem standpoint. Yeah, we've seen pretty good stability with regard to polyethylene prices through the fourth quarter. Things were relatively flat from October through December, then they got a 5-cent increase in January. You know, how much of a 5-cent increase they actually get, I think that might be a little bit of a discussion point.

Timothy D. Roberts: Yes, a couple of things on that from the <unk> standpoint, yes, we have seen actually a pretty good stability with regard to polyethylene prices in the fourth quarter things were relatively flat from October through December than they got a 5% increase in January.

Timothy D. Roberts: How much of the five day actually get I think that might be a little bit of a discussion point, but nonetheless, it did highlight that the U S is running hard demand in the U S as being good, albeit steady in Europe soft in Asia.

Timothy D. Roberts: But nonetheless, it did highlight that the U.S. is running hard, demand in the U.S. has been good, albeit steady in Europe, and soft in Asia. The feedstock advantage here is that you've got a highly utilized U.S. Gulf Coast kit, namely CP-Chem, and they're running hard. You've seen some destocking that's going on as well. So I think that's helped underpin a little bit of momentum. Now, I don't think anybody's declaring victory on this at this point.

Timothy D. Roberts: Feedstock advantage here is really you've got a highly utilized U S Gulf coast kit, namely CP, Chem and they're running hard so you've seen some destock.

Timothy D. Roberts: Destocking thats going on as well so I think thats helped underpin a little bit of momentum now I don't think anybody is declaring victory on this at this point I think there is a lot of destocking thats still needs to happen throughout the balance of the year, but it does tell you that the market forces are in play and you will see a rebalancing through 2024.

Mark E. Lashier: I think there's a lot of destocking that still needs to happen throughout the balance of the year. But it does tell you that market forces are in play, and you will see a rebalancing through 2024. Yeah, and Matthew, I think this just demonstrates the resilience of CP-Chem across this down cycle.

Timothy D. Roberts: And Matthew I think this just demonstrates the resilience of CP chem across this down cycle, they've done relatively well been able to run at high rates and compete and be cash positive.

Mark E. Lashier: They've done relatively well, been able to run at high rates and compete and be cash positive and show bottom of the cycle returns that we're happy with. We're anxious to see them come out of this cyclical downturn, but they are really, really well positioned for the long term. Sounds good.

Timothy D. Roberts: So bottom of the cycle returns that that we're happy with we're anxious to see them come.

Timothy D. Roberts: Come out of this cyclical downturn, but they are really really well positioned for the long term.

Timothy D. Roberts: Okay.

Matthew Blair: Sounds good and then.

Kevin J. Mitchell: And then, um, could you provide an outlook on your deferred taxes for 2024? It's been a little volatile recently, but I believe that 2023 did come in above your overall expectations. What's the outlook for 2024? Yeah, Matt, that's a great question.

Speaker Change: Could you provide an outlook on your deferred taxes for 2024.

Speaker Change: It's been a little volatile recently, but I believe that 2023.

Come in above your overall expectation, what's the outlook for 2024.

Speaker Change: Yes, Matt Great question.

Kevin J. Mitchell: We had a pretty strong deferred tax benefit in 2023 and also 2022. And in both years, the primary driver for that was the MLP roll-up. So in 2022, we had a benefit associated with PSXP, and then in 2023, with the DCP roll-up. And in the end, that was a bigger benefit than we were anticipating, which drove some of the movements in that that you saw last year. That benefit drops off significantly as we go into 2024. And it's a combination of lower capital spend and so less depreciation to take advantage of, and bonus depreciation is scaling down as well. So we dropped the 60% year-one bonus in 2024. So we're anticipating about a $200 million benefit for the year in 2024. So quite a lot lower than what we had in 2023. There is one caveat to this, in that there is a current bill in Congress that, if ultimately passed, will extend some of the tax provisions from the Tax Cuts and Jobs Act that are right now in the process of starting to sunset.

Speaker Change: We had pretty strong deferred tax benefit in <unk>.

Matt: 2023, and also 2022 and in both years the primary driver to those where the MLP roll up. So in 2022, we had benefit associated with PSX P than in 2023 with the DCP roll up in that and in the end that was a bigger benefit than we are anticipating which drove some of that.

Matt: The movements in that that you saw last year that benefit.

Matt: Drops off significantly as we go into 2024, and it's a combination of less lower capital spend and so less depreciation to take advantage of and bonus depreciation is scaling down as well so we dropped to 60% year one bonus in 2024.

Matt: So we're anticipating about a $200 million benefit for the year in 2024, so quite a lot lower than what we had in 2023. There is one caveat on this and there is a current bill in Congress that if ultimately passed will extend some of the tax provisions.

Matt: From the tax cuts and jobs Act, but right now we're in the process of starting to Sunset out and if that passes we will actually see 100% bonus depreciation backdated to 2023, So you would get.

