DINO - Earnings call transcript Q2 2022

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Operator

Welcome to the HF Sinclair Corporation and Holly Energy Partners Second Quarter 2022 Conference Call and Webcast. Hosting the call today is Mike Jennings, Chief Executive Officer of HF Sinclair and Holly Energy Partners. He’s joined by Rich Voliva, Executive Vice President and Chief Financial Officer of HF Sinclair and President of Holly Energy Partners; and Tim Go, President and Chief Operating Officer of HF Sinclair. At this time, all participants have been placed in a listen-only mode and the floor will be open for your questions following the presentation. [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

earnings Partners Thank you, Sinclair quarter issued Energy HF XX, announcing ending results welcome and morning, for XXXX press second the releases Rex. Good Corporation morning, and everyone, call. we This June quarter to XXXX. Holly

and you on our them you like copy a find would of at may hollyenergy.com. hfsinclar.com If the press release, website

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

Michael Jennings

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

compared of than adjusted million per was quarter the more current net billion second net diluted income to adjusted XXXX. the for $X.X an per the EBITDA was in share share $X.X or Adjusted items, the diluted $X.XX quarter billion, these $XXX second for $X.XXX same 'XX. billion Excluding quarter for of of or increase $X.XX to period compared as income

through by taken benefits Ukraine both combined COVID-XX the our assets. refined the successful response and achieved synergies. within the and commercial annual years results synergies over countercyclical million of in actions the To supplies improvements and quarter of refinery We're and rate our of Our run have constrained of the annualized operating second working economy rate pandemic due demand $XX of close picture, to $XXX approximately synergies and lubricant capital Sound to an target to in Puget Sinclair acquisitions related combination to pace Sinclair conflict and optimization. two are $XXX product date global reflect of date, the sanctions a improved on the million expense we and and over reductions the acquisition of exceed million that run acquisition SG&A

$X.XX regular of per announced declared Board payable today holders XXXX, of September August Directors our also a dividend X, We share to record on of that XX.

we We repurchase million with $XXX stock over share through During million $XXX connection to shareholders the program. quarter, returned our common of repurchased and X.X totaling in share shares million dividends repurchases.

on half under million had product allocation investment-grade capital fuels, As low by to to throughout transportation we're we the our than and to shareholders of into constructive sheet to XXXX, Heading active balance year, repurchase no and committed the program healthy rating. expect of $X of later first remain global strategy of remaining for the outlook We of while half billion returning remain XXXX, our second maintaining $XXX solid second to stock the June authorization we XXXX. XX, repurchase demand. quarter fully inventories up the and the supported

within to DINO recently the reliable acquired of safe Sinclair, quarter grow With operations. see and complete, we third the value to initiatives. production XXXX. of end of will segment these strategic our continue of announced remain ramp by the Looking integration as up reach the our the expect on assets previously projects We quarter marketing and of great forward, We our look we while existing program geographies. we with to we will as continue from full all executing assets renewables our production focused maintaining brand levels

realizing are As from largest of earnings fuels renewable diesel, producers our one of the of customers uplift about carbon to investments. providing our we the opportunity excited low incremental while the

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

Richard Voliva

Thank you, Mike.

reviewing Let's financial begin by highlights. Sinclair's HF

our million Pretax of of quarter. table Cheyenne capital. HF $XX $X.X included Sinclair's press in integration were of operations $XX cash acquisition second $XX Net for quarter can release. million totaled of of cost turnaround related items spending impacted to items. conversion working negatively A by decommissioning costs As sourced refinery provided these capital a which inventory $XX a and few found previously million million market valuation charges billion, of mentioned, be $X.X lower million, totaled by from earnings million $XXX the the renewable the and of included second unusual expenditures adjustment to cash production. standalone diesel

