Phillips 66 (NYSE:PSX) Q4 2016 Earnings Conference Call - Final Transcript
Feb 03, 2017 • 12:00 pm ET
Welcome to the Fourth Quarter 2016 Phillips 66 Earnings Conference Call. My name is Sally, and I will be your operator for today's call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. Please note that this conference is being recorded. I will now turn the call over to Rosy Zuklic, General Manager, Investor Relations. Rosy, you may begin.
Thank you, Sally. Good morning and welcome to the Phillips 66 fourth quarter earnings conference call. With me today are Greg Garland, Chairman and CEO; Tim Taylor, President; and Kevin Mitchell, Executive Vice President and CFO.
The presentation material we will be using during the call 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. It is a reminder that we will be making forward-looking statements during the presentation and our question-and-answer session. 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 filings with the SEC. With that, I'll turn the call over to Greg Garland for some opening remarks. Greg?
Greg C. Garland
Thanks, Rosy. Good morning, everyone. Thank you for joining us today. Total adjusted earnings for the fourth quarter were $83 million or $0.16 per share. Market conditions continued to be challenging as Refining, Marketing and Chemicals margins were all lower. We also had significant turnarounds during the quarter. These factors contributed to our disappointing earnings. For the full year, 2016 adjusted earnings were $1.5 billion or $2.82 per share. We operated well and continued to execute on our projects and we maintained financial strength and flexibility, while continuing to return significant capital to our shareholders.
We believe that operational excellence is fundamental for generating and protecting shareholder value. 2016 was our safest year ever and we ran our refineries at 96% utilization, which was a record for our company. Our Marketing and Specialties business also delivered solid results for the year and achieved record volumes. We managed costs well across our organization, holding controllable costs flat despite our significant growth activities.
We reached several milestones in our Midstream growth program in 2016. At Freeport, we completed our 150,000 barrel per day LPG Export Terminal. Commissioning went smoothly and the facility is operating as designed. We shipped our first commercial cargo in mid-December and we expect the facility to be loading to near capacity this month. The Dakota Access ETCOP system is expected to complete in the second quarter. Phillips 66 has a 25% interest in these projects.
In the Gulf Coast, the Beaumont Terminal expansion is ongoing. We commissioned 1.2 million barrels of contracted crude storage in the fourth quarter and 2 million barrels of additional crude and product storage is expected to be available by mid-year. We have plans to ultimately expand this facility to 16 million barrels.
Phillips 66 Partners remains an important part of our Midstream growth