Kevin J. Mitchell: And if that passes, we'll actually see 100% bonus depreciation. [inaudible] That would benefit us in 2024 to the tune of probably an incremental $300 million or so, but that's contingent on that legislation passing. Great, thanks for the color.

Matt: 23, 2024, and 2025 all at 100%.

Matt: That would benefit us.

Matt: In 2024 and to the tune of probably an incremental $300 million or so, but that's contingent on that legislation passing.

Kevin J. Mitchell: Hey, the next question comes from the line of Jason Gabelman with TD Coed. Please go ahead.

Matt: Okay.

Speaker Change: Great. Thanks for the color.

Speaker Change: Okay.

Yes.

Speaker Change: The next question comes from the line of Jason <unk> with TD Cohen.

Jason: Please go ahead.

Richard G. Harbison: Yeah, hey, thanks for taking my questions. I had a follow-up question on the Rodeo startup plan, and I appreciate all the color. I know you mentioned it was going to be ramping up to full rates by mid year. Does that also include the indicative feed fleet, meaning you're going to be running kind of dirty, lower CI feed from the middle of the year? Is that going to be more of a ramp up once you hit full rate? Yeah, Jason, this is Rich.

Jason: Yes.

Jason: Hey, Thanks for taking my questions.

Jason: I had a follow up question on the rodeo startup plan and I appreciate all the color.

Jason: I know you mentioned it was going to be ramping up to full rates by mid year does that also include indicative feed slate, meaning youre going to be running kind of dirty lower Ci feed from the middle of the year or is that going to be more of a ramp up once you hit full rates.

Rich: Yes, Jason this is rich.

Richard G. Harbison: You know, we'll start off with the easier feedstocks, generally. And those are used vegetable oils, maybe some used cooking oils, and some meat. As we get the pretreatment unit up and running and lined out, we'll start introducing lower and lower CI, carbon intensive feedstocks, which include fats, the greases, the tallows, those types of feedstocks. And we fully expect those to be introduced into the system towards the second half of the second quarter, maybe into the third quarter. And we'll slowly and continuously reduce that carbon intensity feedstock quality as we get more and more comfortable with the operation of the pretreatment unit and its impacts inside the processing units as well.

Rich: I will start off with the easier feedstocks generally and.

Rich: Those are used vegetable oils, maybe some used cooking oils.

Rich: Nate vegetable oils.

We get the pretreatment unit up and running and lined out we'll start introducing lower and lower.

Carbon intensive feedstocks, which includes the fat says the fats and greases, the tallow and those types of feedstocks.

Rich: We fully expect those to be introduced into the system.

Rich: Towards the second half of the second quarter, maybe end of the third quarter, and we'll slowly and continuously.

Rich: To reduce that carbon intensity feedstock quality is as we get more and more comfortable with the operation of the pretreatment unit and their impacts inside the processing units as well so.

Richard G. Harbison: And I think our commercial organizations lined up with that theme. And they've been out and about gathering up these feedstocks and actively developing the aggregation facilities. And so they're positioning quite well for the look for the green light from the Rodeo team to go ahead and start sending them that direction. And they'll be ready when we're ready.

Rich: And I think our commercial organization is lined up with that same they've been out are out and about gathering up these feedstocks and actively.

Rich: Developing the aggregation facilities and and so they're positioning quite well for for the looking for the Green light from the <unk> team to go ahead and start sending these that direction and there'll be ready when one already.

Speaker Change: Okay got it and then my follow up is on the midstream segment.

Timothy D. Roberts: And then my follow-up is on the midstream segment and clearly very strong results, as you discussed on the call. But I'm wondering if there's any seasonality in the business that would result in maybe stronger winter results and weaker summer results, thinking of things like higher propane demand and butane being pulled out of storage for blending and anything else that would be included like that that would drive kind of lower earnings 2Q and 3Q relative to 4Q and 1Q. Thanks. Yeah, Jason, that's a great question.

Speaker Change: Clearly very strong results as you've discussed on the call, but I am wondering if there is any seasonality we should think about to the business that would result in maybe stronger winter results in weaker somewhere results thinking of things like higher propane demand and butane being pulled out of storage for blending.

Speaker Change: And anything else.

Speaker Change: That.

Speaker Change: Would it be included like that that would drive kind of lower earnings <unk> and <unk> relative to <unk>.

Speaker Change: Yes, Jason that's a great question and that's how we would look at it if I look at 2024.

Timothy D. Roberts: And no, that's how we would look at it. If I look at 2024, as you kind of think about what we see that IBT looking like, we think that looks somewhere around, again, simple average across the four quarters, about 675 a quarter. But you're right, there's some seasonality that comes into play. Typically, it's a little stronger in the fourth quarter. Again, you nailed it; propane, butane, all those things kind of come into play. You see a little bit of that in the first quarter.