standalone at total with comprised of $X.XX billion ratio we with undrawn XX, HF billion, facility. liquidity June a our had XXXX, XX, a of quarter outstanding which XX.X HEP XX% approximately of a received debt-to-cap market owns of $X X%. value Sinclair On along billion, HEP's As LP June the close. during by a $X.X net acquisition standalone $X.X of Limited $X.XX and Friday's billion of represents stood debt million. XX% HEP Sinclair's the Sinclair Transportation as cash following unsecured Sinclair balance of first of billion million last $XX of HF Partner distributions of units, totaled credit ratio HF debt-to-cap units,

some items. through guidance go Let's

[$XX million $XX marketing, between million to Lubes million for of between $XX loss capital. capital million million. spend the in XXXX under the to received million guidance $XXX $XX million in million million expect cash now during million XXXX in to we $XXX We expect our range Act. HEP, to $XXX and provision for million CARES We million] turnarounds corporate expected to million to $XXX and At catalysts. reduced total $XXX Specialties, to at $XX of million $XX $XXX the to tax, and renewables, and With the to have quarter in $XXX to $XXX in second and $XX at million million respect carryback $XX million spend $XXX refining, in we

Going HF of forward, the is Sinclair the to range rate XX% corporate be to in tax XX%. expected

segment. expect of the For we day XXXX, quarter our second barrels of per million and oil $XXX run XXX,XXX to Refining crude in between

have We major fuels of for scheduled remainder our refineries at the turnarounds no XXXX.

Energy Turning Partners. Holly to

in to $X.X of pipeline net income quarter related HEP our million Second the $XX.X XXXX, refined gain product quarter was $XX.X to million included compared a sale. second attributable million to which

recently record these August compared gain, XXXX distribution was The LP income adjustments Sinclair August HEP's partially second year-over-year in Excluding net was quarter adjusted to related reflecting million generated higher for of year. a unit, found of to paid $XX.X HEP X. of primarily table same on release. XX this be the $X.XX by offset period flow distribution million distribution $XX.X distributable to in a interest is million, assets, resulting press X.Xx. of coverage This as second and of ratio was per and the cash million EBITDA of can earnings increase the reconciliation announced the expense in unitholders second to be quarter quarter $XXX.X we to operating HEP's transportation acquired XXXX. A $XX.X costs. attributable last

million capital $X HEP’s quarter, reimbursable related expenditures refinery of second $X to units, the of in approximately million capital. $XX in During our $X million Cross were and CapEx $X turnaround including million CapEx, total million, Woods expenses processing maintenance expansion

million. For revised XXXX, expenditure $XX slightly was to our capital $XX million forecast to

HEP committed to framework forward, leverage we to cash using continue as retained capital remains Looking reduce allocation our flow.

we increase that, X.Xx returns we're XXXX. unitholder on our achieve to to And Rex, leverage We and year-end to expect target ready are questions. track with of take in short-term by

Operator

with [Operator Instructions] comes Manav Gupta from Our Suisse. question Credit first

Manav Gupta

little buying assets. it, this earlier a you assets Clearly, question know on Congrats delivering I have it's like pushback see. you a what on for now of quarter. Sinclair countercyclical here My you clearly, results. is, you but operated got strategy

synergies. of kind indicating to You're higher

needed and of this one were Sinclair acquisition area the stronger talk it you maybe is positive a would where So little, work us at thought be and more what surprises stage? the

Timothy Go

and -- group assets working little and very last about specifics quarter especially start talk a Sinclair the over some Sinclair the of is with together. let Tim. We're pleased some this I'll the Manav, with level. this higher maybe then employees

running I think could both opportunities see one the logistics at higher or have the than on on us surprise the the site pleasant and able been has synergies either rates Woods and Casper throughput to that led to side product separately. run side crude Cross we've

that. through that's records to locations. the I We've assets of to And accomplish able So only because it's employees been both think monthly be together set the logistics at working exciting.

