Q2 2026 HF Sinclair Corp Earnings Call

July 28, 2026

Speaker #1: Welcome to 8F Sinclair Corporation's second quarter. 2026 conference call and webcast. Hosting the call today is Franklin Myers, who is serving as Chief Executive Officer of HF Sinclair.

Operator: Welcome to HF Sinclair Corporation's Q2 2026 conference call and webcast. Hosting the call today is Franklin Myers, who is serving as Chief Executive Officer of HF Sinclair. He is joined by Steven Ledbetter, President and COO, Vivek Garg, Acting Chief Financial Officer, Valerie Pompa, President, Growth, Technology, and Transformation, and Matt Joyce, SVP of Lubricants and Specialties. 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. If you would like to ask a question at this time, please press star one on your touch-tone phone. If at any point your question has been answered, you may remove yourself from the queue by pressing star one again. If you should require operator assistance, please press star zero. We ask that you please limit yourself to one question and one follow-up.

Speaker #1: He is joined by Steve Ledbetter, President and COO, Vivek Garg, Acting Chief Financial Officer, Valerie Pompa. President, Growth, Technology, and Transformation, and Matt Joyce, SVP of Lubricants and Specialties.

Speaker #1: Welcome to HF Sinclair Corporation’s second quarter 2026 conference call and webcast. Hosting the call today is Franklin Myers, who is serving as Chief Executive Officer of HF Sinclair.

Speaker #1: 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. If you would like to ask a question at this time, please press star 1 on your touchtone phone.

Speaker #1: He is joined by Steve Ledbetter, President and COO; Vivek Garg, Acting Chief Financial Officer; Valerie Pompa, President, Growth, Technology, and Transformation; and Matt Joyce, SVP of Lubricants and Specialties.

Speaker #1: If at any point your question has been answered, you may remove yourself from the queue by pressing star 1 again. If you should require operator assistance, please press star 0.

Speaker #1: At this time, all participants have been placed in a listen-only mode. The floor will be open for your questions following the presentation. If you would like to ask a question at that time, please press star 1 on your touch-tone phone.

Speaker #1: We ask that you please limit yourself to one question and one follow-up. Additionally, we ask that you pick up your handset to allow optimal sound quality.

Operator: We ask that you pick up your handset to allow optimal sound quality. Please note that this conference is being recorded. It is now my pleasure to turn the floor over to Craig Biery, Vice President, Investor Relations. Craig, you may begin.

Speaker #1: Please note that this conference is being recorded. It is now my pleasure to turn the floor over to Craig Veary, Vice President, Investor Relations, Craig, you may begin.

Speaker #1: If at any point your question has been answered, you may remove yourself from the queue by pressing star 1 again. If you require operator assistance, please press star 0.

Speaker #2: Thank you, Kelsey. Good morning, everyone, and welcome to HF Sinclair Corporation's second quarter 2026 earnings call. This morning we issued a press release announcing results for the quarter ending June 30, 2026.

Speaker #1: We ask that you please limit yourself to one question and one follow-up. Additionally, we ask that you pick up your handset to allow optimal sound quality.

Craig Biery: Thank you, Kelsey. Good morning, everyone, welcome to HF Sinclair Corporation's Q2 2026 earnings call. This morning, we issued a press release announcing results for the quarter ending 30 June 2026. If you would like a copy of the earnings press release, you may find it on our website at hfsinclair.com. Before we proceed with remarks, please note the safe harbor disclosure statement in today's press release. In summary, it says statements made regarding management expectations, judgments, or predictions are forward-looking statements. These statements are intended to be covered under the safe harbor provisions of federal security laws. There are many factors that could cause results to differ from expectations, including those noted in our SEC filings. The call also may include discussion of non-GAAP measures. Please see the earnings press release for reconciliations to GAAP financial measures.

Speaker #1: Please note that this conference is being recorded. It is now my pleasure to turn the floor over to Craig Biery, Vice President, Investor Relations. Craig, you may begin.

Speaker #2: If you would like a copy of the earnings press release, you may find it on our website at hfsinclair.com. Before we proceed with remarks, please note the safe harbor disclosure statement in today's press release.

Speaker #2: Thank you, Kelsey. Good morning, everyone, and welcome to HF Sinclair Corporation's second quarter 2026 earnings call. This morning, we issued a press release announcing results for the quarter ending June 30, 2026.

Speaker #2: In summary, it says statements made regarding management expectations, judgments, or predictions are forward-looking statements. These statements are intended to be covered under the safe harbor provisions of federal security laws.

Speaker #2: There are many factors that could cause results to differ from expectations, including those noted in our SEC filings. The call also may include discussion of non-GAAP measures.

Speaker #2: Please see the earnings press release for reconciliations to GAAP financial measures. For any forward-looking non-GAAP measures, the company is unable to provide a reconciliation without unreasonable effort due to the unpredictability and uncertainty of certain items.

Speaker #2: In summary, statements made regarding management expectations, judgments, or predictions are forward-looking statements. These statements are intended to be covered under the safe harbor provisions of federal securities laws.

Craig Biery: For any forward-looking non-GAAP measures, the company is unable to provide a reconciliation without unreasonable effort due to the unpredictability and uncertainty of certain items. Please note any time-sensitive information provided on today's call may no longer be accurate at the time of any webcast replay or rereading of the transcript. With that, I'll turn the call over to Franklin.

Speaker #2: Also, please note any time-sensitive information provided on today's call may no longer be accurate at the time of any webcast replay or rereading of the transcript.

Speaker #2: There are many factors that could cause results to differ from expectations, including those noted in our SEC filings. The call may also include discussion of non-GAAP measures.

Speaker #2: And with that, I'll turn the call over to Franklin.

Speaker #3: Okay. Thank you, Craig. Let me start by thanking the 5,000-plus employees at HF Sinclair for delivering a really good quarter. The teams at the plants and across our businesses did an excellent job of being safe, compliant, and reliable throughout the quarter.

Franklin Myers: Okay. Thank you, Craig. Let me start by thanking the 5,000-plus employees at HF Sinclair for delivering a really good quarter. The teams at the plants and across our businesses did an excellent job of being safe, compliant, and reliable throughout the quarter. As we know, our markets expect us to keep them supplied with the fuels and lubricants necessary to complete their own vital task of life and business, and the dynamometer team performed well. We'll get to the numbers in a moment or two. Let me discuss a few other matters first. You're aware of the announcement earlier this month in which we provided information about adjustments to our senior leadership responsibilities. They were made in order to align certain responsibilities toward the direct long-term goals of the company. Steven Ledbetter was appointed our President and Chief Operating Officer.

Speaker #2: Also, please note any time-sensitive information provided on today's call may no longer be accurate at the time of any webcast replay or rereading of the transcript.

Speaker #3: As we know, our markets expect us to keep them supplied with the fuels and lubricants necessary to complete our own their own vital task of life and business in the dyno team perform well.

Speaker #2: And with that, I'll turn the call over to Franklin.

Speaker #3: We'll get to the numbers in a moment or two, but let me discuss a few other matters first. You're aware of the announcement earlier this month in which we provided information about adjustments to our senior leadership responsibilities.

Speaker #3: They were made in order to align certain responsibilities to direct the long toward the direct long-term goals of the company. Steve Ledbetter was appointed our president and chief operating officer.

Speaker #3: With this change, Steve will be responsible for overseeing the company's operations and commercial organizations while improving safety and reliability and enhancing cost efficiency and unlocking value across our integrated platform.

Speaker #3: We'll get to the numbers in a moment or two, but let me discuss a few other matters first. You're aware of the announcement earlier this month, in which we provided information about adjustments to our senior leadership responsibilities.

Franklin Myers: With this change, Steve will be responsible for overseeing the company's operations and commercial organizations while improving safety and reliability, enhancing cost efficiency, and unlocking value across our integrated platform. We have made several internal promotions in both the commercial and operating teams to work with Steve as he leads these efforts to continue the excellent performance we've been experiencing. Val Pompa, who's done an excellent job leading and improving our operations for the last few years, will take on the responsibility of working on the growth and organic improvement of our operating assets. She will have both information and operating technology as part of her mandate, as well as applying new technologies to our existing operations in order to improve performance.

Speaker #3: We have made several internal promotions in both the commercial and operating teams to work with Steve as he leads these efforts to continue the excellent performance we've been experiencing.

Speaker #3: They were made in order to align certain responsibilities to direct toward the long-term goals of the company. Steve Ledbetter was appointed our President and Chief Operating Officer.

Speaker #3: Val Pompa, who's done an excellent job leading and improving our operations for the last few years, will take on the responsibility. Working on the growth and organic improvement of our operating assets.

Speaker #3: She will have both information and operating technology as part of her mandate, as well as applying new technologies to our existing operations in order to improve performance.

Speaker #3: We believe that there are technological improvements that can be brought to our assets that can advance the effectiveness of our performance in our plants and within our financial framework and commercial operations.

Franklin Myers: We believe that there are technological improvements that can be brought to our assets that can advance the effectiveness of our performance in our plants and within our financial framework and commercial operations. Val is a uniquely qualified, seasoned technical executive. She has both vast experiences and thorough understanding of refining processes as well, as will be key in leading this effort. She will also have executive oversight of both the retirement of the Mississauga refining assets and the build-out of our Go-West initiative, both very important to the future of the company. We certainly note that we're first out among refiners. We'd be remiss in not making a comment on the macro environment for the refining complex.

Speaker #3: Val Pompa, who has done an excellent job leading and improving our operations for the last few years, will take on the responsibility of working on the growth and organic improvement of our operating assets.

Speaker #3: Val is uniquely qualified, a is uniquely qualified seasoned technical executive. She has both vast experiences and thorough understanding of refining processes, as well as will be key in leading this effort.

Speaker #3: She will have both information and operating technology as part of her mandate, as well as applying new technologies to our existing operations in order to improve performance.

Speaker #3: She will also have executive oversight of both the retirement of the Mississauga refining assets and the build-out of our Go West initiative, both very important to the future of the company.

Speaker #3: We certainly note that we're first out among the refiners, so we we'd be remiss in not making a comment on the macro environment for the refining complex.

Speaker #3: Val is uniquely qualified—a seasoned technical executive. She has both vast experience and a thorough understanding of refining processes, and she will be key in leading this effort.

Speaker #3: There's been much written probably by even some of those on this call, of you on this call, analyzing the changes in our market as a result of both the war in Ukraine and the Middle East.

Franklin Myers: There's been much written, probably by even some of you on this call, analyzing the changes in our market as a result of both the war in Ukraine and the Middle East. I'll not repeat what's been said. What we know is there's about five to seven million barrels of refining capacity offline from where we started five months ago. The conflicts continue with no clear resolution seemingly near on either. Now we see witness to damage of other infrastructure assets which would be necessary for the repairs to the damaged refining assets in order to restore their operability. We certainly have no crystal ball as to when the kinetic events in either conflict end with certainty. Therefore, we expect to have tighter refining markets as well into 2027. There is a bit of a wild card in the mix, however.

Speaker #3: I'll not repeat what's been said. What we know is there's about 5 to 7 million barrels of refining capacity offline from where we started 5 months ago.

Speaker #3: We certainly note that we're first out among the refiners, so we we'd be remiss in not making a comment on the macro environment for the refining complex.

Speaker #3: The conflicts continue with no clear resolutions seemingly near on either. And now we see we see witness to damage of other infrastructure assets, which would be necessary for the repairs to the damaged refining assets in order to restore their operability.

Speaker #3: We certainly have no crystal ball as to when the Connecticut vents in either conflict end with certainty. Therefore, we expect to have tighter refining markets as well into 2027.

Speaker #3: I'll not repeat what's been said. What we know is there's about 5 to 7 million barrels of refining capacity offline from where we started five months ago.

Speaker #3: There is a bit of a wild card in the mix, however. China withdrew from buying crude and typical size at the beginning of the Middle East conflict.

Franklin Myers: China withdrew from buying crude in typical size at the beginning of the Mideast conflict. The reduced consumption has led to stabilized prices in crude, and China has also suspended exporting products. If they reverse these decisions, products exported from China will certainly impact the products market. The canary in the coal mine to watch will be the Singapore crack spreads. They tend to react first with China increasing exports. Otherwise, we see markets being constructive for the next several quarters, potentially into 2028. These events have had similar, if not more dire effects on the lubes base oils markets as much as 20% of the world's base oil supply for lubes being offline. Which brings me to our lubes business.

Speaker #3: The reduced consumption has led to stabilized prices in crude. And China has also suspended exporting products. If they reverse these decisions, products exported from China will certainly impact the products market.

Speaker #3: We certainly have no crystal ball as to when the Connecticut events in either conflict end with certainty. Therefore, we expect to have tighter refining markets as well into 2027.

Speaker #3: The canary in the coal mine to watch will be the Singapore crack spreads that they tend to react first with China increasing exports. Otherwise, we see markets being constructive for the next several quarters, potentially into 2028.

Speaker #3: There is a bit of a wild card in the mix, however. China withdrew from bri buying crude and typical size at the beginning of the Middle East conflict.

Speaker #3: These events have had similar if not more dire effects on the lubes base oils markets as as much as 20% of the world's base oil supply for lubes is being offline.

Speaker #3: The reduced consumption has led to stabilized prices in crude, and China has also suspended exporting products. If they reverse these decisions, products exported from China will certainly impact the products market.

Speaker #3: Which brings me to our lubes business. It has been an important and meaningful contributor to the success of Sinclair. But today we announce plans to pursue a separation of the segment through the capital markets, creating a new independent public company.

Speaker #3: The canary in the coal mine to watch will be the Singapore crack spreads, since they tend to react first with China increasing exports. Otherwise, we see markets being constructive for the next several quarters, potentially into 2028.

Franklin Myers: It has been an important and meaningful contributor to the success of Sinclair, but today we announced plans to pursue a separation of the segment through the capital markets, creating a new independent public company. We believe these two companies will benefit from enhanced strategic focus and operational agility, greater alignment of capital deployment within each specific growth priorities, increased ability to pursue strategic transactions independently without competing for resources within a broader portfolio, distinct and compelling investment profiles aligned with different investor bases, and dedicated leadership teams and governance structures with continued focus on driving performance. We intend that the separation will be tax efficient for HF Sinclair and our stockholders and will be executed over the next 12 to 18 months. Our announcement provides three important messages. First, that the base oil refining assets in Mississauga will be retired.

Speaker #3: We believe these two companies will benefit from enhanced strategic focus and operational agility greater alignment of capital deployment within each specific growth priorities, increased ability to pursue strategic transactions independently without competing for resources within a broader portfolio, distinct and compelling investment profile aligned with different investor bases, and dedicated leadership teams and government structures with continued focus on driving performance.

Speaker #3: These events have had similar, if not more dire, effects on the lubes base oils markets, as much as 20% of the world's base oil supply for lubes is offline.

Speaker #3: Which brings me to our lubes business. It has been an important and meaningful contributor to the success of Sinclair. But today, we segment through the capital markets by creating a new independent public company.

Speaker #3: We believe these two companies will benefit from enhanced strategic focus and operational agility, greater alignment of capital deployment within each specific growth priority, increased ability to pursue strategic transactions independently without competing for resources within a broader portfolio, distinct and compelling investment profiles aligned with different investor bases, and dedicated leadership teams and governance structures with continued focus on driving performance.

Speaker #3: We intend that the separation will be a tax efficient for HF Sinclair and our stockholders, and will be executed over the next 12 to 18 months.

Speaker #3: Our announcement provides three important messages. First, that the base oil refining assets in Mississauga will be retired. The team there has done an excellent and outstanding job operating the the assets throughout the years, but a combination of location, size, and scope of the assets have reached a point that their long-term economic contributions to the business causes us to make this very difficult decision to retire the assets.

