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- **Record Q3 Performance**: Adjusted EBITDA of $760 million, driven by $60 million EOP contribution and $400 million SRE monetization.
- **EOP Expansion**: Annual run rate guidance raised to $180 million, with 73 initiatives improving margins and cost efficiency.
- **DKL Growth**: EBITDA guidance raised to $500-520 million, fueled by sour gas processing and Delaware Basin expansion.
- **Shareholder Value**: $30 million returned via dividends and buybacks, highest total return yield among peers.

**【CEO Summary Section】**
- **Q3 2025 Results**: Excluding SREs, reported adjusted EPS of $1.52 and adjusted EBITDA of $319 million. Enterprise Optimization Plan (EOP) contributed $60 million, driving EOP guidance increase to $180 million annual run rate.
- **SRE Progress**: EPA granted 2019-2024 SRE petitions, with $400 million expected from 2023-2024 RIN monetization. 2019-2022 RINs remain unresolved, but legal strategy aims to maximize value.
- **DKL Growth**: Full-year EBITDA guidance raised to $500-520 million, driven by sour gas solution and Delaware Basin expansion.
- **Shareholder Returns**: $15 million in dividends and buybacks, highest total return yield among peers.

**【CFO Financial Commentary】**
- **Q3 Financials**: Net income $178 million, adjusted EBITDA $760 million. Refining segment EBITDA up $583 million, Logistics segment EBITDA $132 million (new quarterly record).
- **Cash Flow**: Operating cash flow $44 million, with $150 million adjusted for working capital. Capital expenditures $91 million, $44 million for DKL growth projects.
- **Q4 Outlook**: Operating expenses $205-220 million, G&A $52-57 million, D&A $100-110 million, net interest $85-95 million.

**【Q&A Key Highlights】**
- **SRE Monetization**: $400 million expected over 6-9 months; cash allocation aligns with disciplined capital strategy.
- **EOP Drivers**: 73 initiatives across cost and margin, with 100% of refining capacity qualifying for 2025 SREs.
- **Permian Sour Gas**: DKL's Libby 2 plant on track to process sour gas, supporting Delaware Basin growth.
- **Sustainability of SREs**: Legal precedence and court rulings support long-term eligibility, transcending administrations.

Delek US Holdings, Inc. (DK) Q3 2025 Earnings Call Transcript

- **EOP Run Rate Boosted**: EOP guidance raised to $130-$170 million, with $30 million Q2 impact, driving free cash flow and breakeven reduction.\n- **Logistics Dominance**: DKL delivers $120 million Q2 EBITDA, with 2025 guidance of $480-$520 million, 80% from third-party business.\n- **Shareholder Value**: $13 million buybacks and $16 million dividends highlight disciplined capital allocation.\n- **SRE Confidence**: EPA poised to favorably resolve SRE petitions, valued above current market cap.\n- **Operational Excellence**: Record throughput across refineries, with El Dorado achieving $1.45/barrel EOP impact.\n- **Market Strength**: Diesel demand resilient, PADD II inventories low, supporting margin stability.\n

**【CEO Summary Section】**
- **EOP Guidance Increased**: Raised EOP (Enterprise Optimization Plan) run rate to $130 million to $170 million, up from $120 million, with $30 million of benefits realized in Q2.\n- **Sum of the Parts Progress**: Delek Logistics (DKL) achieved $120 million in quarterly EBITDA, with 2025 guidance of $480 million to $520 million. DKL's third-party EBITDA grew to 80% of total, up from 40%.\n- **Shareholder Returns**: Paid $16 million in dividends and repurchased $13 million in shares, maintaining a balanced capital allocation strategy.\n- **Small Refinery Exemptions (SRE)**: Confident in favorable EPA decision, with pending petitions valued at over current market cap.\n- **Operational Excellence**: Record throughput across refineries, with El Dorado achieving $1.45 per barrel EOP impact.\n
**【CFO Financial Commentary】**
- **Q2 Financials**: Net loss of $106 million (-$1.76 per share), adjusted EBITDA of $170.2 million (up 58% YoY). Logistics segment contributed $120 million EBITDA, a new quarterly record.\n- **Cash Flow**: Operating cash flow of $51 million, with $164 million in capital expenditures (70% for DKL growth).\n- **Balance Sheet**: Delek standalone net debt stable at $275 million, with DKL liquidity enhanced by $1 billion high-yield offering.\n
**【Q&A Key Highlights】**\n- **EOP Upside**: EOP improvements driven by margin enhancements, with potential for further upside as structural changes take hold.\n- **DKL Growth**: DKL's sour gas gathering and acid gas injection capabilities position it for Delaware Basin growth, with Q3 volumes expected to rise.\n- **Market Outlook**: Optimistic on diesel demand, with PADD II distillate inventories below 5-year averages and utilization rates high.\n- **SRE Proceeds**: EPA likely to address refinery compliance issues, with proceeds used to compensate for past compliance costs.\n- **Refinery Performance**: Big Spring and El Dorado showing margin improvements through product diversification (e.g., jet fuel, premium asphalt).\n- **Net Crack Metric**: Introduced to reflect inland refining dynamics, excluding RVO and backwardation impacts.\n

Delek US Holdings, Inc. (DK) Q2 2025 Earnings Call Transcript

- **EOP Driving $120M+ Annual Cash Flow Improvement**: Refinery operational excellence and cost reduction initiatives on track to meet top-end guidance.
- **DLK Midstream Strength**: $480-520M EBITDA guidance supported by 80% third-party cash flow, with gas processing and water services leading growth.
- **Counter-Cyclical Buybacks**: $32M in Q1 share repurchases amid 30%+ discount to intrinsic value, signaling confidence in turnaround.
- **SREs Regulatory Win**: Potential $300M+ retroactive relief and forward exemptions could offset RFS compliance costs.
- **Operational Excellence**: Tyler and El Dorado refineries achieve record throughput, with EOP delivering $0.80/bbl margin improvements.


