Phillips 66

Welcome to the third quarter 2024 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, Investor Relations. Jeff, you may begin.

Welcome to Phillips 66 earnings conference call. Participants on today's call will include Mark Glazier, Chairman and CEO, Kevin Mitchell, CFO, Don Baldrige, Midstream and Chemicals, Rich Harbison, Refining, and Brian Mandel, Marketing and Commercial. Today's presentation 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. Welcome, everyone, to our third quarter earnings call. The strength of our results in a challenging refining market demonstrates the benefits of our differentiated downstream portfolio. During the quarter, we continued to execute on our strategic priorities and delivered strong operating performance. Since July 2022, we have returned $12.5 billion to shareholders through share repurchases and dividends. We're approaching our $13 to $15 billion target. In refining, we've reduced our costs by $1 per barrel, and we continue to run our system well. The improvement in clean product yield reflects our investments in high-return, low-capital projects. We continue to evaluate all of our assets as part of our strategic priorities and ongoing portfolio optimizations. We recently agreed to sell our 49% interest in a Switzerland-based retail joint venture for approximately $1.24 billion. Our asset dispositions are now expected to exceed the $3 billion target. We plan to use the cash proceeds to support our strategic priorities, including returns to shareholders and debt reduction. During the quarter, we achieved the targets on two of the six priorities ahead of schedule. we've accomplished our $1.4 billion business transformation cost reduction target. We've driven a permanent shift in the way we work, and we remain diligent with a culture of continuous improvement. Our employees have done an incredible job delivering on this commitment, and the results are clear, as Kevin will cover later. Secondly, we achieved our $400 million synergy target across our NGL wellhead to market value chain. This brings the total uplift in mid-cycle adjusted EBITDA to $1.4 billion, from acquiring and successfully integrating DCP Midstream. Slide four shows the growth of our midstream business. We have advanced our well-head-to-market strategy through organic projects and strategic transactions that provided significant synergies and strong returns. Our Sweeney Hub became the second largest NGO fractionation hub in the U.S. with the completion of FRAC4 in 2022. The DCP transactions strengthened this competitive position by fully integrating our value chain. In the third quarter of 2024, we further expanded the business with the acquisition of Pinnacle Midstream. We also approved the construction of an adjacent processing plant with startup expected in mid 2025. On a trailing 12 month basis, Midstream's adjusted EBITDA has increased to $3.7 billion from $2.1 billion three years ago. In addition, Midstream adjusted EBITDA is ahead of 2024 guidance despite weaker natural gas and NGL prices. The stable cash generation from this business covers the company's dividend and our sustaining capital. We continue to high-grade our portfolio and capitalize on our growth platform to generate strong returns and significant free cash flow. Before I wrap up my opening comments, I want to acknowledge our previously announced plans to cease operations at the Los Angeles refinery in the fourth quarter of 2025. The uncertainty of the long-term sustainability of the refinery and market dynamics were key factors in this decision. We are evaluating the future use of the property and will work with the State of California to continue to supply transportation fuels to meet customer demand. As we work towards decommissioning, we are grateful for our employees' continued focus on safety and operating excellence. We are committed to treating all of our employees and contractors fairly and respectfully throughout the process. We continue to deliver on our strategic priorities and targets. I look forward to providing an update on the next earnings call. Now, over to Kevin.