Franklin Myers: The team there has done an excellent and outstanding job operating the assets throughout the years, but a combination of location, size, and scope of the assets have reached a point that their long-term economic contributions to the business causes us to make this very difficult decision to retire the assets. Second, with the retirement, our finished product business will need base oils to continue the successful efforts in their market. The business will continue to deliver base oil solutions through new strategic commercial agreements with two premier global base oil manufacturers, complemented by continued access to products from our Tulsa refinery. Finally, as a potential separate organization under Matt Joyce's leadership, an independent lubes business will operate in a capital-light business model for greater financial flexibility and stronger, more consistent free cash flow while leveraging its core strength and technology, globally recognized brands, and extensive channels to market.

Speaker #3: We intend that the separation will be tax-efficient for HF Sinclair and our stockholders, and will be executed over the next 12 to 18 months.

Speaker #3: Second, with the retirement, our finished product business will need base oils to continue the successful efforts in their market. The business will continue to deliver base oil solutions through new strategic commercial agreements with two premier global base oil manufacturers, complemented by continued access to products from our Tulsa refinery.

Speaker #3: Our announcement provides three important messages. First, that the base oil refining assets in Mississauga will be retired. The team there has done an excellent and outstanding job operating the assets throughout the years, but a combination of location, size, and scope of the assets have reached a point that their long-term economic contributions to the business causes us to make this very difficult decision to retire the assets.

Speaker #3: Finally, as a potential separate organization under Matt Joyce's leadership, an independent business an independent lubes business will operate in a capital light business model for greater financial flexibility and stronger, more consistent free cash flow while leveraging its core strength and technology globally globally recognized brands and extend extensive channels to market.

Speaker #3: We are early in the separation process and will provide additional information as appropriate. Finally, it would be natural to ask about our company's plans for use of excess cash.

Franklin Myers: We are early in the separation process and will provide additional information as appropriate. Finally, it would be natural to ask about our company's plans for the use of excess cash. We are mindful of our past indications for delivering a portion of free cash back to our stockholders and will endeavor to continue to do so. We also have efforts going on where we see opportunities to enhance our existing assets. In other words, we already have things in progress. We're discussing this with our board in our upcoming board meeting. As the board reaches decisions and they become actionable, we'll continue to share that information with our ownership community. I'm going to go off script here. Let's face it. Last fall, when all the refining complex were putting their plans together, we had no clue that a war was going to go on in the Middle East.

Speaker #3: We are mindful of our past indications for delivering a portion of free cash back to our stock our stockholders, and we'll endeavor to continue to do so.

Speaker #3: We also have efforts on going on where we see opportunities to advance enhance our existing cash our existing assets. In other words, we already have things in process progress.

Speaker #3: We are early in the separation process and will provide additional information as appropriate. Finally, it would be natural to ask about our company's plans for use of excess cash.

Speaker #3: We would discussing this with our board in our upcoming board meeting as the board reaches decisions and the actions are become actionable, we'll continue to share that information with our ownership community.

Speaker #3: We are mindful of our past indications for delivering a portion of free cash back to our stock our stockholders, and we'll endeavor to con continue to do so.

Speaker #3: let me I'm going to go off script here. Let's let's face it. last fall when all the refining complex are putting their plans together, we had no clue that a war was going to go on in the Middle East.

Speaker #3: We also have efforts on going on where we see opportunities to enva enhance our existing cash a our existing assets. In other words, we already have things in pros progress.

Speaker #3: We've got excess capital now, and we've got to be prudent and diligent in looking at how we spend this excess capital. Nobody's got a plan for for what we're looking at right now, and we've got to make sure that we we look at it.

Speaker #3: We will be discussing this with our board at our upcoming board meeting. As the board reaches decisions and the actions become actionable, we'll continue to share that information with our ownership community.

Franklin Myers: We've got excess capital now, we've got to be prudent and diligent in looking at how we spend this excess capital. Nobody had a plan for what we're looking at right now, we've got to make sure that we look at it. Our organizational changes in putting Val over the growth initiatives is exactly that. We're going to look at the specifics within our organization and see where we can add value for the future. She's got that skill set and knowledge to be able to lead the team to do that while Steve runs the day-to-day operations. That's the fundamental drivers behind our changes there. I'll now turn it over to Steve for additional comments.

Speaker #3: Our organizational changes and putting Val over the the growth initiatives is exactly that. We're going to look at the specifics within our organization and see where we can add value for the future.

Speaker #3: Let me—I'm gonna go off script here. Let's face it: last fall, when all the refining complex was putting their plans together, we had no clue that a war was gonna go on in the Middle East.

Speaker #3: And she's got that skill set and knowledge to be able to lead the team to do that while Steve runs the day-to-day operations. That's the fundamental drivers behind our changes there.

Speaker #3: We've got excess capital now, and we've got to be prudent and diligent in looking at how we spend this excess capital. Nobody's had a plan for what we're looking at right now, and we've got to make sure that we look at it.

Speaker #3: I'll now turn it over to Steve for additional comments.

Speaker #2: Thank you, Franklin. Thank you all for joining our call. I'll now cover our business highlights. During the second quarter, we delivered strong financial results across each of our business segments.

Speaker #3: Our organizational changes and putting Val over the growth initiatives is exactly that. We're going to look at the specifics within our organization and see where we can add value for the future.

Steven Ledbetter: Thank you, Franklin. Thank you all for joining our call. I'll now cover our business highlights. During Q2, we delivered strong financial results across each of our business segments, underpinned by solid operational and commercial execution. In refining, our crude oil charge averaged approximately 640,000 barrels per day, which exceeded our guidance range and reflects our progress towards improving operational excellence and optimization across our business. This enabled us to take advantage of the favorable market conditions as we operated well. We have a planned turnaround scheduled at El Dorado, which commences in September. In our marketing segment, we added 63 branded sites in Q2, with more than 100 sites in the branding pipeline that are expected to come online over the next 6 to 12 months. We are pleased with our progress here as we continue to see year-over-year volume increases in our branded channel.

Speaker #2: Underpinned by solid operational and commercial execution, and refining our crude oil charge average approximately $640,000 barrels per day, which exceeded our guidance range and reflects our progress towards improving operational excellence and optimization across our business.

Speaker #3: And she's got that skill set and knowledge to be able to lead the team to do that while Steve runs the day-to-day operations. That's the fundamental drivers behind our changes there.

Speaker #3: I'll now turn it over to Steve for additional comments.

Speaker #2: This enabled us to take advantage of the favorable market conditions as we operated well. We have a planned turnaround scheduled at Eldorado, which commences in September.

Speaker #2: In our marketing segment, we added 63 branded sites in the second quarter with more than 100 sites in the branding pipeline that are expected to come online over the next 6 to 12 months.

Speaker #2: Underpinned by solid operational and commercial execution, our refining crude oil charge averaged approximately 640,000 barrels per day, which exceeded our guidance range and reflects our progress towards improving operational excellence and optimization across our business.

Speaker #2: We are pleased with our progress here as we continue to see year-over-year volume increases in our branded channel. We still expect to grow the number of branded sites by approximately 10% annually.

Speaker #2: This enabled us to take advantage of the favorable market conditions as we operated well. We have a planned turnaround scheduled at El Dorado, which commences in September.

Steven Ledbetter: We still expect to grow the number of branded sites by approximately 10% annually. In our renewables segment, we reported another quarter of strong financial performance with $123 million in adjusted EBITDA, supported by favorable market conditions and disciplined execution of our business strategy. We believe the macroeconomic backdrop will remain favorable throughout the year and are encouraged with the recent performance of this business. We have a planned turnaround scheduled to begin in Q3 at our Cheyenne facility. From a strategic perspective, we continue to progress the evaluation and development of our multi-phase initiative designed to leverage our strong logistics network and production advantage in the Rockies region to support increasing demand across Western markets. We expect that the first phase would increase capacity by approximately 35,000 barrels per day to move supply from Rockies production into Nevada and is targeted to be online in 2029.

Speaker #2: In our renewable segment, we reported another quarter of strong financial performance with 123 million dollars in adjusted EBITDA. Supported by favorable market conditions and disciplined execution of our business strategy.

Speaker #2: We believe the macroeconomic backdrop will remain favorable throughout the year and are encouraged with the recent performance of this business. We have a planned turnaround scheduled to begin in the third quarter at our Cheyenne facility.

Speaker #2: In our renewables segment, we reported another quarter of strong financial performance with $123 million in adjusted EBITDA, supported by favorable market conditions and disciplined execution of our business strategy.

Speaker #2: From a strategic perspective, we continue to progress the evaluation and development of our multi-phase initiative designed to leverage our strong logistics network and production advantage in the Rockies region to support increasing demand across western markets.

Speaker #2: We expect that the first phase would increase capacity by approximately 35,000 barrels per day to move supply from Rockies production into Nevada and is targeted to be online in 2029.

Speaker #2: We are also moving forward with the Eldorado vacuum furnace project which is expected to enhance operational reliability and improve product yields while enabling processing of up to an additional 10,000 barrels per day of heavy crude within our feedstock slate.

Steven Ledbetter: We are also moving forward with the El Dorado vacuum furnace project, which is expected to enhance operational reliability and improve product yields while enabling processing of up to an additional 10,000 barrels per day of heavy crude within our feedstock slate. The project remains on track for completion during the fall turnaround. We are also encouraged by the integration and early performance of our Green Trail Fuels JV in marketing, we continue to believe this will be an accretive addition and accelerator of our brand position. Further, we are evaluating several technology investments to advance the competitiveness of our business. We continue to see opportunities for future investment across our portfolio, as we evaluate these opportunities, we're okay with carrying excess cash on our balance sheet while final investment decisions are made.

Speaker #2: We expect that the first phase would increase capacity by approximately 35,000 barrels per day to move supply from Rockies production into Nevada, and it is targeted to be online in 2029.

Speaker #2: The project remains on track for completion during the fall turnaround. We are also encouraged by the integration and early performance of our green trail fuels JV in marketing, and we continue to believe this will be an accretive addition and accelerator of our brand position.

Speaker #2: We are also moving forward with the El Dorado vacuum furnace project, which is expected to enhance operational reliability and improve product yields, while enabling processing of up to an additional 10,000 barrels per day of heavy crude within our feedstock slate.

Speaker #2: Further, we are evaluating several technology investments to advance the competitiveness of our business. We continue to see opportunities for future investment across our portfolio.

Speaker #2: And as we evaluate these opportunities, we're okay with carrying excess cash on our balance sheet while final investment decisions are made. During the quarter, we returned 265 million dollars in cash to shareholders consisting of 89 million in regular dividends and 179 million in share repurchases.

Speaker #2: The project remains on track for completion during the fall turnaround. We are also encouraged by the integration and early performance of our Green Trail Fuels JV in marketing, and we continue to believe this will be an accretive addition and accelerator of our brand position.

Steven Ledbetter: During the quarter, we returned $265 million in cash to shareholders, consisting of $89 million in regular dividends and $179 million in share repurchases. Since the Sinclair acquisition in March 2022, we've returned approximately $5.2 billion in cash to shareholders and have reduced our share count by over 68 million shares. Today, we also announced that our board of directors declared a regular quarterly dividend of $0.525 per share, an increase of 5% over our previous dividend of $0.50 per share. As we look ahead, our strategy remains focused on enhancing safety, reliability, and efficiency across all of our business segments while unlocking more from our integrated value chain, including growing our Marketing and Midstream segments. With refining fundamentals expected to remain supportive through the fall, we are confident that our diversified asset base will continue to generate strong cash flows.

Speaker #2: Further, we are evaluating several technology investments to advance the competitiveness of our business. We continue to see opportunities for future investment across our portfolio.

Speaker #2: Since the Sinclair acquisition in March 2022, we've returned approximately 5.2 billion in cash to shareholders and have recorded our share reduced our share count by over 68 million shares.

Speaker #2: Today, we also announce that our board of directors declared a regularly quarterly dividend regular quarterly dividend of $52.50 per share and increase of 5% over our previous dividend of $0.50 per share.

Speaker #2: Since the Sinclair acquisition in March 2022, we've returned approximately $5.2 billion in cash to shareholders and have reduced our share count by over 68 million shares.

Speaker #2: As we look ahead, our strategy remains focused on enhancing safety, reliability, and efficiency across all of our business segments, while unlocking more from our integrated value chain including growing our marketing and midstream segments.

Speaker #2: Today, we also announce that our board of directors declared a regular quarterly dividend of 52 and a half cents per share, an increase of 5% over our previous dividend of 50 cents per share.

Speaker #2: With refining fundamentals expected to remain supportive through the fall, we're confident that our diversified asset base will continue to generate strong cash flows. With that, let me turn the call over to Vivek.

Speaker #3: Thank you, Steve, and good morning, everyone. Let's begin by reviewing HF Sinclair's financial highlights. Today, we reported second quarter net income attributable to HF Sinclair shareholders of $892 million, or $4.93 per diluted share.

Steven Ledbetter: With that, let me turn the call over to Vivek.

Vivek Garg: Thank you, Steve, and good morning, everyone. Let's begin by reviewing HF Sinclair's financial highlights. Today, we reported Q2 net income attributable to HF Sinclair shareholders of $892 million, or $4.93 per diluted share. These results reflect special items that collectively decrease net income by $68 million. Excluding these items, adjusted net income for Q2 was $960 million, or $5.31 per diluted share, compared to the adjusted net income of $322 million or $1.70 per diluted share for the same period in 2025. Adjusted EBITDA for Q2 was $1.5 billion, compared to $665 million in Q2 2025. In our Refining Segment, Q2 adjusted EBITDA was $1 billion, compared to $476 million in Q2 2025.

Speaker #3: These results reflect special items that collectively decrease net income by 68 million. Excluding these items, adjusted net income for the second quarter was $960 million, or $5.31 per diluted share.

Speaker #3: Compared to the adjusted net income of $322 million, or $1.70 per diluted share for the same period in 2025. Adjusted EBITDA for the second quarter was $1.5 billion compared to $665 million in the second quarter of 2025.

Speaker #3: These results reflect special items that collectively decrease net income by $68 million. Excluding these items, adjusted net income for the second quarter was $960 million, or $5.31 per diluted share.

Speaker #3: In our refining segment, second quarter adjusted EBITDA was $1 billion, compared to $476 million in the second quarter of 2025. This increase was principally driven by strong refining margins and volumes in the midcon and best regions as a result of steady demand, tight supply, and favorable crack spreads.

Speaker #3: Compared to the adjusted net income of 322 million, or $1.70 per diluted share for the same period in 2025. Adjusted EBITDA for the second quarter was 1.5 billion compared to 665 million in the second quarter of 2025.

Vivek Garg: This increase was principally driven by strong refining margins and volumes in the MidCon and West regions as a result of steady demand, tight supply, and favorable crack spreads. Crude oil charge averaged 640,000 barrels per day for Q2 compared to 616,000 barrels per day for Q2 2025. Our Marketing Segment reported EBITDA of $28 million for Q2 compared to $25 million for Q2 2025. Total branded fuel sales volumes were 387 million gallons for Q2 2026 compared to 337 million gallons for Q2 2025. Our Midstream Segment reported adjusted EBITDA of $112 million, both in Q2 2026 and the same period of last year.

Speaker #3: Crude oil charge averaged $640,000 barrels per day for the second quarter compared to $616,000 barrels per day for the second quarter of 2025. Our marketing segment reported EBITDA of $28 million for the second quarter compared to $25 million for the second quarter of 2025.

Speaker #3: In our refining segment, second quarter adjusted EBITDA was a billion dollars compared to 476 million in the second quarter of 2025. This increase was principally driven by strong refining margins and volumes in the midcon and best regions as a result of steady demand, tight supply, and favorable crack spreads.

Speaker #3: Total branded fuel sales volumes were $387 million gallons for the second quarter of 2026 compared to $337 million gallons for the second quarter of 2025.

