Group 1: RVO Settings and Overall Trends - The 2026 - 2027 RFS final rule unifies the RVO measurement of BBD from "physical gallons" to "RINs", aligning with other fuel categories and simplifying compliance [1][2] - The total RVO in 2026 - 2027 reaches 26.81 and 27.02 billion RIN respectively, with an increase of over 20% compared to 2025, mainly driven by biomass - based diesel and advanced biofuels [2][3] - Cellulose biofuel RVO shows steady growth, reaching 1.36 and 1.43 billion RIN in 2026 - 2027 from 1.21 billion RIN in 2025, but faces terminal demand constraints [3] - The basic RVO of corn ethanol remains stable at 15 billion gallons, reducing the impact on the grain market [3] - The 70% re - distribution of SRE quotas from 2023 - 2025 to 2026 - 2027 is finalized, filling the compliance gap and stabilizing the RIN market [4][14] Group 2: Biomass - Based Diesel Analysis - In 2026, 9.07 billion RIN of biomass - based diesel is equivalent to 5.5 billion gallons, and in 2027, 9.2 billion RIN is equivalent to 6.1 billion gallons, meeting market expectations [2][5][6] - The production of biodiesel and renewable diesel is expected to be 40.7 billion gallons in 2025, 49.9 billion gallons in 2026, and 58.9 billion gallons in 2027. EIA may adjust the balance sheet [6] - The biomass - based diesel volume will increase by 35.1% in 2026 compared to 2025 and 10.9% in 2027 compared to 2026 [6] - North American raw materials (US soybean oil, Canadian canola oil, Mexican UCO) will benefit from the 45Z tax credit policy, while non - North American raw materials will be excluded from the US market [7] - The 45Z tax credit creates price differences between different raw materials. The EPA expects the supply of US soybean oil to meet the growing demand through various means, and the development of US biodiesel will drive global vegetable oil demand [8][9] - The EPA estimates that the price of US soybean oil will be 66 - 68 cents/lb in 2026 - 2027, with a risk of rising to 86 - 90 cents/lb in a high - price scenario [9] Group 3: Policy Adjustments - The EPA delays the effective date of the new equivalent values for renewable diesel, renewable jet fuel, and renewable naphtha to January 1, 2027 [10][11] - The Import RIN Reduction (IRR) policy is postponed to 2028 and later to avoid market supply shocks and rising refined oil prices, which is expected to benefit trade and raw material demand in the US, Canada, and Mexico [12] - Renewable electricity (eRINs) is removed from the list of eligible renewable fuels in the RFS program to strengthen the core position of liquid biofuels [13] - RIN generation rules are tightened, requiring a strict link between RIN generation and transportation use and adding importer joint - liability clauses [15]

Financial Data and Key Metrics Changes - Delek reported adjusted EPS of $1.52 and adjusted EBITDA of approximately $319 million for Q3 2025, reflecting strong momentum and progress from the enterprise optimization plan [3][14] - Net income for the quarter was $178 million, or $2.93 per share, while adjusted net income was $434 million, or $7.13 per share, with adjusted EBITDA reaching approximately $760 million [14][15] - Cash flow from operations was $44 million, but adjusted for working capital, it improved to $150 million, a $202 million increase compared to Q3 last year [16] Business Line Data and Key Metrics Changes - The supply and marketing segment contributed approximately $130 million in the quarter, with wholesale marketing generating about $70 million [12][13] - The logistics segment delivered approximately $132 million in adjusted EBITDA, marking an $11 million increase over the previous record [15] - The enterprise optimization plan (EOP) contributed approximately $60 million to the P&L in Q3, leading to an increase in the annual run rate EOP improvement target from $150 million to at least $180 million [5][9] Market Data and Key Metrics Changes - The refining system achieved record throughput, with Krotz Springs setting a record high [11] - Total throughput in Tyler was 76,000 barrels per day, with a production margin of $11.32 per barrel [11] - El Dorado's throughput was approximately 83,000 barrels per day, with a production margin of $7.43 per barrel [12] Company Strategy and Development Direction - The company is focused on safe and reliable operations, with a strong operational quarter across its refining system [4] - Delek is committed to a disciplined capital allocation framework, having paid approximately $15 million in dividends and repurchased $15 million of its shares [9] - The company is optimistic about the future, expecting to finish 2025 strong and build on current momentum [9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the monetization of granted RINs, expecting approximately $400 