DK - Earnings call transcript Q3 2020 | Delek US Holdings, Inc.

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Operator

Good day, and welcome to the Delek 2020 Third Quarter Conference Call and Webcast. All participants will be in listen-only mode. After today's presentation, there will be an opportunity to ask questions. Please note, the event is being recorded. I would now like to turn the conference over to Mr. Fernandez. Blake Mr. is floor sir. yours, the Fernandez,

Blake M. Fernandez

XXXX would Good joining Delek thank quarter for to on morning. US today's third discuss I us to conference everyone webcast like call results. financial Holdings and

CEO; on President materials today's our call found management members can Investor and Yemin, President and Joining me used as section call of Reuven EVP well be is EVP and on Spiegel, LaBella, of presentation during Refining, Relations our today's team. Uzi Delek the Chairman, The and of website. US Louis other CFO; as the

As forward-looking statement. under Harbor a term X reminder, federal this as defined Safe conference the call slide may is see for statements contain securities Please laws. the

or encouraged found GAAP, website. Investors press the report financial is to results. review measures non-GAAP which non-GAAP our to can we financial be in section Relations In accordance addition with principles reporting certain are reconciliation in GAAP of results, to financial posted Investor the results of the comparable on these the which generally accounting release, accepted

Our turn that press reviewed the will assuming I'll been quarter will the into Reuven and comments. call a offer performance. has covering to CapEx, cover and is will that, guidance. will today's the we On over than cover are call, prepared release. capitalization financial are information release segment review and I being less third earnings incorporated Louis Uzi and strategic and operations remarks few With Reuven. market closing made

Reuven Spiegel

million prior-year a diluted or of negative per per you, million share quarter of reported the net of a third On $X.XX in XXXX, $X.XX basis, $XX US adjusted to a $XX net the for compared Thank Delek period. loss share income Blake. an or

million $XX was period. the prior-year $XXX in adjusted quarter Our to million in XXXX third compared of the EBITDA

on quarter. might per of Refining page of modeling to In flow or operation, adjusted The second table includes slide after-tax million release in million. million the of providing highlight would flow results. of XX impacts I like the press items by a $X.XX of release This this cash approximately in we was detriment the a $XX cash be of in the other the share working inventory the quarter provide continuing helpful benefit in XXXX, $X $XX highlights of expenditure paragraph of million. segment. approximately we included refinery third negative which $XX from Cash capital waterfall. On had quarter the X, terms capital

turn rights will X% the I DK $XX announced and during ownership Blake. XX%. over in cash. distribution general Finally, of conversion issued newly of DKL of This that, brings to a in into million incentive we XX partner the quarter, interest With exchange units the and in up DKL to interest the elimination million DKL for the non-economic it

Blake M. Fernandez

Slide We Reuven. a our $X.X of third capitalization. and million X debt. Thanks, billion cash on ended consolidated net highlights long-term the of $XXX quarter with basis

we debt in $XXX expect million tax at Delek of half approximately XX, XXXX. that would remind at of $X Logistics the we I September net a of long-term approximately debt net had Excluding first $XXX XXXX. million you billion, of federal refund

$XX million versus $XX million This of XXXX initiative reduction $XXX to is G&A. tactical workforce of modeling. track of in in $XX cost Springs, levels. combination Moving the for on to comprised XXXX we we a guidance million provide through exceed targets remain quarter additionally including million X, operating We and reduction slide cost our year of fourth and reductions Krotz another for anticipate

to the October of Permian to Texas. Basin oil to be Midland fourth with during on in was is Permian shippers The quarter, segment the system Lastly Wink completion segment pipeline Houston, crude Webster expected main to in quarter. Houston the main Project commissioned the from achieved available the mechanical to the and connecting service

in JV. As interest XX% financing that has a a the in JV XX% interest a we reminder, pipeline own

shippers Additional CapEx. to will our offering over service expected the – place to in segment, With turn and XXXX. discuss segments are call operations in further Louis to that, I be