Speaker Change: You kind of think about.

Speaker Change: What we see that IDT looking like.

Speaker Change: We think that look somewhere around on average again simple average across the four quarters about 60 75 a quarter.

Speaker Change: But youre right Theres, some seasonality that comes into play.

Speaker Change: Typically it's a little stronger in the fourth quarter again.

Speaker Change: You nailed it on propane and butane all of those things kind of come into play.

You see a little bit of that still in the first quarter. So.

Timothy D. Roberts: So, again, first quarter, fourth quarter, a little bit stronger, and then it comes off a little bit. But on average, about 675 is what we're looking at. Now, that's at mid-cycle, so I want to be real clear there. At mid-cycle commodity prices, that's the framework we're operating under. Now, obviously, if you look at the first quarter, if there are winter events and things that happen that remind you of a couple years ago that we had, and, you know, that's a different game, too.

Speaker Change: Again first quarter fourth quarter, a little bit stronger and then it comes off a little bit but on average about 60 75 is what we're looking at now that's at mid cycle. So I want to be real quarter. There at mid cycle commodity pricing. That's that's the framework. We're operating under now obviously, if you look at first quarter if their winter.

Speaker Change: Events and things that happen that I remember a couple of years ago that we add in.

Speaker Change: That's a different game too we will have that we just deal with that one that occurs but generally that's kind of the framework. We're looking at again on EBT basis.

Timothy D. Roberts: We'll have to, we just deal with that when that occurs. But generally, that's kind of the framework we're looking at, again, on an IBT basis. All right. Great. Thanks. This question comes from the line of Theresa Chen with... He's going.

Speaker Change: Alright, great. Thanks.

Speaker Change: Our next question comes from the line of Theresa Chen with Barclays. Please go ahead.

Theresa Chen: Hi in terms of your longer NGL wellhead to market strategy can you just remind us.

Timothy D. Roberts: Hi, in terms of your longer NGL wellhead to market strategy, can you just remind us on a run rate basis what you anticipate is the breakdown of Y grade volumes you control from your own processing plants flowing to your downstream assets versus third parties? Well, I won't go into a lot of detail on that, Theresa, but what I will tell you is we're long. We are long on NGLs. But actually, we want to be, and that's by design.

Theresa Chen: On a run rate basis, what do you anticipate.

Theresa Chen: The breakdown of Y grade volumes, you're controlling your own processing plants flowing to your downstream assets.

Theresa Chen: Party.

Speaker Change: Well I won't go into a lot of detail on that trees, but what I will tell you is we're long [laughter].

We are a log on ngls, but actually we want to be and Thats by design, we offload to third parties to run some of our product for us whether they're to transport rather to frac.

Timothy D. Roberts: We offload to third parties to run some of our product for us, whether to transport or whether to frack. And at some point, I'd like to think that, over time, as we continue to build scale on the integrated value chain that we've got, we'll bring those volumes in-house. But at this point in time, like I said, we're long, and we are for the foreseeable future on NGL. Got it. And would you mind giving us an update on the progress with the asset sales? How far are you along in this process? And have you narrowed things down further?

Speaker Change: And at some point I would like to think over time as we continue to build scale on the integrated value chain that we've got we're bringing those volumes in house.

Speaker Change: But at this point in time.

Speaker Change: Like I said, we're long and we are for the foreseeable future on Ngls.

Speaker Change: Got it and would you mind, giving us an update on the progress with the asset sales and how far are you along that process.

Speaker Change: Narrowed things down further.

Speaker Change: Yes, as far as asset sales go.

Mark E. Lashier: Yeah, as far as asset sales go, you know, we said before that everything we have has a value, and we understand what that value is. And that's what we're focused on. If we can capture more value from someone else owning assets, then we'll do that.

Said before that everything we have has a value and we understand what that value is and thats what were focused on if we can if we can.

Speaker Change: To capture more value from someone else holding assets, then we will do that but having said that.

Mark E. Lashier: But having said that, we are in some active discussions as we speak; there's a number of processes underway that we can't comment on. But all I'd say is leave it there that we'll have more comments, likely at our first quarter earnings. Thank you, and on behalf of Joe Leitch. [inaudible] Great.

Speaker Change: We are in some active discussions as we speak there is a number of processes underway that we can't comment on but.

Speaker Change: All I'd say is leave it there to that will have more comments.

Likely at our first quarter earnings call.

Speaker Change: Thank you.

Speaker Change: Our next question comes from the line of Joe <unk> with Morgan Stanley. Please go ahead.

Speaker Change: Yeah.

Joe: Great. Thanks for taking my questions and congrats on a good quarter.

