HF Sinclair (DINO) 5 May 212021 Q1 Earnings call transcript

Company Profile

Participants

Craig Biery	executive
Michael Jennings	executive
Richard Voliva	executive
Manav Gupta	analyst
Matthew Blair	analyst
Theresa Chen	analyst
Thomas Creery	executive
Ryan Todd	analyst
Paul Cheng	analyst
Timothy Go	executive
Phil M. Gresh	analyst
Neil Mehta	analyst
Jason Gabelman	analyst
Douglas Leggate	analyst

Call transcript

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Operator

Welcome to the HollyFrontier Corporation's First Quarter 2021 Conference Call and Webcast. Hosting the call today from HollyFrontier is Mike Jennings, President and Chief Executive Officer. He is joined by Rich Voliva, Executive Vice President and Chief Financial Officer; Tim Go, Executive Vice President and Chief Operating Officer; Tom Creery, President, Refining and marketing; and Bruce Lerner, President, HollyFrontier Lubricants and Specialties.

[Operator Instructions]

Please note that this conference is being recorded. pleasure President, the Investor my Craig over now Vice Biery, Relations. is to floor turn to It Craig, you may begin.

Craig Biery

issued Call. Thank Shell's you, Corporation's morning, results Earnings HollyFrontier we quarter Yesterday of ending a welcome and release March we for This XX, the Julie. Good acquisition First press Refinery. morning, Quarter release Puget everyone, our a Sound announcing press afternoon, XXXX. to issued XXXX announcing

the the like at would the copy Sound acquisition find investor may a on hollyfrontier.com. website and you If press one presentation of Puget our you Refinery, releases on

may SEC replay acquisition including the Before many of release. harbor expectations, the rereading be safe we to to factors proceed statements investor judgments with our and are time-sensitive remarks, longer financial of those of if reconciliations statements. Please noted presentation release the today's provisions non-GAAP results differ at summary, from measures. harbor are statement of please made press in intended security note These today's predictions covered call management laws. are There time expectations, for filings. safe on that transcript. note may or be to in under call include the press information any webcast please measures. accurate no GAAP discussion see such earnings federal cause Also, regarding any disclosure could In also provided forward-looking statements the The or

that, with And turn over Jennings. the I'll Mike call to

Michael Jennings

special share. million. Today, $XXX reflect items or net income to of attributable morning, results million collectively $XXX Great. net by increased Thanks, diluted HollyFrontier per Craig. we reported that everyone. quarter first income Good $X.XX shareholders These

for million quarter XXXX. first a consolidated of a negative gross or period the segment $X.XX in XXXX, compared adjusted first the refining was reported million, per quarter in same share XX% year. $XX quarter decrease of was items, $XX the $X.XX XXXX. million barrel, diluted adjusted for to Adjusted the margin diluted of adjusted net per compared $XX the the EBITDA first million to per these last period decrease EBITDA net for of and versus million share same Excluding or million income of produced negative loss a $XX $XXX negative $XXX compared period $X The was refinery to for

compressed primarily was decrease lower This to product crude with realized coupled margins due differentials.

margins million by quarter $XX system. winter increased Uri, gas refining across impacted were also Storm which natural by costs our First approximately

was barrels XXX,XXX. Woods scheduled below and day work throughput crude XXX,XXX at turnaround quarter XXX,XXX to our planned We recently per Tulsa completed fall. until approximately the have slightly First guidance and maintenance no of our refineries Cross

in and financial Products base Specialty margins and first million last quarter million business. drove year our compared Lubricants the $XX to finished oil Strong $XX Reported for of for quarter and $X included a million was charges. EBITDA product record restructuring

Excluding $XX $XX restructuring of million EBITDA margin. and representing Forward in charges million, lubricants adjusted an adjusted the EBITDA was million. EBITDA $X XX% Rack adjusted specialties, was

EBITDA in full to we portion Rack million million business. adjusted the $XXX $XXX expect the between For and XXXX, of Forward of this of earn year