Speaker #3: Crude oil charge averaged 640,000 barrels per day for the second quarter, compared to 616,000 barrels per day for the second quarter of 2025. Our marketing segment reported EBITDA of $28 million for the second quarter, compared to $25 million for the second quarter of 2025.

Speaker #3: Our midstream segment reported adjusted EBITDA of $112 million, both in the second quarter of 2026 and the same period of last year. In our renewable segment, excluding the lower off-cost or market inventory valuation adjustment charge of $30 million, and asset impairment of $47 million, we reported adjusted EBITDA of $123 million for the second quarter compared to a loss of $2 million for the second quarter of 2025.

Speaker #3: Total branded fuel sales volumes were 387 million gallons for the second quarter of 2026, compared to 337 million gallons for the second quarter of 2025.

Vivek Garg: In our renewables segment, excluding the lower of cost for market inventory valuation adjustment charge of $30 million and asset impairment of $47 million, we reported adjusted EBITDA of $123 million for Q2 compared to a loss of $2 million for Q2 2025. This increase was principally driven by increased RIN price, higher Production Tax Credit benefits, and increased volumes compared to Q2 2025. Total sales volumes were 60 million gallons for Q2 2026 as compared to 55 million gallons for Q2 2025. Our Lubricants and Specialties Segment reported adjusted EBITDA of $207 million for Q2 compared to $55 million for Q2 2025. The increase was primarily driven by higher sales volumes and product prices in Q2 2026 compared to Q2 2025.

Speaker #3: Our Midstream segment reported adjusted EBITDA of $112 million both in the second quarter of 2026 and the same period of last year. In our Renewables segment, excluding the lower of cost or market inventory valuation adjustment charge of $30 million, and asset impairment of $47 million, we reported adjusted EBITDA of $123 million for the second quarter, compared to a loss of $2 million for the second quarter of 2025.

Speaker #3: This increase was principally driven by increased rinse price, higher producer's tax credit benefits, and increased volumes compared to the second quarter of 2025. Total sales volumes were $60 million gallons for the second quarter of 2026 as compared to $55 million gallons for the second quarter of 2025.

Speaker #3: Our lubricants and specialty segment reported adjusted EBITDA of $207 million for the second quarter compared to $55 million for the second quarter of 2025.

Speaker #3: This increase was principally driven by increased RINs price, higher producer's tax credit benefits, and increased volumes compared to the second quarter of 2025. Total sales volumes were 60 million gallons for the second quarter of 2026, as compared to 55 million gallons for the second quarter of 2025.

Speaker #3: The increase was primarily driven by higher sales volumes and product prices in the second quarter of 2026 compared to the second quarter of 2025.

Speaker #3: During the second quarter of 2026, we recognized a FIFO benefit of $46 million compared to a FIFO charge of $20 million in the second quarter of 2025.

Vivek Garg: During Q2 2026, we recognized a FIFO benefit of $46 million compared to a FIFO charge of $20 million in Q2 2025. Net cash provided by operations totaled $1.5 billion in Q2, which include $56 million of turnaround spend. HF Sinclair's capital expenditures totaled $118 million for Q2. As of 30 June 2026, HF Sinclair's total liquidity stood at approximately $4.26 billion, which includes a cash balance of approximately $2.26 billion and our undrawn $2 billion unsecured credit facility. As of 30 June 2026, we had $2.8 billion debt outstanding, with a debt-to-cap ratio of 21% and net debt-to-cap ratio of 4%. Let's go through some guidance items.

Speaker #3: Our lubricants and specialty segment reported adjusted EBITDA of 207 million for the second quarter compared to 55 million for the second quarter of 2025.

Speaker #3: Net cash provided by operations totaled $1.5 billion in the second quarter, which include $56 million of turnaround spend. HF Sinclair's capital expenditures totaled $118 million for the second quarter.

Speaker #3: The increase was primarily driven by higher sales volumes and product prices in the second quarter of 2026, compared to the second quarter of 2025.

Speaker #3: As of June 30th, 2026, HF Sinclair's total liquidity stood at approximately $4.26 billion, which includes a cash balance of approximately $2.26 billion and our undrawn $2 billion unsecured credit facility.

Speaker #3: During the second quarter of 2026, we recognized a FIFO benefit of $46 million, compared to a FIFO charge of $20 million in the second quarter of 2025.

Speaker #3: Net cash provided by operations totaled $1.5 billion in the second quarter, which includes $56 million of turnaround spend. HF Sinclair's capital expenditures totaled $118 million for the second quarter.

Speaker #3: As of June 30th, 2026, we had $2.8 billion debt outstanding with a debt-to-cap ratio of 21% and net debt-to-cap ratio of 4%. Let's go through some guidance items.

Speaker #3: As of June 30, 2026, HF Sinclair's total liquidity stood at approximately $4.26 billion, which includes a cash balance of approximately $2.26 billion and our undrawn $2 billion unsecured credit facility.

Speaker #3: With respect to capital spending for full year 2026, there is no change to our capital guidance at this time. But it is subject to change as we continue to progress certain projects under evaluation.

Vivek Garg: With respect to capital spending for full year 2026, there is no change to our capital guidance at this time, but it is subject to change as we continue to progress certain projects under evaluation. For Q3 2026, we expect to run between 590,000 to 620,000 barrels of crude oil in our refining segment, which reflects the planned turnaround at El Dorado in the period. We are now ready to take questions from the audience. Operator?

Speaker #3: For the third quarter of 2026, we expect to run between $590 to $620,000 barrels of crude oil in our refining segment, which reflects the planned turnaround at El Dorado in the period.

Speaker #3: As of June 30, 2026, we had $2.8 billion of debt outstanding, with a debt-to-cap ratio of 21% and a net debt-to-cap ratio of 4%. Let's go through some guidance items.

Speaker #3: We are now ready to take questions from the audience. Operator.

Speaker #4: The floor is now opened for questions. At this time, if you have questions or comments, please press star one on your touch tone phone.

Speaker #3: For the third quarter of 2026, we expect to run between 590,000 and 620,000 barrels of crude oil in our refining segment, which reflects the planned turnaround at El Dorado during the period.

Operator: The floor is now opened for questions. At this time, if you have questions or comments, please press star one on your touchtone phone. We ask that you please limit yourself to one question and one follow-up. If you have additional questions, we welcome you to rejoin the queue. If at any point your question has been answered, you may remove yourself from the queue by pressing star one again. Your first question comes from the line of Manav Gupta with UBS. Your line is open, Manav. Please go ahead.

Speaker #4: We ask that you please limit yourself to one question and one follow-up. If you have additional questions, we welcome you to rejoin the queue.

Speaker #4: If at any point your question has been answered, you may remove yourself from the queue by pressing star one again. Your first question comes from the line of Manav Gupta with UBS.

Speaker #3: We are now ready to take questions from the audience. Operator.

Speaker #4: The floor is now opened for questions. At this time, if you have questions or comments, please press star one on your touch tone phone.

Speaker #4: Your line is open, Manav. Please go ahead.

Speaker #5: Good morning, congrats on a very strong beat. My first question is a little bit on the refining macro. Even the last time when Russia-Ukraine conflict started, diesel was moving up, but gasoline wasn't really participating to these levels.

Speaker #4: We ask that you please limit yourself to one question and one follow-up. If you have additional questions, we welcome you to rejoin the queue.

Manav Gupta: Good morning. Congrats on a very strong beat. My first question is a little bit on the refining macro. Even the last time when Russia-Ukraine conflict started, diesel was moving up, but gasoline wasn't really participating to these levels. This time, we are seeing a very strong gasoline crack out there. I'm just trying to understand from the perspective of HF Sinclair, how this benefits the company, and if you could specifically talk about your two regions, MidCon and West, what you are seeing in terms of gasoline margins as well as diesel.

Speaker #4: If at any point your question has been answered, you may remove yourself from the queue by pressing star one again. Your first question comes from the line of Manav Gupta with UBS.

Speaker #5: This time, we are seeing a very strong gasoline crack out there. And I'm just trying to understand from the perspective of HF Sinclair, how this benefits the company.

Speaker #4: Your line is open, Manav. Please go ahead.

Speaker #5: And if you could specifically talk about the two your two regions, midcon and west, what you are seeing in terms of gasoline margins as well as diesel.

Speaker #5: Good morning of congrats on a very strong beat. My first question is a little bit on the refining macro. Even the last time when Russia-Ukraine conflict started, diesel was moving up but gasoline wasn't really participating to these levels.

Speaker #3: Thanks, Manav. This is Steve. Yeah, it's mainly been a distillate story from a global geopolitical scenario, both in the Middle East, heavy distillate producers, and now Russia that used to export quite a bit in distillate.

Steven Ledbetter: Thanks, Manav. This is Steve. It's mainly been a distillate story from a global geopolitical scenario, both in the Middle East, heavy distillate producers and now Russia that used to export quite a bit in distillate, and now is even importing some. Yes, the overall flows in terms of gasoline have been tight and there's some export capability that's happening out of both regions in the Gulf and the West Coast, or to the West Coast from the Gulf. In the overall market environment on cracks, we're seeing tighter cracks, particularly in the MidCon and gas as you see more things move south. Less barrels are getting up into the MidCon, that structure's tightening up. We've seen in the quarter, the demand picture look relatively healthy for not only the US, but our regions.

Speaker #5: This time, we are seeing a very strong gasoline crack out there, and I'm just trying to understand from the perspective of HF Sinclair how this benefits the company.

Speaker #5: And if you could specifically talk about the two your two regions midcon and west, what you are seeing in terms of gasoline margins as well as diesel.

Speaker #3: Now it's even importing some but yes, the overall flows in terms of gasoline have been tight, and there's some export capability that's happening out of both regions in the Gulf and the West Coast.

Speaker #3: Thanks, Manav. This is Steve. Yeah, it's mainly been a distillate story from a global geopolitical scenario—both in the Middle East, heavy distillate producers, and now Russia, which used to export quite a bit in distillate and now is even importing some.

Speaker #3: Or to the West Coast from the Gulf. In the overall market environment on cracks, we're seeing tighter cracks, particularly in the midcon and gas, as you see more things move south.

Speaker #3: And so less barrels are getting up into the midcon, and so that structure is tightening up. But we've seen in the quarter the demand picture look relatively healthy for not only the US but our regions and I think our regions have felt fared a little bit better, both in gas and diesel.

Speaker #3: But yes, the overall flows in terms of gasoline have been tight, and there is some export capability that's happening out of both regions—the Gulf and the West Coast.

Speaker #3: Or to the West Coast from the Gulf. In the overall market environment on cracks, we're seeing tighter cracks, particularly in the Midcon and gas, as you see more things move south.

Steven Ledbetter: I think our regions have fared a little bit better, both in gas and diesel, in both regions. Now on the West, we have a little bit of softness in diesel, but we think that that is factored into more the bio and the RD coming online with the incentive structure that has been generated there. Overall, our markets look pretty strong, and we think that the tightness is further because our inventories on a US and a regional basis have been below the five-year average. As Franklin mentioned earlier, we see that it starts from a global perspective and stocks are very low, and it's going to take a while to replenish those. That just comes back into the US market with the overall market structure.

Speaker #3: In both regions. Now on the west, we have a little bit of softness in diesel, but we think that that is factored into more the bio and the RD coming online with the incentive structure that has been generated there.

Speaker #3: And so more less barrels are getting up into the midcon and so that that structure is tightening up. But we've seen in the quarter the demand picture look relatively healthy for not only the US but our regions and I think our regions have felt fared a little bit better both in gas and and diesel.

Speaker #3: But overall, our markets look pretty strong, and we think that the tightness is furthering is furthered because our inventories on a US and a regional basis have been below the five-year average.

Speaker #3: In both regions now, on the West we have a little bit of softness in diesel, but we think that that is factored into more the bio and the RD coming online with the incentive structure that has been generated there.

Speaker #3: So as Franklin mentioned earlier, we see that globally it starts from a global perspective, and stocks are very low. And it's going to take a while to replenish those.

Speaker #3: And that just comes back into the US market with the overall market structure. And the export values are attributing to lower supply that is on the market, and naturally that creates a tighter structure with supportive crack environment.

Speaker #3: But overall our markets look pretty strong and we think that the the tightness is is furthering is further because our inventories on a on a US and a regional basis have been below the five-year average.

Steven Ledbetter: The export values are attributing to lower supply that is on the market, naturally, that creates a tighter structure with supportive crack environment.

Speaker #3: So, as Franklin mentioned earlier, we see that, you know, globally it starts from a global perspective and stocks are very low, and it's going to take a while to replenish those.

Speaker #5: Perfect. My second question is more for Frank. So I'm just trying to understand, A, the timing on the lubes, why now? Some of the key benefits, if you could reiterate.

Manav Gupta: Perfect. My second question is more for Frank. I'm just trying to understand, A, the timing on the lubes, why now? Some of the key benefits, if you could reiterate, and one of the questions we are understanding is, when something like this happens, you need the buy-in of the senior management. Is there a buy-in from the senior management in terms of, are you still looking for an external CEO? If you could help us understand how those dynamics are playing out, because something as big as this would definitely need the buy-in of the incoming CEO and CFO.

Speaker #3: And that just comes back into the U.S. market with the overall market structure. And the export values are attributing to lower supply that is on the market, and naturally that creates a tighter structure with a supportive crack environment.

Speaker #5: And one of the questions we are understanding is, when something like this happens, you need the buy-in of the senior management. Is there a buy-in from the senior management in terms of are you still looking for an external CEO?

Speaker #5: And if you could help us understand how those dynamics are playing out, because something as big as this would definitely need the buy-in of the incoming CEO and CFO.

Speaker #5: Perfect. My second question is more for Frank. So I'm just trying to understand, A, what the timing on the lubes is—why now? And some of the key benefits, if you could reiterate.

Speaker #3: We've never indicated we were looking for an external CEO. So I'd dissuade you of thinking about that. Secondly, senior management on both sides are very bought into this.

Franklin Myers: We've never indicated we were looking for an external CEO, I'd dissuade you of thinking about that. Secondly, senior management on both sides are very bought into this. Remember, I guess, if you think about it, the board owns the business, and all we're doing is separating it so that they can both flourish. We have a good senior team at the lubes business under Matt's leadership, and that will develop and build out as we get closer to the time of whatever transaction we decide to go with, because there's a lot of work to be done in deciding what's best for our stockholders. We're not losing something, we're just splitting it among the stockholders to where value is being created and let them run independently.

Speaker #3: And remember, I guess, if you think about it, the board owns the business and all we're doing is separating it so that they can both flourish.

Speaker #5: And if you could help us understand what how those dynamics are playing out because something as as big as this would definitely need the buy-in of the incoming CEO and CFO.

Speaker #3: We have a good senior team at the lubes business that under Matt's leadership, and that will develop and build out as we get closer to the time of whatever transaction we decide to go with, because there's a lot of work to be done deciding what's best for our stockholders.

Speaker #3: We've never indicated we were looking for an external CEO, so to dissuade you from thinking about that. Secondly, senior management on both sides are very bought into this.

Speaker #3: And remember, I guess if you think about it, the board owns the business and all we're doing is separating it so that they can both flourish.

Speaker #3: But we're not losing something. We're just splitting it among the stockholders to where value is being created and let them run independently. But the team is the team is aligned in this.

Speaker #3: We have a good senior team at the lubes business that under Matt's leadership and that will develop and and build out as we get closer to to the time of whatever transaction we decide to go with because there's a there's a lot of work to be done deciding what's best for our our stockholders.

Speaker #3: The board is aligned in this, and we see this as the best direction for the lubes business.

Franklin Myers: Note, the team is aligned in this, the board is aligned in this, and we see this as the best direction for the lubes business.

Speaker #5: Thank you. And congrats, Steve, again, on being promoted to the CEO. Congratulations.

Manav Gupta: Thank you. Congrats, Steve, again on being promoted to the CEO. Congratulations.