Louis LaBella

Blake. Thanks,

full-year perform the is completed the as work highlight I cost approximately The were beginning program. During in to the of crude million. or XX% the to barrels our midpoint. was third the is estimated per This and this After XXX,XXX Springs XXXX broken system throughput light is quarter will will quarter the work basis spending. barrels of In should the should elected third Alky work quarter, XXXX, back capital oil Reformer macro macro Capital conditions, total to capital to expect capable improve this a first help a the Krtoz during fourth perform November. expenditures the throughput conducted end straight the full between next $X of XXX,XXX the environment day. difficult economics Krotz at slide crude million. outlined on level. capital to assumes toward of In oil us improve. refinery will guidance that towards the This at utilization will XX,XXX and or On We slide. per breakeven segment allow million of to The of in by unit we our barrels CapEx be be is per below confident in refining quarter come approximately program turnaround at our want Springs throughput year, running XXX,XXX achieve XXXX approximately utilization in time we $XXX and XX,XXX of down facility our average $XX included remained day. we that day to to continue moving X,

approximately turnarounds. the million XXXX, we the million $XX to to million levels $XXX CapEx be than full the expect For with $XXX for including lower year of XXXX guidance

to Next, I comments. closing turn Uzi call the will for over

Ezra Uzi Yemin

with This well be as our towards through million Thank reductions, Louis, decreased a improvement year. expenses, CapEx of steps taking operating costs as of operation, aggressive of optimizing of morning, good $XXX other flow Krotz Springs combination company you, initiatives. visibility and cash achieved the and G&A will collective improve refinery profile We're everybody. to next

suspended has dividend the this environment. or repurchases value the in shares our assets given time conditions, a the see flexible to equity underlying board would market the over balance maintain disconnect given Based be sheet capital a market. as Our between resumption on growth macro dividend significant at priority payments a we of versus

and September. you and journey planning recognizes to our take statistics, review the the including like steps would our for are actions new (XX:XX:XX) describing will ESG disclosing we sustainability company published year-end to future. the we Delek of detailing I to open encourage report the in XXXX some share responsibility in community Lastly, stakeholders and to that, please operator, in pleased call With to questions. the are took our XXXX, you

Operator

Yes, sir.

we to We pause And question will the At now from Goldman the our will begin Neil question-and-answer momentarily first assemble time, of ahead. Mehta we'll go roster. come Please session. just have this Sachs.

Neil Mehta

Good Uzi. question team. decision capital dividend the making around morning, just Uzi, you're shares. the allocation. first is to Today, Good morning, the to repurchase suspend

we're And is think some view in the is headwinds despite seeing a so, that now. right valued stock attractively that question guess I of is, here the that refining you implicit the

about goes you be the you time market next uncertainty So, it's timing the inflows sizing into there, that math recognizing think cash have talk in stock, the coming to back year. about and calculus, out buying also and why some the given talk in then

Ezra Uzi Yemin

question, the Appreciate Neil.

directly. with than answer start (XX:XX:XX) we'll different, Let's little something those

being If initiatives initiatives you look we're fee-based, at that other $XXX coming that we about the we and CapEx, said with said, in. million the other – what between OpEx, talking

down around $XXX If it, you million. coming look $XX is million, CapEx at CapEx, call

So, it's million. million to going $XXX to down around $XXX

a we XXXX-XXXX, the That (XX:XX:XX) cash look let's $XXX toll $XXX OpEx about the of G&A XXXX-XXXX around company DK little If So, bit. was cap talk – at was million, number. the the flow million. and in things once somewhere for free normalize toll

what ahead just are go gave you $XXX and million. OpEx for apply guidance you the G&A we XXXX, we If million, $XXX for around and

XXXX-XXXX normalized, savings definition time first whatever to to you see may million. That's So, the what million call is. compared $XXX around of that used or you elevated at be $XXX which

is XXXX XXXX-XXXX. XXXX, the done of $XXX at $XXX second DKL is be today The because DKL were all improvement and Midstream, that to in of million in you the look used $XXX if in million, XXXX million investments