$XX the expect be to Energy base million of will they X reported years. quarter higher temper first for in last Back past but levels the quarter Rack Holly oil of first we market compared the expect year. in to EBITDA Within spot current continue million $XX segment, the from margins Corporate to

the we refined head in for our into product we volumes quarter, summer markets as product improvement are refined the During season. driving demand and in optimistic improved, continued

based represents hydrocarbon $XXX for a acquisition inventory refinery's Sound $XXX estimated access with barrel in per a purchase conversion, an to financial excited is at acquire to an in purchase the $XXX Slope multiple current market We million Refinery that Trans has valued day Sound Northwest announce XXX,XXX the are capacity pipeline both HollyFrontier be to well of of net It high value product price entered plus X.Xx and premium via of The on Anacortes, of million yesterday Puget to well Pacific to Canadian Puget Shell's closing into as advantaged to Alaska EBITDA attractive performance. an as positioned Washington. agreement crude price X.X million. historical supply. is Mountain inventory, plant located Refinery the This North

been safety track Puget capitalized an years. environmental, outstanding past Sound has has the through well record and health and XX

skilled site's highly We to the welcoming HollyFrontier continuing the forward of family. workforce to look we and are record to committed Puget track operations Sound's responsible

history refinery free and Financially, of Again, and cash XXXX. free million operated very a X.X to EBITDA and XXXX flow X.Xx of of capitalized attractive well $XXX Averaging flow. Puget an cash EBITDA net inventory Sound $XX between multiple well million and has for of earnings consistent this refinery. annual

cash flow. a Financing from suspension come expect immediately as X acquisition share the per as will We hand. earnings the regular combination on acquisition for free cash accretive be year of and our will dividend to of well

on press for accessed is regulatory we're and Presentations and can other customary Relations clearance Investor close -- deck fourth subject Holly website of drop in copy be tab. the Energy conditions quarter acquisition closing accompanying currently evaluating to of opportunities down XXXX. is Partners. A to an to we and asset the our under and Additionally, This release Events the expected slide transaction

Rich. with So over to let call me that, the turn

Richard Voliva

Thank you, Mike.

million million related a unusual offset costs by Pretax the a of by mentioned, Lubricants gain and million previously severance to $X to quarter first adjustment cost impacted included settlement, lower of Specialties segment. were items. on partially a $XXX tariff were a our restructuring in few positively of market which earnings As and $XX

release. the and liquidation charges cost $XXX,XXX. press earnings $X as table can includes to A production found in items of related renewable inventory of diesel approximately charges As $X refinery charges conversion well Cheyenne million, totaling million severance be of our these LIFO to decommissioning

which working capital capital in of million stand-alone and operations HollyFrontier's for the totaled Cash turnaround million $XXX $XX gains. was included quarter, spending from million expenditures flow $XX the quarter. of first million $XX

billion. stood balance XX, As of March $X.XX our unsecured stand-alone of undrawn of with Comprised a $X.X along over XXXX, total cash billion, approximately facility. our billion credit $X.X at liquidity

March ratio $X.XX net As have XX% and X%. debt a billion of debt-to-cap of a XX, stand-alone ratio of we outstanding, debt-to-cap of

week, estimated payments under anticipate we successfully cash and $XX completed XXXX. in made our in Last million revolving in in credit and facility, we an between extension of the CARES during matures of We first now $XX benefit tax Act million of recovered million $X.XX tax XXXX the $XX which XXXX. quarter, billion April recovering

$X.XX million. totaling a $XX the During per share declared first paid quarter, of we and dividend

effective as resume of of the the be after time. Puget X-year of Directors financing acquisition the part regular mentioned, the Sound Mike the the a for As declared Refinery, first to expected quarterly such of dividend dividend approved the of dividend to XXXX, quarter is HollyFrontier with suspension it Board

during HFC first LP by value $XX million. received units, billion HollyFrontier HEP distributions of XX% million a HEP over of night's the units totaled $X.X market HEP's owns XX.X partnering with as quarter close. last representing limited of

Within Turning our segment. refining to forward-looking guidance.

our XXXX, estimates. on crude XXX,XXX to the spending, between we are respect in capital cost based to increasing guidance, day. updated of segment per quarter run expect renewables For capital specifically our With project XXX,XXX barrels we and second of

million, Our on now schedule. these total is $XXX spend renewables and million importantly, remain expected projects project between $XXX and

million million now and to XXXX, for million expect $XXX million million of HEP, Products, million $XXX we and million joint of to calendar expansion Specific our $XX expect prior our maintenance renewables in our in $XXX $XXX in refinery to million. to processing $XXX versus capital, $XXX the to $XX venture expect million to spend million Lubricants to spend Cushing million is million The between catalysts. $XX to and for turnarounds. million HollyFrontier million and we XXXX $XX capital which refining to Still Connect marketing, turnarounds $X spend between million capital $XXX Specialty $XX million to at budget guidance rest to unit and for capital, $XX $X to $XXX includes for investments unchanged. At

of and New associated are in quarter to Cheyenne along the other units with reminder, the renewable Artesia, XXXX, conversion HollyFrontier's pretreatment production, beginning As fourth Mexico, segment. diesel in with a reported of construction refinery and the Corporate diesel activities in HollyFrontier's of renewable

