HF Sinclair (DINO) 20 Feb 252024 Q4 Earnings call transcript

Company Profile

Participants

Craig Biery	executive
Timothy Go	executive
Atanas Atanasov	executive
Manav Gupta	analyst
Steven Ledbetter	executive
Ryan Todd	analyst
Matt Joyce	executive
Paul Cheng	analyst
Valerie Pompa	executive
Neil Mehta	analyst
Theresa Chen	analyst
Roger Read	analyst
Douglas Leggate	analyst
Matthew Blair	analyst
Jason Gabelman	analyst
John Royall	analyst

Call transcript

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Operator

[Audio Gap] sound quality. Please note that this conference is being recorded. And it is now my pleasure to turn the floor over to Craig Biery, Vice President, Investor Relations. Craig, you may begin.

Craig Biery

Thank you, Christa. welcome Sinclair and XXXX Fourth everyone, Call. Earnings morning, to Corporation's HF Quarter Good issued release a the we morning, This press December XXXX. quarter announcing XX, ending for results

release, copy If like our of you hfsinclair.com. may the website you at find a earnings would on it press

today's proceed in remarks, disclosure with we note the release. Before harbor safe please statement press

harbor securities summary, statements call of non-GAAP made discussion be predictions There These statements. forward-looking intended factors such cause regarding to or that federal those filings. include In measures. results from statements under in covered provisions are many safe to The the are SEC may our laws. expectations, management expectations, of noted are could also judgments including differ

financial today's please provided the that, time rereading see the time-sensitive information transcript. may any call of measures. or with Also, accurate press the any to Please earnings at on note of And longer release call Tim. no be for replay the over to turn webcast GAAP I'll reconciliations

Timothy Go

morning, Good everyone.

full the challenging our strength operational XXXX that and results conditions to out navigated refining. year macroeconomic highlight as was prove in of portfolio, and we diversified and resiliency XXXX Our good a year financial

demonstrate our also we results on strategic success executing Our delivering X are the priorities. key

reliability. improving on First,

for to pleased reliably. by XXXX report of our on completed utilization also our and [indiscernible] safely positioning over all continue that Our increased heavy turnaround we workload operating and XX% in Safety leading to results budget, our to best-ever I'm was Personal beating year-over-year. to on assets old schedule and and refinery achieved XXXX, higher record

our strong and and EBITDA earnings. record year midstream Specialties us business Second, businesses. optimization integration helped another in both and our of generated marketing Lubricants And achieve

from lower expenses We also year-over-year. benefited SG&A

billion cash a while to commitment $X sheet cycle through strong the have shareholders and strong liquidity both dividends repurchases, are flows assets Third, all in maintaining position. our share generate and returned through We pleased of over to to XXXX shareholder and manage to portfolio our returns. balance

All that examples points are working. is of these proof our strategy

our adjusted highlights. refining, lean cover $X.XX throughput achieving path us throughput barrel. were me a annual barrel In and let lowered XXXX, our our liability, year-over-year target for the barrel and setting expenses of Now reduction efforts segment towards of $X.XX on per to $X.XX through per operating per

set XX% annual We our in premium reliability Sound at of utilization Artesia by operating production hydrogen amongst we increasing Puget and milestones significant efforts. production through annual records other XXXX, production year-over-year at for records. optimization while site year-over-year Cross, and Woods reducing gasoline individual renewables, our per sales gallon, at volumes for achieved expenses improved In jet XX%

year business renewables end of Excluding the fourth would higher charge quarter million positive EBITDA. $XX cost to have of drawdown inventory, significant achieved related our

we the of could in through through unit, our environment availability to the was strategy leveraging While the such strengthen commercial reliability CI efforts increasing our low things control XXXX, pretreatment our challenging and improving hydrogen our we earnings the margin as on focused business. feedstock power mix our

XX% a for XXXX annual record Our EBITDA million, over $XX increase Marketing segment delivered XXXX. of

net sites branded of grew the also volumes our XX grow by our during We wholesale to branded across demonstrating increase percentage business our a refining commitment supply and this footprint of system. XXXX,

uplift in provides a value integrating strategic brand outlet barrels. our it see into long-term DINO to continue for our as We margin portfolio growing and refining the with

adjusted million number In $XX expect by Specialties, grow sites to earnings with million XX% of EBITDA, strong headwinds. Lubricants our $XXX delivered branded of another we of FIFO with even year of & forward, we Looking annually.

integration. and our base across oil by product Our continued sales results finished were volumes, portfolio driven strong optimization mix products

structure and the annual business, volumes highlighting up HEP. value year-over-year XX% our from up synergies buy-in record and of adjusted Midstream EBITDA X% capturing delivered corporate our the million, year-over-year, In we total record of of $XXX simplifying

Looking optimizing there refining forward, integrating midstream is believe low-hanging more businesses. growing and fruit business and for remain we our committed this and to