So, saving of $XXX million, take another (XX:XX:XX) million if the million. (XX:XX:XX) million and OpEx we $XXX you CapEx plus Today, you another million. $XXX – million $XXX that's of million $XXX another to that $XXX million of million. normalized around are $XXX in of you're $XXX G&A, savings at $XXX to XXXX-XXXX was telling The now DKL,

XXXX-XXXX I spreads was for know I'm all in, not talking are about lower. Midland a much you're benefiting one $XXX about the just barrel. million. crack the second. talking $X crack spreads So,

talking Midland If take barrels, of $XXX XX you (XX:XX:XX) of million times you're benefits million. it about

the offset had we $XXX million the So, all Midland than are benefit is that we in showing XXXX-XXXX. more

that we achieved So, this to feel our overcome Midland goal overhang. we

the knowing crack. a to under back to cash starting around million $XXX crack going generate we not start your free feel our of assumption Now, in but the that million $XXX $X.XX all return, generating of interest to goes generate that of that are flow – and what actually tax question, heads, $X we we flow free through CapEx, from at cash

Let's call $X.XX. it just

– $X. we so and today, And are around

coming something I should a perform cushion, hope fact but generate we to continues and (XX:XX:XX) free are cash that, the that and numbers. had $XXX to that we we answer, DKL back see us be the your million question. that once the the expect that flow. quickly. starting would WXW And That have, we So, tax you we was of approach I very long coming is think returns answered that because online to that is

Neil Mehta

great. was That Yeah.

modeling Uzi. the did You us, for

a you Gulf are you I'm cash get talk free of parameters trying talk like about free positive and as a the a WTI-Brent So, talking you shares. benchmark top you about about on spread to at crack, flow that. sort Coast to an spread to like Brent repurchasing of X-X-X, $X.XX here's plus Midland understand that? crack a just where which (XX:XX:XX). or follow-up flow that, point When breakeven around cash When

Ezra Uzi Yemin

We WTI and assume crack. Midland Coast X-X-X zero, Golf assume we

Neil Mehta

embedded in that And Webster Okay. to Wink as well? calculus is

Ezra Uzi Yemin

mentioned agreements around Wink to Well, others the to we commercial related that Webster. the – is part of

The a phase weeks few first ago. completed was

part. other is So, the million $XX that mainly that, of

$XX start of Obviously, benefit So, a benefit. Webster seeing at next year you fully to and then million their the by end only completed of this be Wink will get full point. you'll

Neil Mehta

Thank Uzi. Thanks, Great. you.

Operator

of RBC we Heffern next Brad And Capital have Markets.

Brad Heffern

Hey. Yeah. everyone. morning, Good

on, Just on the follow to Neil's dividends. about question

called it a You suspension.

will comes normalize, much it continue more better to So, the in until, or some flow at is the than of once maybe, some think you deferral the that repurchase a performance with a dividend to line dividend. more this point gets reinstitution trade, back rather go and likelihood of the equity is market the the should cash where

Ezra Uzi Yemin

Thanks Okay, history. Brad. by for the go I'll the question.

If look today at million. XXXX-XXXX, you $XXX cap our is market

our If if I you Midland Midland anymore. Neil along, look to just on never of and not that the don't our Midland being Midstream normalize, XXXX-XXXX, count That we in with because thought crack go was offset situation because we better to the numbers, even Midland walked strategy zero, $X. should benefits even why all Midland, to will through – be at with being at stay

$XX, shareholders. you get We it similar we market go years $XXX is a returned buybacks If is you can cap $XX, million to XXXX-XXXX, two call our back during cracks normalized, coming. we $XXX and these numbers $XX, that if should returned combination expect So, to million. of then dividends. Today,

more of you normalized between it I $XXX buyback, are price, I we share question. think you go us, price toward dividend. Lower the then the but if back the much flow the because how stock cracks, is free that completely biggest buyback. things share cash going mentioned, obviously at just Higher the obviously, hope the depends for you are share – the recovers, to to thing But Now is shares actually dividend. or need shares buying we that goes the kind then it your generating free I once, cash – we then play the most to important flow, then, $XX, but more the all price, price. have answered on million we some where start or

Brad Heffern

about a to all, that's on it where so, spread of ever longer octane level it's the then or Yeah, is Reformer And this during Alky the because a could you period that market we then than of sort very we of beyond clear. time lot modeling how expect you two I Krotz activity like take multiply units capacity is first would stays there's closed? And that think Okay. and should if that just kind chance this be the by of talk for it just of Krotz and running there just value that, those about guess, units? can expect Krotz, those this the minimum ultimately at of just in

Ezra Uzi Yemin

Krotz market, is make money. it a doesn't good In today's asset.