**【CEO Opening Remarks】**
- Highlighted progress in operational reliability, completing key refinery outages in Tyler and Big Spring.
- Advanced EOP (Enterprise Optimization Plan) targeting $120M+ annual cash flow improvement starting H2 2025.
- DKL midstream EBITDA guidance reaffirmed at $480-520M, with 80% third-party cash flow.
- Shareholder returns: $32M in Q1 buybacks and $16M dividends, emphasizing counter-cyclical buybacks due to undervaluation.

**【Operations Update】**
- Tyler refinery: 73-77k b/d Q2 throughput guidance, $0.80/bbl EOP improvement in Q1.
- El Dorado: $2/bbl annual EOP run rate target, $50M+ long-term value from jet fuel production and process improvements.
- Big Spring: 67-71k b/d Q2 throughput, $1.70/bbl outage impact in Q1.
- Cross Springs: Record 85k b/d Q1 throughput, 82-86k b/d Q2 guidance.

**【Financial Highlights】**
- Q1 net loss: $173M (-$2.78/share), adjusted EBITDA: $26.5M.
- Logistics segment EBITDA: $117M (up $9M QoQ), driven by gas processing and water services.
- Capital spending: $133M in Q1, $72M in logistics (Libby 2 plant commissioning).
- Net debt: $3.2B, maintaining strong liquidity for growth and buybacks.

**【Key Q&A Takeaways】**
- SREs (Small Refinery Exemptions): Potential $300M+ retroactive relief for 2019-20, forward claims could offset rising RIN costs.
- M&A Strategy: Focused on accretive midstream bolt-ons with >50% free cash flow generation.
- EOP Upside: Management hints at exceeding $120M annual target, citing ongoing process optimization.
- Logistics Growth: DKL's Lee County gas plant and sour gas capabilities position for Permian basin growth.


Delek US Holdings, Inc. (DK) Q1 2025 Earnings Call Transcript

- **2024 Transformation Success**: Sold retail assets for $390M, completed DKL swap, and saved $100M via zero-based budgeting
- **EOP Progress**: El Dorado targeting $50M EBITDA improvement, Big Spring cost structure nearing target
- **DKL Growth**: 2025 EBITDA guidance $480-520M (+20% YoY), with third-party EBITDA >70%
- **Shareholder Returns**: $16M/Q4 dividends and $22M/Q4 buybacks, with plans to continue buybacks at current valuation
- **Operational Excellence**: Krotz Springs turnaround achieved 83,000-86,000 bpd Q1 2025 throughput target

**【CEO Opening Remarks】**
- 2024 was transformative with operational improvements and asset monetization: 
  - Sold retail assets for $390M in Q3 2024
  - Completed economic swap with DKL to enhance refinery profitability
  - Zero-based budgeting saved $100M, targeting $80-120M annual cash flow improvement via EOP
- DKL deconsolidation progress: ownership reduced to 63.6%, third-party EBITDA >70% of total
- Shareholder returns: $16M dividends + $22M share buybacks in Q4

**【Operations Update (Joseph Israel)】**
- **El Dorado Refinery**: 
  - Q4 throughput 77,000 bpd, targeting $50M EBITDA improvement by mid-2025
  - Converting heavy bottoms to light products, optimizing logistics
- **Big Spring Refinery**: 
  - 2024 throughput +10% YoY, cost structure approaching target
  - Q4 throughput 73,000 bpd, operating expenses $6.29/bbl
- **Krotz Springs Refinery**: 
  - Post-turnaround Q4 throughput 50,000 bpd, targeting 83,000-86,000 bpd in Q1 2025
- **DKTS (Supply & Trading)**: 
  - Q4 loss $34.6M (seasonal weakness), but +$10M YoY improvement
  - EOP initiatives reducing costs and expanding product reach

**【Financial Summary (Robert Wright)】**
- Q4 2024 Results: 
  - Net loss $414M (including $212M goodwill impairment)
  - Adjusted EBITDA loss $23M
  - Cash flow from operations used $164M
- 2025 Outlook: 
  - OpEx $220-235M
  - G&A $55-60M
  - D&A $100-105M
  - Capital spend $150-170M
- Net debt increase 2024: +$82M, modest vs peers

**【Key Q&A Highlights】**
- **El Dorado Competitiveness**: 
  - $50M EBITDA improvement via product mix shift and logistics optimization
  - Targeting $2/bbl margin expansion
- **DKL Strategy**: 
  - 2025 EBITDA guidance $480-520M (vs 2024 $400M)
  - Sour gas injection FID in Q4 2024, expansion on track for H1 2025
  - DKL deconsolidation via $150M unit buyback program
- **Capital Allocation**: 
  - Prioritize dividends ($16M/Q4) and buybacks ($22M/Q4)
  - Share buybacks at current valuation seen as highly accretive

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