Michael Jennings

our excited more super brand integrated to vertically distribution. product we're that, terms in beyond Manav, this opportunity the of and be about

I'll asked You where And fulfilled we haven't for say yet. something specifically it's dreams hopes there. our and

lot us. a do opportunity a lot have of converting going opportunity to adding And within opportunity front within a approach existing we more plenty downstream rack branded We is to look we and really refining lot work where our see And distribution We of be are there's of of stores. as this wholesale to is distribution. of that's in footprint. then forward branded from and a

Manav Gupta

what's little are it? you a quick you dynamics driving quarter us little strength? grow to is talk business. the for understand also, have? Are If with follow-up happy those. could strong the looking like My here a Rack business? uses your you vision the about entire Are for Forward very the another Perfect. Help And this which bit bit you footprint

Timothy Go

the over has encouraging. specifically as XX%, results capital, your lower up, Lubes, costs. Tim. oils, another SKU a Mike in product start able which you But driving up really and quarter, is this things question. mix talking has improved that able talked of that last then Rack we've pointed simplify about couple strong rationalization to seeing. upgrade year our we're I to Forward business, had our SKU cost in We finish that Despite Manav, Forward starting is been that Again, the to think Yes. SKUs a the working I'll been really or prices the with for the Rack up out about Rack base business out, quarter are in play that of Back and we're we're is I'll let carrying XX% record to take the broader rationalization, business, reduced out. increase keep

is or efficiencies, specialties we better of and motor in better is driving that to and for on All mix better to oils versus car upgrade our businesses us focus the passenger synergies product as example. oils, process also us helping yields continue

between with petroleum, our business our lubes from You're better feedstocks our Tulsa coming with also finished integration seeing to tying Mississauga. refinery

of stronger results. three all So contributing those the to are really

Michael Jennings

Manav, from a higher little level.

not, we're or about And the think time, time this own we absolutely and core meat can to be particularly the it. other business. valuation. And the external bone do. At that terms We we grow we on in being, note business. we lot business we think of here of As take transaction. and consider this obviously Valvoline like we whether this to can the markers, same inside a we the see for any versus But of pragmatic grow outside we we

Operator

Paul of from comes question Cheng next Scotiabank. Your

Paul Cheng

my it expected. On said looked than was comparing third the Rich, you you like billion, return at that certainly of second time today, stronger capital quarter to the and $X end, much when quarter

question. wait that Maybe I And will raise the be consideration so go the at to when for what that first you you're answer one. criteria will that. will for or second you That's number? that until I number, the looking

Richard Voliva

the Rich. to Paul, just expect we'd this quarter that. to comfortable we're think color put first get little number. there achieve we Look, that this At Yes, more no is that than very later point, around I a will

dividends in quarter. July. As shares Mike X.X in shares another pay. million did X the got for about mentioned, to We did $XXX we million million second We've

point. expect market that number. toward optimistic let's comfortably see point it, running at increasing how we're your goes we here, this So To that we're the about but

Paul Cheng

say, to mean can you be And the share to with that any of you yes, distribution.” But, us that that will that order need what for in you Rich, hit or "Oh, criteria raise guys share anything? I metric can we that kind can you

Richard Voliva

matrix. a So Paul, give I know don't you if I can

You deliver less time. long know have volatile been more. speak these this be. can rather We how doing We'd and a markets

Paul Cheng

maybe for -- is good realization stronger than Tim. West thought. margin very was that And much we'd and region The Okay. this

will or capture because quarter any that, just curious we in can the oh, mainly there Just capture if margin say, have is one-off the you benefit that again? that. good, similar is again, And yet overall a and it’s margin we you

Timothy Go

that a Not well quarter Rockies full lot Northwest was significantly capture. this Tim. less as in us Puget margins capture, Sinclair go utilization the of about the -- as But as in exceptional that the there obviously RVO that and that the that or whole Yes, helped Northwest and this cracks and capture RINs saw to And we're Mike one-offs. talked well. able identify had margins, on helps. the Paul, terms is our well. synergies that then Sound at as becomes Really, Pacific the in we West in higher, to percentage-wise, we contribution the contribution in as the helped capture running of helped first the

point So I to don't one-offs any out, Paul. major really see

Operator

the from Theresa comes question next Your of Barclays. of line Chen

Theresa Chen

on first the strategy I from midstream to wanted here. ask

their versus of in or choosing today, with increasing sponsored over In of in about what So time over the as long there's competitors this holders them been roll spoke doing kind acceleration -- and of activity we've MLPs, talking trend contrast, the bucking XXXX. you're unit to past year the are your many about, HEP for so. you're

returns, question be compelling in. what your I'd special underlies more distribution higher first decision update be part to related roll And unitholder buybacks when distribution? it on this of detail it here. love is hear So an outstanding then increases, Would to your HEP to strategy to or through happening? just versus envision midstream would general and the do how keep you it the

