Phillips 66 at JPMorgan Energy, Power, & Renewables Conference Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: John Macalister Royall - JPMorgan Chase & Co, Research Division - Analyst : So why don't we start with the balance sheet. You've set out a guide of 25% to 30% net debt to capital. You were at the bottom end in the end of 1Q. But you've recently closed DCP and presumably have moved up that scale a bit. Where would you like to be positioned within that range today, particularly given some of the uncertainty in the environment?

Question: John Macalister Royall - JPMorgan Chase & Co, Research Division - Analyst : And then maybe we can move on to capital allocation. You laid out a target of $10 billion to $12 billion returned to shareholders through 2024 at your Investor Day last year. If '23 and '24 finished below mid-cycle, is it possible you could come in below that guide? Or do you expect to execute on that guidance regardless of the direction of the cycle? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JUNE 21, 2023 / 3:20PM, PSX.N - Phillips 66 at JPMorgan Energy, Power, & Renewables Conference

Question: John Macalister Royall - JPMorgan Chase & Co, Research Division - Analyst : And then one of your big initiatives since taking over, Mark has been cost reductions. And I think the most recent number you've given is that you've achieved $600 million to date or over $600 million. I know you plan to give us a bit more on the 2Q call, but can you give us some details on the progress made so far on your cost save program? And maybe some of the key sources, the final piece is to get to your $1 billion target?

Question: John Macalister Royall - JPMorgan Chase & Co, Research Division - Analyst : So on the refining side of the business, there's been some news flow about the closure of an FCC at Bayway. Are these reports true? And how should we think about the impact on 2Q throughputs and captures if so? And just a general update there.

Question: John Macalister Royall - JPMorgan Chase & Co, Research Division - Analyst : Great. And then next one is on renewable diesel and the Rodeo conversion. How do you view the attractiveness of the RD market today and the returns in today's market relative to your initial expectations and maybe particularly in light of the news that's come out about the RVO.

Question: John Macalister Royall - JPMorgan Chase & Co, Research Division - Analyst : And that's a good segue. Maybe we can stick with sustainable aviation fuel. And I know you're producing that SAF at Humber. Are there learnings from being a producer on Humber that can be applied to Rodeo? And if you could just maybe elaborate a little bit more on the opportunity set for SAF at Rodeo? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JUNE 21, 2023 / 3:20PM, PSX.N - Phillips 66 at JPMorgan Energy, Power, & Renewables Conference

Question: John Macalister Royall - JPMorgan Chase & Co, Research Division - Analyst : And then I have one more on Rodeo, which I think you've answered, but I just -- I'll ask anyway just to be sure. In the hypothetical where we kind of come to year-end and West Coast refining feels very strong and RD maybe looks less attractive kind of during that time period. Is there a chance the project gets delayed and the facility continues to run as a refinery just to maximize near-term cash flow?

Question: John Macalister Royall - JPMorgan Chase & Co, Research Division - Analyst : And just back to traditional refining. I'm just thinking about the gasoline crack now. We're in the beginning part of summer driving season. How are you thinking about gasoline cracks right now? And how do you think about expectations for summer driving season? It seems like things are off to a decent start coming off kind of a tough year last year.

Question: John Macalister Royall - JPMorgan Chase & Co, Research Division - Analyst : Then maybe on to a business that Mark has spent a lot of time in, the Chemicals business. ethane-based, ethylene margins have recovered modestly off of bottoms. In 1Q would seem relatively flat for most of the year. What are your expectations for margins in the second half? And can margins show a strong recovery in the event of a less robust reopening in China?

Question: John Macalister Royall - JPMorgan Chase & Co, Research Division - Analyst : Okay. We have about 4 minutes remaining. Do we have any questions from the audience? No? Okay. So Mark, we're finishing up the second quarter here and Jeff, and we've gone from cracks looking pretty weak in April to a nice recovery in May and June, particularly on the gasoline side, which we discussed. Any early expectations you can give us going into the 2Q quarter?

Question: John Macalister Royall - JPMorgan Chase & Co, Research Division - Analyst : The print, the 2Q print.

Question: John Macalister Royall - JPMorgan Chase & Co, Research Division - Analyst : And let's stick with crude differentials that you brought up, Jeff. And what's your view on coastal light-heavy differentials for the remainder of the year. Maya has come in since the OPEC+ cuts were announced, but still feels relatively elevated relative to history. What are the key drivers there? And what should we look for in terms of coastal light heavy diffs?

Question: John Macalister Royall - JPMorgan Chase & Co, Research Division - Analyst : I think I have time to squeeze one more in. So you had a heavy first quarter maintenance period that followed a heavy 2022 maintenance year. Is your system fully caught up now in terms of the refining? And are you moving back to a more normalized schedule for turnarounds?

Question: John Macalister Royall - JPMorgan Chase & Co, Research Division - Analyst : Great. Well, we're right up against time here. So I just want to thank Mark and Jeff for coming and I appreciate it, and have a good rest of your day.