So, we but company, we being have are being our small advantages, a nimble, couple we a have being quick. of disadvantages,

said knew supposed next down to do, that what turnaround. So, are there going and we and to was we we be sat year a we

doing both and we're expect So, we straight At sense that to the over value (XX:XX:XX) next three to turnaround Alky to activities said, – We that time, other entire time them run that take recover Krotz let's Reformer the a turnaround in refinery. same in don't also line this straight it the and have level months. the makes refinery.

in release, after modeling reduced just breakeven today's environment. normal usually situation point March, with shut the which for February Obviously, than turnaround honestly OpEx. in switch Krotz don't then million. we'll which we flip normality. you If then costs it's Come this to the So, go take that. back into that only to things the towards a standpoint, because not, causes This is see recover as obviously, press more we $XX much continue we be or expect being even I And Krotz completed a we'll said account should you operation. completely. this at turnaround if costs

Reuven Spiegel

need a to any reduction just OpEx that associated with XX% $XX articulated, to get to that you modeling if of from about you Brad, of of that help that towards help perspective level, breakeven million And, we Krotz. is XX%

to costs breakeven move towards So, you if basically, helpful. that's you there that your operating can save help level

Brad Heffern

Okay. Thank you, everyone.

Operator

have of we Energy. next, Simmons Todd And Ryan

Ryan M. Todd

run-through value one market I valued the a I seems Thanks. cap of market clearly of mean Uzi, if lot appreciate destroy I DKL, the on to Delek's some moving and of business holdings the earlier period questions. up over with But Good Refining thorough pieces side. the follow on on the cost below be time. Maybe morning. pricing in could will the the cash its

of there maybe for the any the structure going flex You've – next to done amount tremendous how But lower talk you Is a OpEx sustainable flex both there much the is? forward cost of budget forward. can is about XXXX, the as Refining of into cost we And as maybe look year? we longer-term sustainability value think savings CapEx the and how about in much how this business? much left

Ezra Uzi Yemin

Okay.

So, them. I'll first, Ryan, you two questions. both follow please I think I try to if answer And something, up. asked of missed

first ask OpEx, sustainable how and how the mind is what you – question G&A, in sustainable the So, is CapEx. my

on and all part. So, CapEx, history normalized easy you CapEx at if let's start was on look that the the without along our growth special project. basis the with – without

are do is to just number, El was in one sense. there course, the moved So, turnarounds. up other make two any project doesn't going that growth It In not of environment. the Dorado. that and this we are (XX:XX:XX) One,

two down turnarounds million, $XXX same knock in you $XXX So, the million.

sustainable millions this it's each just remember, in So, we invested in of environment. refinery. And absolutely hundreds

feel we the from we run we ready demonstrate that a So, the just are money at invested we that very in standpoint, can high all reliability utilization past. refineries because to

first the I think that's question.

to you bring doesn't It no should things it. want returning price than trying study or not there's Again, environment, we make just second share we're to do the $XX G&A. that what no At or at said cash growth if at that was things to look or value and no that or The sense, just question there's you OpEx not projects shareholders. much $XX. we besides this in $XX, do many being more do

flipped. why a felt if you that's to that $X.X doesn't we we time you So, – ago It's which we (XX:XX:XX) which, that us years that's money being ago sense. mentioned, had and to needed and million, like listen all again, year invest or billion why it $XXX or versus discussions, two in at make these assets, physical we DKL what is now DK $X.X billion did,

Refining asking you some of component Refining, question the if the do Actually, (XX:XX:XX), third positives think we The of negative. you is (XX:XX:XX). that

it negative are find and assets DK are assets the refining hard for companies in have I negative Now, not the value. other when why Refining market to these we understand (XX:XX:XX)

we to disconnection shifting a there's So, answered CapEx I which aim these hope move by correct questions. growth of the dividend and to from buyback. I all

Ryan M. Todd

Yes.