The our strong performances of of these X nonrefining segments and strength demonstrate portfolio. diversified the resiliency

billion dividends. HEP March over XXXX, XX% we Since shares, we cash share for the through shareholders Sinclair $X acquisition and XXXX, XX the represents returned both billion repurchases over in to and issued transactions. Sinclair and have to the share we $X by over returned count reduced which shareholders our of During in shares have million

our and cash also and we quarterly on Today, strong Directors March a As strategy to March of of on a we rating. holders approximately committed record we while sheet million XX, December X, XXXX, of XXXX. authorization, on return remain payable $XXX our maintaining declared Board balance $X.XX XX, had long-term share credit to per long-term outstanding investment-grade repurchase ratio announced share that regular our and of dividend XXXX, payout

and we forward, reliability, return continued to believe value our and for portfolio our shareholders, on capital we Looking and integrate remain our growth will drive strategies focused accretion improve optimize shareholders. which profitable to

this the margins encouraged uptick to also in and recent over that, are rebound during the refining believe to by With season. in At. me our let positioned call well driving the are cracks we indicator anticipated We capture turn

Atanas Atanasov

Thank everyone. good morning, and Tim, you,

results that $XX Let's These per by begin of net we highlights. HF collectively by quarter special reviewing million. million net decreased loss share. income shareholders to Today, negative $XXX items attributable Sinclair's HF reflect fourth reported financial Sinclair or

compared the items, $XX fourth these per of diluted quarter XXXX. $X.XX period million quarter the income for net XXXX. the million in $XXX net $XXX to same or per million $X.XX loss of for adjusted to the $XXX quarter share for diluted compared or fourth Adjusted EBITDA Excluding adjusted in was was share million negative fourth

product was refined lower sales gross as global adjusted decrease million in This EBITDA and to lower fourth In West industry fuels of quarter segment, adjusted XXXX. quarter $XXX $XXX across of volumes. the fourth principally by supply negative margins of result million the the our driven Mid-Con both a refining was regions high in transportation compared refinery and

of barrels weaker at the negative fourth for in Dorado Crude market quarter to to a the XXX,XXX XXXX. quarter oil charge per XXX,XXX The XXXX. day El the and fourth of in XXXX, primarily barrels million charge declined Renewables result day averaged reported million of compared Crude our per of as segment, we the refinery quarter our EBITDA negative fourth In compared quarter $X quarter the $X turnaround fourth for for of the adjusted conditions. fourth

XXXX. was principally million to in gallons volumes gallons Total decrease quarter XX high-priced This resulting for XXXX. a for of inventory, sales were cost of of of the fourth fourth million the increase fourth sales million XX as due to to quarter drawdown compared the $XX the XXXX of in quarter

$XX for fourth quarter fourth $X to million the of XXXX. Our million the compared for Marketing of segment reported quarter EBITDA

was XXXX. increase in the primarily fourth This quarter driven of by margins higher

the Our million driven decrease EBITDA million FIFO fourth of compared Lubricants charge EBITDA was by and of in to $XX $XX quarter in from in million of XXXX. quarter the the of adjusted XXXX. the Specialties fourth for to adjusted quarter $XX fourth a increase fourth million primarily quarter for segment reported $X This of XXXX

FIFO in inventory. were by the of periods The both driven consumption charge high-priced feedstock

segment higher turnaround operations $XXX quarter primarily XXXX. in of million spend. Midstream year. quarter million quarter adjusted million $XXX driven which included in of of by increase tariffs to fourth quarter cash Net compared revenues the by the Our fourth was $XXX fourth from last the used $XXX higher the This totaled reported in million of fourth EBITDA in

$XXX the quarter. Sinclair's HF expenditures fourth for capital totaled million

facility. XX, approximately $XXX credit total which of on unsecured As HEP million, cash XXXX, availability the billion of $X.XX credit billion our and $X.X includes liquidity December Sinclair's balance million HF stood $XXX a undrawn at facility

net As ratio XX, due notes, principal amount XX% of debt-to-cap January $XXX due a of of December we senior XX, of with XXXX. and of $X.X On of XX%, consisting million of billion of X.XX% billion Sinclair XXXX, an HF or notes senior debt have of outstanding $XXX $X.X X.XX% issued million notes XXXX debt-to-cap ratio senior aggregate

to while notes We million maturity XXXX notes. $XXX the weighted borrowings approximately XXXX used net tenders in and our $XXX our tenders credit interest This million expense. of our in outstanding extended $XXX profile HEP notes and under proceeds redemptions senior repay in debt lowering senior our fund all and from average of to facility million the

through sustaining a go $XXX for approximately is turnaround XXXX expect and in spend This from catalysts. Let's to guidance full year and specialties -- some XXXX. in turnaround nonrefining million spending respect and and includes With including capital $XX to items. capital, specialties down million we XXXX, lubricants

expect we to our across in spend addition, $XXX growth In capital investments million segments. business

which For to take day our to We're barrels some the expect run planned Tulsa oil refining first the audience. of turnaround in questions reflects we between quarter at XXX,XXX from XXXX, ready segment, of the now and Refinery. XXX,XXX crude per our

Operator

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

Manav Gupta

tighter just overseeing. unplanned Coast I'm market West downtime we given looks to lot trying the are look, understand, a all the

refineries are to supply Sound the leverage [indiscernible] through your West that you that or whether can have the linked which to So or Coast help understand which markets it's us crack. other Coast West Puget market, to