Richard Voliva

Theresa, it's Rich.

important to first, refining those ownership outstanding Sinclair. business. to team operating we've So HEP our The of And critical I'd say, is an critically assets assets. those got look, is HF

see that's really a do question grow structure, and your opportunities finance Sinclair we business, with HF to to corporate So of Sinclair. HF the that both To question. outside financial us, about

and might that do. worth HEP far, so roll-up that And It's affects pointing per probably out share relative made of large sense Sinclair any here to relatively a you sort that has perspective. not is from HF math

situation thing we'll look, monitor all best value for and continue that to So shareholders. our to the create do of

question I point, Looking to are this evaluate think At your buybacks. to itself. 'XX, growth. distribution the we about We'll distribution increasing

HEP stock. not As most liquid you the is know,

want not if the it. the necessary best going it's better reduce I'd but of in It to the of it's to So not say go that and a do But float. be interest take distribution form option, that's may now, ahead we we'll HEP, right increases.

Michael Jennings

a And capital in acquisitions. returned shareholders first. And goes a that, of via in toward quite buying in point, the all to this external MLP, I'll the Rich is holders to its Theresa. put add of capital as growth in that term compared simply HF capital true. really, But that to incremental of at we've lot is Sinclair to terms be criticality Sinclair to near it of related it allocation, terms said and ownership HF

Operator

of Your Doug next from question comes line the Leggate.

Douglas Leggate

you PBF. from recent Mike, restructuring the on I Shell being from balance to and along of relative the continuing the last XX often seen from pristine Phillips now one of are What you you your to speak, the yields wonder they opinion that do structure? are, men the shape with of sheet so we've you're -- what And in ownerships standing, logic ownership about how MLP terms of if think can back got obviously Marathon. some of you've thinking obviously

Michael Jennings

be let's back but the dividend put two and a We to value bought at pay our to year. point, two head we acquisitions for last a patients one and made table. their intend high pause those took of -- which that this it tried investments. shareholders off my really we different comment, I to We in Doug, on we consider for

course. need cash the take of we're do, near we'll we're returning the shareholders. the case, And would our in HF for our size our do to as relative And Sinclair and otherwise. ship, entities to term, buy-in be in to capital a interested it's math, flow examples. most Rich on that the mother Shell, says peers of a was larger. earnings. basically insinuating, of depends size accretive the lot as BP time versus probably capital that those lot What being, relatively that In allocating the So of But

Douglas Leggate

know it's too Mike. of a question, obvious probably I

asked So don't macro really think I appreciate anyone's your yet. perspective. I on I guess the

So destruction, on pretty seeing current trends third question kind seeing get gasoline just really I then, And I'll there. over And wonder the the given have hard. in any maybe are your you you leave the going through And seem quarter? quarter to are of are I insights in a far. that What it almost diesel course, so terms What can if bit your wider. could seeing rolled your demand gasoline holding inevitable of views of you what system? halfway to obviously, offer there, you there, is as in how are spreads

Timothy Go

direct Tim. and questions, Doug, let of more below five-year our in in inventories seeing weigh still start macro. Again, with Yes, this on regions is We're the demand let high responses coupled me product with strong your some It's still then demand of averages. being the in utilization. Mike I'll resulting to

that's We very would that. at constructive but Gasoline, in and specifically XXXX all good is very levels. Diesel, our the Southwest, within we say or X% particular, the we in positive So strong, of in about probably operate. feel above demand XXXX areas levels.

retail our we expand there. the Mike in beginning, We've mentioned into added strength also marketing good brand. brand strong added new of that I that second these more as on see the to see to here progress sites some markets. Sinclair quarter. than We the look XX XX in still continuing for to the continuing at we're we're So would mention side, demand

pull marketing So from as see well. standpoint, to a we're strong there continuing

Michael Jennings

more little on that. a bit Doug, Yes.

