Phillips 66

Welcome to the fourth quarter 2022 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. 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 Dieter, Vice President of 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 Mark Lazor, president and CEO, Kevin Mitchell, CFO, Brian Mandel, marketing and commercial, Tim Roberts, midstream and chemicals, and Rich Harbison, refining. Today's presentation material can be found on the investor relations section of the Phillips 66 website. along with supplemental financial and operating information. 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 the call over to Mark.

Thanks, Jeff. Good morning, and thank you for joining us today. In the fourth quarter, we had adjusted earnings of $1.9 billion, or $4 per share. We generated $4.8 billion in operating cash flow. For the year, adjusted earnings were $8.9 billion, or $18.79 per share. Our diversified integrated portfolio generated strong earnings and cash flow in 2022, supported by a favorable market environment and solid operations. Our cash flow generation allowed us to strengthen our financial position by repaying debt and resuming our share repurchase program. We returned $3.3 billion to shareholders through share repurchases and dividends. We continue to focus on operating excellence and advancing our strategic priorities to deliver on our vision of providing energy and improving lives as we meet global demand. In midstream, We continued integrating DCP Midstream to unlock significant synergies and growth opportunities across our NGL wellhead to market value chain. Additionally, we completed Fract 4 at the Sweeney Hub, adding 150,000 barrels per day. Our total Sweeney Hub fractionation capacity is 550,000 barrels per day, making it the second largest fractionation hub in the U.S. In chemicals, CP Chem is pursuing a portfolio of high-return projects, enhancing its asset base as well as optimizing its existing operations. This includes construction of a second world-scale unit to produce 1-hexene in Old Ocean, Texas, and the expansion of propylene splitting capacity at its Cedar Bayou facility. Both projects are expected to start up in the second half of 2023. CP Chem and Qatar Energy announced final investment decisions to construct petrochemical facilities on the U.S. Gulf Coast and in Ras Laffan, Qatar. CP Chem will have a 51% interest in the $8.5 billion integrated polymers facility on the U.S. Gulf Coast. The Golden Triangle Polymers Facility will include a 4.6 billion pounds per year ethane cracker and two high-density polyethylene units with a combined capacity of 4.4 billion pounds per year. Operations are expected to begin in 2026. In January, the Ross Lafon Petrochemical Project was approved. CP Chem will own a 30% interest in the $6 billion integrated polymers complex. The plant will include a 4.6 billion pounds per year ethane cracker and two high-density polyethylene units with a total capacity of 3.7 billion pounds per year. Startup is expected in late 2026. In refining, we're converting our San Francisco refinery into one of the world's largest renewable fuels facilities. The Rodeo Renewed project is on track to begin commercial operations in the first quarter of 2024. Upon completion, Rodeo will have over 50,000 barrels per day of renewable fuels production capacity. At our investor day, we announced priorities to reward Phillips 66 shareholders now and in the future. We're holding ourselves accountable, and we know that you are as well. Slide four summarizes our progress. We are delivering returns to shareholders. Since July 2022, we've returned $2.4 billion to shareholders through share repurchases and dividends. We're on track to meet our target return of $10 to $12 billion by year-end 2024. In January, we reached an agreement to acquire all of the publicly held common units of DCP Midstream. We expect the transaction to close in the second quarter of 2023, at which point we will have an 87% economic interest in DCP Midstream. The increase in our economic interest from 28% prior to the third quarter transaction is expected to generate an incremental $1.3 billion of adjusted EBITDA, including commercial, and operating synergies. We're executing our business transformation. The team achieved savings in excess of $500 million on an annualized basis at the end of 2022, setting us up well for 2023. This includes cost reductions of over $300 million, mostly related to reducing headcount by over 1,100 positions during the year as we redesigned and streamlined our organization. In addition, Our 2023 capital program includes a 200 million reduction of sustaining capital. We're transforming to a sustainable, lower cost business model and expect to deliver $1 billion of annualized savings by year end 2023. We're laser focused on executing these strategic priorities to deliver returns and increase distributions in a competitive and sustainable way. We look forward to updating you on our progress. Now, I'll turn the call over to Kevin to review the financial results.