And unrelated project potential that so ask maybe Maybe didn't option on told? diesel renewable progressing able I time. same tell I be is facility follow-up, that? any (XX:XX:XX) buy-in, been capital involvement be one able at mean, you many the can you'd your what it offset you'd remind intend how the after Sorry, you've and whether there's what separate and remind obligations about to Bakersfield us RV maybe whether – the how your from us would to to

Blake M. Fernandez

So, that. Ryan, take it's Blake. I'll

you Global project. is So, I who would Clean operating constructing and defer Energy to the

participate interest. We option to have a XX% with an

after execute I a that. operational think is facility window the XX-day we it's that can

at So, macro We mode. how this in we're the standby can point, see unfolds. basically

of not fairly dollar is We tell disclosed amount. I is just absolute it what capital the minimis. an commitment not total – be and percentage It not It of large, it's the But think, would would the have project. a be. by de you would construction I cost

So, I our believe diesel this XXXX. basically timeframe And renewable that is XXXX, is early at towards optionality for year-end the maybe point.

Ryan M. Todd

Blake. Thanks, Great.

Blake M. Fernandez

Yes.

Operator

Manav take what us Suisse Uzi, little doing you have - Securities you at that (USA) technically And help two a more little Suisse. can Gupta Credit to profitability. a Krotz more is will make Credit need LLC and And you El to are next Dorado Tyler lower if that's work of over them spin exactly a do Hey, Gupta across to we Manav profitable? can refinery the you refineries there help similar to those the breakeven, bring if that something

Ezra Uzi Yemin

usual, have We what a because let's expenses go benefit you said, sat million asked. Manav, ask As exactly down in done portion dollars, by then several questions year. And the one-by-one. you quarter you smart the always – like and Krotz, happened. we're next so see full fourth of already Blake we which and it, will cutting

side, scheduled do are that other On the by then units end we year OpEx here. were and around next and taking of to turned have the the turnaround

should we in and Krotz. is So in (XX:XX:XX) environment. the the in money it can see you actually even breakeven of at this is close to Dorado, asphalt making that numbers, – because – El actually good

So, there's – noise that especially and El no El of there though, one million. Big is you with buying planning West Midland the the Spring be is little Big But this turnaround there's Dorado in to first market you as the of know, quarter the (XX:XX:XX) reason to as best Dorado, in are numbers it Spring that below do the in we exists. this not in Big Spring, do and will shipping, know, is and $XXX wins part time. at in the niche Texas, refineries

in the will coming Spring, half shouldn't online be is as DKL, of in familiar is just have more So, Tyler. with future, and Tyler, fact of the the very (XX:XX:XX) you're around – not And Webster touch Big which light Big refinery. then a a there income Spring, system to you well as especially in that coming Wink the now gathering portion the you

today's facility, there when in – even tends make money. you been that environment, to we this many You've know years bought

tweak So, the the we company. tweaking did across expenses, shouldn't touch it which besides, expenses

(USA) doing actually there follow-up looking Retail, Delek, Credit one. well. said Gupta one Logistics, doing are is two then you well think I've Refining, a No. at is which so which doing When it parts Securities actually are got by I've and - and is LLC very here. perfectly great which I not fine: which Suisse Perfect. Manav look

merchandized growth very bigger Now, getting Retail more when one you bullish projections your lowering building more also your time, sales. businesses. stores, you the were about are CapEx, lowering in, you're At Uzi, sales getting for

hard side, So, you fine a I'm your Retail are until pull actually on as the on Retail back well Refining very trying because even which just on back pulling was is you side business to CapEx, date. understand doing too little the