Steven Ledbetter

of for Manav, Sound touch that Yes, south unplanned refinery is multiple we are fundamentals the the We we Steve like X turnaround the say market overall that, as the and helps the this can market that to only side for recent in on and not events the the balance our the Pacific watching points. Coast but Puget have we're Northwest, PADD season from improving. West started question. heavy think

our and UNF the can down of our from We Phoenix. integrated come Navajo, refinery Salt Vegas Valley into Artesia Lake pipeline up into out

we and there, to advantage unfolds. as look of benefit this the take seeing we're So that

Timothy Go

barrels Manav, would perceive shortage overall to area. a talked to to move part of Tim And just just what I I be of say, would we've we about long term strategy that this in take is is how say and advantage our able to west -- be gasoline

right out and so events some as season And paying now. is unplanned turnaround this . that see going we heavy on strategy

Manav Gupta

follow-up. Perfect. A quick

You marketing Or bolt-on -- on marketing was going it Help there? to what's to when at small more the business. Is understand of grow a you to be little are opportunities again, your looking deal, trying and you grow it part plans over going some business? organic? more did your us Sinclair

Steven Ledbetter

We of that untapped good Steve. progress. the largest one making is yet the acquisition. Sinclair elements is that, still see We're of this Again, Yes. value

Tim remarks, XX on As prepared the net put stores. we in mentioned

have and it. high on that an third We XXX through branded the next put that, aspect, in quarter. signed is believe for come year half look or demand another We the sustainable to we first seeing we're important, that of the --

our And starting of and to XX% and When through is organic program. but benefits this accelerating look can looking important fill growth marketing. things, predominantly point. growth inorganic, slate the So grow year-over-year. X% nothing market wholesale the our in between through there's to out we really think that about we on believe at from see that that the organic at We'll we our again, we're

Operator

of question next the Ryan comes Sandler. from Piper Your with line Todd

Ryan Todd

could one I ask business. lubes if the Maybe on

been a here below backdrop, what earnings rate bit that the it's power quarters, back First, view mid-cycle about talk macro of the little weaker, And we the run level going in expect backdrop as maybe the last business. couple of in XXXX? how you $XXX million to the forward? flows would business generally you Can get like should you

Matt Joyce

Joyce It's compression experienced at if portfolio. of Sure, big still the here. of which in in look what saw to Matt on oil a part our business swing XXXX, lot Ryan. of base the the business refining you fairly macro we've the we on lubricants the markets, similar it, a backdrop side,

subdued we're done we oil a market what from seen -- cycle couple past has and see the over encouraged manage the forward what consider we that through base the quarters. by actually, a that pretty in -- turn of perspective. going we're bit, team seeing that nicely We've now And down and to would

nice we've businesses. offtakes seen steady European And our our just in We've general, market off past and established the positions in the over subdued U.S., in in normal. growing particular, that we've in a That been in very of we're also than actually our seen years. slower North businesses several has America, demand base

if So we'll and our we you number, result. perform, it's at think X.XX see continuing look FIFO I business to a see, excluding

performance very healthy underlying of above the this still trending mid-cycle. is again, and business So

Timothy Go

it, said Matt this just Ryan, just too. and face Matt that I'll in described. chime challenges Yes, even businesses I headwinds the despite that all Tim. is mean

of If $XXX the in kind for of million you have we which of XXXX. actually were in business would rate been FFO an a factor $XX million, impacts, a underlying record

pick fourth weakest quarter again generally is So believe expect. and strong. seeing quarter business is first the like Seasonally, quarter would we we're the we back up still

Ryan Todd

to between of balance thing to lubes monetization? business diversified the profile Great. know a there's model. external do best think within recognize your about And an but example growth I then value it's way like or obviously value profitability, recognition of favorite the through not for activist your involved with within debate investor the talk something improved versus potential driving with about, businesses peers particularly mix the over you your high for How for organic one

Timothy Go

Nothing Ryan. strategy and Thanks, around Yes. our has business. specialties lubes changed the in

maximize not we're open is to goal to have But going our value. someone our I that portfolio across goal shareholder quarter. come else's have last Our shareholder as should is as we -- to or in value are maximize in whether to may portfolio. that's the clear But

In mentioned term, evaluate And to we're as But and mostly in But the it quarter, is to options we midterm, some that would our continuing continue do willing inorganic that. on business maximize integrate Matt will the value. it best that near how to if strategic small we to are bolt-ons on primary this that. there optimize focus come continue focused shareholder to the means. to opportunities through up, grow organic certainly be last to entertain

Operator

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

Paul Cheng

Tim go back map -- understand and that -- good, marketing. want or very dropped why of The look if I divided quarter-to-quarter simple at year-over-year, and really XX%. on to maybe number that volume, the into But you per you sales is sales Trying stores, share add Steve, guys per first just store do to store. by looked the continue to and the a about that we the EBITDA case? your question say, your

it concern just it's like the that getting a productive that your less question. than seems store existing? And you're That's incremental is in, the -- it first the

Steven Ledbetter

the we like as on this volume element, Yes, talk to grading the Paul. looking Thanks, marketing at year-over-year, about high portfolio.

at a seeing on revenue the As XX% site replacement we and higher these time. what is ground, and a come new little we're online take they go put are once margin. But a XXX% sites between performing the better things

continue a these you're we really sites seeing maybe of our don't really, timing EBITDA. want in are So of with pruning and much some this better, with the sites, performing but is it we to issue and tree, the some are that seeing

in So on this is issue a things timing shaking are actual how the financials. just really out

