Phillips 66

Welcome to the Fourth Quarter 2020 Phillips 66 Earnings Conference Call. My name is David, and I will be your operator for today's call. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session. Please note that this conference is being recorded. I will now turn the call over to Jeff Dietert, Vice President, Investor Relations. Jeff, you may begin.

Good morning, and welcome to Phillips 66 Fourth Quarter Earnings Conference Call. Participants on today's call will include Greg Garland, Chairman and CEO, Kevin Mitchell, EVP and CFO, Bob Herman, EVP Refining, Brian Mandel, EVP Marketing and Commercial, and Tim Roberts, EVP Midstream. Today's presentation material can be found on the Investor Relations section of the Slide two contains our safe harbor statement. We will be making forward-looking statements during the presentation and our Q&A session. 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 over the call to Greg for opening remarks.

Okay, thanks, Jeff. Good morning, everyone, and thank you for joining us today. At the start of this last year, we could not have envisioned the unprecedented challenges that we face in 2020. We're proud of and grateful to the many people who have worked diligently and tirelessly to develop the COVID-19 vaccines. We're optimistic about the positive impact the vaccines will have on economic recovery in the months ahead. In the fourth quarter, we had an adjusted loss of $507 million, or $1.16 per share. Market conditions remain challenged. Our refining business continues to be affected by demand destruction associated with the pandemic. For the year, we had an adjusted loss of $382 million, or 89 cents per share. We operated well and completed major growth projects in our midstream segment, including the Gray Oak Pipeline, our largest pipeline project to date, and the Sweeney Hub Phase II expansions. We took early, decisive steps to reduce costs and capital spending, secure additional liquidity, and suspend our share repurchases. We exceeded $500 million in cost reductions and cut capital spending by more than $700 million. These actions, combined with cash flow generation from our diversified portfolio, provided us with financial flexibility to maintain our strong investment-grade credit ratings, sustain the dividends, and to navigate the crisis. Our focus continues to be on the wellbeing of our company, our employees, and our communities. In 2020, we contributed $32 million to charitable organizations, including $6 million toward COVID-19 and disaster relief. Even with the distractions and the challenges of the pandemic, our people remain focused on safe, reliable operations and execution of our strategy. 2020 was the safest year in the history of our company. Our total recordable injury rate of 0.11 was 30% better than our industry-leading rate in 2019. Our process safety improved by 60%, and our environmental performance was our best ever. In 2020, we generated $2.1 billion of operating cash flow and returned $2 billion to shareholders. Since we formed the company, we've returned approximately $28 billion to shareholders through dividends, share repurchases, and exchanges. We remain committed to a secure, competitive, and growing dividend. Entering 2021, there's still uncertainty in the market. We'll continue to maintain a strong balance sheet and disciplined capital allocation. In December, We announced our 2021 capital budget of $1.7 billion, and that includes full 66 partners. This is a reduction compared to recent years. This will free up capital for debt repayment. In 2020, we added approximately $4 billion of debt. We plan to reduce debt to pre-COVID levels as cash generation improves. Our 2021 capital budget includes $1.1 billion of sustaining capital for reliability, safety, and environmental projects. In addition, $600 million of growth capital is directed towards in-flight projects and investments in renewable fuels. During the quarter, we advance our growth program. At the Sweeney Hub, Fract 2 commenced operations in September, and Fract 3 started operations in October. we plan to resume construction of our fourth fractionator in the second half of 2021. Upon completion, the Sweeney Hub will have 550,000 barrels a day of fractionation capacity supported by long-term customer commitments. At the South Texas Gateway Terminal, the second dock commenced crude oil export operations in the fourth quarter. Upon expected completion in the first quarter of 2021, The terminal will have 8.6 million barrels of storage capacity and up to 800,000 barrels per day of docked throughput capacity. Phillips 66 Partners owns a 25% interest in the terminal. Phillips 66 Partners continued the construction of the CDG pipeline, connecting its clean and storage caverns to petrochemical facilities in the Corpus Christi area. Project is backed by long-term commitments and expected to be completed in mid-2021. At the Beaumont terminal, we completed the fourth dock, bringing total dock capacity to 800,000 barrels per day. The terminal has a total crude and product storage capacity of 16.8 million barrels. Since acquiring the terminal in 2014, we've doubled the dock's capacity and more than doubled its storage capacity. and chemicals. CPChem is advancing optimization and deep bottleneck opportunities. This includes recently approved projects at its Cedar Bayou facility that will increase production of ethylene and polyethylene. In addition, CPChem is developing an expansion of its normal alpha-olefins production. During the quarter, CPKM announced its first production of polyethylene from recycled plastics at its Cedar Bayou facility and received ISCC Plus certification. CPKM remains committed to finding sustainable solutions, including the elimination of plastic waste in the environment. We're advancing our Rodeo Renewed project at the San Francisco Refinery. We expect to complete the diesel-hydro-treater conversion in mid-2021, which will reduce 8,000 barrels per day. Full conversion of the facility in early 2024 could reduce over 50,000 barrels a day of renewable fuels. This capital-efficient investment is expected to deliver strong returns and will reduce the plant's greenhouse gas emissions by 50%. This project helps California to meet its low-carbon objectives. In marketing, we recently acquired 106 retail sites in the central region through a joint venture. This aligns with our strategy of securing long-term placement of Phillips 66 refinery production and extending participation in the value chain of retail. We've also advanced our digital transformation efforts, fostered innovation across our company, and implemented new technologies, including digital systems for work processes, artificial intelligence for maintenance requirements, and optimize processing unit performance. Our company is making investments to competitively position us for a low-carbon future. Earlier this month, we announced our emerging energy organization. This group is charged with establishing a lower-carbon business platform. We will pursue opportunities within our portfolio, such as renewable fuels, and work with our company's energy research and innovation group to commercialize emerging energy technologies. For example, in collaboration with Georgia Tech, Gold 66 received a grant from the U.S. Department of Energy that will support development of electrolysis technology that has the potential to convert CO2 into clean fuels. Our company is committed to addressing the global climate challenge at the same time to deliver shareholder returns. So with that, I'll turn the call over to Kevin to review the financial results.