Company Overview - Delek US Holdings is an integrated downstream energy company with operations in refining, logistics, and retail, managing four refineries and a network of pipelines and convenience stores [6][10] - The company generates revenue through refining operations, logistics services, and retail fuel and merchandise sales, primarily serving customers in the southern and southwestern United States [10] Financial Performance - For the trailing twelve months (TTM), Delek reported revenue of $10.7 billion and a net income of -$514.9 million [4] - In the third quarter, Delek achieved a net income of $178 million and an adjusted EBITDA of $759.6 million, significantly improved from $70.6 million a year ago [11] - The stock price as of Thursday was $37.61, reflecting a 99% increase over the past year, outperforming the S&P 500's 13% gain during the same period [3][4] Investment Insights - GeoSphere Capital Management established a new position in Delek, acquiring 150,000 shares valued at approximately $4.8 million, representing 3.7% of its $131.7 million in U.S. equities [2][3] - The investment indicates confidence in Delek's improved fundamentals and cash-flow strength, despite the stock being down roughly 40% from pre-pandemic highs [11][12] - Delek's operational improvements, expanding margins, and rising free cash flow capacity present potential upside for investors, especially with expected SRE grants of around $400 million in the coming months [12]

Financial Data and Key Metrics Changes - For Q4 2024, the company reported a net loss of $414 million, equating to a negative $6.55 per share, with an adjusted net loss of $161 million or negative $2.54 per share [30] - Adjusted EBITDA for the quarter was a loss of $23 million, primarily due to an $80 million decrease in refining contributions attributed to a lower margin environment [31][32] - Cash flow from operations was a use of $164 million, influenced by a net loss and a $71 million outflow related to working capital movements [33] Business Line Data and Key Metrics Changes - The logistics segment delivered $107 million in adjusted EBITDA, continuing to perform strongly despite challenges in the refining segment [32] - Total throughput in Tyler for Q4 was approximately 66,000 barrels per day, with a production margin of $6.66 per barrel [19] - In El Dorado, total throughput was approximately 77,000 barrels per day, with a production margin of $0.56 per barrel [20] Market Data and Key Metrics Changes - The refining margin environment was reported to be around $6 below mid-cycle in Q4 2024, indicating a challenging market [3] - Supply and marketing contributed a loss of $34.6 million in Q4, driven by seasonal low demand trends [27] - Diesel prices weakened by 14 cents per gallon year-on-year, impacting overall market conditions [62] Company Strategy and Development Direction - The company is focused on improving operational performance and profitability through initiatives like zero-based budgeting, which saved around $100 million [12] - The sum of the parts strategy is being emphasized, with significant progress made in unlocking asset value and enhancing the independence of Delek Logistics [7][11] - The company aims to maintain a disciplined approach to capital allocation while being shareholder-friendly, including share buybacks and dividends [14][96] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the prospects for 2025, highlighting improvements in operational performance and cash generation capabilities [17] - The company is confident in completing the deconsolidation of DKL in a methodical manner, which is expected to create value for both shareholders and unit holders [11][49] - Management acknowledged the challenges posed by the refining margin environment but remains committed to enhancing cash flow and operational efficiency [12][86] Other Important Information - The company completed a major turnaround at KSR in Q4, leading to improved operational performance [5] - A significant asset swap between DK and DKL was executed, expected to enhance profitability and cash flow certainty [8] - The company is progressing with capacity expansion in the LiviGas processing complex, expected to be completed in the first half of 2025 [10] Q&A Session Summary Question: Focus on El Dorado's competitiveness - Management highlighted El Dorado as a key focus area, with efforts to improve product mix and operational efficiency [42][44] Question: DKL's growth strategy amidst divestitures - Management clarified that the strategy involves growing DKL's EBITDA while reducing ownership, emphasizing the importance of deconsolidation [46][48] Question: Supply and marketing dynamics in Q4 - Management noted that seasonal demand weakness impacted performance, but there was an improvement compared to the previous quarter [60][62] Question: OpEx guidance for Q1 - Management explained that the increase in OpEx guidance is due to several factors, including higher throughput and planned maintenance [70][74] Question: DKL EBITDA guidance details - Management provided insights into the moving pieces contributing to the DKL EBITDA guidance, emphasizing the growth story and economic separation [75][78] Question: DKL unit repurchase program - Management discussed the timeline for deploying buyback cash and its benefits for both companies, highlighting a balanced capital allocation approach [94][96]