And that some July, that's the was of anything numbers. demand a little I right? implied June, of bit a the think XX% there DOE fall-off. industry I see clearly the late think price elastic We don't saw in demand, like sort early that aggregate in

seeing markets of And aren't kind than just that that. our so behavior, more

product $X.XX XXXX think taxes, this and now I not excise at $X.XX, you're much distribution above trade retail is levels. at range adding that rack the costs,

So expectation back labor is given quickly. probably seeing, strong demand the price that the economy, comes we're pretty that elastic numbers

Douglas Leggate

but labor explanation the any do Guys, on Any thoughts why to point, that? showing I have the data as EIA hate you what it's showing? to

Michael Jennings

No, no. see it to We're Wednesday. every happy

Operator

Goldman Sachs. of comes question Mehta, from Neil next Your the line

Neil Mehta

Good quarter here.

renewable diesel. little diesel first on this results, is The just came the softer quarter. bit of question outlier a Set was renewable strong

talk just see margins outlook long-term of you also about blenders' tax that tracking the profitability how and thereof So the because rest talk business? about are then extension the and could year. the for the of the And support credit

Michael Jennings

Certainly. really its on and renewable in Recognize now gain project The diesel product as earnings anything. quarter, revenue stream to as throughput just sales. is beginning margins Artesia low -- our from much coming and RDU reflect this that just

high we And So invested utilization But will if RBD. in a going low economics. Ukraine, throughputs, bought veg a we've oil you much unit. is is with that feedstock of of this own you slate, of start-ups, And sort the initially significantly economies, as diverse toward improve I poor PTU pretreatment on lot our feedstock and in disruption and through of to will. think we're while know, a heels relatively respect costs our feed the progressing RBD to our which

versus like example, $X.XX. is spread something per for degummed gallon As today, of RBD

that's can uplift see, in significant a So as you margins.

to called because not and through the end that we quarter. rate the in third is period much really the production still have start-up but in for quarter, terms of still by what our quarter is very expects we full have, achieve the of out a Artesia forward, ramp Looking

terms little margins But So costs here. bit otherwise, performance. going in and that's feedstock a be a in earnings are favor headwind of our of to

still is say we've So very affected constructive and more and it's we're the that's that utilization made startup anything investments -- else on what I'd than margins.

producers' of XXXX. Inflation all But to certainty some converts know, terms BTC, of thereafter, to margins yes, in sort contribution it through solidifies margin of the CI-driven an provides outlook the And in as and terms that makes that fuels us more Act, you that a credit. Reduction As or clean optimistic. LCFS certainly

BTC of Our XXXX. -- the initial the economics anticipated end through expiring at

Now benefit solid then and we've got CI based that. two after years a expectations of very

Neil Mehta

the crude or the timing TI How That spreads? of also Brent you sense, underlying support turnarounds fewer WTI WCS. And do something a is the widening of about transport is Okay. sustainability differentials? some And follow-up think with those just with sir. there half and in the just in would makes wider the that around of economics is both SPR equation good side of back then year, the the that wider of the reflection it's

Timothy

Yes, the Neil, Tim. impacting TI Brent it's is spread. certainly, SPR the

the a side, bit is production demand Permian out very if gas volumes providing Brent in WTI also there, higher and got some coming strong a look natural stable little driving certainly perspective. a making think uncertainty I more Europe, you've But from more Brent you on scarce.