XXXX, expect range million year and million to in severance related costs operating the be to $XXX in conversion $XXX $XX the segment continue fiscal of the expenses corporate to includes refinery $XX decommissioning For Cheyenne we which to to of million. range million

With that, to ready questions. we're Julie, take

Operator

Instructions] [Operator

first Suisse. Gupta with Your from comes question Manav Crédit

Manav Gupta

million from refinery and a been who last as problem the night West go look the the bought as hoping of concerned. Shell since not far way. we obviously also have make key But guy the down on that to $XXX the Coast is questions last one is was So it refinery getting did a price doesn't

due what would buying Coast that diligence make out the trying and well? have what there done you to assets out say basically this just I'm really to who So are Shell like saying from to you to work West realizable doesn't EBITDA bears understand is sure

Richard Voliva

a in premium a operator it for barrel premium and a has paying a of going It's and of in current market, an to as very question. run capitalized on less that in your we Thank asset for this not well. and other a buyers And you price the as good that transactions getting great market. comment we're high $X,XXX point, we're complexity starting feeling as other and one, facility really a We're owner are well capacity refinery it. to particular very than

them. spend that, this some I'll opportunities And it. of past bang through discussing expect will we time Going and company. our big elaborate just certainly for on to it call creates kind And

operations going California advantage refinery heavy of that yield. versus a to gasoline from a benefit has we're Washington relative First, with in

benefit feedstock crude and our Second, to Mountain a bring relationships refinery with suppliers Trans expansion. we this versus additional existing

commercial diversification finally, dependent our a Fourth, present capitalized LCFS adding for another at business. an foothold at is heavily we're asset renewables fairly which well regional that scale, opportunity crude operations, as adding And which engaging I've differentials. great we're an price. attractive portfolio, our on Third, adds state, we're in has said, purchase to

Manav Gupta

guidance. higher Rack business your And a turned around. Forward, follow-up than here. have question this you Clearly, even

think because were there quarter the was lag of also, realize couldn't a that benefit. I price last full you you which indicating

in which have the of earlier rate, even strong on XQ because could at outlook forward looking beat a the on a little are Forward bit clearly, Rack So the rack guidance, really you year, little things your but -- front. difficulty annual looked actually

comment market a if little? that on So you could

Richard Voliva

first COVID this the which to out comes side. up short look dynamics going of So of as for overall and year, the similar as refineries the but involves steam conditions continuing and as quarter maybe market, the along the they in come were relief a we There'll people see first pick balance similar in in probably vaccinations term, with right supply on fuel be more quarter. be turnarounds now little to forward be

Operator

from comes question Pickering, Tudor, Next Matthew Holt. Blair with

Matthew Blair

where in you to just do In of as onetime Or strategy, you'd a that acquire see opportunistic regards to like you of up? your shift down kind even more like as road, deal PADD the X acquisition, passed to this this kind a view assets? overall

Richard Voliva

respect and the few terms enough terms but concentration within remainder don't in following that, if in is are of is PAAD Northwest there that us a PADD see of a us. for it Pacific And attractive. as in principle. is particularly in has see environment be think attractive we this versus X I but And acquisition, of Puget the being question. X. of said, Sound, It California, would our cost geography for have advantages So your operating this I also onetime strategy, opportunity With advantaged operating that reasons we'll and

PADD we from will benefit X be want in effectively, part on and to California. what's the of in So north going believe

Matthew Blair

And you refineries? the with Coast could if conditions the it. passing the Washington the do? And blending LCFS what's Coast, with what pretty West electrification. RIN there? then is can West on you And internal outlook Got outlet also, became How then increasing increasing weak would your program, talk for at right, Where exposure do about renewable just much the it refinery? just and diesel, recently

Richard Voliva

it's Rich. Matthew,

RINs, transportation gasoline diesel fuels, plant at quantum XX% exported, the the can its there. and with it, that rack of respect has So to call historically blend and about

so. our went and So that I'd is here, call this cut, into rent, out XX% has a relatively diesel or call our a point thinking. that's low plan exposure

diesel look have market versus at balance we're gasoline market renewable X that what actually seeing the in closures we'd the in and and diesel, you general, As been expect in that's announced PADD short. the that's

are So really our really feel where this that we investments frankly, like and And well well is our vis-à-vis plant positioned. outlook. diesel positioned you renewable company consider

Operator

Barclays. with Chen Theresa from comes question Next

Theresa Chen

Mike, projects? in hoping synergies the little mean there? that passed What LCFS you state comment you further has foothold Washington state existing standard your of greenfield dig legislation. kind about I that an What was on could Assembly is your having this derive in a for can does commercial commercial

Michael Jennings

will So in terms small Washington, relationships of immediately, speed marketing, diesel. opportunity get liquid going be And toward markets. products X those commercial a directed up be between clearly because the California, to in there's benefit oils, are arbitrage as renewable to it in we'll we demand light our to for have but knock-on

And comment so that's comes really where that from.

