Phillips 66

Welcome to the fourth quarter and full year 2025 Ellipse 66 earnings conference call. My name is Michael, and I'll be your operator for today's call. At this time, all participants are in listening mode. Later, we will conduct a question and answer session. Please note that this conference is being recorded. I'll now turn the call over to Sean Maher, Vice President of Investor Relations and Chief Economist. Sean, you may begin.

Today's call will include Mark Lazor, 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 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.

Thank you, Sean. Welcome, everyone, to our fourth quarter earnings call. We delivered strong financial and operating results, reflecting our continued focus on world-class operations. Our disciplined approach to improving refining performance has delivered high utilization rates, record clean product yields, and enhanced flexibility. In midstream, we achieved another quarter of record NGL transportation and fractionation volumes driven by our Coastal Bend and Dos Picos II expansions. More importantly, our team remains focused on continuous improvement. We're lowering our cost structure and increasing reliability so that we can maximize profitability in any market environment. Moving to slide four, Safe, reliable operations coupled with disciplined investment generates compelling shareholder returns. Safety is foundational. I'm pleased to report that 2025 was our best year ever for safety performance. I'm very proud of our employees for their commitment to safety. I would like to congratulate them on a job well done. In 2025, we optimized our portfolio through multiple strategic actions. We acquired the remaining 50% interest in the WRB joint venture, sold a 65% interest in the Germany and Austria retail marketing business, and idled the Los Angeles refinery. We also improved our competitive position in midstream with the acquisition of Coastal Bend and expansion of Dos Picos II. The strong operating results are a reflection of a concerted multi-year plan and we're not done yet. In refining, we're targeting adjusted controllable cost per barrel to be approximately $5.50 on an annual basis by the end of 2027. We've also streamlined our business to focus on the areas where we have a competitive advantage. As an example, our acquisition of the remaining 50% interest in WRB increased our exposure to Canadian heavy crude differentials by 40%. These differentials have widened by approximately $4 a barrel since the announcement of the acquisition. Phillips 66 assets are well positioned to capture opportunities in markets across the value chain. Combining operating excellence, our integrated portfolio, and our disciplined capital allocation mindset, we'll continue to deliver shareholder returns across commodity cycles. Last quarter, Rich discussed the progress and future of refining. This quarter, Don will share more about our plans in Midstream.