Delek US(US:DK)2026-02-27 17:02Financial Data and Key Metrics Changes - In Q4 2025, Delek reported an adjusted EPS of $0.44 and adjusted EBITDA of approximately $226 million, indicating strong fourth-quarter results [4][12] - For the full year 2025, adjusted EBITDA was approximately $763 million, excluding SREs [12] - Net income for Q4 was $78 million or $1.26 per share, with adjusted net income of $143 million or $2.31 per share [12] Business Line Data and Key Metrics Changes - The refining segment saw a decline in adjusted EBITDA by $91 million due to seasonality, while supply and marketing contributed approximately $23 million [13] - The logistics segment delivered approximately $142 million in adjusted EBITDA, continuing strong performance [13] Market Data and Key Metrics Changes - DKL had a record year with approximately $536 million in adjusted EBITDA and announced 2026 EBITDA guidance in the range of $520 million to $560 million [5] - DKL is expected to achieve over 80% third-party EBITDA in 2026, reflecting strong growth in the Delaware Basin [7] Company Strategy and Development Direction - The company is focused on improving free cash flow and has raised its Enterprise Optimization Plan target to at least $200 million annually [5][9] - The strategy includes enhancing operational reliability and flexibility at refineries, particularly at Big Spring, which is undergoing a planned turnaround [8][45] - The company aims to ensure that the value of its midstream business is fully reflected in share prices through various strategic initiatives [43] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ongoing strength of the Enterprise Optimization Plan and its impact on cash flow generation [52] - The company remains committed to a balanced capital allocation strategy, including dividends and share buybacks, while maintaining a strong balance sheet [11][53] Other Important Information - Cash flow from operations in Q4 was $503 million, with a significant improvement of $211 million compared to the previous year [15] - The company paid approximately $15 million in dividends and repurchased about $20 million of its shares during the quarter [11] Q&A Session Summary Question: Cash inflow on remaining SREs and future RINs value - Management discussed the monetization of RINs and the importance of SREs for maintaining local jobs and affordable fuel [20][22] - They confirmed that they expect to monetize remaining RINs in the first half of 2026 [31] Question: Consolidation of DKL and Big Spring turnaround initiatives - Management highlighted ongoing efforts to ensure the value of the midstream business is reflected in share prices and discussed specific initiatives for improving performance at Big Spring [40][45] Question: Drivers of raised cash flow guidance - Management attributed the raised cash flow guidance to the success of the Enterprise Optimization Plan and ongoing operational improvements [51][52] Question: Supply line performance and future expectations - Management noted that the supply and marketing segment has shown strength due to EOP initiatives and market conditions, but some volatility is expected [60][62]