Speaker #3: COO.

Speaker #2: Thank you, Manav.

Speaker #3: But we're we're not losing something. We're just splitting it among the stockholders to where value is being created and let them run independently. But note the team is the the team is aligned in this.

Speaker #5: Thank you.

Speaker #4: Your next question comes from the line of Matthew Blair with TPH. Your line is open, Matthew. Please go ahead.

Franklin Myers: COO.

Steven Ledbetter: Thank you, Manav.

Manav Gupta: Thanks.

Operator: Your next question comes from the line of Matthew Blair with TPH. Your line is open, Matthew. Please go ahead.

Speaker #6: Great. Thank you. And good morning. And congrats on the lubricants bin. Do you have an estimate of what mid-cycle EBITDA for lubricants would look like going forward?

Speaker #3: The board is aligned on this. We see this as the best direction for the lubes business.

Matthew Blair: Great. Thank you and good morning, and congrats on the lubricants spin. Do you have an estimate of what mid-cycle EBITDA for lubricants would look like going forward, and what kind of leverage could a standalone lubricants business support? Is there any estimate yet on potential synergies from spinning out lubes?

Speaker #5: Thank you. And congrats, Steve, again on being promoted to CEO. Congratulations.

Speaker #6: And what kind of leverage could a standalone lubricants business support? And then also, is there any estimate yet on potential disc synergies from spinning out lubes?

Speaker #3: COO.

Speaker #1: Thank you, Manav.

Speaker #5: Thank you.

Speaker #4: Your next question comes from the line of Matthew Blair with TPH. Your line is open, Matthew. Please go ahead.

Speaker #3: Oh, I'll turn over some of the synergy to Vivek in a second. Yes, there always whenever you stand up a public company, there's always some public cost that we will be identified, separate company audits, some additional fees that adjusted with that.

Speaker #3: Great, thank you, and good morning. Congratulations on the lubricants. Do you have an estimate of what mid-cycle EBITDA for lubricants would look like going forward?

Franklin Myers: I'll turn over some of the synergy to Vivek in a second. Yes, whenever you stand up a public company, there's always some public costs that we will be identified, separate company audits, some additional fees that adjusted with that. They're usually more than offset by having kind of the spotlight on the business. Let's take a step back. The refining business dominates our franchise as it currently exists. Because of the volatility of the franchise that we have, that all refining assets have, all franchises have, you tend to have a discounted value on multiples of EBITDA. Lubes is a more stabilized business, and it's in different markets than the refining asset. Typically, they would run the lubricants business with a higher multiple. We would expect a step up in value as we take it out the door.

Speaker #3: And what kind of leverage could a standalone lubricants business support? And then also is there any estimate yet on on potential disk synergies from from spinning out lubes?

Speaker #3: But there usually more than offset by having kind of the spotlight on the business. Let's take a step back. The refining business dominates our franchises.

Speaker #2: Oh, I'll turn over some of the the synergy to Vivek in a second. Yes, they're they're always whenever you stand up a public company, there's always some public cost that we will be identified separate company audits, some additional fees that that adjusted with that.

Speaker #3: It currently exists. And because of the volatility of the franchise that we have, that all refining assets have, all of franchises have, you tend to have a discounted value on multiples of EBITDA.

Speaker #3: Lubes is a more stabilized business, and it's in different markets than refining assets. And typically, they would run the lubricants business with a higher multiple.

Speaker #2: But they're usually more than offset by having kind of the spotlight on the business. Let's, let's, let's take a step back. The refining business dominates our franchises as they currently exist.

Speaker #3: And so we would expect a step up in value as we take it out the door. In terms of gearing, we haven't reached that point.

Speaker #2: And because of the volatility of the franchise that we have—that all refining assets have, all franchises have—you tend to have a discounted value on multiples of EBITDA.

Speaker #3: We're not going to over-lever this thing going out. We want to make sure it has the flexibility. And look at our own balance sheet.

Franklin Myers: In terms of gearing, we haven't reached that point. We're not going to over-lever this thing going out. We want to make sure it has the flexibility. Look at our own balance sheet. We're not what I would call an over-leveraged company, we're not going to treat them any different than we would be treating ourselves. In terms of estimates, Vivek, I don't know what guidance we have in there, if any.

Speaker #3: We're not what I would call an over-levered company. And so we're not going to treat them any different than we would be treating ourselves.

Speaker #2: Lubes is a more stabilized business and it's in different markets than refining assets. And typically they would run the lubricants business with a higher multiple.

Speaker #3: In terms of estimates of Vivek, I don't know what guidance we have in there, if any.

Speaker #2: And so, we would expect a step up in value as we take it out the door. In terms of gearing, we haven't reached that point.

Speaker #2: I think that's right, Franklin. There will be additional costs associated with separating lubricants and specialties as an independent public company. We're kind of early in the separation planning process, and we'll provide estimated costs as time progresses.

Vivek Garg: I think that's right, Franklin. There will be additional costs associated with separating lubricants and specialties as an independent public company. We're kind of early in the separation planning process, we'll provide estimated costs as time progresses.

Speaker #2: We're not going to over-lever this thing going out. We want to make sure it has the flexibility, and look at our own balance sheet.

Speaker #2: We're we're not what I would call an overlevered company. And so we're not going to treat them any different than we would be treating ourselves.

Speaker #7: And if I can just jump in, Matt. One of the things that this is Matt Joyce. We've typically looked at trailing 12 months as our rough guesstimate and guidance for 300 to 350 on an EBITDA basis.

Speaker #2: In terms of estimates of Vivek, I don't know what guidance we have in there, if any.

Matt Joyce: If I can just jump in, Matt. This is Matt Joyce. We've typically looked at trailing 12 months as our rough guesstimate and guidance for 300 to 350 on an EBITDA basis. We're looking to execute that business in a way that we can continue to deliver those types of performance results on a go-forward basis, with a capital light structure in mind.

Speaker #1: I think that's right, Franklin. There will be additional costs associated with separating Lubricants and Specialties as an independent public company. We're kind of early in the separation planning process, and we'll provide estimated costs as time progresses.

Speaker #7: We're looking to execute that business in a way that we can continue to deliver those types of performance results on a go-forward basis. But with a capital light structure in mind.

Speaker #3: And if I can just jump in, Matt, one of the things that this is Matt Joyce. We've we've typically looked at trailing 12 months as our our our rough guesstimate and guidance for 300 to 350 on an EBITDA basis.

Speaker #6: Okay. And my follow-up was on this capital light structure. So I guess, could you talk a little bit about the impacts of shutting the Mississauga base oil refinery?

Matt Joyce: Okay. My follow-up was on this capital light structure. I guess, could you talk a little bit about the impacts of shutting the Mississauga base oil refinery? In the slides it mentions it would reduce volatility, also reduce your working capital needs. Maybe you could expand on that a little bit. What kind of EBITDA impacts would you expect from shutting these assets? Does this take you on vertical integration? Does this take you to essentially 100%? Because I believe previously it was roughly closer to two-thirds or so. Thank you.

Matthew Blair: Okay. My follow-up was on this capital light structure. I guess, could you talk a little bit about the impacts of shutting the Mississauga base oil refinery? In the slides it mentions it would reduce volatility, also reduce your working capital needs. Maybe you could expand on that a little bit. What kind of EBITDA impacts would you expect from shutting these assets? Does this take you on vertical integration? Does this take you to essentially 100%? Because I believe previously it was roughly closer to two-thirds or so. Thank you.

Speaker #6: In the slides, it mentions it would reduce volatility. Also reduce your working capital needs. Maybe you could expand on that a little bit. What kind of EBITDA impacts would you expect.

Speaker #3: We're looking to execute that business in a way that allows us to continue to deliver those types of performance results on a go-forward basis, but with a capital-light structure in mind.

Speaker #6: Shutting these assets? And does this take you on vertical integration? Does it take you to essentially 100%? Because I believe previously it was roughly closer to two-thirds or so.

Speaker #2: Okay. And my follow-up was on this capital-light structure. So, I guess, could you talk a little bit about the impacts of shutting the Mississauga base oil refinery?

Speaker #6: Thank you.

Speaker #7: Yeah. Sure. So this is Matt Joyce. The way that we're looking at it is we've gone out and sourced competitive offer from these global premier base oil manufacturers for both our own internal supply, but as well as distribution agreements, where we are going to represent their oils in the market so that we will have and continue to have that full suite of products with our continued production out of Tulsa, for our Group 1s and our specialties.

Speaker #2: You know, in the slides it mentions it would reduce volatility. Also reduce your working capital needs. Maybe you could expand on that a little bit.

Matt Joyce: Yeah. Sure. This is Matt Joyce. The way that we're looking at it is we've gone out and sourced a competitive offer from these global premier base oil manufacturers, for both our own internal supply, but as well as distribution agreements where we are going to represent their oils in the market. That we will have and continue to have that full suite of products with our continued production out of Tulsa for our Group I and our specialties. We'll also have Group II and Group III to offer to the marketplace on a third-party basis. As a distribution partnership. We'll use those same sources for our own internal consumption. As such, we expect that the LNS business on a go-forward basis is really going to lean into a free cash flow improvement on the financial profile.

Speaker #2: What what kind of EBITDA impacts would you expect from shutting these assets? And does this take you on on vertical integration? Does it take you to essentially 100%?

Speaker #2: Because I believe previously it was roughly closer to two-thirds or so. Thank you.

Speaker #3: Yeah. Sure. So this is Matt Joyce. The way that we're looking at it is we've gone out and sourced competitive offer from these global premier base oil manufacturers for both our own internal supply but as well as distribution agreements.

Speaker #7: And then we'll also have Group 2 and Group 3 to offer to the marketplace on a third-party basis. But as a distribution partner, partnership.

Speaker #7: We'll then use those same sources for our own internal consumption. So as such, we expect that the L&S business on a go-forward basis is really going to lean into a free cash flow improvement on the financial profile.

Speaker #3: Where we are going to represent their oils in the market so that we will have and continue to have that full suite of products with our continued production out of Tulsa for our group ones and our specialties.

Speaker #3: And then we'll also have Group 2 and Group 3 to offer to the marketplace on a third-party basis, but just as a distribution partner.

Speaker #7: And what I can say today is that exiting the base oil production is also expected to materially lower our capital intensity as well as networking capital.

Matt Joyce: What I can say today is that exiting the base oil production is also expected to materially lower our capital intensity as well as net working capital. We can continue to provide you updates as and when the process progresses, but suffice it to say, we're pretty comfortable with where the financial position of the business on a go-forward basis is going to be.

Speaker #3: Partnership. We'll then use those those same sources for our own internal consumption. So as such, we expect that the L&S business on a go forward basis is really going to lean into a a free cash flow improvement on the on the the financial profile.

Speaker #7: So we can continue to provide you updates as and when the process progresses, but suffice it to say, we're pretty comfortable with where the financial position of the business on a go-forward basis is going to be.

Speaker #3: And what I can say today is that exiting the base oil production is also expected to materially lower our capital intensity as well as networking capital.

Speaker #6: Great. Thank you.

Speaker #4: Your next question comes from the line of Neil Mehta with Goldman Sachs. Your line is open, Neil. Please go ahead.

Matthew Blair: Great. Thank you.

Speaker #3: So we can you know, we can continue to provide you updates as and when the the the process progresses. But suffice it to say, we're pretty comfortable with where the financial position of the business on a go forward basis is going to be.

Operator: Your next question comes from the line of Neil Mehta with Goldman Sachs. Your line is open, Neil. Please go ahead.

Speaker #5: Yeah. Congrats on strong quarter. All the updates and, of course, some of the promotions here. Two more day-to-day questions here. The GOS pipeline initiative that you guys were talking about, it's an important part of building out the midstream effort, but I think you've also alluded to important part of cleaning up Pad 4 and potentially even into Pad 5 balances.

Neil Mehta: Yeah. Congrats, a strong quarter, all the updates and of course, some of the promotions here. Two more day-to-day questions here. The Go-West pipeline initiative that you guys were talking about, it's an important part of building out midstream effort, but I think you've also alluded to important part of cleaning up PADD IV and potentially even into PADD V balances. Can you just talk about where you stand on that initiative, and what do you think the economic implications are, not just for the midstream business, but also for your refining segment?

Speaker #2: Great. Thank you.

Speaker #4: Your next question comes from the line of Neil Mehta with Goldman Sachs. Your line is open, Neil. Please go ahead.

Speaker #5: So can you just talk about where you stand on that initiative and what do you think the economic implications are? Not just for the midstream business, but also for your refining segment.

Speaker #5: Yeah. Congrats on a strong quarter, all the updates, and of course, some of the promotions here. Two more day-to-day questions here.

Speaker #5: The GOS pipeline initiative that you guys were talking about, you know, is an important part of building out the midstream effort. But I think you've also alluded to it being an important part of cleaning up pad 4 and potentially even into pad 5 balances.

Speaker #2: Yeah. Neil, this is Steve. Let me talk a little bit on GOS. It is a very strategic project for us that we announced several quarters ago.

Steven Ledbetter: Yeah, Neil, this is Steve. Let me talk a little bit on Go-West. It is a very strategic project for us that we announced several quarters ago. The project continues to advance in terms of determining the right economic balance and the execution capability. We're still advancing towards taking FID on phase 1 this year. Ultimately, we do see that the reason we're doing this is the tightness in PADD V that's continuing to get short, and we have advantages logistically in terms of production in the Rockies and our integrated midstream assets where we can unlock more of that and supply the needed fuels that are growing in terms of an imbalance out of PADD V. We think that this is just phase 1, as we talked about.

Speaker #2: The project continues to advance in terms of determining the right economic balance and the execution capability. We're still advancing towards taking FID on phase one.

Speaker #5: So, can you just talk about where you stand on that initiative, and what you think the economic implications are—not just for the midstream business, but also for your refining segment?

Speaker #2: This year, but ultimately, we do see that the reason we're doing this is the tightness in Pad 5 that's continuing to get short. And we have advantages logistically in terms of production in the Rockies and our integrated midstream assets where we can unlock more of that and supply the needed fuels that are growing in terms of an imbalance out of Pad 5.

Speaker #1: Yeah, yeah. Neil, this is Steve. Let me talk a little bit on GOS. It is a very strategic project for us that we announced several quarters ago.

Speaker #1: The project continues to advance in terms of determining the right economic balance and execution capability. We're still advancing towards taking FID on phase one.

Speaker #2: We think that this is just phase one as we talked about. It's a multi-phase approach that will continue to evaluate as we get past this initial phase, which brings up to approximately 35,000 west into Nevada.

Speaker #1: This year but ultimately we do see that you know, the reason we're doing this is the tightness in pad five that's continuing to get short.

Steven Ledbetter: It's a multi-phase approach that we'll continue to evaluate after we get past this initial phase, which brings us to approximately 35,000 west into Nevada. Longer term, we think we can hit larger markets out on the West, including California. We're not guiding on economics at this point. When we get into the phase of taking FID that the board will opine on, we'll come to the market with guidance and estimates at that point.

Speaker #1: And we have advantages logistically in terms of production in the Rockies and our integrated midstream assets where we can unlock more of that and supply the needed fuels that that are that are that are growing in terms of an imbalance out in out of pad five.

Speaker #2: Longer term, we think we can hit larger markets out on the west, including California, but we're not guiding on economics at this point. And when we get into the phase of taking FID that the board will opine on, we'll come to the market with guidance and estimates at that point.

Speaker #1: We think that this is just phase one, as we talked about, and that we will continue to evaluate as we get past this initial phase, which brings up to approximately 35,000 west into Nevada.

Speaker #5: All right. Thanks, Steve. And then just the return of capital can be enormous at current margin environment, even in the forward curve. And so, of course, can you comment on just the capacity for share buybacks?