Timothy Go

with stores that also the rolled net some-odd grading on like really XX is to for of Yes, the I stores, netted is is that Tim. is add What stores, And this year, in would consists that high the that's referencing. XX% XXX that increase you off. which see something out been about the Steve of old have

those And XXXX. high driving business some you the maybe that's per why are And in gallon increase. stores you're but seeing far -- is posting that driving gross see that lose margin off, of difference margin here new volumes in the we're some by grading of rolling the the

Paul Cheng

that can that or portfolio a least we can do has have the your a apple-to-apple at Steve some that for comparison? sales in Tim, those been same-store do more you [indiscernible] than you so year of that share

Steven Ledbetter

Yes.

them are trending and same-store sales, So is Timing about we to element. those an where in. important look at be do we expect

X up. things ramp parity months And you lapped or full mentioned, as between about to we're speed. stores we've year-over-year, to take up that the seeing And so though, these slightly

continue see in our We to region. growth

we us our one positive strategy moving with that more So right is into gives a business. the put that think this our to on branded take indication

Paul Cheng

Okay.

targets, refining to that's barrel rate higher, is say, reliable, utilization is more sufficient. question become Tim, The able get you time look partly think that your second be and $X.XX to will denominator you not be cost at when so your I going better, medium-term think, the but you that, per over

bridge $XXX that what the terms update you need have to you are have of that million, cost $XXX Do you you able in duration achieve and And to in gap there. that the think what get savings is probably cost any can in share I guys million the that? achieve to initiatives to and past to time in you said taking pace reduction? really And

Valerie Pompa

Valerie. is This

we the $X.XX know, you the target. thing took As this we're step year. working Reliability #X remains past on. a aiming We are at

-- in that production. and year-over-year So you're seeing

after capital, with and also high-cost costs putting ground and In feeling through assets. capital addition we're on go eliminating which turnaround that, in efficiency the the improvements we're those to operating maintenance

strategy that digital our thing is other is The performance. in

we're and are well. costs optimize intelligence plants. models So asset maintenance predictive expect those we that, and digital out drive those operating and that's we play overall strategies we our year, anticipate several we're using work, this our serve -- changing continue costs to way to These going programs and us the our that see to to starting in

Timothy Go

our Others Tim. reduction just they're as about. their trying of that of what We that cost because Yes. reduction to announcing -- take talked improved dollars about goal And out barrel addresses think this of the well I'll both achieve. jump talked we're trying reliability programs terms on we are the that of Val to portfolio. the is to metric per announced Val in Paul, cost terms in that denominator total $X.XX numerator out program as

to progress level. can -- We cost think better much to we numerator take know our doing against how the kind this that $X.XX order is measure we're so that see at in our to bottom a have get way line. out you of how and to We

the reliability. is we're just with pleased more date. this And progress than So to

done. of Val's believe about we sight remarks. line talked talked some to $X.XX. We $X.XX in this achieved get that as about of to a we And prepared we've things our the that that year we record have

Operator

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

Neil Mehta

we're and be do entering just able a tougher of just we've buyback? question couple meaningful see a line margin your to into strategy the into on on perspective entered return resume environment when you to sight capital. -- over of your thoughts a It's of tougher Obviously, big a Just the part of been -- the first last years is

Atanas Atanasov

long-term We to and -- shareholders. to return foremost, of to first like I'd commitment our reiterate XX% capital our our commitment

our looking we at year look this the we the of line portfolio, exceeded feel of not -- history, sight balance of improving of where and that. of far we've with XX%. From for you target target comfortable diversified If that margins with at today NIM very stand meeting

exceed to, us approximately midstream I'd to -- it. And nonrefining at our point improve fact, marketing then XXX, provides businesses, year look past that improved as to will our with to dry in meet attention this like XXX commitments continue at you of when cracks to your return as shareholders. powder, to cracks of dividend and XX, our that I if you lubricants look to of certainly cash significant

Timothy Go

And Neil, the saying. to on was pile same We're how are in out some strong as are of and I'll dividend this the midstream is It's know are able cover their basically Atanas are terms Tim interesting. talking I businesses well. what about just boat. people in there needs.

$XXX the If of look business pay our the -- off is you million dividend. that with comes that our cash EBITDA midstream at is that our to generating enough

everything Atanas allowing really of to else coming of base that out refining marketing about in coming to is coming that's out And us buybacks talked shareholders of of value to additional that's pace. other so return out it's lubes, take through really, advantage then

Neil Mehta

sense. makes That Yes.

is the about Is How Mid-Con? problem this a improvement? seeing just the Is the to famously . do perspective into So margin it setup it a a the really winter. bit signs problem? are environment. just But back on then going problem? we crude a work your It comes on the think product seasonal. through of What's you Mid-Continent little you be tends or seasonal as it in weaker to And summer?