You barrels. got the embargo those a that's Russian drive creating for Brent crude

by of think near now are the in any range, probably the and time And at of I not look we the driving think being if TI while to is it's that term. Brent change side. spread really, going spread. that you that, kind to the the normally think, we right between transportation We not setting dynamics scarcity X.XX] that is set So [X think transportation basis Brent

the you couple we kind on of So TI long range. inland at and happen years. next time of in to here the a be to strip, Brent our to And that's additional obviously see look in portfolio. have over think the forward spread that $X crude $X good if It's you going refineries refining what's

Neil Mehta

WCS? And on WTI, Tim,

Timothy Go

Yes.

than have third previous quarter take is to of that to there more the be the spread in spread. in advantage the that widening we in of again, may We that's think taking ran On quarters, able have you WCS advantage out, WCS quarter. noticed we more second

coming was we start on spread. by year, going back the again, pipeline seeing We WCS some occurring see that pipelines being to online the going of fill in end takeaway maintenance pressure and the allocated think the of and that to of we're think Canada, put the You capacity. that's some again to up production out complete starting some WTI

as we and going at allocation for be those we're to So to spreads. think our look here that that's sustainable. is going to come a enjoy we able forecast, while, we think back Really,

Operator

Tudor, of Your line & Co. Blair Holt with Matthew next question comes Pickering, from the

Matthew Blair

better marketing we in how was what The here profitability segment far and the this than are talk Could expecting. were about you progressing QX? in things drivers so

Timothy Go

Yes, Matt, this is Tim.

think that XX we are growth end another we're we X% to of that be we'll branded earlier, as new Our hoping Sinclair added able that progress in performing bring quarter targets, Growth in looking before brand. mentioned very X% alone. better we're than can got the seeing is sites segment, I in the But We're to year. pointed range expected, just encouraging. be before, here XX is reachable. Mike we to our a marketing in and the attraction that's what on second very We've all of here we've and at, as lot here retail think

have strategy Our of those in are start, and right sites, good sites we our would licensed retail is seen a into some sites, previous convert guys doing clearly, we disclosures place supply licensed have to several be that can we if that as now. you

region. have in We're markets Sinclair continue as our the Southwest of where pull we there of Rockies assets incremental at a PNW already lot where new to of Sinclair then HollyFrontier growing interest seeing to our been Some grow brand in in well lastly, the the region, seeing well. brand lot And in there. legacy we're established, a the our markets mature have

for long to the our us for in we a that Matthew, and exciting So be branded important very is term. time going portfolio think business

Matthew Blair

end RV are then And have you other Do or today? California appealing? rail geographical markets you to all talk production the markets your good. that equally you as could about for Sounds found that

Michael Jennings

but through and but California. just Yes. markets to find not quantities, We as states trying areas, throughout working value, best specific Western then well as pursuing be won't the as we're those to Canada

Operator

Jason line from comes Gabelman the Cowen. of with question Next

Jason Gabelman

go-forward for think sheet on it be about just other of as your maybe moving could of And and forward, the couple your refining then quarter's maybe in we this West SG&A if What's helpful you a and indicative of levels OpEx debt be remind balance a terms just a basis? expect modeling it go-forward targets First, -- basis? questions. buyback to us region cash is both on you where would the related

Richard Voliva

it's Rich. Jason,

the that's So look we're at, with trough sheet debt that from to guided metric to been very now. and of is inside we got investment-grade perspective, the leverage a sort sheet to debt start mid-cycle to at right We're a repurchase or balance Xx balance committed of to We've you'll we're Xx respect consolidated EBITDA the our rating. and note there.

So we've got capacity.

cash or debt So point. there's repay to no this need to preserve at repurchase

think costs big repurchase for the there. at run this point. think at with dry we million the look West will, appropriate a to operating good share continue XQ to it's We called adjustments this of rate. a of plenty got respect good powder, if to rate. flywheel And that SG&A, make M&A then just I run I here, our you cash as $XXX sort A for is out some if quarter expenses, minimum or target you balance, and we've

Jason Gabelman

Understood.