Neil Mehta: All right. Thanks, Steve. Just the return of capital can be enormous at its current margin environment, even in the forward curve. Of course, can you comment on just the capacity for share buybacks, the willingness to lean into repurchases even though the stock has done exceptionally well in the last year? On slide five, you talk about opportunistic M&A. Maybe Franklin, you could talk about how that fits into your thinking here. Because what gaps, if any, are you trying to solve for, and what segments should we think about M&A being appropriate to look at?

Speaker #1: Longer term, we think we can hit larger markets out on the West, including California. But we're not guiding on economics at this point. And when we get into the phase of taking FID that the board will opine on, we'll come to the market with guidance and estimates at that point.

Speaker #5: The willingness to lean into repurchases, even though the stock has done exceptionally well in the last year. And then on slide five, you talk about opportunistic M&A.

Speaker #5: So maybe, Franklin, you could talk about how that fits into your thinking here. Because what gaps, if any, are you trying to solve for and what segments should we think about M&A being appropriate to look at?

Speaker #5: All right. Thanks. Thanks, Steve. And then just—the return of capital can be enormous at current margin environment, even in the forward curve.

Speaker #5: And so of course, you know, can you comment on just the capacity for share buybacks? The willingness to lean into repurchases even though the stock has has done exceptionally well in the last year.

Speaker #6: Yeah. Let's take them in order. Number one, we have implied and indicated and actually acted on about a 50% distribution of capital back to our stockholders.

Franklin Myers: Yeah. Let's take them in order. Number 1, we have implied and indicated and actually acted on about a 50% distribution of capital back to our stockholders since spring of 2022. Steve mentioned that's $5.2 billion in a franchise that's currently valued at about $15 or $16 billion. We've been dedicated to that. We will continue that emphasis as we go forward. Secondly, all my comments with respect to management and how the leadership shifted around

Speaker #5: And then on slide five, you talk about opportunistic M&A. So maybe, Franklin, you could talk about how that fits into your thinking here. Because, you know, what gaps, if any, are you trying to solve for? And what segments should we think about M&A being appropriate to look at?

Speaker #6: Since spring of '22, Steve mentioned that's 5.2 billion dollars in a franchise that's currently valued at about 15 or 16 billion dollars. So we've been dedicated to that.

Speaker #6: We will continue that emphasis as we go forward. Secondly, all my comments with respect to management and how the leadership shifted around, a lot of refining assets across the country, not just ours, but across the country, to some degree have been a little underinvested in technology.

Speaker #2: Yeah, let's take them in order. Number one, we have implied, indicated, and actually acted on about a 50% distribution of capital back to our stockholders since spring of '22.

Franklin Myers: A lot of refining assets across the country, not just ours, but across the country, to some degree have been a little under-invested in technology. We're going to look at that real hard to make sure we have some of the technological advances to make sure we stay. If you've heard our mantra of safe, compliant, reliable, make sure we are standing up when others might have problems, that we're the ones that folks can count on. In terms of M&A, I wouldn't go broad with this. We're not going to go on a shopping spree or anything. Don't read anything to that. Marketing has a lot of opportunities where they can do some things. Midstream has what I'll call tuck-in opportunities within fields to where pipes can be laid as opposed to putting them in trucks.

Speaker #2: Steve mentioned that's 5.2 billion dollars in a franchise that's currently valued at about 15 or 16 billion dollars. So we've been dedicated to that.

Speaker #6: And we're going to look at that real hard to make sure we have some of the technological advances to make sure we stay if you've heard our mantra of safe, compliant, reliable, make sure we are standing up when others might have problems, that we're the ones that folks can count on.

Speaker #2: We will continue that emphasis as as we go forward. Secondly, all my comments with respect to management and how the leadership shifted around. A lot of refining assets across the country not just ours but across the country.

Speaker #6: In terms of M&A, I wouldn't go broad with this. We're not going to go on a shopping spree or anything. Don't read anything to that.

Speaker #6: But marketing has a lot of opportunities where they can do some things. Midstream has what I'll call tuck-in opportunities within fields to where pipes can be laid as opposed to putting them in trucks.

Speaker #2: To some degree, we have been a little underinvested in technology. And we're going to look at that real hard to make sure we have some of the technological advances to make sure we stay, if you've heard our mantra, safe, compliant, reliable.

Speaker #6: We're going to look at a lot of that because even crawfish sometimes free up just as much as eating a big steak. And so it's going to be smaller things where we're going to put money to work.

Speaker #2: Make sure we are standing up when others might have problems. That we're we're the we're the ones that they that folks can count on.

Franklin Myers: We're going to look at a lot of that because eating crawfish sometimes will fill you up just as much as eating a big steak. It's going to be smaller things where we're going to put money to work. I think you'll see the benefits because the paybacks on those things, the returns are in that mid-20s%, you can't do that on big deals. You got to do it. It's work, you can get it done.

Speaker #2: In terms of M&A, I wouldn't go broad with this. We're not going to go on a shopping spree or anything. I wouldn't read anything into that.

Speaker #6: And I think you'll see the benefits because the paybacks on those things, the returns are in that mid-20s percent. You can't do that on big deals.

Speaker #2: But marketing has a lot of opportunities where they can do some things. Midstream has what I'll call tuck-in opportunities within fields, where pipes can be laid as opposed to putting them in trucks.

Speaker #6: You got to do it it's work, but you can get it done.

Speaker #2: We're going to look at a lot of that because even crawfish sometimes free up just as much as eating a big steak. And so, you know, it's going to be smaller things where we're going to put money to work.

Speaker #4: The next question comes from Joe Late with Morgan Stanley. Joe, your line is open. Please go ahead.

Operator: The next question comes from Joe Laetsch with Morgan Stanley. Joe, your line is open. Please go ahead.

Speaker #2: And I think you'll see the benefits, because the paybacks on those things—the returns—are in that mid-20% range. You can't do that on big deals.

Speaker #7: Great. Good morning, team. And thanks for taking my questions and congrats to Steven Val on your new roles. So I wanted to follow up on the lubricant separation.

Joe Laetsch: Great. Good morning, team, and thanks for taking my questions, and congrats to Steve and Bell on your new roles. I wanted to follow up on the lubricant separation. Could you just talk about the thought process between a capital market separation and an outright sale?

Speaker #2: You got to, you got to do it. It's work, but you can get it done.

Speaker #7: Could you just talk about the thought process between a capital market separation and an outright sale?

Speaker #6: Sure. That's easy. You're doing the same thing, but you're giving up value. If you go to a sale process, somebody's trying to either over-lever or maximize something for their own benefit.

Speaker #4: The next question comes from Joe Leitch with Morgan Stanley. Joe, your line is open. Please go ahead.

Franklin Myers: Sure. That's easy. You're doing the same thing, you're giving up value if you go to a sale process. Somebody's trying to either over-lever or maximize something for their own benefit, we're taking that benefit to our own stockholders. You add on the effect that doing a sale means the United States government probably ends up with, I don't know, $200 to $400 million of tax payments that gives no value to any of our stockholders. We save that by doing a tax-efficient transaction, we basically capture the gains that a third party may want to have. Now, could a strategic come in and look at some synergies and all like that? Possibly, that's trying to mind-read what's in the heads of some strategics, a lot of times it's a waste of effort to do that. Obviously, we're commercial.

Speaker #6: Great. Good morning, team. Thanks for taking my questions and congrats to to Steven Val on your new roles. So I wanted to follow up on the lubricant separation.

Speaker #6: And we're taking that benefit to our own stockholders. And then you add on the effect that it's doing a sale would mean that the United States government probably ends up with, I don't know, 2 to 400 million dollars of tax payments that gets no value to any of our stockholders.

Speaker #6: Could you just talk about the thought process between a capital market separation and an outright sale?

Speaker #2: Sure. That's that's easy. You're you're doing the same thing but you're giving up value. If you go to a sale process. Somebody's trying to you know, either overlever or maximize something for their own benefit.

Speaker #6: So we save that by doing a tax-efficient transaction. And we basically capture the gains that a third party may want to have. Now, could a strategic come in and look at some synergies and all like that?

Speaker #2: And we we're taking that benefit to our own stockholders. And so and and then you add on the effect that it's you know, doing a sale would means that the United States government probably ends up with you know, I don't know, two to four hundred million dollars of tax payments that gets no value to any any of our stockholders.

Speaker #6: Possibly, but that's trying to mind-read what's in the heads of some strategics and a lot of times, it's a waste of effort to do that.

Speaker #6: We think this is but obviously, we're commercial. If somebody wanted to pay a big number for lubes, I can't say that that would be out of the question, but that's not our intent.

Speaker #2: So we we save that by doing a a tax-efficient transaction. And we basically capture the gains that a third party may want to have.

Franklin Myers: If somebody wanted to pay a big number for lubes, I can't say that would be out of the question, that's not our intent. That is not what we're looking at. It is looking at having a business that can be valued properly in the public markets capture that value for our stockholders through one of these distributions.

Speaker #6: That is not what we're looking at. I mean, it is looking at having a business that can be valued properly in the public markets and capture that value for our stockholders through one of these distributions.

Speaker #2: Now, could a strategic come in and look at at some synergies and all like that? Possibly. But you know, that that's trying to mind read what's in the heads of some strategics and a lot of times it's it's a waste of effort to do that.

Speaker #7: Yeah. That makes a lot of sense. And then shifting over to refining. So just from a throughput standpoint, looked like the system ran well overall, crude oil charge came in above the top of the guidance range in Q2.

Speaker #2: We think this is, but you know, obviously we're commercial. If somebody wanted to pay a big number for lubes, I can't say that would be out of the question.

Joe Laetsch: Yep, that makes a lot of sense. Shifting over to refining. Just from a throughput standpoint, looked like the system ran well overall. Crude oil charge came in above the top of the guidance range in Q2. Can you just talk about what went well during the quarter, maybe more broadly, can you talk about where we are in the refining improvement process that target of 640,000 barrels a day on average? Thank you.

Speaker #7: Can you just talk about what went well during the quarter? And then maybe more broadly, can you talk about where we are in the refining improvement process and that target of 640,000 barrels a day on average?

Speaker #2: But that's not our intent. That is that is not what we're looking at. I mean, it is looking at having a a business that can be valued properly in the public markets and get and capture that value for our stockholders through one of these distributions.

Speaker #7: Thank you.

Speaker #2: Sure. Yeah. So what went well? I think what we've begun to do is really work in terms of leveraging our underlying reliability and operational improvements, and then optimizing our kit.

Speaker #6: Yeah. That makes a lot of sense. And then shifting over to to refining. So just from a throughput standpoint, looked like the system ran well overall.

Steven Ledbetter: Sure. Yeah. What went well? I think what we've begun to do is really work in terms of leveraging our underlying reliability and operational improvements and then optimizing our kit. To the extent that we have limitations, whether it be finishing into premium products or we have excess intermediates, we've been able to optimize moving those molecules to different locations. To be honest, it is looking more at our kit like an integrated kit, where instead of standalone fence line balance, we are finding ways to move products and take advantage of markets or fill gaps while some of our fleet gets healthy on certain areas. Running 640 in this quarter, as you mentioned, that is something that we aspire to do where the market is there, and certainly the market was there.

Speaker #6: Crude oil charge came in above the top of the guidance range in Q2. Can you just talk about what went well during the quarter?

Speaker #2: So to the extent that we have limitations whether it be finishing into premium products or we have excess intermediates, we've been able to optimize moving those molecules to different locations and to be honest, it's looking more at our kit like an integrated kit where instead of standalone, fence-line balance, we're finding ways to move products and take advantage of markets or fill gaps while some of our fleet gets healthy on certain areas.

Speaker #6: And then maybe more broadly, can you talk about where we are in the refining improvement process and that target of 640,000 barrels a day on average?

Speaker #6: Thank you.

Speaker #1: Sure. Yeah. So what went well? I think I think what we've begun to do is really work in terms of leveraging our underlying reliability and operational improvements.

Speaker #1: And then optimizing our kit. So to the extent that we have limitations whether it be finishing into premium products or we have excess intermediates, we've been able to optimize moving those those molecules to different to different locations and to be honest, it's it's looking more at our kit like an integrated kit where instead of standalone fence line balance, we're we're finding ways to move products and and take advantage of markets or fill gaps while some of our our fleet gets healthy on certain areas.

Speaker #2: Running 640 in this quarter, as you mentioned, that is something that we aspire to do where the market is there and certainly the market was there.

Speaker #2: And doing that while we had already talked about last quarter having a few unplanned maintenance elements at El Dorado, I think we were able to demonstrate our flexibility and capability to do that.

Steven Ledbetter: Doing that while we had already talked about last quarter, having a few unplanned maintenance elements at El Dorado, I think we were able to demonstrate our flexibility and capability to do that. We still have a ways to go. Part of what we've talked about in terms of the organizational structure and change is really to look at not only growth, but optimizing inside of the integrated value chain. We think there's more to gain there.

Speaker #2: We still have a ways to go. And part of what we've talked about in terms of the organizational structure and change is really to look at not only growth, but optimizing inside of the integrated value chain and so we think there's more to gain there.

Speaker #1: Running 640 in this quarter, as you mentioned, that is something that we aspire to do where the market is there, and certainly, the market was there.

Speaker #1: And doing that while we had already talked about last quarter having a few unplanned maintenance elements at El Dorado, I think we were able to demonstrate our flexibility and capability to do that.

Speaker #7: Great. Thank you.

Speaker #4: Your next question comes from the line of Theresa Chen with Barclays. Your line is open to Theresa. Please go ahead.

Joe Laetsch: Great. Thank you.

Speaker #1: We still have a ways to go. And part of what we've talked about in terms of the organizational structure and change is really to look at not only growth, but optimizing inside of the integrated value chain.

Operator: Your next question comes from the line of Theresa Chen with Barclays. Your line is open, Theresa. Please go ahead.

Speaker #5: Thank you. First of all, I'd like to offer my congratulations to Steven Val for your new roles as well. In turning to some of the midstream commentary stepping back, when we look at the compelling long-term supply and demand economics across past four and past five, that underpins your go west opportunity.

Theresa Chen: Thank you. First of all, I'd like to offer my congratulations to Steve and Bell for your new roles as well. In turning to some of the midstream commentary, stepping back, when we look at the compelling long-term supply and demand economics across PADD IV and PADD V that underpins your Go-West opportunity, even beyond the initial phase, can you remind us, how much of incremental phases do you think you will need the support of third-party shippers versus volumes from your own facilities? As you evaluate and commercialize incremental phases, how are you thinking about potential competition from other refined products projects, taking MidCon and Gulf Coast products targeting Western markets, including Phillips and Kinder's Western Gateway Pipeline, delivering to PADD V, as well as existing expansions plus expandable assets from ONEOK and Enterprise targeting PADD IV markets, including Denver, Grand Junction, Colorado, Salt Lake and so on?

Speaker #1: And so, we think there's more to gain there.

Speaker #6: Great. Thank you.

Speaker #4: Your next question comes from the line of Theresa Chen with Barclays. Your line is open, Theresa. Please go ahead.

Speaker #5: Even beyond the initial phase, can you remind us how much of incremental phases do you think you will need the support of third-party shippers versus volumes from your own facilities?

Speaker #5: And as you evaluate and commercialize incremental phases, how are you thinking about potential competition from other refined products projects taking Midcon and Gulf Coast products targeting Western markets including Philips and Kinder's Western Gateway delivering to pad five as well as existing expansions plus expandable assets from One Oak and Enterprise targeting pad four markets including Denver, Colorado Junction, Salt Lake, and so on?

Speaker #5: Even beyond the initial phase, can you remind us how much of incremental phases do you think you will need the support of third party shippers versus volumes from your own facilities?

Speaker #5: And as you evaluate and commercialize incremental phases, how are you thinking about potential competition from other refined products projects taking Midcon and Gulf Coast products targeting Western markets, including Phillips and Kinder's Western Gateway delivering to PADD V, as well as existing expansions plus expandable assets from ONEOK and Enterprise targeting PADD IV markets, including Denver, Grand Junction, Salt Lake, and so on?