So, expansion front, the the question is sir. Retail on

Ezra Uzi Yemin

share Manav. art. which And that's capital that But look you again, a to It's That's need $XX. question, is why every we price, allocation look, And paid. I'm at look is great day. being something the

these and dollars You market more another investments a reported will parts you last the and more bring for years continue to and And of told to DKL. do the we have quarter record as all (XX:XX:XX). DKL DKL in some few the over you,

the But well. because doing DKL Retail DK is $XX. share of is investments. doing the So, well price very of very is

Securities back to mind of more terms very yourself, Manav if to And at then in in taking question. my a put I chips? Thank you That's growth this should you price chips capital - goes towards should for capital allocation LLC say So, towards Gupta change stock projects. where (USA) Suisse my the allocation, should the interpretation. $XX moment. Obviously, Credit our fair go very buyback

Ezra Uzi Yemin

Thanks, Manav.

Operator

Next, Wells we Read Fargo. have Roger of

Roger D. Read

Yeah. Good all you are Thank morning. How doing? you.

Blake M. Fernandez

Good, Roger.

Ezra Uzi Yemin

Roger. Hey,

Roger D. Read

Hey, be Blake. me and could fundamentals One OpEx kind the forth. (XX:XX:XX) the balance of thing And seems questions so beaten the market has to on of good others for kind sheet here. Two pretty been Uzi and financial on It side. you.

haven't that inventories, a obviously (XX:XX:XX) at balance pretty spiked If came sheet. one LLS seen high in MEH So, Cushing been then real and to steadily hit or increasing, first the I'll the widening yet we the back back and either in we down come spring, they've they look differential.

now, but curious not that months may of a see some think hearing quarters. how in the out about you're of lot the we that times market right whether coming do you structure tank about we hear about or not given tops was that there (XX:XX:XX), or I So,

that and balance come if the then back all that's leave right. So, I'll sheet on with it

Ezra Uzi Yemin

most So, of How it's Roger. (XX:XX:XX)? the differential. (XX:XX:XX) great today And overbid. pipeline the are question you Hey, a obviously, is about in the

as differentials. We coming (XX:XX:XX) of stability see time (XX:XX:XX) the Cushing Both (XX:XX:XX) in LLS at MEH. along the CMA going was A it next be since said. in the of as there'll it's see because to the that as all more that panic as than mean extensive be of stability open doesn't that quickly that just was be in future manageable some it's we QX but hit them cannot of the past, make and opened it (XX:XX:XX) But you So, pandemic. QX. till because the don't before there's level as Does sense? spread not

Roger D. Read

And Yes. the I Okay. does. again, sheet presentation. then other balance the had the question It kind in of about just thinking in X slide

or just a kind that I the But of do to obviously little talked how delever the not you've debt a as delever I debt, was of seen it's of portion you as you necessarily think across can into to to would cap, either delever, debt in to increases thing? EBITDA, the stock that overall just we've maybe space. you depression significant need about some on. for, think debt, wondering, using recognizing to has that some cash you of on detail, debt, the total excess reasons how about Uzi, structure increased. use debt about as is so even want call cash, a it excess expense a cash what in (XX:XX:XX) think interest Net

Ezra Uzi Yemin

our remember mid-cycle I'm – you you sure is very simple. if target Roger,

EBITDA DKL Logistics going up. of for the and leverage is course, – DKL DKL, goes and the up yeah assets the of For because of

DKL well. but cap time, up So the at market of as – goes same the

are target is covenants Logistics, at have you credit our are to (XX:XX:XX) facility look (XX:XX:XX). max we covenants So, leverage there the the X.X we even to or no according – – X.X X.X leverage max if though but

that the dollars. of area in We're the So, we're billion (XX:XX:XX) in range. middle of X.X

we not part, than Retail know. in of which should obviously right this the are The Refining $XXX time and doesn't of EBITDA, EBITDA be Refining, exist but there it's we not rest X which entire around more thought that million, as course, we now, business be second should today, the between

start – we next $XXX taking, it sometime the preserving want, coming really time. and the with protection the year. that and prefer But though we cash that believe we're million we are X we protecting the with it will early (XX:XX:XX) to balance So, needed we're sheet, be to mid-cycle, steps with,