Theresa Chen

the is Got point, relation that? there to left about project in it. on And Rich, spending, talk can what the what's the And do you side? execution driving this to uptick at on

Thomas Creery

up have costs cost costs encouraged project. gone of I'll is alternative the And for this due we as have idea a to a we've be a lower able Creery, renewable Tom we that feedstocks up in CI. and changed variety more metallurgy factors in question. project that different being to so, run little and metal to the forward bit have is with of doing make we to diesel moved to few with construction comments has have this the The response Theresa, scope your

also this our oil. not particular So play. that a renewable with play hanging is hat soybean feedstock X the It's being economic marketplace on we And diesel. as move we're through an longevity

is seen such up and it. as prices that's steel. in costs going in We've We've little bit construction to vessels delivery because well schedule prize some the seen is So end been have the the in trying tried within long costs terms up. parts a seen us is part which from of the those We've money of as of material of of overseas delay effects COVID some to risk previously also we've of locations. lot And capture our raw what a going that as do we're day, stay said, previous to run. at led worth to BTC

schedule is important to us. very So

where So we're if versus in the the some are -- having increased to coming schedule balance this at that's time. And from the point some of most, all of cost. costs not

future the order. equipment, In have of or high spending, ordered we terms on Most very have of percentage.

numbers. included We've new increases cost probably have some of little our in And to bulk locked we allowance weather, where and be of new very left be for would our the impact most going think do of as I a the in already of costs to that's numbers. risk those are again, so things is and made go is set forward COVID, construction our construction are we probably like terms in cost. that. in And such that there,

Operator

Todd is Energy. next Simmons Ryan with question coming Your from

Ryan Todd

Great. Thanks.

than sensitivity expected, on the cautious part? supportive more of quarters from was of you suspension? you earnings Following up the on next there dividend? exposure just is through the up on that suspend if walk the just length or decision are or sheet How your can to couple of over necessary the thinking about ended was the view, it point a And any acquisition, balance it

Richard Voliva

call it's opportunity We but sure. Rich. Ryan, comes that I Look, cautious other tremendous financing here, see, the grade opportunity Renewables in and it would obviously, in of midst for a credit as these well viewed our long-standing investments to rating. business. really maintenance all an the as investment-grade be in And to commitment in have a our year of context heavy refining

in year's that mind, worth ensure to it's of through feel XXXX. a balance we prudent with to So sheet dividends our invest

not thesis. HollyFrontier And essential industry an cash We our the part return return. cash of dividend the vehicle in our lightly. doing We investment and are primary as at view this of is

I that. say point, previous we rate we're return this expecting, November think at recall, our your in things grow you than as a if to I'll in earlier year, better thing plan XXXX, the dividend. dividend be could intend Last go than a articulated to we To is, of on

is our going about going we ability forgotten haven't renewables forward. that We our Puget believe do business that build-out And of the and that. Sound to to enhance strongly

Ryan Todd

an I if there's the look about mean there if earlier, And obligatory that state obligation you is there the you of years additional, And a standard. some on X, how LCFS do nowhere mean, well, think that getting down line? you of also come, in up Washington, All right. in but burden kind in the under potential foothold burden, -- and facility? Mike. the an may a your XX line possibility in that convert down you maybe there's with ever benefit following any a is accordance to could I Or plans? R&D the comments

Michael Jennings

time. LCFS them we'll A And us hit marketing questions, Okay. flow. one The opportunity will to to and there think out at diesel the that because for a renewable foothold product. actively we going the try few is molecules in state be I'm

as is So I've previously opportunity, an spoke. that

an As I look obligation to to. link trying is to burden, an or whether to the it's also which opportunity just or a California think Washington market, we

Now effectively trying link the burden to LCFS. California, of taking recognize passed. to of consumer just is XXX% California, in this legislation But the