Speaker #2: All right, Theresa. Thanks. This is Steve out. I'm trying to break that down a little bit. So the first part was on pad four at pad five, multiple phases.

Steven Ledbetter: All right, Theresa. Thanks. This is Steve. I'll try to break that down a little bit. The first part was on PADD IV, PADD V, multiple phases. We've said the first phase is right at 35,000 in terms of unlocking Rockies production move west. The full phase, whether we go to a mid-phase or the final phase, it gets up to 140,000 to 150,000 barrels per day. We think that given our proximity, both our owned midstream position as well as our logistics proximity in the Rockies production, we will be able to fill a large portion of that. On larger phases, we will have the ability to connect some of our own production, but we think we would offer a compelling value proposition to move barrels out of the MidCon right into PADD V.

Speaker #2: We've said the first phase is right at 35,000 in terms of unlocking Rockies production move west. The full phase, whether we go to a mid-phase or the final phase, it gets upwards to up to 140 to 150,000 barrels per day.

Speaker #1: All right, Theresa. Thanks. This is Steve I'll I'll try to break that down a little bit. So the first part was on pad four at pad five.

Speaker #2: We think that given our proximity both our integrated our owned midstream position as well as our logistics proximity in the Rockies production, we will be able to fill a large portion of that on larger phases.

Speaker #1: Multiple phases. We've said the first phase is right at 35,000 in in terms of unlocking Rockies production move west. The full phase, whether we go to a mid phase or a or the final phase, it gets upwards to up to 140 to 150,000 barrels per day.

Speaker #2: We will have the ability to connect some of our own production, but we think we would offer a compelling value proposition to move barrels out of the Midcon right into pad five.

Speaker #2: So not going to come on an exactly how much is owned equity production versus third party. We'll commercialize that and do course, but we think we'll have the ability to go do that.

Speaker #1: We think that given our proximity both our integrated our owned midstream position as well as our logistics proximity in the Rockies production, we will be able to fill a large portion of that on larger phases.

Steven Ledbetter: Not going to comment on exactly how much is owned equity production versus third party. We'll commercialize that in due course, but we think we'll have the ability to go do that. Then as you asked about competing projects, we've said that the Western Gateway Pipeline project is not a competitive project. When you look at the total balance structure in PADD V, and you think about it from an imports, PADD V in California import quite a bit of product. You've had two major refineries that have shuttered. We think the regulatory environment in California continues to be difficult to operate in, and therefore, you're going to need more supply. We don't think these projects were necessarily competitive.

Speaker #2: And then as you asked about competing projects, we've said that the Western Gateway project is not a competitive project when you look at the total balance structure in pad five and you think about it from an imports pad five in California port quite a bit of product.

Speaker #1: We will have the ability to connect some of our own production but we think we would offer a compelling value proposition to move barrels out of the Midcon right into into pad pad five.

Speaker #1: So, not going to comment on exactly how much is owned equity production versus third party. We'll commercialize that in due course. But we think we'll have the ability to go do that.

Speaker #2: You've had two major refineries that have shuttered. We think the regulatory environment in California continues to be difficult to operate in and therefore you're going to need more supply.

Speaker #1: And then, as you asked about competing projects, we've said that the Western Gateway project is not a competitive project when you look at the total balance structure in PAD V, and you think about it from an imports—you know, PAD V and California import quite a bit of product.

Speaker #2: So we don't think these projects were necessarily competitive. We think they're complementary to each other, but we clearly wanted to advance our project given our footprint and make sure that whatever the opportunities are to go into pad Western pad four and pad five, that we are the ones to take advantage of that, which is why we announced and why we're advancing the project to move to FID by end of this year.

Steven Ledbetter: We think they are complementary to each other, we clearly wanted to advance our project given our footprint, and make sure that whatever the opportunities are to go into western PADD IV and PADD V, that we are the ones to take advantage of that, which is why we announced and why we're advancing the project, to move to FID by end of this year.

Speaker #1: You've had two major refineries that have shuttered. We think the regulatory environment in California continues to be difficult to operate in and therefore you're going to need more supply.

Speaker #1: So we don't think these projects will necessarily competitive. We think they are complementary to each other. But we clearly wanted to advance our project given our footprint and make sure that whatever the opportunities are to go into pad Western pad four and and pad five, that we are the ones to take advantage of that which is why we announced and why we're advancing the project to move to FID by end of this year.

Speaker #5: Thank you for that.

Speaker #2: I don't know if I got all your questions. I might have missed one there.

Theresa Chen: Thank you for that comprehensive answer.

Speaker #6: Go ahead.

Speaker #5: We're good. Maybe turning to refining, can you just give us an update about the status of your SRE applications? Would you expect continued wind relief for the applications that you file?

Steven Ledbetter: I don't know if I got all your questions. I might have missed one there. Go ahead, Theresa.

Theresa Chen: No, we're good. Maybe turning to refining, can you just give us an update about the status of your SRE application? Would you expect continued RIN relief for the applications that you filed?

Speaker #2: Well, you guys probably know as well as we do. We are daily on the phone with Washington and various constituents. We have put in our 2025 petitions for Tulsa Artesia Parco, Casper, and West Cross.

Speaker #1: I don't know if I got all your questions. I might have missed one there.

Steven Ledbetter: Well, you guys probably know as well as we do. We are daily on the phone with Washington and various constituents. We have put in our 2025 petitions for Tulsa, Artesia, Parker, Casper, and Woods Cross. They are in pending status. There are a few historical petitions for 2023 and 2024 that we're waiting on. You'll note that the DC court has recently ruled in our favor on the EPA's decision to exclude Parker's eligibility for 2024, and we're expecting relief and results soon. We were hearing weeks, not months. We're hearing days, not weeks. We need to get an answer. As you know, the compliance deadline is 1 September. As those SREs are delayed to us, it has an impact in terms of how we can leverage those to offset a material burden.

Speaker #6: Go ahead, Theresa.

Speaker #5: We're good. Maybe turning to refining—can you just give us an update about the status of your SRE applications? Would you expect continued wind relief for the applications that you file?

Speaker #2: They are in pending status. There are a few historical petitions for '23 and '24 that we're waiting on. You'll note that the DC court has recently ruled in our favor on the EPA's decision to exclude Parcos eligibility for '24.

Speaker #1: Well, you guys probably know as well as we do. We are daily on the phone with Washington and various constituents.

Speaker #2: And we're expecting relief and results soon. We hear we were hearing weeks, not months. We're hearing days, not weeks. We need to get an answer as you know the compliance deadline is September 1st.

Speaker #1: We have submitted our 2025 petitions for Tulsa, Artesia, Parco, Casper, and Woods Cross. They are in pending status. There are a few historical petitions for '23 and '24 that we're still waiting on.

Speaker #2: And as those SREs are delayed to us, it has an impact in terms of how we can leverage those to offset a material burden.

Speaker #1: You'll note that the D.C. court has recently ruled in our favor on the EPA's decision to exclude PARCO's eligibility for '24. And we're expecting relief and, you know, results soon.

Speaker #2: As far as the overall wind bank goes, which I think is part of this question, something is going to have to be done. At the end of the day, the wind bank is projected to go negative or only into a slightly balanced position by the end of the year.

Steven Ledbetter: As far as the overall RIN bank goes, which I think is part of this question, something is going to have to be done. At the end of the day, the RIN bank is projected to go negative or only into a slightly balanced position by the end of the year. If there's not some level of relief legislatively, I fear that it is a race to the top in terms of pricing. Through our advocacy networks and our trade organization associations, we are engaged in the conversation. We expect to get relief from the SREs imminently. We just need it to happen soon.

Speaker #1: We we hear we were hearing weeks not months. We're hearing days not weeks. We need to get an answer as you know the compliance deadline is September 1st.

Speaker #2: And if there's not some level of relief legislatively, I fear that it is a race to the top in terms of pricing. And so we through our advocacy networks and our trade, organization, associations we are engaged in the conversation but we expect to get relief from the SREs imminently.

Speaker #1: And as those SREs are delayed to us, it has an impact in terms of how we can leverage those to offset a material burden.

Speaker #1: As far as the overall wind bank goes, which I think is part of this question, something is going to have to be done. At the end of the day, the wind bank is projected to go negative or only into a slightly balanced position, you know, by the end of the year.

Speaker #2: We soon.

Speaker #1: And if there's not some level of relief legislatively, I fear that it is a race to the top in terms of pricing.

Speaker #5: Thank you.

Speaker #4: Your next question comes from the line of Doug Lagatte with Wolf. Your line is open, Doug. Please go ahead.

Theresa Chen: Thank you.

Speaker #1: And so we through our advocacy networks and our trade organization associations we are we are engaged in the conversation but but we expect to get relief from the SREs imminently.

Operator: Your next question comes from the line of Doug Leggate with Wolfe. Your line is open, Doug. Please go ahead.

Speaker #6: Hey, good morning, everyone. Let me also offer my congrats to Stephen Bao and Franklin. I appreciate the very candid assessment of the current refining environment.

Doug Leggate: Hey, good morning, everyone. Let me also offer my congrats to Steve and Val. Franklin, I appreciate the very candid assessment of the current refining environment. I wanted to kind of try and parse some of your comments about how you manage this windfall, I guess you could call it. It sounds like you might be opportunistic.

Speaker #1: We just need it to happen soon.

Speaker #6: I wanted to kind of try and parse some of your comments about how you manage this windfall, I guess you could call it. It sounds like you might be opportunistic.

Speaker #5: Thank you.

Speaker #4: Your next question comes from the line of Doug Leggate with Wolfe. Your line is open, Doug. Please go ahead.

Speaker #2: That is not how Doug, I would not characterize it as a windfall. It's just a rebalancing of the market based on an external windfall makes me shutter.

Speaker #6: Hey, good morning, everyone. Let me also offer my congrats to Stephen, Bao, and Franklin. I appreciate the very candid assessment of the current refining environment.

Franklin Myers: Doug, I would not characterize it as a windfall. It's just the rebalancing of the market based on an external. That windfall makes me shudder because I know.

Speaker #2: Because I don't.

Speaker #6: Well, let me well, let me pick up on that then. Do you think mid-cycle has changed in perpetuity, Franklin?

Speaker #6: I wanted to kind of try and parse some of your comments about how you manage this windfall, I guess you could call it.

Doug Leggate: Let me pick up on that then. Do you think mid-cycle has changed in perpetuity, Franklin?

Speaker #2: No.

Speaker #6: In that case, it's a windfall.

Speaker #6: It sounds like you might be opportunistic.

Speaker #2: Well, it's just just rebalancing. It's profits from someone else elsewhere. But semantics aside, we don't know what's going to happen with those refining assets.

Franklin Myers: No.

Speaker #1: That, that is—that is not how, Doug. I would not characterize it as a windfall. It's just the rebalancing of the market based on an external—you know, windfall makes me shudder.

Doug Leggate: In that case, it's a windfall.

Franklin Myers: Well, it's just rebalancing. It's profits from someone else that came our way that would've gone elsewhere. Semantics aside, we don't know what's going to happen with those refining assets. What we do know is that if you look back in history to the '70s, the fuels market is not as impactful on the overall economy. The dire comments made by certain members of executives of international oil companies. The end of June came and went, and we didn't fall off a cliff. The fact is that we do need liquid fuels around the world. The free market forces are balancing that out to where, yes, we are having greater crack spreads now, but it's a function of what's going to happen to those refineries that are offline, and it's just going to take them for a while.

Speaker #1: Because I don't believe.

Speaker #6: Well let me let me let me well let me pick up on that then. Do you think mid cycle has changed in perpetuity Franklin?

Speaker #2: We do know what we do know is that if you look back in history to the '70s, the fuels market is not as impactful on the overall economy.

Speaker #1: No.

Speaker #6: In that case it's windfall.

Speaker #2: And so the dire comments made by certain members of executives of international oil companies have not the end of June came and went and we didn't fall off a cliff.

Speaker #1: Well, well, it's just rebalancing. It's profits from someone else that came our way that would have gone elsewhere. But semantics aside, we don't know what's going to happen with those refining assets.

Speaker #2: The fact is that we do need liquid fuels around the world. The free market forces are balancing that out where, yes, we are having greater crack spreads now, but it's a function of what's going to happen to those refineries that are offline.

Speaker #1: We do know what we do know is that if you look back in history to the 70s the fuels market is not as impactful on the overall economy.

Speaker #1: And so, the dire comments made by certain members of the executives of the International Oil Companies have not—you know, the end of June came and went, and we didn't fall off a cliff.

Speaker #2: And it's just going to take them for a while. And so we'll benefit from that for a while. And we're going to have to look and make sure that we put this we're going to have to take advantage of the opportunity is what I would say.

Steven Ledbetter: We'll benefit from that for a while.

Franklin Myers: We'll benefit from that for a while. We're going to have to look and make sure that we're going to have to take advantage of the opportunity, is what I would say. The opportunity gives us a chance to reinvest into an industry that had under-invested for a while based on economic issues. We're going to reinvest to where we're more efficient and hopefully more profitable for a longer period of time. You look at Sinclair, and since the merger through the end of June, I'm looking at Craig here, I think our annualized rate of return has been 20% since 2022. We're working real hard to use what assets we have. I don't want to be argumentative with you at all. That was not my intent, and I apologize for that.

Speaker #1: The the fact is is that we do need liquid fuels around the world. The free market forces are are balancing that out that we're yes we are having greater crack spreads now.

Franklin Myers: We're going to have to look and make sure that we're going to have to take advantage of the opportunity, is what I would say. The opportunity gives us a chance to reinvest into an industry that had under-invested for a while based on economic issues. We're going to reinvest to where we're more efficient and hopefully more profitable for a longer period of time. You look at Sinclair, and since the merger through the end of June, I'm looking at Craig here, I think our annualized rate of return has been 20% since 2022. We're working real hard to use what assets we have. I don't want to be argumentative with you at all. That was not my intent, and I apologize for that.

Speaker #2: The opportunity gives us a chance to reinvest into an industry that had underinvested for a while based on economic issues. We're going to reinvest to where we're more efficient and hopefully more profitable for the longer period of time.

Speaker #1: But it's a function of you know what's going to happen to those refineries that are offline. And it's just going to take them for a while.

Speaker #2: You look at Sinclair, and since the merger through the end of June, I'm looking at Craig here, I think our annualized rate of return has been 20% of since 2022.

Speaker #1: And so we'll benefit from that for a while. And we're going to have to look and make sure that we put this—we're going to have to take advantage of the opportunity, is what I would say.

Speaker #2: We're working real hard to use what assets we have and I don't want to be argumentative with you at all. That was not my intent and I apologize for that.

Speaker #1: The opportunity gives us a chance to reinvest in an industry that had underinvested for a while due to economic issues. We're going to reinvest so that we're more efficient and, hopefully, more profitable over the longer period of time.

Speaker #2: But we're given something to deal with and we're going to deal with it. And in terms of taking advantage of the opportunity, make this company and franchise better and making a great opportunity for our stockholders.

Franklin Myers: We're given something to deal with, and we're going to deal with it in terms of taking advantage of the opportunity to make this company and franchise better and making a great opportunity for our stockholders.

Speaker #1: If you look at Sinclair, and since the merger through the end of June—I'm looking at Craig here—I think our annualized rate of return has been 20% since 2022.

Speaker #6: No, I think it's fair. To look at the extended duration of all these disruptions, you're published at double year the street surroundings for 26, 27, and 28 just for context.

Speaker #1: We're working real hard to use what assets we we have and and I don't want to be argumentative with you at all. That that was not my intent and I apologize for that.

