Phillips 66

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 2 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 first quarter earnings call. During the quarter, we continued to execute on our transformational strategy and deliver returns to our shareholders. By staying focused on what we can control, we made important progress across our 2027 priorities, improving refining operations, enhancing our NGO value chain, and executing on our growth opportunities. Underpinned by the strength of cash flow contributions from our midstream business, we returned $716 million to shareholders this quarter. We did this in a challenged macro environment in refining, renewables, and chemicals. We also executed one of the largest spring turnaround programs in the history of Phillips 66 that impacted volumes and margins. These important investments position us well for the future. While our results reflect the challenges of this environment, our ability to return significant capital to shareholders demonstrates the strength of our integrated business model. We remain focused on strategy execution, disciplined capital allocation, and cash returns to shareholders. Slide four shows how we continue to improve refining operations through targeted low-capital high return projects. These recent investments lead to greater feedstock flexibility and yield. Before I touch on some of these projects, I want to highlight the success of our spring turnaround program, which was completed safely, on time, and under budget. Furthermore, our refineries not in turnaround this quarter ran well. These accomplishments would not have been possible without our employees' unwavering dedication to operating excellence and safety. Thank you to the refining team. Well done. The bulk of the annual turnaround activity and associated costs are largely behind us, which you will see reflected in our guidance going forward. We are well positioned to capture upside in the market for the remainder of the year. During this quarter's turnarounds, we achieved meaningful project milestones. At the Sweeney Refinery, we removed constraints and enhanced crude flexibility. We now have an additional 40,000 barrels per day of heavy light crude switching capability. Depending on market conditions, we will run additional Permian barrels, displacing imported heavy crudes. We expect this flexibility in a rapidly changing price environment will enhance long-term margins at this strategic refinery. Also, at our Bayway facility, we completed a project that increases our FCC native feedstock capabilities, reducing the need for BGO imports. Both of these low capital and high return projects are enabling us to enhance market capture. We're committed to our refining business. We have a clear path to increase operational runtime, improve yields, and reduce cost per barrel. Moving to slide five, Midstream is critical to our integrated strategy. It's a key growth driver and creates ongoing value for shareholders. We've made disciplined investments to build out our integrated well-head-to-market strategy. a strategy that allows us to efficiently move products from the wellhead to high-value end markets. This strategy provides significant stability to our financial results and adds material benefits to other segments. Our value chain creates optionality in product placement and supports reliable, long-term cash generation. We acquired Epic NGL on April 1st, which is immediately accretive and expands our takeaway capacity from the Permian. The acquired assets are highly integrated with the existing Phillips 66 asset base and provide long-term fee-based earnings growth. This acquisition enhances our ability to offer producers unmatched flow assurance while expanding connectivity to end markets. We also continue to expand our natural gas gathering and processing footprint in the Permian Basin. Our Dos Picos II expansion plant, which was part of our pinnacle acquisition strategy, is expected to come online in the third quarter of 2025. Today, we're announcing the construction of another gas processing plant in the Permian. The Iron Mesa plant will serve Delaware and Midland Basin production and will be funded within our existing capital budget. The facility is expected to come online in the first quarter of 2027. Both of these projects are great examples of our highly strategic and selective investments at low build multiples. They contribute to our plan to organically grow midstream run rate adjusted EBITDA to $4.5 billion by 2027. At Phillips 66, we've embraced a culture of continuous improvement and have taken decisive action to create long-term value for our shareholders. Slide 6 shows some of the achievements over the past three years. We have divested more than $3.5 billion of non-core assets at high multiples while making strategic acquisitions within midstream at attractive multiples to build a world-class NGL value chain. In refining, we're improving competitiveness by optimizing our assets to align with long-term demand trends. We've made operational improvements throughout the portfolio, and we've rationalized our footprint with the sale of Alliance, conversion of Rodeo, and plan to cease operations and repurpose the land at Los Angeles. We have taken steps to execute on our transformational strategy, and we will do more. We remain committed to maintaining safe and reliable operations, investing in high return growth opportunities, and capturing integration benefits. We will return over 50% of net operating cash flow to shareholders through share repurchases and a secure, competitive, and growing dividend. Demonstrating this commitment, we recently announced a 5 cents per share increase in our quarterly dividend. Since our formation in 2012, The annual dividend has increased every year, resulting in a significant 15% compounded annual growth rate. We have delivered over $14 billion to shareholders since July 2022. We will continue to create long-term value for shareholders as we execute on our 2027 strategic priorities, maintaining operational excellence, pursuing disciplined growth, returning capital, and ensuring financial strength. Over to Kevin to cover the results for the quarter.

Thank you, Mark. First quarter reported earnings were $487 million, or $1.18 per share. The adjusted loss was $368 million, or $0.90 per share. Both the reported earnings and adjusted loss include the $246 million pre-tax impact of accelerated depreciation due to our plan to cease operations at the Los Angeles refinery at the end of 2025. The adjusted loss excludes the $1 billion pre-tax gain on disposition of our non-operated interest in co-op. We generated $187 million of operating cash flow and returned $716 million to shareholders, including $247 million of share repurchases. I will now cover the segment results on slide eight. Total company adjusted loss increased $307 million compared with the prior quarter. Midstream results decreased mainly due to lower volumes because of the turnaround activity in refining. This was partly offset by the impact of higher commodity prices benefiting gathering and processing results. Also during the quarter, the Sweeney Hub had record fractionation volumes of 650,000 barrels per day. In chemicals, results increased mainly due to higher volumes and lower costs driven by turnaround activity in the prior quarter. Lower refining results reflect the impact of lower volumes and higher costs driven by turnaround activity and higher utility prices. This is partly offset by increased realized margins from higher market cracks. Marketing and specialties results improved due to lower depreciation and higher margins in the international business. In renewable fuels, results decreased mainly due to the transition from blenders tax credits to production tax credits, inventory impacts, and lower international results. Slide 9 shows cash flow for the first quarter. Cash from operations, including working capital, was $187 million. We received $2 billion from the sales of the non-operated equity interests in Co-op and the Gulf Coast Express pipeline. We paid down $1.3 billion of debt and returned $716 million to shareholders through share repurchases and dividends. We funded $423 million of capital spending. Our ending cash balance was $1.5 billion. Looking ahead to the second quarter of 2025 on slide 10. In both chemicals and refining, we expect utilization rates to be in the mid-90s. In refining, we expect turnaround expense to be between $65 and $75 million. We anticipate corporate and other costs to be between $340 and $360 million. Now we will move to slide 11 and open the line for questions, after which Mark will wrap up the call.