– your if So, thing. modeling is this for

Roger D. Read

as helpful. guess, this market And just, wait together. that's I conditions when come to of No, on we'll all kind

Ezra Uzi Yemin

first feel found. since But question, the people asked you when safe Well, a has that back. will is full to when go be step been I recovery think vaccine

I to think XX months XX between about now. we're from talking

we So, full not $XX XXXX. before do – I recovery see expect to crack to

Roger D. Read

Okay. helpful. Thanks. That's

Operator

we JPMorgan. next, And of have Phil Gresh

Phil Gresh

Hey, good morning.

Blake M. Fernandez

Hey, Phil.

Ezra Uzi Yemin

Good morning.

Phil Gresh

related just pointed others of is have, the value unlocking which question First out. kind to

and Midstream peers big of One a they company business, Retail has your business Retail unlock sold Refining to the value.

done you've it in the past. So,

to I look that indicated recently this you these is Retail important stock more assets think you've But are as price, at consider? your more something, you. that you

Ezra Uzi Yemin

CapEx. peers need I selling First, million number we one should our we The money is We – we do look don't times, is. their at whatever the everything in to are XX what EBITDA this portion with based on million, XX, CapEx. market $XX environment. going is question, cap of of don't around the have $XXX with don't Retail, as you know, know,

and tempting good And same you million yourself, just cap the entire to Retail a $XXX not question. that's say you time, At can market to is is for the Retail company buy yet. is it. maturing So, when look million, Retail, $XXX at it's

get being in we question to And can value. earlier we Manav ways have go. asked stores. about think more We a

of Some well. are stores very built we've the doing that

wagon cash point, add this for at the market more to sheet that the don't with Retail I just company on a $XXX to jumping balance us cap see million. the So, is only

Phil Gresh

Okay.

of is company Wink at dropped the exists the to with me could that Wink just or you of Is parent that to ramp the if up Webster to question, directly that Second at DKL? start-up Webster. something gets remind level DKL

Ezra Uzi Yemin

at is DK. it No, (XX:XX:XX)

Ezra Uzi Yemin

There was nothing that And it. no there in was now. until benefit to

Phil Gresh

Right.

about So, DK that potential are it to just level now. at have a you for you DK the drop? like feel thinking you Do keep capacity you or levels, that, the do

Ezra Uzi Yemin

be need to we Phil. Well, patient,

And unfolding. story, obviously what feel that said transition it is. market always You that the it and environment, we is story it is – transition

where are environment. to with continuing the it are of strategy didn't Logistics. the grow change We But we

all However, WXW, we said period. as along, a ramp-up there's

it make will at to down. we If decision drop we So, point sense, should that makes need at a do what what it. point

Phil Gresh

it. Got

in Okay. guess, you're now buybacks, buyback doing at but the this on comfortable you just to opportunistically. don't potential, point it assessing And clarify time, feel I

Or wait. to that. just rather clarify Thank you. You'd

Ezra Uzi Yemin

we the When wait. which $X.XX. that model, clearly $X.XX, shouldn't according once very I $X.XX. market it's flow said I that to we generating XXX say around free start believe our is cash (XX:XX:XX) We

Phil Gresh

Yeah.

Okay.

Ezra Uzi Yemin

I cash after free and said CapEx. after flow, interest mean I when And

Phil Gresh

Yes.

Okay. you. Very clear. Thank

Operator

next, Jason of Gabelman we have And Cowen.

Jason Gabelman

Yeah. Hey. Morning.

Ezra Uzi Yemin

Morning, Jay.

