Phillips 66 (NYSE:PSX) Q3 2023 Earnings Call Transcript
Phillips 66 (NYSE:PSX) Q3 2023 Earnings Call Transcript October 27, 2023
Phillips 66 misses on earnings expectations. Reported EPS is $4.63 EPS, expectations were $4.78.
Operator: Welcome to the Third Quarter 2023 Phillips 66 Earnings Conference Call. My name is Carla and I will be your operator for today’s call. [Operator Instructions] Please note that this conference is being recorded. I will now turn the call over to Jeff Dietert, Vice President of Investor Relations. Jeff, you may begin.
Jeff Dietert: Good morning and welcome to Phillips 66 third quarter earnings conference call. Participants on today’s call will include Mark Lashier, President and CEO; Kevin Mitchell, CFO; Tim Roberts, Midstream and Chemicals; Rich Harbison, Refining; and Brian Mandell, Marketing and Commercial. 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 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 will turn the call over to Mark.
Mark Lashier: Thanks, Jeff. Good morning and thank you for joining us today. We are pleased to report another quarter of strong financial and operating results and we continue to execute on our strategic priorities to increase shareholder value. Our achievements to-date have enabled us to make significant progress toward the commitments we made to shareholders a year ago at Investor Day. We are confident in our ability to exceed these commitments and we will provide an update today. Slide 4 shows the evolution of our portfolio. We are much more than a refining company. We are differentiated by an integrated and diversified Midstream, Chemicals, Refining, Marketing and Specialties portfolio that generates free cash flow through the economic cycles.
Our global commercial supply and trading organization leverages our assets to generate incremental value. We continue to execute our strategy to increase more stable cash flows in Midstream. We see more growth opportunities as U.S. natural gas and natural gas liquids production is expected to outpace crude oil. The demand fundamentals are strong as NGLs and petrochemical feedstocks remain the fastest growing segment of liquids demand. The DCP acquisition earlier this year strengthened our competitive position by integrating our NGL wellhead-to-market value chain and adds over $1 billion to mid-cycle adjusted EBITDA. Our current synergy run-rate is on pace to deliver more than $400 million. Midstream’s stable cash generation covers the company’s dividend and our sustaining capital.
We will continue to capitalize on our integrated and diversified portfolio to deliver results. Moving to Slide 5. At our Investor Day in November 2022, we targeted $3 billion in mid-cycle EBITDA growth by 2025. This included NGL wellhead-to-market, Rodeo Renewed, business transformation and CPChem growth projects. Given the substantial progress employees across the company have made, we are raising the bar. We now expect to grow mid-cycle adjusted EBITDA by $4 billion between 2022 and 2025, reflecting a $1 billion increase from our original target. This includes additional value from business transformation, midstream synergies and commercial contributions. We are increasing the business transformation target to $1.4 billion from $1 billion.
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