Timothy Go

have comments, to on Sound [Rawlins] out bit bonus A at couple some call to is, elevated. did We've the of that to some West But at be we as natural normal. little continues to a accrual and than maintenance things impacts add got higher planned Richard's may well. just be gas Puget

looking bring that to looking forward. we're So down

Jason Gabelman

quarter? for that to way Okay. Understood. quantify Any the

Richard Voliva

it's puts -- honest. to those be No. are No, and not takes

can again day, the it's So think number we to I natural of I gas around. at don't forecast, can't end but being going one be move the that thing driver a the big that really

Jason Gabelman

question, Got just the on business. renewable it. other diesel And then my

the of As much in the RBD But fully up running up, platform portion you get you the the run how mentioned ramp-up, XQ? platform. to is production pretreatment you the unit we once now -- in this you're think just and running do early about what of as RBD expect

Michael Jennings

half around economics. depending other say be will on obviously RBD that Yes, less on degummed But versus I'd or half economics. and dependent than

Richard Voliva

to add math Jason, So there. maybe some

call some our Our we kind ability and forma the feeds to of will transaction percent other units straight everything have pretreatment the production. And do well. run it, be, pro of then XX-plus diesel capacity into the as renewable

So percent run non-RBD. to we've flexibility the got XX-plus

end is mentioned, at day, driven going Mike to the only this though. of be the economics As right,

Operator

Your line the Paul from of next Cheng, Scotiabank. question comes

Paul Cheng

can much pretty of a that how two quarter? gallon us in mean, the in on Just So better you have is the in dynamic trying fluctuation gross to steady? understand margin, marketing Maybe Or the Tim, this X.X business? is quick understanding follow-ups. help per that. that I seasonality

Timothy Go

gross are $X.XX higher Paul, with Sinclair to originally seeing, formas. than We're what guided Yes, and in We're pro businesses. we pleased had we out branded the strength again, put the margin that.

As to higher third real gasoline enough to strength it, know look have quarter. and We in we unbranded. continue prices it's and sustainable experience think here that's a of that between and spread know you I don't we've demand, widening if the for going think seeing not. higher or see to I But that we are be seen and we branded don't yet.

Paul Cheng

a fixed those you the Maybe then margin the let signed me ask contract is price are or it or is jobbers, rack margin. another way. plus of more with that whatever less additional sort a that the In

the how that those understand are? to trying on contracts Just pricing

Timothy Go

price, Yes. on work any No, we jobbers with all It's up for sign how really that's based on prices we and Paul. that. the there, a don't posted fixed

Paul Cheng

-- that curious this just for And maybe see. Mike. is I

the that that store the think have no that have past, said getting business, in in retail interest marketing? you that directly you you the Any have the into change own and now brand thought it? operate I you

Michael Jennings

skill brand. level. change to add We We the our different set, staffing No, be manage contribution. channel those branded branded volume that wholesalers. but strong in to That's Paul. distribution very We there thought, a to is want want with no and to presence, intend that's support a that retailers

Operator

Your line JPMorgan. Royall the next from John question comes with of

John Royall

been asked, Most of I had mine just have one.

that upwards about refining. EBITDA mid-cycle generally, billion is is you the I'm $X.XX just you what are -- think a have looking guided just wondering just environment anything bit guidance, synergies You your for where there. upwards? biased at But $X.XX sticky adjusted pointed know number from had that you this I maybe billion

Richard Voliva

we'd say I'd adding product to you'll thing we taking that by crude than and in notice Rich. differential product than point it's the feel our the number, John, we Gulf better one differentials. say cracks structurally in I'd there there. get reflected to Coast is, probably about the is Hey, differentials that markets buildup right

itself. upside we demographics where And some very particular, growth, good to economic there. supply opportunity perspective. substitute that there's from constrained very in got fuels and So really right, the think there's not you've petroleum and The market there's do a got just to much geography due you've probably Rockies,

that's we to a place So that do mid-cycle upside that see buildup.

Operator

over There you. this turn are back further questions time. the call at to Craig, I no

Craig Biery

the appreciate call. everyone. time Thanks, you join We on today's taking to us

always, reach have follow-up If forward Otherwise, in as out Relations. third questions, November. any to our with you you Investor to sharing quarter we look results

Operator

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HF Sinclair (DINO) 8 Aug 222022 Q2 Earnings call transcript