Jason Gabelman

questions. Two

First, a back see a assets just a across your secondly, assess capital not spending opportunity other the kind the be it's where heard of And then, could something on the kind want deploy future – question, you take contribution else? kind strategic back it or to million initiatives. moving I $XX as and of company forward, that's where seems unique a you've you of like you Wink you step of and Webster more mostly on I'm if right that's fit. to pulled and if sure if clarification

than changing. new energy thinking you again, at wonder about generate and about think – as US globally historically be the that I segments, deploying spending increasing to in if business multiples if maybe looking that has when Thanks. your seems it segments higher you're you you're in portfolio So, given demand refining

Ezra Uzi Yemin

in of asset in they And refineries. The the best the for on (XX:XX:XX) in good the to have needed the returns the first there And the XX doing and are invested years, in our CEO we answer every seen why the reason downs. in the to past future CEO what in That's we And three we that's this company first to millions, is the in we'll investing capital for option – once long. And and And we invested say, California, third, is question the (XX:XX:XX). different? now, second The too clear billions, And our I've allocate or actually the notify invest have we been – market. I've or thing to – long five reason yes. you refineries to the that fix time. And First, the said right And look Bakersfield. been what if to expected in – have (XX:XX:XX) sure, need the refineries not I'm the is shape. doing. being one-third at the something I've we is to answer next? we doing hundreds it, years, question it, are earlier – of it ups But look. paid probably to these it that's based do I that's path we at and time.

Jason Gabelman

it. Thanks. Got

Ezra Uzi Yemin

you. Thank

Operator

The go Akamine we of next come Bank of have Kalei will from question ahead. America. Please

Kalei Akamine

guys. Hey, on They're Doug questions. in Good It's Krotz. both two for here. morning. got I've Kalei

question, of this some related to so of about sounds is million is It XX% Krotz lower like utilization. First $XX the savings.

period and the offline normally. what whether to sustainable is I'm mainly maintenance, any whether So, plant trying to out when from figure that we'll OpEx of whether this plant for for extended once cost out some comes see to is will an I'm of this be savings be figure on – able time trying the there's coming XQ

Blake M. Fernandez

it's the through Kalei, that here the and to will At in Blake. March. into end work of spill start So, November going we're day, the turnaround

the the really, utilization We'll Unit the – Alkylation there's Reformer. of the and crude crude unit running So, the going be no the of FCC. utilization or be

that to for year. keep the reductions we and we'll OpEx end modeling cash what there removed the margin of standpoint will OpEx savings generation the the at the in a And embedded the improves So, fashion. from will environment XQ. be But help If you just (XX:XX:XX) is I would cost the in day, you suggest can Does day, at offset that of out? feel the improved it. end margins, from the operating be cash restart flow with the we to

Kalei Akamine

Got it. sense. That makes

Have ask whether way, operating also like Second maybe Krotz. another capital. explored I'm be on plant And what question what a terminal Maybe aversion what ex-Krotz? that would maintenance as look that today is the value-accretive? about guess, does is of the I CapEx guys and and maintenance you thinking

Ezra Uzi Yemin

maintenance around Krotz $XX the size year. built not it's CapEx million, million. by Alky. in million the a remember, $XX of Please It's not refinery million we $XXX Usually, a $XXX a is to

obviously, doing is turnaround. CapEx straight not (XX:XX:XX) maintenance we're turnaround time. now And the in So,

not But environment. of in not-so-good can million. of $XX $XX it's advantage we to $XXX So, you million, terms million take – it's modeling,

that's think Kalei, the right? I question,

Kalei Akamine

I Thanks. Indeed. answers, guys. appreciate the

Operator

Well, go no remarks. question-and-answer closing further would session. I team our management call conference now We'll questions. time, at for Gentlemen? conclude this we're showing and to ahead the to turn like back any over the

Ezra Uzi Yemin

table, morning. company. to employees I'd my this you, friends morning. like around listening I'd thank to this thank to I'd great you Thanks my us us to like the Mike. Well, of colleagues. like thank the this thank hosting for

with. We here steps. not great right have work easy together and I'd the we and lot of day. to great you are taking have but a times directors. These been to board are like Thank are the thank a through they

Operator

thank concluded. Thank also, conference the to At disconnect team. sir day. may is time, you time you you and management and today and the we everyone, your a have this your And rest for lines. of call now the care Again, wonderful take

Delek US (DK) 5 Nov 202020 Q3 Earnings call transcript