Steven Ledbetter

that Steve. I'll one. Yes. This is take

the seasonal. Mid-Con, was us, we've for Dorado. our very quarter, that I El large particularly as and What at think turnaround in the was fourth had is mentioned, you

to we our the into advantage into and that some structure the we're we starting U.S. balance what what as Mid-Con, we'll in head the far drive terms -- seeing already. then of As see of is to take crack supply/demand in little able will And as be I bit driving think improved see in of we're a whole season. the that terms of

then balance, We for be economic strong constructive like looking continues pretty across fundamentals a view in we see will our to XXXX. very that it's demand. distillate And mid-cycle. winter. think Demand regions. look at regions. going up. a we suggesting just average at Growth been is underlying right And think the some it's -- across and there's on cold We It's that a supportive our margins be rebound

and the So overall, look feel of pretty good Mid-Con we pretty about as part we regions -- our that. overall

Operator

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

Theresa Chen

to Back on And the and comments. earlier potential expandable in refining how L.A., -- point facility on be midstream the competing the commitments your and forward gasoline a able Vegas optimizing utilization . and proximity what here? current you refining to that additional topic path low-hanging that closure the your path the of past system, source pipeline? and And terminus the businesses you the on Can market of barrels and is light that fruit and from for midstream X talk are to would commitments additional to evolving of some about a do integrating competitor L.A. unit you with your seek of anticipated see that? to

Steven Ledbetter

into West opportunity believe be structure potentially where it on going Coast. as we Theresa, around one. you we do think utilization not line, and know, It Steve. of although capacity specifics take UNEV, that Las Thanks, supporting is end we and that at supplied was is, the I'll the from that some to maneuverability this I'm get south is the market could which, higher Vegas. have

of bodes near what term, term for well and that us. potentially we're seeing longer think tightness we the Given

and market value north of valley of seeing west that more into and that the so to and Tim up extract Salt advantage go of benefit already down we'll chain into the mentioned we're heading as out we we're look part the moving unfolds. Lake that for, Lake then as value out Las integrated Vegas Valley of taking of And Salt moving believe as earlier, group barrels out the

Timothy Go

of the way is those isn't we advantage Theresa, take can only Coast margins. this West And UNEV Tim.

through As of do more needed. components as our if our get Phoenix and you way, carb needed. can refinery make we to refinery, to into gasoline can California direct for that more also and can jump matter Tesa the gasoline make know, can still Sound capacity course, that we area Puget have the And and then,

different take ways advantage right we there's then that West can influenced on X and we're that going Coast the So now. issues through are

Theresa Chen

just through system And terms would maximizing the clarify, it. higher theme systems be your of that either Got to in Phoenix utilization without primarily of across incremental evolves profitability as UNEs or Artesia to CapEx.

And percentage can product any can be the what make color just gasoline on much how provide the side, based you into today? California Puget yield on on can clean the what of component Puget or delivered or specifically

Steven Ledbetter

So this to We I some And question. X-part proximity believe our production that's opportunity regions close where in our we're significant a capital. the optimizing more We of regions to are believe about unlock where advantaged there's without that -- value happening. is is. in we make think it's have fortunate

integrated perspective, attract do And we midstream so operation we the uplift but chain, of attract as can barrels we from our from well. for to modes more there can can more midstream, value a different

the When we gas if make ability and put components market and to Puget, further make it that continue into question can components value in the have market. help see to there, along. move card plays out. Right that some California to go more into to we as of look We the we'll supply gets exists exploit where market that the down future significant we're finding down high-grade to now, the higher that at we short put we even to think -- around those opportunities to look

Timothy Go

describe growth about every Tim. capital that of talk for is pieces reserve -- we when we this we Theresa, And capital We our year growth. the

We have Sound here That allow small or online comes us even the gasoline next Puget and to it. in month capital more ship project X. card growth at make a that will

perfect terms advantage to of timing warranted. market we're what be to take in if of the try And going to do able to so that's

Theresa Chen

could And squeeze if I just That's in. great hear. one more to

third-party On much of segment the midstream is [ XXX how by the flows? versus paid that refining ], cash

Roger Read

we earnings XX% open integrated an performance the at without where midstream impacting there's space and business. improve we and opportunity value integrated And roughly chain. think our We're type Yes. further value can all

Operator

comes Read next from the with Fargo. Your line of Wells Roger question

Roger Read

gasoline California everybody. optionality of there's of car potential is wanted versus to what the gets Is morning, Good capture . and looking into to your maybe referring of in what I to you're Yes. more versus the of of hit, what project always which sort imported of your of was the mean is here, in kind you're what issue Anacortes. unfinished indication guess at address deliver finished. any to part and the make specifically ability finished I I is what unfinished that an off product the California?

Steven Ledbetter

put and volume decide this the not a make and the and components whether optionality. the card today, for we the but Pacific work Northwest or I a versus there's Roger, flexibility us us And question. components. this Yes, valuable thing right now, is project is Steve. into mean it's larger great California into is on high a California, unfinished What go allows bringing is grade most the to that in

to get of will our supply-demand the on and of going it's share at in for balance overall market But depend we'll the Puget best those the either we what that entity. time, decisions, is one but capture and of

Roger Read

lube of or the here the that. business, side. oil Okay. of And I mentioned on know, seasonal a, I side downturn then lube cyclical know don't sort the Appreciate on you

need the that call sort we macro particular pay to? of at for supply that out and it, any side is there the to look of, you let's As attention demand. base expectation What the market oil Is markets?

the to here terms little in a tied crude for you has of I'm What China chemicals the tied of it been slow oil key to thinking loose? lubes more kind this attention consumption. impacts a here up to item China being pay Is tightening to is think of do how market?