Doug Leggate: No, I think it's fair to look at the extended duration of all these disruptions. You published at double your The Street's earnings for 2026, 2027, and 2028, just for context. We're there with you. The question we're trying to debate is: What is discounted in perpetuity in the sector in your stock? It really goes back to the cash return question, which is where I was going. Are you prepared to build cash in this environment, build net cash as opposed to the formulaic share buyback? That was really where I was going with this windfall comment.

Speaker #1: But it it's we we we're we're given something to deal with and we're going to deal with it. And in terms of taking advantage of the opportunity to make this company and franchise better and making a great opportunity for for our stockholders.

Speaker #6: So. With you? The question we're trying to debate is what is discounted. Perpetuity in the sector and your stock. It really goes back to the cash return question, which is where I was going.

Speaker #6: Are you prepared to build cash in this environment, build net cash as opposed to the formulaic share buyback? That was really what I was going with this windfall comment.

Speaker #6: No I think I think it's fair you know to to look at the extended duration of all these disruptions. You published a double year the streets earnings for 26, 27, and 28 just for context.

Speaker #2: Okay. Would not be our intent. No. That's a this gets into asset allocation, which is really right in the heart of where our board and our senior management team should focus their efforts.

Speaker #6: So we're there with you. The question we're trying to debate is what is discounted in perpetuity in the sector in your stock and it really goes back to the cash return question which is where I was going.

Franklin Myers: Okay. Would not be our intent, no. This gets into asset allocation, which is really right in the heart of where our board and our senior management team should focus their efforts. It goes into how do we allocate assets doing the lubricants transaction. Cash on a balance sheet with no particular place to go is not a very smart thing for any management or board to do. Would we lean into buying more shares? Sure, if we don't see opportunities to have reasonable returns on that. Of course. We're not here to just roll around in a room full of cash just for the benefit of having the cash on the balance sheet. That is not our. Steven's got a comment.

Speaker #2: It goes into how do we allocate assets doing the loose transaction. And cash on a balance sheet with no particular place to go is not a very smart thing for any management or board to do.

Speaker #6: Are you prepared to build cash in this environment build net cash as opposed to the formulaic share buyback? That was really what I was going with this windfall comment.

Speaker #2: And so would we lean into buying more shares? Sure. If we don't see opportunities to have reasonable returns on that. Of course, but we're not here to just roll around in a room full of cash just for the benefit of having the cash on the balance sheet.

Speaker #1: Okay. That would not be our intent. No. That's a—that's a, you, you—this gets into asset allocation, which is really right at the heart of where our board and our senior management team should focus their efforts.

Speaker #1: It goes into how do we allocate assets during the loose transaction. And cash on a balance sheet with no particular place to go is not a very smart thing for any management or board to do.

Speaker #2: That is not our case. Steve's got a comment.

Speaker #3: Yeah. So just as we talked about the structure my role in Bao's role we saw our ability to go defend and take offense of the markets.

Steven Ledbetter: Yeah. Just as we talked about the structure, my role and Val's role, we saw our ability to go defend and take offense of the markets. We've been evaluating several major projects. The business is now set up to go execute upon those with efficiency and make sure that we can allocate those dollars. While, to Franklin's comments, having cash sitting on the balance sheet with nowhere to go, we are evaluating a number of large projects that we think would be accretive to the business and return very good value to the shareholder that we're just not ready to talk about.

Speaker #3: And so we've been evaluating several major projects. We are set up the business is now set up to go execute upon those with efficiency.

Speaker #1: And so would we lean into buying more shares? Sure. If we don’t see opportunities to have reasonable returns on that, of course. But we’re not here to just, you know, roll around in a room full of cash just for the benefit of having the cash on the balance sheet.

Speaker #3: And make sure that we can allocate those dollars. So while to Franklin's comments, having cash sitting on the balance sheet with nowhere to go, we are evaluating a number of large projects that we think would be accretive to the business and return very good value to the shareholder.

Speaker #1: That is not our case. Steve's got a comment.

Speaker #3: Yeah. So so just as we talked about this the the structure my role in Bao's role we saw our ability to go defend and take offense of the markets.

Speaker #3: That we're just not ready to talk about.

Speaker #2: Yeah. We're not ready to go live with that. And so but you have to look at the legacy of this company that we have been good managers of the capital given to the company.

Speaker #3: And so we've been evaluating several major projects. We are set up the business is now set up to go execute upon those with you know efficiency.

Franklin Myers: Yeah. We're not ready to go live with that. You have to look at the legacy of this company, that we have been good managers of the capital given to the company, and we hope to continue to be.

Speaker #3: And make sure that we can allocate those dollars. So while to Franklin's comments sitting having cash sitting on the balance sheet with nothing nowhere to go we are evaluating a a number of large projects that we think would be accretive to the business and return very good value to the shareholders.

Speaker #2: And we hope to continue to be.

Speaker #1: I'd also add that we're tracking well against our target of 50% payout ratio so far during the year. So we're close to 40% and we still have six more months to go.

Vivek Garg: I'd also add that we're tracking well against our target of 50% payout ratio so far during the year. We're close to 40%, and we still have six more months to go.

Speaker #2: Yep.

Speaker #6: All right, guys. I'll take enough time. Thanks so much.

Speaker #3: That we're just not ready to talk about.

Speaker #1: Yeah. We're we're not ready to go live with that. And so but but you you have to look at the legacy of this company that we have been good managers of the capital given to to the company.

Speaker #2: Okay. No, thank you for the questions.

Franklin Myers: Yep.

Doug Leggate: All right, guys. I've taken enough time. Thanks so much.

Speaker #4: The next question is from the line of Philip Jungworth with BMO. Your line is open, Philip. Please go ahead.

Franklin Myers: Okay. No, thank you for the questions.

Speaker #1: And we hope to continue to be.

Operator: The next question is from the line of Phillip Jungwirth with BMO. Your line is open, Phillip. Please go ahead.

Speaker #2: I'd also add that we're tracking well against our target of a 50% payout ratio so far during the year. We're close to 40%, and we still have six more months to go.

Speaker #7: Oh, thanks. Good morning. Just wanted to ask on the market environment for Lubes. First, last quarter you mentioned cost inflation headwinds. Just what's the latest here in success of pricing actions to offset this?

Phillip Jungwirth: Thanks. Good morning. Just wanted to ask on the market environment for lubes. First, last quarter, you mentioned cost inflation headwinds. Just what's the latest here in success of pricing actions to offset this? Are you seeing much demand sensitivity due to price? Second, just coming back to a comment you made earlier about 20% of the global base oil capacity being offline. Roughly, what's the breakdown here across the different areas where you're seeing unplanned downtime due to conflict or China export policy, just because some of these could take longer to normalize than others?

Speaker #1: Yep.

Speaker #6: All right guys. I think enough time. Thanks so much.

Speaker #7: Are you seeing much demand sensitivity due to price? And then second, just coming back to a comment you made earlier about 20% of global base oil capacity being breakdown here across this different areas where you're seeing unplanned downtime due to conflict or China export policy?

Speaker #1: Okay. No, thank you for the questions.

Speaker #7: The next question is from the line of Philip Jungworth with BMO. Your line is open Philip. Please go ahead.

Speaker #8: Thanks. Good morning. Just wanted to ask on the market environment for for Lubes. First last quarter you mentioned cost inflation headwinds. Just what's the latest here in success of pricing actions to offset this?

Speaker #7: Just because some of these could take longer to normalize than others.

Speaker #8: Correct. Yeah. Thanks for the question. This is Matt. Just looking at the second quarter performance, we had an exceptional quarter. We saw that driven by higher volumes and we took multiple pricing actions throughout the quarter.

Speaker #8: Are you seeing much demand sensitivity due to price? And then second, just coming back to a comment you made earlier about 20% of global base oil capacity being offline.

Matt Joyce: Correct. Yeah. Thanks for the question. This is Matt. Just looking at the Q2 performance, we had an exceptional quarter. We saw that driven by higher volumes, and we took multiple pricing actions throughout the quarter. We did, and were able to get through pricing in base oils that allowed for us to have some margin expansion. Of course, you saw that we had some favorable FIFO impact. We had a bit of a tailwind behind us. We've exhausted quite a lot of that inventory, and that's worked its way through. We are going to see in the Q3, we will see some more higher-cost inventories that we'll be managing through, and the team is doing an exceptional job of going out and getting those costs recovered as we progress.

Speaker #8: We did and we're able to get through pricing in base oils that allowed for us to have some margin expansion. And of course, you saw that we had some favorable FIFO impacts.

Speaker #8: Roughly, what's the breakdown here across these different areas where you're seeing unplanned downtime due to conflict or China export policy? Just because some of these could take longer to normalize than others.

Speaker #8: So we had a bit of a tailwind behind us. We've exhausted quite a lot of that inventory and that's worked its way through. So we are going to see in the third quarter, we will see some more higher cost inventories that will be managing through.

Speaker #9: Correct. Yeah. Thanks for the question. This is Matt. Just looking at the second quarter performance we had an exceptional quarter. We saw that driven by higher volumes and we took multiple pricing actions throughout the quarter.

Speaker #8: And the team is doing an exceptional job of going out and getting those costs recovered as we progress. What we've also seen is that the demand for our finished lubricants business has also been really stable.

Speaker #9: We did, and we were able to get through pricing in base oils that allowed us to have some margin expansion. And, of course, you saw that we had some favorable FIFO impacts.

Speaker #8: And as well as our specialties business. So we've had a good performance there. It's important though, we have been watching very carefully cost discipline and when we look for the future, we have to go out and get as much as we can from the markets and in particular, the base oil markets that are in that short supply.

Matt Joyce: What we've also seen is that the demand for our finished lubricants business has also been really stable, as well as our specialties business. We've had a good performance there. It's important, though, we have been watching very carefully cost discipline. When we look for the future, we have to go out and get as much as we can from the markets, and in particular, the base oil markets that are in that short supply. We talked about the 20%. Those are primarily Group III base oils that are offline at this stage. Our team have done a nice job of sourcing our feedstocks, both from the Gulf Coast as well as from overseas, to continue to maintain our production in our Mississauga facility at a ratable event, and so that we're able to provide our customers with the products that they require.

Speaker #9: So, we had a bit of a tailwind behind us. We've exhausted quite a lot of that inventory, and that's worked its way through. So, we are going to see—in the third quarter—we will see some more higher-cost inventories that we'll be managing through.

Speaker #9: And the team is doing an exceptional job of going out and getting those costs recovered as we progress. What we've also seen is that the demand for our finished lubricants business has also been really stable.

Speaker #8: So we talked about the 20%. Those are primarily group three base oils that are offline at this stage. And our team have done a nice job of sourcing our feedstocks both from the Gulf Coast as well as from overseas to continue to maintain our production in our Mississauga facility at a rateable event.

Speaker #9: And and as well as our special specialties business. So we've had we've had a good a good performance there. It's important though we have been watching very carefully cost discipline and and when we look for the future we have to go out and and get as much as we can from the the markets and in particular the base oil markets that are in that short supply.

Speaker #8: And so that we're able to provide our customers with the products that they require. So we do see that this is going to be a near-term opportunity for us and it's a benefit that we're taking advantage of in the market today.

Speaker #9: So we talked about the 20%. Those are primarily group three base oils that are offline at this stage. And our our team have done a nice job of of sourcing our feedstocks both from the Gulf Coast as well as from overseas to continue to maintain our production in our Mississauga facility at a at a rateable event.

Matt Joyce: We do see that this is going to be a near-term opportunity for us, and it's a benefit that we're taking advantage of in the market today. With the separation and what we're looking at for the business, we are looking at this business for the longer term, and the strategic rationale behind that is that the lubes and specialties business can create even more value through a focused capital-light specialty products model. The access to the sources of base oils that we have been able to negotiate is a much better position for us than the ownership of these refining assets. We're excited about having that distinct strategy, capital allocation that's really truly ours, and some exciting jumping-off points for growth in the portfolio of products that we offer to the market.

Speaker #8: But with the separation and what we're looking at for the business, we are looking at this business for the longer term. And the strategic rationale behind that is that the Lubes and specialties business can create even more value through a focused capital light specialty products model.

Speaker #9: And so that we're able to provide our customers with the the products that they require. So we we do see that this is this is going to be a near term opportunity for us.

Speaker #8: And the access to the sources of base oils that we have been able to negotiate is a much better position for us than the ownership of these refining assets.

Speaker #9: And it's a benefit that we're taking advantage of in the market today. But with the separation and what we're looking at for the business, we are looking at this business for the longer term.

Speaker #8: And we're excited about having that distinct strategy capital allocation that's really truly ours and some exciting jumping off points for growth in the portfolio of products that we offer to the market.

Speaker #9: And the strategic rationale behind that is that the Lubes and Specialties business can create even more value through a focused, capital-light specialty products model.

Speaker #9: And the access to the sources of base oils that we have been able to negotiate is a much better position for us than the ownership of these refining assets.

Speaker #7: Okay, great. And then refining capture was stronger than anticipated. You didn't get a whole lot of help from crude diffs either. I was just hoping you could talk about the tailwinds improvements to this metric in the quarter.

Phillip Jungwirth: Okay, great. Refining capture was stronger than anticipated. You didn't get a whole lot of help from crude diff either. Was just hoping you could talk about the tailwinds improvements to this metric in the quarter. While we're only a month into Q3, just how are you viewing the puts and takes so far around refining capture?

Speaker #9: And we're excited about having that distinct strategy in capital allocation that's really, truly ours, and some exciting jumping-off points for growth in the portfolio of products that we offer to the market.

Speaker #7: And while we're only a month into Q3, just how are you viewing the puts and takes so far around refining capture?

Speaker #3: Yeah, thanks Steve. I'll take that one. Capture was again, I think a positive. We've talked about what we've been doing in terms of our underlying ability to get more value out of the molecule through extending value chains and our heavy oil value chain and our retail asphalt, producing more jet, the jet flexibility projects that we put into Puget.

Speaker #8: Okay, great. And then refining capture was stronger than anticipated. You didn't get a whole lot of help from crude diffs either. I was just hoping you could talk about the tailwinds or improvements to this metric in the quarter.

Steven Ledbetter: Yeah, thanks. This is Steve, I'll take that one. Capture was, again, I think, a positive. We've talked about what we've been doing in terms of our underlying ability to get more value out of the molecule through extending value chains and our heavy oil value chain and our retail asphalt. Producing more jet, the jet flexibility projects that we put into Puget, that came online in Q4, really getting the molecules in the right space. Our light product yield improved. It was mainly both in distillate, we had 11,000 barrels a day more year-over-year in distillate. That was a good thing given the pricing environment, we also were able to generate more premium in the quarter.

Speaker #8: And while we're only a a month into Q3 just how are how are you doing to put some takes so far around around refining capture?

Speaker #3: That came online in Q4 and really getting the molecules in the right space. Our light product yield improved and it was mainly a both in distillate, we had 11,000 barrels a day more year over year in distillate.

Speaker #3: Yeah. Thanks Steve. I'll take that one. Capture was again I think a a positive. We we've we've talked about what we've been doing in terms of our underlying ability to get more value out of the the molecule through extending value chains and our heavy oil value chain and our and our retail asphalt.

Speaker #3: That was a good thing given the pricing environment. And we also were able to generate more premium in the quarter. So extending the value chain getting our crude slate flexibility in place across all of the facilities that can run different crude slates and have access to different crudes has been a focus of ours.

Speaker #3: Producing more jet the jet flexibility projects that we we put it to fugit that came online in Q4 and really getting the molecules in the right space.

Steven Ledbetter: Extending the value chain, getting our crude slate flexibility in place across all of the facilities that can run different crude slates and have access to different crudes, that's been a focus of ours. We also ran well. When you're running and you're finishing the product, you're able to sell the higher-value products into the market, not have to downgrade things. Against us, to the point you made, our lading crude was our largest drag inside the quarter, that was associated with the massive volatility and what was happening on the geopolitical stage, steep backwardation only to flatten out, more steep backwardation only to flatten out. You had some regional crudes that were priced out wide. Fortunately, the crack environment covered that.

