Phillips 66 Q2 FY2025 earnings call

• Refining: High utilization, set new clean product yield records, market capture improved, and focused on operating excellence and cost reduction. - Midstream: Acquired Coastal Bend, near completion of capacity expansion, Dos Picos II gas processing plant came online ahead of schedule, and on track for EBITDA target. - Shareholder Returns: Returned over $900 million to shareholders this quarter. - Board: Welcomed 3 new Board members with comprehensive onboarding process.

Refining: Refining assets ran at 98% utilization (highest since 2018), clean product yield over 86%, captured 99% of market indicator, and achieved lowest adjusted cost per barrel since 2021. Midstream: Generated adjusted EBITDA of approximately $1 billion, on track to achieve $4.5 billion annual EBITDA target by 2027. Marketing and Specialties: Reported its strongest quarter since 2022.

• Third quarter Chemicals: Expected global O&P utilization rate in mid-90s. - Refining: Expected worldwide crude utilization rate in low to mid-90s, turnaround expense between $50 million and $60 million, reduced full-year turnaround guidance by $100 million to $400 million to $450 million. - Corporate and other costs: Expected to be between $350 million and $370 million.

• Market volatility affecting refining and chemicals margins. - Regulatory changes impacting renewable fuels, such as limiting eligible feedstocks for PTC credits and reducing premiums for sustainable aviation fuel. - Debt levels and working capital fluctuations, including a $1.1 billion outflow in working capital due to increased accounts receivable.

Q: After the last 6 months, are you still comfortable with the forward strategy of the integrated company?

A: Yes, we've had constructive engagement with shareholders, Board is engaged in evaluating strategy, and we're focused on long-term value creation.

Q: How far away are you from the $15 billion EBITDA target?

A: Refining is several dollars per barrel away from mid-cycle indicator of $14 per barrel, Chemicals is still a couple of years out.

Q: Can you talk about the refining results and what helped drive improvement?

A: Combination of disciplined focus, projects, clean product yield, utilization, and cost control efforts.

Q: What about the renewable fuels segment?

A: Renewable margins are weak, running at reduced rates, dealing with regulatory headwinds and working on cost reduction and feedstock options.

Q: Any plans for divestiture of noncore assets?

A: Have an active list of noncore assets to monetize, including some Midstream non-operated assets.