Matt Joyce

a Yes. lot and areas certain many here. this specifically at demand around China. is I of in seeing Joyce mean you're It's namely Asia the base the macro an Matt overall oils we're spot Good years, past geographic taken that stage what question. more that perspective, had on. From

And looking with a softer to the traditionally that Folks little a are oils. place European course, at more then, and bit as demands of favorable coupled generally U.S. market there. than the had the are place American base North and been dampened market

that, a environment we've contributing I factor through that overall think, to margin is gone dampened XXXX. so the in And

that that way base those really up. of this really about to to to and finished think continuing their our into do we how to continue be plays At for stage, oils back being the excellent marketplace matter tighten have improve specialties our us and our China portfolio forward talked oils base a continuing And lubricants margins. allow where to I things favorable And make business to a mix it our strategy and recover. and operationally to integrate see we've regards will products with then that that's that in

as we're So not on business. reliant that

Timothy Go

we our has the not when we're in sales the base while of see you'll that but down all disconnect oil percentage for business. X Roger, our as last strategy the And oil the way is that we base business up to basically this from past. talked years report base oil before, that grow mix last trying it we've excess our over percent complete craft that and point yet, produced finished We're a about all business going And the years. lubes had integrate that lubes to product our been in X to soaks

strategic that's is we've the see base And And from as stay out. play our see, markets to that's oil you disconnecting cycle. cycle that through a to strategy doing been And you'll the able -- our through that standpoint. that strong been have results continuing working,

Roger Read

up the acquisitions. about Is on way in when follow Is bolt-on that good. . past expansions the you've real just organic just part potentially I of that Can to Or address quick. it some that? spoken are that internal easier as is

Steven Ledbetter

Yes.

So Roger. it's really -- both, it's

win believe a allow have out organic that in. have and that a lines us and we then place we grow developing growth proposition go our that uses deliver to we getting products and distinctive right product in for the value compete and and So focused growing are on reason or to and

that, incorporate as line to at may past, and other with only And another. the accretive acquisition And integrate the looked base that. value mentioned we EBITDA to to able portfolio we've and or wells, that then also the oils tuck-ins value-added will our opportunities but forward coupled EBITDA numbers that, and at of in we've continue to just isn't those our one not look look our being This in sight be at base into where but formulations. and of

balanced the organic the have kind to approach. between inorganic We it way do of and

Operator

of Doug line Your comes question Wolf with from Leggate next Research. the

Douglas Leggate

I'm had Atanas, want refinery administration. Frankly, and which ruling, or Obviously, you I not right August Sinclair of to take Tim in sure of to I wants was ask wake in one Trump guess their it the now. where not I'm this. the sure exemptions about back small it stands

will at X. FPM conference We have our March refinery on

on that where potentially SREs to could in will But if, obviously, there just things if DINO you did ruling. a mean what you and favorable you stand I insights could be grateful offer we're any also. fact, find for And guys it was wondering

Timothy Go

mean can what and refinery I that in different Trump business question. what is But the thinking believe on small answer the think SREs, now. back if Yes, table. we question exemptions on Doug, right are a his we administration be do on we'd good I is

would the real path no had Trump administration, have I refinery small that we the you to told outlook forward. that a prior had exemptions And

path a this certain to at chooses and have path it's to I do. And administration the forward, think to what we're but monitor away there I just far a point. could think be from going

There's they're come to I And and it's going stakeholders as the going down to are off on the small the of think of know, order the refinery needs exemptions. debate. sides you resolution to parties lot different involved, the of trade exemption in of balance small get that how both to and refinery wishes a all

the into Clearly, the this courts have appeals thrown back lap the of EPA.

that so were and unjustified unlawful. And prior they've -- denials their

there going do guess. I here could resolution to this this point, So forward? at we are few question the be EPA least next a the think years. will what at And that's But anyone's hopeful that is, issue in the

Douglas Leggate

any back? to mean credit what of magnitude I put but get know there fact, of you did, it the kind if . order Tim, premature, is as a maybe could you could way in it's

Timothy Go

know Yes. No, have exemptions of It's refinery can the past. how of as -- We gotten to you what history, to type go which know do who it's will be. type RINs the because -- any to have for plants resolution you approved if value hard exemptions. in hard knows -- see or what RINs any into we back our

if then, look that X no different at got if Doug, for can history, past. to we're have might feel result you those forward. the plants about We And to a get There's the iterations know that But all get of course, kind happen in exemptions value have in think gotten I you different the -- the end at you of that could what that least going exemptions could be. could X of think numbers. high

Douglas Leggate

would to and to is question I it's a appreciate that. back for and to week, event going go Tim, of big getting bit its XXx on could is a are table. EBITDA. be speculation apologize BP know imprecise. sort marker that I I That in X next a for perhaps around the of to banded I point, you, lot want have advance. the Ryan's there's one guys? numbers be for this very so for the And at you Castrol

this on business. either where it's guess EBITDA an your And guess, I your clarified maturity for scale options? want is morning Is someone are you I the was If where your feel if saying, you you've of lubes basis million you $XXX have an by you? business adjusted My question it portfolio, the of I quarter position indeed, to for seriatim my is, language. or lubes that is, else's last at do think, bolt-ons? a question

what quarter Or core. a thinking? with its just was to -- level have still we last the obviously, want is Because where options? Can you're getting maybe to exactly senders in it clarify you we're it

like about it value. it's maximizing sounds This quarter,

for to sorry clarity. I'm So repeat looking the some question, but I was

Timothy Go

minds. No, about people's and it's of independent. independent I think to or perceptions when Doug. creates look, more think different -- it good not there's No, as I ideas different question, -- ask noncore, core like a that in or we people

it's different many mean a whether core so So or can business not, things.