So we economics. refining don't into see that our encroaching significantly

Third a It on relatively is we've diesel plant. made. as gasoline yield but maker. jet, This point the this we as is would does low diesel be, and have

positioned because we So it is of regionally that. think well

production time, finally, And at is say I'd of emissions. need fuels to is permitting convert. legislation And lower the about renewable legislation What modified very cautious and to or the the for the CI itself opportunity they're by in as same state fuels. new

with visioned LCFS the and forward diesel, both our do the impacts roll this also ability ability in that Anacortes renewable so something manner. to but And to for

opportunities intends really with So to mark. that of associated respect the I through to out we'll question permitting the And play think that's production local state versus emissions. what a as time

Operator

from is question with coming Cheng Paul next Scotiabank. Your

Paul Cheng

is does is the that go or So should purely suspend to dividend that an the suggestion to with be trying a background decision just like back, internal CapEx the be want suspension. a also? decide it understand suspension, spending that your the why Rich strong guys the rating it handle agency because balances Just increase that on you able you high, from look without not. should to be Even the in it or to renewable

Richard Voliva

Sure, Paul.

with made of Like historically. think a made balance that's of this with we run abundance an and I caution, sheet this the speaking agree we've you'd is consistent no, was out before So our decision how agencies.

agencies, the this with We have from objectively credit run, And since the long the in is positive changes obviously a ratings. spoken to any not we're expecting perspective.

this So an nothing abundance caution, more now, was from of done than that.

Paul Cheng

guess right. All parts, been maybe and is that, also I have is Sound guys the given also? step very has day is on -- reference we X this Mike out. progressive expectation from for the the that state, And how over progressive comfortable is long-term and environment a regulatory never been? cycle it's second And One and the this spend question that Puget you for pushback pace I separate. how have can the you -- a think a XXXX and you the do in there for And got the CapEx so people feel is political totally about

Richard Voliva

hit hand it I'll question, let your Mike. Paul, capital me to

historically, to to consistent in I would we'd with turnarounds a $XX what to year are spend capital. what we similar see $XX you've sustaining think Obviously, million elsewhere. million seen expect

The XXXX. scheduled is first X that's

do that. to have that on else you the capital. Tim, So anything speaks

Timothy Go

night. about $X.XX just region Washington numbers but going would some say, OpEx in also mentioned before, a tell and a asset got we competitive, then posted as X is you PADD high in Mike just to the barrel whole was the area. asset, not is I what that PowerPoint I highly the the last in basically quality is we've slides

Michael Jennings

point And this question, Paul, a that I Dorothy. second anymore, So was we isn't understand. fully think, -- your

operated the time. refinery long this has for First, been and Washington in operating state has very a

first, forward our of is the kind really are But progressive money. viewpoint operate ability the what that of around crude So and going OpEx that jurisdiction also real really questions our advantaged, And and on economics. business. happens going limit agenda or California cost creates progressive and lesser to We in make two believe threefold. is terms to the in within more relatively refining and it higher CapEx. And usually respect we're that of to is opportunity be a operating

we'll just otherwise LCFS going we the be we're more a reality as to such that, and agenda. other demand Beyond and what see opportunistic, have of good other any to or blending progressive against also by like things destroying stewards opportunities be hydrocarbon operator, created

passed. X% that, think operating and we energy about feel Beyond us can plant. on The efficiency like gas procedure address we emissions. that through and there's cap I will a trade investments in recently that greenhouse legislation reduction be And at the impact

believe we're through So hard the we at this. more looking we're it. We've studied We understand it diligence, elaborate prepared. answer and is due

Paul Cheng

sneak final I can Mike, in one question?

Michael Jennings

Sure, Paul.

Paul Cheng

increased you budget since is times. project, year diesel couple a of already renewable the you it ago, announced only On a raised about

So back and anything that you when look in increase sight, in the process when that avoid need or learned be FID, cost to to this in of the terms that high order project overrun? change we you budget have what may

Michael Jennings

Yes.

So we've onetime. increased Paul,

evolved were Our or we learnings are end CI, think project towards those not this by better And are your projects of we was range, add high question that intelligent things increase through is take of economics. to in as the the lower previous these chose We that to feedstock threefold. to return. period. advice and warranted the of have One point, your respect advantage scope in decisions looking

to execute and cetera. chain projects in working more contingency, home, a Second, now we had know would we announced, seeing with of a terms supply added environment front what to of bit credit. is in respect scope we're lot et of we known in I Yes, final trying The addition feedstock. this of think, COVID blender's what have capturing people in was, then in to wanted tax we from get change that's the as around constricted,

for relatively other Blender's to relative And was made on take tax stripes that. hand, early. credit. make And to investment going can one final so decision And money doing on we're the we hand,

a led when scope reason to made down firmly it tacked decision project. So to evolution wasn't we that the we that and was announced that

Operator

Gresh is our You Phil JPMorgan. next question from coming with

Phil M. Gresh

the million. for guidance mid-cycle and EBITDA you what evolving? think you to Could XXXX was of respect million to how $XXX With is $XXX Puget XXXX share Sound

Richard Voliva

it's Phil, Rich.