million in profits over the next six to nine months [6][24] - The company anticipates continued strength in distillate cracks and a positive outlook for Q4 [47] - Management emphasized the importance of the EOP as a core strength and a continuous improvement culture within the organization [5][40] Other Important Information - The company has increased its full-year EBITDA guidance for Delek Logistics to between $500 million and $520 million [4][9] - The EPA's approval of several SRE petitions is seen as a critical part of the current administration's energy policy, with implications for future profitability [6][24] Q&A Session Summary Question: Refining throughput guidance and RVO risk - Management clarified that they expect to qualify for 100% of SREs for 2025 and are confident in the legal backing for their petitions [20][25] Question: Clarification on total adjusted refining margin - The reported total adjusted refining margin of $688.6 million includes SRE benefits, while gross margins reported do not [29][30] Question: Impact of Permian Sour Gas opportunity - Management highlighted the strategic advantage of being early in the Permian Sour Gas market and the need for rapid solutions for sour gas [32][35] Question: Timing of SRE cash impact on balance sheet - Management expects to see cash from SRE monetization in the next six to nine months [37][38] Question: Drivers of recent EOP cash savings guidance increase - Management emphasized that EOP is a lifestyle across the organization, with ongoing initiatives leading to improved margins and cash flow [39][40] Question: Strength of wholesale and supply results - Management noted that structural improvements in the wholesale business are a significant part of the EOP progress [43][45] Question: Sensitivity of results to Group 3 pricing - Management stated that the enterprise optimization plan aims to reduce dependence on specific market conditions, leading to more structural improvements [58][59] Question: Monetization of $400 million in RINs - Management confirmed that $400 million is a solid number to model for future cash flow from RINs [60][61]

Financial Data and Key Metrics Changes - HF Sinclair reported a third quarter net income attributable to shareholders of $403 million, or $2.15 per diluted share, with adjusted net income of $459 million, or $2.44 per diluted share, compared to $96 million, or $0.51 per diluted share, for the same period in 2024 [13][14] - Adjusted EBITDA for the third quarter was $870 million, up from $316 million in the third quarter of 2024 [13] - The company returned $254 million in cash to shareholders, consisting of $160 million in share repurchases and $94 million in dividends [9][12] Business Line Data and Key Metrics Changes - In the refining segment, adjusted EBITDA was $661 million, significantly up from $110 million in the same quarter of 2024, driven by higher gross margins [14] - The marketing segment reported record EBITDA of $29 million, an increase from $22 million in the third quarter of 2024, attributed to high margins and improved store mix [16] - The lubricants and specialty segments reported EBITDA of $78 million, slightly up from $76 million in the same quarter of 2024, driven by improved mix and FIFO benefits [16] Market Data and Key Metrics Changes - Total sales volumes were 57 million gallons for the third quarter of 2025, down from 69 million gallons in the same quarter of 2024 [16] - Crude oil charge averaged 639,000 barrels per day for the third quarter, marking the second highest quarter on record [15] Company Strategy and Development Direction - HF Sinclair is focusing on expanding its midstream refined products footprint across PADD 4 and PADD 5 to address supply and demand imbalances in key Western U.S. markets [10][11] - The company is evaluating a multi-phased expansion projected to enable incremental supply of up to 150,000 barrels per day into various West Coast markets [11] - Strategic projects include the CARB project at the PSR refinery and a jet project to enhance flexibility in product output [10][12] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the refining market, citing a global shortfall of approximately 800,000 barrels per day and supportive demand for distillate fuels [26][29] - The company anticipates continued strong performance in refining margins due to ongoing supply constraints and increasing demand [27][29] - Management remains committed to returning excess cash to shareholders while maintaining an investment-grade balance sheet [9][12] Other Important Information - HF Sinclair issued $500 million of senior notes at 5.5% due 2032 to redeem higher interest notes, allowing for a reduction in the weighted average cost of debt [17] - The company has approximately $1.5 billion in cash and a debt-to-cap