Financial Performance - Adjusted EPS was $7.13 in 3Q 2025[17] - Adjusted EBITDA reached $759.6 million[18] - CFO (ex WC and SREs) amounted to $150 million[19] Enterprise Optimization Plan (EOP) - The company achieved approximately $60 million in EOP improvements in 3Q 2025[9] - The run-rate cash flow improvement guidance is raised to at least $180 million from the previous $130 - $170 million[12] - $50 million margin improvement plan stems from enhanced logistics, reduced costs, higher quality product slate and higher yields at El Dorado[37] Delek Logistics (DKL) - DKL is increasing its expected 2025 EBITDA range to $500 million[13] - Increased DKL Distribution: $1.12 per unit ($4.48 per unit annualized)[15] Small Refinery Exemptions (SREs) - The majority of pending 2019-2024 SRE petitions were approved[13] - A cash inflow of approximately $400 million is expected over the next six to nine months due to SREs[14] - The impact of (50% RVO Exemption 1Q to 3Q 2025) is $160.2 million[21] Capital Returns - Approximately $30 million was allocated to dividends and buybacks in 3Q 2025[15, 17] - Delek has led the group in the last twelve months in total shareholder returns, outperforming the group average by 7%[26]

Financial Data and Key Metrics Changes - The company reported strong third quarter results with Adjusted EBITDA of $372 million and adjusted net income of $5.95 per share, reflecting a significant increase from previous quarters [3][11] - The refining segment generated Adjusted EBITDA of $338 million, a substantial rise from $108 million in the second quarter, driven by small refinery exemptions that contributed approximately $203 million [11][3] - Cash provided by operations was $219 million, with a working capital outflow of $147 million primarily due to higher RIN inventory [15] Business Line Data and Key Metrics Changes - The retail segment achieved Adjusted EBITDA of $22 million, slightly down from $23 million in the second quarter, but continues to outperform mid-cycle targets [14] - The logistics segment reached a record Adjusted EBITDA of $37 million, up $7 million from the second quarter, reflecting improved operations in Montana and Wyoming [14] Market Data and Key Metrics Changes - The combined throughput for the third quarter was 198,000 barrels per day, with Hawaii throughput at 82,000 barrels per day and a new monthly record of nearly 90,000 barrels per day set in September [8][9] - The fourth quarter combined index averaged $15.55 per barrel in October, an increase from the third quarter, driven by strong market conditions [3][13] Company Strategy and Development Direction - The company is expanding its development pipeline with new store openings in the Pacific Northwest and redevelopment opportunities in Hawaii [4] - Focus on low-capital, high-return projects to enhance mid-cycle earnings power, particularly in Montana [6] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the market outlook, citing strong product margins due to tight supply and demand balances and geopolitical disruptions [3] - The company anticipates lower throughput and increased costs in the fourth quarter due to routine maintenance, with expected system-wide throughput between 184,000 and 193,000 barrels per day [9][10] Other Important Information - The company closed a joint venture with Mitsubishi and Neste for Hawaii Renewables, receiving $100 million in proceeds [6] - The balance sheet is strengthening, with gross term debt at $642 million, positioning the company at the low end of its leverage target [16] Q&A Session Summary Question: Washington capture lower than expectations - Management confirmed that the lower capture was primarily due to jet versus diesel dynamics, with expectations for improvement in the fourth quarter [19] Question: Turnaround schedule for 2026 - Management indicated planned turnarounds in Hawaii and Washington, with Wyoming's turnaround deferred [20] Question: Cash usage priorities - Management highlighted a focus on completing the Hawaii Renewables project while considering share repurchases [24] Question: Sustainability of Singapore margin strength - Management noted strong Singapore margins driven by tight inventories and geopolitical disruptions, with expectations for continued strength [26] Question: Q4 capture expectations - Management provided guidance for refining index and capture levels, with expectations for seasonal dynamics to impact results [30] Question: RINs and small refinery exemptions - Management stated they will pursue all opportunities for exemptions consistent with the law and are prepared for a range of outcomes [38][41] Question: Montana operating costs sustainability - Management expects seasonal improvements in operating costs but maintains a target of $10 per barrel for the Montana team [43]