I say the is front in today's will but XXXX that. at I clearly loss. running mid-cycle plant have me, on that So at don't number better. number was get to we'll a back of that or you

You've early levels since the really Northwest. seen those March probably Pacific in

Phil M. Gresh

Okay. Got it.

On could expect to mean, up? diesel elaborate the side, Exactly some for plans other to just on process renewable you teething your you facilities start bit expect when I had start a you up. some start-up and issues that have how with go?

You're talking about alternative metaling up run feedstock. to

blender's what credits there be you So sure that to progress to you these are will XXXX? be capture able in making tax

Thomas Creery

Phil, is this Tom. Well,

Some what me let we've done in we've of time. say, secured things terms some first feedstock start-up, is at that in the this of point done already we've

start-up. we're So our scheduled get getting to at feedstocks to this ahead place ball hit in in time of the point

same with hydrogen trading at advantage doing to learning devices we're people come definitely us. failsafe We've we're start-up training. other plants. information take or terms some well the think internally doing We're the RDU in not so into the at plants positions. We're some hydro as of actual mode. who we're our people changes new and and dealing as before I refinery, suppliers to make In in cross have using to accommodate in technology, that this the also knowledge their itself, putting we're lessons of And learning so those from putting moved the refineries with the knowledge new around

on much like I units the there. as, internal help who So getting from and units. we're other alternatives and knowledge happened are come within these people to as went to us on using us And those before, said from with operate how as well external new then they learning as what sources before

Phil M. Gresh

got it. okay, So

Timothy Go

helping our so for Phil, can procedures this mentioned, in say as of are who us start-up is are lessons licenser What we we I closely and prepare that us the They and up working involved also and with would as us. learned processes beef just we is, with some our helping are our train be preceding starting. that technology is Tim. projects And successful Tom

Phil M. Gresh

Okay. question. Rich, last

XXXX guess, 'XX ahead spending, you or will and that well for into just us can bleed beyond? As residual future as some I the we just Sound look in normalized Puget layering kind to over think how of to CapEx, as, renewable XXXX, about spend framework remind

Richard Voliva

Yes.

typically, range, the to sustaining. $XX Phil, Puget rate, with or $XXX million of in the lot And as we that should X that $XX emphasize, mid-cycle level we'll turnarounds. around the So corporation it, capital always, of so every million call Sound for number on as years volatility a obviously a sustaining sustaining and timing be I there's million have turnaround well.

most the is be of the the a expect It's as looking half of $XXX the to $XX To on So of the call depend in this million we'd million. is to now, there of going 'XX somewhere we're I obviously, timing $XXX and come at round in think of going at million lot second point bleed over million that here, going moves will invoices spend is $XXX -- to and a some what right probably number. in work your second the between on year. CapEx, most renewables come

bit a going what in that's So up is we're the time having the or a little if But 'XX show in December 'XX. to here. play January of of of hard figuring base

Phil M. Gresh

year? Okay. be a turnaround And that lower should

Richard Voliva

Yes. Dramatically.

Phil M. Gresh

that? on ballpark Any

Richard Voliva

Woods about is I turnaround don't at believe scheduled the only have number now, partial we front Cross I us of 'XX. thing have that but in

Operator

is coming Neil Mehta. question from Next

Neil Mehta

back the conscious this therefore, and dividend conditions, suspend given decision invest either given market this this a Holly asset? way conversations, likely this I'm related a the go to the rating to to wasn't decision dividend was the it transaction? because funding want Or to still dividend. was growth was on in agency on point. track I struggling point to that to Rich, your was suspend

Richard Voliva

No, Neil, decision an the conscious making investment in while this suspend to of Sound. was a dividend out Puget of the caution abundance

we caution directly out acquisition. done Again, the this related to it's and So of talk right. before to agencies,

them. from action expect We no

Neil Mehta

Great.

look and investor return to just of special of of return do do returning comfortable this And Holly the time shareholders to with capital the that's right continues capital the spend the was to over the next over things shareholders. on capital, free versus so get how you made the the point to some the growth to And community push special year? dividend one introduction prioritizing because the years that's thing of outsized stronger that particularly margin during more environment,