other lubes independent so businesses than Our or at business as independent our -- of more least the businesses. is rest our of

it separated can can easier be our separated marketing than, be So say, refining. from our midstream businesses or

what it's of reason independent. in and there So lot is why the a that a it optionality, seems like does because flexibility lot of there's

businesses shareholder more value. are ways those on dependent have can we business. our maximize that that Then refining really We core

us inorganically independent, So things, a I monetize the bit I don't word confusing the of lot folks gives little because and it like build it's use to what sell organically, do the that's grow core, ability value to it, it a it and think or independently. is

$XXX about process, business how And this I the really good have the think when EBITDA our his The million. built been this we business years, where in you X last are we average for up feel think years. about Matt over has and really team X last

we strong. from and It's the say, there. can been that's this about. been low-hanging we're low-hanging very more capture after business lubes But fruit There's I short something because there's to go tell more that should that come. very it's to feel that so to we lot And a think that trying valuing the term, in you, go we we believe good fruit

but we that build the we business? continue Or last kind advantage part that the continue options that? and the on So there. Market take and that's as rates been to those IPO years, in market there, And active look see. as too. down success interesting we we've in believe market at markets in on any coming on as interest why -- line little of bit it's conditions have and have a play that's what haven't we're that's monetize are the to of grow we balance, a as The well. should the the on can play big part been we as to and really had Castro, to people a -- that don't for big equity that anticipated. all much Doug, specific people had anticipating watch been the private opportunities is this, and out overall And of comment it

Operator

Your Blair Matthew TPH. next from with question of the comes line

Matthew Blair

to Could you lot then in so you losing any discuss far you higher. moving the between DRIs first the quarter have first capture BTC, do Do in R&D R&D downtime of expect parts with the . environment XXZ? moving a the but planned quarter? the And

Steven Ledbetter

Steve. is this Matt,

it's $XX,XXX What that's QX. certain volatility here is think the is question. I in

under XXZ it terms as was also California, And we yet. not the point. with just run and issue that business some Either As to a the in know, effect there model law of LCFS prices. are well created is they goes though preparing a notices. great at you valuations There's on our the a uncertainty out amendment are as know, LCFS you bit and that recent of in into

that out our really that can get right had things business the CI So We QX. And quarters. what to and optimizing operational that things good have quarter. our believe doing now, wish where in is low successful over for but on And more is specificity, past we're we amounts, had efficiencies. high markets moving we made the utilization our on these lid strategy, operational then will and I X very focusing I feedstock settle a costs molecules keeping netback. prompt best and buying the and the

still are to elements becomes be framework law actually forward. moving Those regardless important going what of

a specificity, value So shareholder our the that and we're wish but I to best QX, aspect. had to the in more of sure stay running make optimize of doing uncertainty it carefully I business there's on lot and we're top

Matthew Blair

like issues the And then might of either depreciation up been looking than adjusted while the any rate. it recent factors? versus good. in step quarter, there with rate took seems lower EBITDA onetime your tax at Sounds have fourth Were a EPS the run those

Atanas Atanasov

function spending simply capital is depreciable a and With respect depreciation, the of our to turnarounds. this life

tax credits . business. look basis, CapEx. renewables that's tax purely function on rate, XX% we additional a a When at XX%. full our the receive that year and actually advantaged on you And timing rate So is still that's of we're versus primarily statutory of our the

Operator

Cowen. with Jason of comes Gabelman question from the next line Your

Jason Gabelman

to of ask on one apologies going another Lubricants, time. ahead I'm

larger business? like this of as terms is the right a size of you've business? growing, contribution interest lubricants around is overall the kind of the kind of mentioned potentially mix to Or organic earnings an mix growth, a there and In you bolt-ons in terms step-up overall but feel do in in of

Timothy Go

focus Yes. HF whole -- Which Jason, for our thanks the more is, about when portfolio. Sinclair is what the just is than we talked this This -- just is this question. moves. and

Our grow this is organically. business focus primary still to

an optimization/synergies together. we gotten on are We new portfolio to as continue reliability integration improvements, we've focused optimize this that

we initial a our to unique bolt-on accelerate size. the a that would is opportunistic way could would more not we're integrating appetite that kind talk accelerate it's be very be growth, us bolt-ons, some primary accelerated something at. of as desires our or but organic transformational or the the for inorganic bolt-ons bolt-on growth help any allow But achieve this of example, base lubes, really that that we on when do goal maybe that's really it look do looking is our have is company, something to focus. to or openness growth is secondary still into opportunity to oils would about a finished So it If at an of to betting us type

Jason Gabelman

thoughts markets, Canadian how your and to run I crude was PADD switch wondering see the the have another crude updated amount tariffs Okay. Canadian headlines assets X XX inland your get you on to think run follow-up, Great. impacting I on Rockies, we given That's flexibility to really tariffs those full in on may of and the clear. ability And oil, their days, fore within I for your And my rates at in refineries. both would of potential tariffs. love specifically crudes. you