ratio of 23% as of September 30, 2025 [17] Q&A Session Summary Question: Can you elaborate on the multi-phased expansion targeting PADD 4 and PADD 5? - Management believes they are strategically positioned due to existing infrastructure and the ability to quickly deliver refined products to markets facing shortages [21][24] Question: What is the outlook for refining margins in the near term? - Management is bullish on refining margins, expecting continued support from demand for distillate fuels and low product inventories [25][27] Question: Can you clarify the impact of small refinery exemptions (SREs) on your financials? - The $115 million benefit from SREs is reflected in cost of sales, while the $56 million is from trading benefits associated with RINs [35][46] Question: How do you plan to finance the pipeline expansion projects? - Management indicated multiple financing options, including liquidity on the balance sheet and potential joint ventures [60][61] Question: What is the current state of the lubricants market and M&A opportunities? - The lubricants market is performing well, and the company continues to explore bolt-on acquisitions to enhance its portfolio [73][76]

Financial Data and Key Metrics Changes - The company reported a consolidated net loss of $90 million for the second quarter of 2025, with a loss per share of $1.14 and an EBITDA loss of $24 million [5][11] - Adjusted EBITDA for the quarter was $99 million, with an adjusted loss per share of $0.23 [11] - The negative mark to market impact on the RFS obligation was $89 million, and the unfavorable inventory valuation impact was $32 million [11] Business Line Data and Key Metrics Changes - In the Petroleum segment, total throughput was approximately 172,000 barrels per day, with a light product yield of 99% on crude oil processed [5] - Adjusted EBITDA for the Petroleum segment was $38 million, driven by increased Group 3 crack spreads, offset by higher RIN prices and lower throughput volumes [11] - The Fertilizer segment achieved an adjusted EBITDA of $67 million, supported by higher UAN and ammonia sales pricing and volumes [11] Market Data and Key Metrics Changes - Group 3 2-1-1 benchmark cracks averaged $24.02 per barrel for the second quarter, compared to $18.83 per barrel in the same period last year [6] - Average RIN prices for 2025 were approximately $1.11, an increase of over 70% from the prior year [6] - Nitrogen fertilizer prices for 2025 were higher for both UAN and ammonia compared to 2024 [10] Company Strategy and Development Direction - The company plans to focus on improving capture rates, reducing costs, and growing the business profitably [25] - The alkylation project at Wynnewood is expected to enhance the ability to produce premium gasoline, with completion anticipated in 2027 [19] - The company is cautiously optimistic about the refining sector's near and medium-term outlook, given low refined product inventories and steady demand [20] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism regarding the refining market, citing low inventories and steady demand for refined products [17][20] - The company is awaiting final regulations from the IRS regarding PTC benefits, which could positively impact the Renewables segment [9][21] - Management indicated that the energy transition is evolving, with a belief that gas and diesel will remain essential fuels for the foreseeable future [48] Other Important Information - The company ended the quarter with a consolidated cash balance of $596 million and total liquidity of approximately $759 million [15] - Significant cash uses included $189 million for capital and turnaround spending and a $70 million prepayment on the term loan [13] Q&A Session Summary Question: Impact of excess inventory on financials - Management acknowledged that excess inventory during turnaround seasons negatively impacted financial performance, estimating a 7% to 9% decline in capture rates due to timing of product sales [31][35] Question: 2026 CapEx and turnaround outlook - Management indicated that there are no major turnarounds planned for 2026, and guidance on capital spending will be provided later in the year [36] Question: Strategic focus for new leadership - Management emphasized the need for diversification and the potential for future acquisitions to mitigate reliance on a single market [40] Question: Dividend reinstatement considerations - Management expressed a desire to return to dividend payments as soon as possible, with ongoing discussions at the board level [48][51] Question: Small refinery exemptions outlook - Management discussed the ongoing challenges with small refinery exemptions and the potential for legal action if necessary, emphasizing the importance of these exemptions for rural refineries [54][56]