Richard Voliva

see cash us XXXX, today. is have anything, beyond. was is thesis that in spending a given going the beyond. And think return from shareholders we think flow, investment pretty higher still here If more So the we the To we we've in period going I for to XXXX powerful returns I XXXX it's growth absolutely the opportunity had a what of to our be I to capital gets the within in That of and that dividend perspective. I we intact. the our XXXX, 'XX through Ergo, -- but been hope returns and think your which reality to clear cash were point, cash -- in restricted capital

Michael Jennings

return that Obviously, capital of cash I the The investment, employed. about return other that thing concern some balance capital renewables this engine is And obviously that stress. believe to take through I and shareholders higher. employed is can, sheet we through if we return on would had drives add, substantially we on

-- is rating. And than in different of want of metrics because would respect the say, by to at us they of size. diversity, to run HollyFrontier our scale I the, the peers investment-grade of of retaining and tend criticisms One larger lack agencies

our returns decision cap. shareholders. per cash it's day, is can have we the we ultimately business end little to the unit that our the room So maybe less investment. high-return of to provided about debt driving of be And feel the a But on like wiggle this of given right

Neil Mehta

Mike, this, if I you that or sales there dividend? on could have way the way cheaper having just that, alternative to on elsewhere without could you or either press an asset was maybe press a funded

Michael Jennings

into And increasing concern equity. increases By capital. debt. The cheaper is introducing by way is and that overall cost ultimately obviously of our volatility our our of debt our cost that,

of capital. cost that believe we So our reduces this

Operator

coming is Jason from with Gabelman question Next Cowen.

Jason Gabelman

ask costs. above follow-up. within And financials guess, the now? financials prices RIN Puget burdened disclosed to that today those where would maybe Is wanted Sound. a disclosed just would, based the on cost Are RIN RIN in what And it those where have I the -- I on are fully where right financials? on be you is I

Richard Voliva

Jason, it's the fully Rich. Yes, don't those reflect of for historic today. a have financials number RINS. cost I

Jason Gabelman

to a way aren't Any $X, mean, talking ballpark barrel, Okay. $X $X, it? just... we I

Richard Voliva

probably the forward. RINS math export quoted blend we obviously your based and publicly prices at You RIN rates, of could the can well-known right? XX-plus of If or blend percent expectation going do on are product, the

Michael Jennings

$XX,XXX effectively spot of -- market capture make, a obviously product question Rich It's we fully as the crack is the the in plant, today. profitable XX% slate due by is Rich spread how that's And much do the fuels And price. said, uplift market. as past this the today's question is, is in burdened to of said. on higher-end and But nicely

Jason Gabelman

worried of And increasing than better refining second my as more are move the peers. and you there's lower limited expanded can concerned you investing that's that cost today with then now And that the aligned you've business space Can Helpful. just around in where discuss, of your you the versus helpful. transition That's energy optionality something forward doing opportunity this it. future-proof even of the terminal we is it in question just refining footprint? Got is maybe be one, valued business? Right. in investing opportunities as your are the asset on likely that value in business

Richard Voliva

time. and values Jason, object around XX we'll And the take think But we making a question. good And other fuel later. this powering next years. It's obviously high in economy at be Petroleum we operated part willing in it. pretty this It's step headlines, I made have bright gasoline, we're responsibly petroleum returns. money would inroads, a And In the in our to of that core hydrocarbons new the clearly think, jet that that's we're is the through argue and the invest the now, is to participating talk do back But a what renewables. business. the think of for see a major diesel about those, say the of what fact can terminal period is are And But Petroleum future well. equipment and lot good a right shiny mover fuels we here. of for despite numbers foreseeable people from and future. some are a of provided we we economy. And

Operator

Leggate Our next Doug Bank with America. from comes of question

Douglas Leggate

ago. we last I I'd comment, petroleum of the on voice remember all say, XX appreciate really years beyond Mike, that reason

I that? that related One may. So questions, thank both Puget. by environmental X I you or liability The have on? I that process with around refineries, related or Shell on is for if and to also quick this Or comes guess, how that And you if competitive holding at put can to specifically. is that guys whether I negotiation? right was taking are Can under was? any you characterization ask that

Michael Jennings

the It first the chosen was up direct full and were negotiation. purchase, And are through the for frankly taking second tied question process. confidentiality. will liability in the answer second I'll I But an We asset we first. -- you then organized tell an past. certain not that a answer it's is

Douglas Leggate

any Okay. I for potential wonder you could is notional follow-up look you if an it briefly what the elaborate I drop appreciate. product numbers down. mentioned like? My on of MLP