Financial Data and Key Metrics Changes - The company reported strong third quarter results with adjusted EBITDA of $372 million and adjusted net income of $5.95 per share, reflecting a significant increase from previous quarters [3][10] - The earnings boost included approximately $200 million from small refinery exemptions, contributing to the overall financial performance [3][10] - Cash provided by operations was $219 million, with a working capital outflow of $147 million primarily due to higher RIN inventory [14] Business Line Data and Key Metrics Changes - The refining segment generated adjusted EBITDA of $338 million, a substantial increase from $108 million in the second quarter [10] - The logistics segment achieved a record adjusted EBITDA of $37 million, up $7 million from the second quarter, driven by higher system utilization [12] - The retail segment's adjusted EBITDA was $22 million, slightly down from $23 million in the second quarter, but marked the third consecutive quarter of record LTM retail adjusted EBITDA at $86 million [13] Market Data and Key Metrics Changes - The combined throughput for the third quarter was 198,000 barrels per day, with Hawaii throughput at 82,000 barrels per day and a new monthly record of nearly 90,000 barrels per day set in September [3][7] - The fourth quarter combined index averaged $15.55 per barrel in October, up from the third quarter, primarily driven by strength in the Singapore market [3][11] - Margin capture in Hawaii was reported at 111%, while Montana and Wyoming captured 93% and 91% respectively, reflecting a return to normal operations [10][11] Company Strategy and Development Direction - The company is expanding its development pipeline with new store openings and redevelopment opportunities, particularly in the Pacific Northwest and Hawaii [4][5] - Strategic objectives include low-capital, high-return projects to enhance the mid-cycle earnings power of the Billings asset [5] - The company is focused on completing the Hawaii SAF project and has formed a joint venture with Mitsubishi and Neste, receiving $100 million in proceeds [5][6] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the market outlook, citing tight supply and demand balances and geopolitical disruptions driving product margins [3] - The company anticipates lower throughput and increased costs in the fourth quarter due to routine maintenance, with expected system-wide throughput between 184,000 and 193,000 barrels per day [8][9] - Management highlighted the strong balance sheet and operational momentum as key factors for pursuing growth and opportunistic share repurchases [6][15] Other Important Information - The company has a gross term debt of $642 million, positioning it at the low end of its leverage target [15] - The Hawaii Renewables joint venture is expected to bolster liquidity, alongside future monetization of excess RINs [15] Q&A Session Summary Question: Washington capture lower than expected - Management confirmed that the lower capture was primarily due to jet versus diesel dynamics, with expectations for improvement in the fourth quarter [18][19] Question: Turnaround schedule for 2026 - Management indicated planned turnarounds in Hawaii and Washington, with a deferral of the Wyoming turnaround [19] Question: Cash usage priorities - Management stated that the improving balance sheet allows for growth pursuits and share repurchases, with a focus on completing the Hawaii Renewables project [22][23] Question: Sustainability of Singapore margin strength - Management noted strong Singapore margins driven by tight inventories and geopolitical disruptions, with expectations for continued strength [25][26] Question: RINs from small refinery exemptions - Management expressed willingness to pursue additional opportunities for exemptions and emphasized flexibility in managing RIN lot liability [37][39] Question: Montana operating costs sustainability - Management expects seasonal improvements in operating costs but anticipates a return to the $10 per barrel target in the long term [41]

Core Insights - Delek US Holdings, Inc. (DK) is a significant player in the U.S. downstream energy sector, focusing on refining crude oil and managing logistics, producing essential fuels like gasoline, diesel, and jet fuel [1] - The company has seen a 40.8% increase in share price over the past six months, outperforming the broader refining and marketing oil and gas sub-industry and the overall oils and energy sector [2] Performance Overview - DK's logistics segment achieved a record $117 million in adjusted EBITDA in Q1 2025, contributing to strong cash flows and growth [7] - The refining operations have improved, with throughput guidance for Q2 2025 set between 302,000-318,000 barrels per day, and margin improvements expected at El Dorado [9][11] - Seasonal demand is anticipated to enhance refining margins in Q2 2025 due to increased gasoline demand and tighter supply conditions [11] Strategic Positioning - DK's midstream assets are strategically located in the Permian Basin, benefiting from sour gas gathering and water midstream opportunities, with the Libby 2 gas plant nearing completion [10] - Management has expressed confidence in the long-term strategy, highlighting operational improvements and midstream growth [12] Challenges and Risks - The refining segment reported an adjusted EBITDA loss of $27.4 million in Q1 2025, a significant decline from $110.1 million in Q1 2024, primarily due to lower crack spreads [13] - Execution risks related to the Enterprise Optimization Plan could impact cash flow improvements, with potential delays in operational efficiencies and cost cuts [15] - Regulatory uncertainty surrounding Small Refinery Exemptions poses a risk, as the approval timeline and political factors remain hurdles [17] Investment Considerations - DK presents both opportunities and risks, with strong logistics performance and strategic positioning in the Permian Basin, but ongoing challenges in refining margins and high capital intensity could pressure near-term cash flows [21][22] - A cautious investment approach is suggested, with a hold strategy recommended until a more favorable entry point is identified [23]