Steven Ledbetter

are -- we've been tariffs looking of uncertainty, this is again, at toes which is that I'll is is carefully. you QX on Yes, Steve. this the dose. quarter Jason, And something one. keeps quite good, that take your

scenarios. event to connected up, ability full we the and different have is a hubs. lighten we're to many the what in have We at potential team looking command our refineries we all And believe

extent, is, when honest, tariffs think Guernsey, lesser us. think there good own proposed ability up in We're those early And whatever we even customer gives be connected the acquisition by we Cushing, What be market A&S. to the borne the a we have producer the crude our portion we indicators. we to some with opened but tariffs will the flexible. a shortly of market Permian, that saw deal on And to after to a and be were the will

take we'll tariff come as so those is perspective. a decisions they And with whatever enacted from

Jason Gabelman

come just severe impacting it. that flexibility that order order with of kind there has could utilization a without And follow economic to if flexibility I an implications? first up, more . Got Yes. does utilization? is and impact of maybe Or a second

Steven Ledbetter

Yes.

So minimize Dorado, a it's and a is slate. level that but El going and the is at what to Parco of we both mechanism's depend price on that where need set. run lighter introduce again There heavy can we to

it, elements settled the clear things pricing may and as ultimate runs. So pricing will up, on depending us back and happen structure full position moves and efficient rebalance impact get the and market throughput. if an have those economic an would of market yield into But

Operator

JPMorgan. have with And that comes for question more We from one time John Royall question.

John Royall

there the M&A. side? now? acquisition like you when maybe this the past be can. it on refining good Tim? M&A in mentioned sheet you you do Or on to potential is question around get about that How first my a think in to with Is that refining the So you've active you caution for more some market, think I countercyclical balance time the for is

Timothy Go

about were when refining John. Yes. we're lubes said we've about Good well. this Again, as we talking it say talking I'll that when question,

internal is business. in main Our growth our refining focus organic

optimization. in me our way refinery before, there's that that's and inside so that believe, our that's efforts our in you've spend integration hidden reliability, say energy with spend accretive we We business. the own our portfolio, refinery refining to and And a is the heard as most believe and still to unlock

end optimize. we've way, the room peel in still we continue still to of lot continue here year. layers as laid way There's there's by headway this and -- made still a the we foundation of past we've the lot to a over -- of made and grow to a

in either You're seeing throughput that year-over-year.

in OpEx lower that seeing You're year-over-year.

with You're some that integrate continue and seeing you're of seeing we midstream unlock as us marketing, that to potential.

And our so that's really focus where is. main

the the a be as a assets are spread the has and our be advantages that the tell as you're the conditions I placement talk right timing, countercyclical. are out at competitive again, right bid-ask fruit might products It we opportunistic crude right, advantage. to However, changes, within would there. has to be fit look the it laying having It we be advantage, all And to you, foundation. we time, able refining and a change price. market right portfolio that available having market laden has about asset, overall to But

they as but and organic we're And growth. at focused this available. we'll on mostly options become point, consider optimization

John Royall

refined you about . Great. that's the quick a my to Rockies scheduled think Rockies. to relation start on Denver pipeline your And bringing follow-up up year, about then There's you product is the to that pipe in footprint? next Can area. talk how

Steven Ledbetter

Rockies go is west. And to that but is refineries to That our or expansion that more Front we're in ultimately, take out of we in sense base. the barrels ability down Steve. products the advantage move moving the of believe whether things position have up predominantly of We west of asset pipeline it John. Range, Yes, moving This to Denver makes to is out the the potentially move our best we'll into group. open jet

sure Lake into highest that into to market, products the still And to as Valley the Idaho we market. get Vegas we market, be UNEV flexibility look so come have that that earlier, that into as netback the or up them mentioned the make we'll to Salt down,

certainly when take of our ourselves will product is to more are done, bring there. marketplace advantage our but competitive it and advantages positioning So that we

Timothy Go

this Yes. different. be pipelines no Tim. And marketplace. always competitive There's is These the going to John, changes are in

we'll markets still be the be And and able the protect strategy to stations, we continue And stations market about. foot, that Sinclair believe be talk we our if and those low-cost that our then Our serve. supplier DINO we we grow execute share. branded same. to We want . want competitive to still is objectives, in the the to grow we can the

Operator

back does that closing now Tim conference question-and-answer And the to conclude over for comments. session. our turn I will

Timothy Go

you, Krista. Thank

of the Before we to to plan they like end, XXXX. out hard work in for employees our all give committed would shout our to I executing a

on the was very profitability. We what conditions, we to these and number we satisfying records can are market cost of it reliability, focused in safety, and control annual challenging see during delivered

year addition, results demonstrate full the In of our our earnings power diversified portfolio.

we While also are the we to seen grow have specialties excited the lubricants are and in continuing refining and our marketing that businesses. encouraged improvement in midstream by recent we cracks real about markets,

Looking call. and our remain our same: new excess shareholders. to of assets all our ahead, Thank our improve the cash to you integrate reliability to a day. joining our optimize for portfolio Have priorities great return and

Operator

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

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