Richard Voliva

think some truck I we'll evaluate second logical dock, here the Yes, Rich. it's the Doug, in and that marine there's namely. quarter, assets Rack

total probably range $XX a million high at see million of potential $XX a think to I there. drop-down level, we

Douglas Leggate

go Okay. you helpful. go third. -- and Can That's for a really

Richard Voliva

Yes yes.

the buddy but. Sorry, Mike under throwing your

Douglas Leggate

apologize I'm I sorry, that. publicly Paul, for

obviously, it's was in terribly want cash what kind because, item There's So any for in go-forward from crude the be not understand here. just nice to of what's eliminate growth didn't to capital. and I try not a we out And to they night, flow a change. estimates deck this to that going obvious it put super there level really line on free question. last our is at throughput you the

you the that and do to assures was disappear now growth capital what that have insight to going forward? as So or any right X -- that growth

Timothy Go

has here, is, gone identified as to yield for this their Canada, pleased growth supply be to incremental with Tim. second. would to has Sound's of blend a increased gasoline. that What They course, future through projects very We're can with the Puget position able Sound the us that make Sound portfolio call supply flexibility of Puget projects Doug car that flexibility Alaska. increase in as folks in to Puget bear gasoline, digging We're have, for cycles, about is can asked Doug, gasoline typical options types turnaround well qualities. tell just they that I Those the product primarily a those lot you they they continue themselves can as have today. have of growth can make of around on you

changes growth ability flexibility changed a landscape to as As give projects forward. moving result the and them the becomes regulations. product place has of These

we Now specifically have analysis. any forward will that we case-by-case projects and in But assumed as our of course, not basis. growth a them on them going forward, comes investment evaluate consider

Richard Voliva

crude flexibility. Yes. that. Doug, They do I add on fairly heavily if spent

Bakken like crude of Northwest, $XX infrastructure. and deliveries crude targeting Not in spent the variety receipt in million, basic by in desalters of But means. of of currently all $XX namely money. Pacific and barrels million anticipation those things in As terms did sorts the investments was many there are of facilities receiving those any

The investments. it regulatory going the much So environment make is frankly, well facility perspective. obviously, carry wouldn't from that tough really a growth capitalized. It's is And do forward. made to compliance into to

So I that. we think can expect

Operator

Blair is Tudor, question Holt. next Matthew with coming Pickering, Your from

Matthew Blair

quick EBITDA the the of with And Two logistics yield drop product can you provide the there is to would so, refinery? here. expect two, then any eventually And on specifics One, associated you HEP? that into a if follow-ups actual just refinery?

Richard Voliva

Matthew, it's Rich.

I we've to do that side, potential we guided. that, back within here So see that go on the total the within logistics

So for room has on here makes on out it product there's down in yes, X think historic everybody. deck night, million you a sense the I'd last $XX $XX put for if point million to I Slide drop detail mix. to we

reflective expect would be what that think forward we going I as of well. would

Michael Jennings

Matt, out well. just to addition, Graco diesel and make make and specialty they there, and I'll as point the [indiscernible] chemicals yields gasoline In jet they and

base the product products just enhance premium portfolio. those So

Operator

questions. And there the no over back more you, I'll are Craig. turn call to

Craig Biery

finish of operator. individually and We'll of Uri a I it Yes. investors by it's would to to with the up, our follow-up respect of Thank with OpEx. just say here up solid quarter, the in wrap was Storm that million quarter, analysts. you, and affected sort But $XX extent obviously, obviously

well full is run us you're and markets product are the the with to screen. seeing recovery, Our margins on allowing that in demand now

in lubricants geography. and on I commodity seeing. business the of hitting we're markets all market So by supply, Recovery what is And wise lumber we're such reopening that cover right as The is right markets. really are wise. really our a produced these pleased serves wise, mean It's into what commodities with lot and being of and and that Canadian short sort demand cylinders. deep

and affected storms by the Also, we others were. weren't

willing But really a we've obviously, and both Sound. products what's It oil in it. Sound, investment-grade we're Puget on right and think excited got we enough our Sound that and Puget well, business it's was the the that us of to to business. Puget do doing our do want to our we our didn't it. with value of And finished important really deal focus really lot now we credit something company. us maintain the in and are So right to is respect rating in to long-term for dividend. We're quite right base for creation to do But front of about

that, wrap participation. for So much very your thank we'll you with up, and

Operator

at Please a your This conclude Thank lines have and day. this teleconference. disconnect time, today's you. wonderful does

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