Brian M. Mandell: Thanks for taking my questions and congratulations on a good quarter. So I wanted to ask about cracks in the central corridor, particularly on the gasoline side, which have remained weak to start the year. I know you benefit from running WCS there, but I was just hoping to get your latest thoughts on mid-con dynamics and jobs watching there as the year progresses. Yeah, you know, particularly in Chicago, where the crack is now close to zero, a number of factors have caused that weak gasoline margin. Demand has been poor due to winter weather, which affected production. Demand more than production, refinings have been running strongly there. And then the upper Illinois River was frozen for 10 days, which blocked U.S. or VidCon or Chicago exports from getting to the U.S. Gulf Coast.

Joe: I wanted to ask on cracks in the central corridor, particularly on the gasoline side, which have remained weak to start the year I know you benefit from running WCS, there, but I'm just hoping to get your latest thoughts on mid con dynamics in cabs watching there as the year progresses.

Joe: Yes, particularly in Chicago, where the.

Joe: <unk> is now close to zero number of factors have caused that we gasoline margins demand has been poor due to winter weather, which affected production demand more than production refineries have been running strongly there and then the upper Illinois River was frozen for 10 days, which blocked.

Joe: Mid con or a Chicago exports from getting to the U S Gulf Coast.

Brian M. Mandell: So, kind of our view there is Chicago refineries are soon going to be in turnaround. There's a closed ARB from the U.S. Gulf Coast up north. We think things will clear up, particularly as winter grade gasoline is moved out of the tank and the market switches to summer grade gasoline. Great, thank you for that. And then, on the export side, have you seen a shift in any crude or product flows with the Panama Canal capacity limitations or any Suez Canal diversion? More product to Europe. You know, I would say, first with Russia, now with the Red Sea, we have been seeing different arbitration, different places.

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

Speaker Change: Great. Thank you for that and then I just wanted to ask on the export side have you seen shifting any crude or product flows with the Panama canal capacity limitations.

Speaker Change: Suez Canal diversions, maybe shipping more product to Europe.

Speaker Change: I would say.

Speaker Change: First with Russia, now with the Red Sea, we have been seeing different arbitrage different places as you know Russian barrels are going different places than they used to but by and large it's just increasing freight rates and time for us that's actually helpful.

Brian M. Mandell: As you know, Russian barrels are going to different places than they used to. But by and large, it's just increasing freight rates and time. For us, that's actually helpful, because as it does that, the European-type barrels, the red TI's, widen out, and we buy more barrels at basis WTI, so for us, it's a benefit.

Speaker Change: Is it does that.

Speaker Change: The European type barrels.

Speaker Change: The Brent Ti has widened out and we.

Speaker Change: We buy more barrels of basis <unk>. So for us. It's a benefit also we have a strong and robust a bunker fueling business, which also benefits from a higher bunker sales for the longer voyages.

Brian M. Mandell: Also, we have a strong and robust bunker fueling business, which also benefits from the higher bunker sales for the longer voyages. Great, thank you all. Thank you. This concludes the question and answer session. I'll now turn it back to Mark for his closing remarks. Thanks for all your questions.

Speaker Change: Okay.

Speaker Change: Great. Thank you all.

Speaker Change: Paul.

Paul: Thank you. This concludes the question and answer session I will now turn it back to Mark for closing remarks.

Paul: Yeah.

Mark Glazer: Thanks for all your questions.

Mark E. Lashier: I'm going to wrap up with slide 13 and have some comments about where we've been and where we're headed. You'll recall back in 2022, at our investor day, we set some pretty ambitious goals, and those goals were based on shareholder feedback. Then, in 2023, we focused on what we controlled, and we delivered on our plans with strong operating and financial results. (Inaudible) Now, in 2024, we're raising the performance bar once again to enhance our ability to reward shareholders with strong returns now and in the future. For those of you that are invested in Phillips 66, we thank you for your confidence. Thanks for all your interest in Phillips 66. If you have further questions, please call O&M ring. Thank you, Thank you everyone for joining us today. This concludes our call, and you may now disconnect your line..........

Mark Glazer: To wrap up with slide 13, and have some comments about where we've been and where we're headed youll recall back in 2022 at our Investor day, we set some pretty ambitious goals.

Mark Glazer: And those goals were based on shareholder feedback than in 2023, we focused on what we control and we delivered on our plans with strong operating and financial results.

Mark Glazer: Those results enable us to deliver the attractive returns to shareholders that you heard about today.

Mark Glazer: Now in 2024, we're raising the performance bar once again to enhance our ability to ROIC to reward shareholders with strong returns now and in the future.

Mark Glazer: For those of you that are invested in Phillips 66, we thank you for your confidence.

Speaker Change: Thanks for all your interest in Phillips 66, if you have further questions. Please call O&M Marie Thank you.

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

Speaker Change: [music].

Q4 2023 Phillips 66 Earnings Call

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