Speaker #3: We also ran well. When you're running and you're finishing the product, you're able to sell the higher value products into the market and not have to downgrade things.

Speaker #3: You know, our light product yield improved, and it was mainly both in, in distillate. We had 11,000 barrels a day more year over year in distillate. That was a good thing given the pricing environment.

Speaker #3: And against us to the point you made, our leading crude was our largest drag inside the quarter and that was associated with the massive volatility and what was happening on the geopolitical stage.

Speaker #3: And we also were able to generate more premium in in the quarter. So extending the value chain getting our crude slate flexibility in place across all of the facilities that can run different crude slates and have access to different crudes.

Speaker #3: And steep backwardation only to flatten out and more steep backwardation only to flatten out. You had some regional crudes that were priced out wide.

Speaker #3: That's been a focus of ours. We also ran well. You know, when you're running and you're finishing the product, you're able to sell the higher-value products into the market and not have to downgrade things.

Speaker #3: Fortunately, the correct environment covered that. So it continues to be the game of taking waste out of the value chain and getting more value for all the molecules and higher grading the product.

Speaker #3: And and against us to to the point you've made you know our leading crude was our largest drag inside the quarter and and that was associated with the massive volatility and what was happening on the geopolitical stage and steep backwardation only to flatten out and more steep backwardation only to flatten out.

Steven Ledbetter: It continues to be the game of taking waste out of the value chain and getting more value for all the molecules and higher grading the product and taking advantage of feedstock through the kit. Those themes won't change, as we look into Q3, we see another strong quarter for us. We do have the turnaround at El Dorado that commences in September. Aside from that, I think we're looking at another strong quarter as we continue to advance our reliability and our optimization initiatives.

Speaker #3: And taking advantage of feedstock through the kit. Those themes won't change. And as we look into Q3, we see another strong quarter for us.

Speaker #3: You had some regional crudes that were that were priced out wide fortunately the the the crack environment covered that. So you know it it continues to be the game of taking waste out of the value chain and getting more value for all the molecules and higher grading the product.

Speaker #3: We do have the turnaround at El Dorado that commences in September. But aside from that, I think we're looking at another strong quarter as we continue to advance our reliability and our optimization initiatives.

Speaker #7: Thank you.

Speaker #3: And taking advantage of feedstock through the kit. Those themes won't change. And as we look into Q3, we see another strong quarter for us.

Speaker #1: The final question comes from the line of Jason Gableman with TD Cohen. Your line is open, Jason. Please go ahead.

Phillip Jungwirth: Thank you.

Operator: The final question comes from the line of Jason Gabelman with TD Cowen. Your line is open, Jason. Please go ahead.

Speaker #5: Yeah. Hey, thanks for taking my questions. I wanted to circle back to the Lubes spin announcement that you made this morning. And just trying to make sure I'm understanding correctly, the EBITDA from what the remain or the spin co will be because historically, if I look back and it seems like you're spinning out what historically has been called the rack forward business.

Speaker #3: We do have the turnaround at El Dorado that commences in September. But aside from that you know I think we're looking at another strong quarter as we continue to advance our reliability and our optimization initiatives.

Jason Gabelman: Yeah, hey. Thanks for taking my questions. I wanted to circle back to the lubes spin announcement that you made this morning and just trying to make sure I'm understanding correctly the EBITDA from what the remain or the spin co will be. Historically, if I look back, it seems like you're spinning out what historically has been called the rack-forward business. You retired that language in 2022, and then you're shutting down most of the rack-back business. If I look back to what those businesses earned in 2021 and 2022, it was about even split on average between the two subsegments at about $350 million of EBITDA. Is what you're keeping moving forward half of that 350 or around 175, 200, or do I have that math wrong? Thanks.

Speaker #8: Thank you.

Speaker #1: The final question comes from the line of Jason Gableman with TD Cohen. Your line is open Jason. Please go ahead.

Speaker #5: You retired that language in 2022. And then you're shutting down most of the rack back business. If I look back to what those businesses earned in '21 and '22, it was about even split on average between the two sub-segments at about 350 million dollars of EBITDA.

Speaker #2: Yeah. Hey. Thanks for taking my questions. I wanted to circle back to the Lubes spin announcement that you made this morning. And just trying to make sure I'm understanding correctly the EBITDA from what the remain or the or the spin co will be because historically if I look back and it and it seems like you're spinning out what historically has been called the rack forward business.

Speaker #5: So it was what you're keeping moving forward, half of that 350 or around 175, 200, or do I have that math wrong? Thanks.

Speaker #2: You retired that language in 2022, and then you're shutting down most of the rack back business. If I look back to what those businesses earned in 2021 and 2022, it was about an even split on average between the two subsegments at about $350 million of EBITDA.

Speaker #6: Hey, Jason. It's Matt here. Yeah, I just want to pardon me. Take a minute, just to clarify. What we are actually putting out as far as guidance, we're going to limit what we guide on at this point in time.

Matt Joyce: Yeah. Hey, Jason, it's Matt here. Yeah, just want to, pardon me, take a minute just to clarify what we are actually putting out as far as guidance. We're going to limit what we guide on at this point in time. What I can say is that our trailing 12 months in a traditional year would be anywhere between $300 and $350, and we anticipate the new LNS organization and that independent business will deliver something in that range. Here's how. With the way that we have built the relationships with the two premier suppliers, and the continued operation of our Tulsa refinery and our Group I supply, as well as our specialties business. We will effectively have everything intact as far as our business is concerned and what we anticipate will be our margins, but they will be based on a capital-light model.

Speaker #6: What I can say is that our trailing 12 months in a traditional year would be anywhere between 300 and 350. And we anticipate the new L&S organization and that independent business will deliver something in that range.

Speaker #2: So is it what you're keeping moving forward, half of that $350 million, or, you know, around $175 to $200 million? Or do I have that math wrong?

Speaker #2: Thanks.

Speaker #7: Yeah. Hey Jason. It's it's Matt here. Yeah. I just want to pardon me. Take a minute just to clarify. What we are actually putting out as far as guidance we're we're going to we're going to limit what we guide on at this point in time.

Speaker #6: And here's how with the way that we have built the relationships with the two premier suppliers, we are now going and the continued operation of our Tulsa refinery and our group one supply as well as our specialties business.

Speaker #7: What I can say is that our trailing 12 months, in a traditional year, would be anywhere between $300 and $350 million. And we anticipate the new L&S organization and that independent business will deliver something in that range.

Speaker #6: We will effectively have everything intact as far as our business is concerned and what we anticipate will be our margins. But they will be based on a capital light model.

Speaker #7: And here's how with the with the way that we have built the relationships with the two premier suppliers we are now going and and the continued operation of our Tulsa refinery and our group one supply as well as our specialties business.

Speaker #6: So we will be supplied materials from those suppliers external suppliers on a long-term basis. That will provide us ample base oils for our own requirements for our branded business.

Matt Joyce: We will be supplied materials from those suppliers, external suppliers, on a long-term basis that will provide us ample base oils for our own requirements for our branded business, that being the Petro-Canada brand, the Sinclair brand, the Red Giant Oil brand, Sonneborn, et cetera. For both finished and specialties, as well as having a distribution agreement, which will also afford us a new revenue stream that would serve as a rack forward type view to our business, similar to the relationship we enjoy today with the Tulsa refinery. In doing so, we believe, remained intact with what would be more traditional run rates on EBITDA. We aren't going to guide any further than that at this point in time.

Speaker #6: That being the Petro Canada brand, the Sinclair brand, the Red Giant oil brand, Sonneborn, etc. For both finished and specialties. As well as having a distribution agreement which will also afford us a new revenue stream that would serve as a rack forward type view to our business similar to the relationship we enjoy today with the Tulsa refinery.

Speaker #7: We will effectively have everything intact as far as our business is concerned and what we anticipate will be our margins. But they will be based on a capital-light model.

Speaker #7: So we will be supplied materials from those external suppliers on a long-term basis. That will provide us ample base oils for our own requirements for our branded business.

Speaker #6: So in doing so, we have we believe remained intact with our traditional what would be more traditional run rates on EBITDA. But we aren't going to guide any further than that at this point in time.

Speaker #7: That being the Petro-Canada brand, the Sinclair brand, and the Red Giant Oil brand, Sonneborn, et cetera, for both finished and specialties. As well as having a distribution agreement, which will also afford us a new revenue stream that would serve as a rack-forward type view to our business, similar to the relationship we enjoy today with the Tulsa refinery.

Speaker #5: Okay. Understood. Just I guess my other one is also on the Lubes updates today and specifically on the Ontario shutdown. Just given the base oil margin environment is so strong right now, it is slightly surprising you've announced the closure.

Jason Gabelman: Okay. Understood. I guess my other one is also on the lubes updates today, and specifically on the Ontario shutdown. Just given the base oil margin environment is so strong right now, it is slightly surprising you've announced the closure. Is there any flexibility to extend the life of that asset if the Middle East conflict drags on? Are there more structural changes in the base oil market that keep that asset in the money? Thanks.

Speaker #7: So in doing so, we believe we have remained intact with our more traditional run rates on EBITDA. But we aren't going to guide any further than that at this point in time.

Speaker #5: Is there any flexibility to extend the life of that asset if the Middle East conflict drags on or they're more structural changes in the base oil market that keep that asset in the money?

Speaker #2: Okay, understood. I guess my other question is also on the Lubes updates today, and specifically on the Ontario shutdown. Given the base oil margin environment is so strong right now, it is slightly surprising you've announced the closure.

Speaker #5: Thanks.

Speaker #6: Yeah. Let this is Franklin. I'll take that one. We don't have a line in the sand on exactly the date we're going to go to a safe state basis.

Franklin Myers: Yeah. This is Franklin. I'll take that one. We don't have a line in the sand on exactly the date we're going to go to a safe state basis. We're not unmindful of where the market is, not being unmindful of the market today, we also recognize that there are a number of base oil suppliers who are increasing capacity around the world with a lower cost environment than what we have in Mississauga. Those assets will be coming on over the course of a period of time, and we had to make the hard decision. We're in basically a residential area outside of Toronto on the St. Lawrence waterway, which is not the prime place where you would put a refining asset to begin with.

Speaker #6: So we're not unmindful of where the market is. But not being unmindful of the market today, we also recognize that there are a number of base oil suppliers who are increasing capacity around the world with a lower cost environment than what we have at Mississauga.

Speaker #2: Is there any flexibility to extend the life of that asset if the Middle East conflict drags on or there are more structural changes in the base oil market that keep that asset in the money?

Speaker #6: So those assets will be coming on over the course of a period of time. And we had to make the hard decision. We're in basically a residential area outside of Toronto on the St.

Speaker #7: Yeah. Yeah. Let let let's let this is Franklin. I'll I'll take that one. We don't have a line in the sand on exactly the date we're going to go to a a safe state basis.

Speaker #2: Thanks.

Speaker #6: Lawrence waterway, which is not the prime place where you would put refining asset to begin with. And it's a small asset where it would take a substantial capital to kind of compete with some of these projects that are going on around the world creating lower cost base oil products.

Speaker #7: So we're we're not unmindful of where the market is. But not being unmindful of the market today we also recognize that there are a number of base oil suppliers who are increasing capacity around the world with a lower cost environment than what we have at Mississauga.

Franklin Myers: It's a small asset where it would take a substantial capital to kind of compete with some of these projects that are going on around the world, creating lower cost base oil products. It was a difficult decision. The team there running the refining assets is outstanding. They've been doing a great job for a number of years, we've got logistics issues that we're going to have to confront in the future. We felt like this was the right time because we believe that there will be certainty on supply of base oils from other places around the world coming on, it gives us the opportunity to take this time to graciously get to a safe state over the next few months. Yes, we're very mindful of that.

Speaker #7: So those those assets will be coming on over the course of a period of time. And we we had to make the hard decision.

Speaker #6: And so it was a difficult decision. I mean, the team there running those running the refining assets is outstanding. They've been doing a great job for a number of years.

Speaker #7: We're in a a basically a residential area outside of Toronto in the St. Lawrence waterway which is not the the prime place where you would put a refining asset to begin with.

Speaker #6: But we've got logistics issues that we're going to have to confront in the future. We felt like this was the right time. Because we believe that there will be certainty on supply of base oils from other places around the world coming on and gives us the opportunity to take this time to gradually get to a safe state over the next few months.

Speaker #7: And it's a small asset where it would take a substantial capital to kind of compete with some of these projects that are going on around the world creating lower cost base oil products.

Speaker #6: And so yes, we're very mindful of that. It went into the calculus of the decisions that we were doing. But I appreciate the question.

Speaker #7: And so, it was a difficult decision. I mean, the team there running the refining assets is outstanding. They've been doing a great job for a number of years.

Speaker #5: Yep. All right. Thanks for all the color. That's really helpful.

Franklin Myers: It went into the calculus of the decisions that we were doing, but I appreciate the question.

Speaker #7: But we've got logistics issues that we're going to have to confront in the future. We felt like this was the right time, because we believe that there will be certainty on supply of base oils from other places around the world coming on, and it gives us the opportunity to take this time to graciously get to a safe state over the next few months.

Speaker #1: We have reached the end of the Q&A session. I will now turn the call back to Franklin Myers for closing remarks.

Jason Gabelman: Yep. All right. Thanks for all the color. That's really helpful.

Speaker #6: Thank you so much. Before we end the call, I'd like to take a moment to share that Eric Nitscher, our general counsel, and a frequent and solid participant on these calls who has also here today has expressed his desire to retire effective at the end of the month.

Operator: We have reached the end of the Q&A session. I will now turn the call back to Franklin Myers for closing remarks.

Speaker #7: And so yes, we're very mindful of that. It went into the calculus of the decisions that we were making. But I appreciate the question.

Franklin Myers: Thank you so much. Before we end the call, I'd like to take a moment to share that Eric Nitcher, our general counsel, and a frequent and solid participant on these calls, who is also here today, has expressed his desire to retire effective at the end of the month. I want to express our gratitude and appreciation for Eric's contributions to the company during his tenure at HF Sinclair. For those of you who know Eric, you're aware that he had a long and successful career at BP, ending his career there when he retired as their general counsel. Eric joined us after the merger between HollyFrontier and Sinclair, and has provided seasoned leadership to the company in its legal function and as the company came together and matured. We wish Eric good and great times as he moves forward back into retirement.

Speaker #6: I want to express our gratitude and appreciation for Eric's contributions to the company during his tenure at HS Sinclair. For those of you who know Eric, you're aware that he had a long and successful career at BP ending his career there when he retired as their general counsel.

Speaker #2: Yep. All right. Thanks for all the color. That's really helpful.

Speaker #1: We have reached the end of the Q&A session. I will now turn the call back to Franklin Myers for closing remarks.

Speaker #2: Thank you so much. Before we end the call, I'd like to take a moment to share that Eric Nitscher, our General Counsel and a frequent and solid participant on these calls, who is also here today, has expressed his desire to retire effective at the end of the month.

Speaker #6: Eric joined us after the merger between Holly Frontier and Sinclair and has provided seasoned leadership to the company in its legal function and as the company came together and matured.

Speaker #6: We wish Eric good and great times as he moves forward back into retirement and announcement on Eric's successor will be forthcoming soon. We just want to express our appreciation.

Speaker #2: I want to express our gratitude and appreciation for Eric's contributions to the company during his tenure at HF Sinclair. For those of you who know Eric, you're aware that he had a long and successful career, ending his tenure as VP and retiring as our general counsel.

Speaker #6: And thank you all for joining our call today.

Franklin Myers: An announcement on Eric's successor will be forthcoming soon. We just want to express our appreciation, and thank you all for joining our call today.

Speaker #2: Eric joined us after the merger between HollyFrontier and Sinclair, and has provided seasoned leadership to the company in its legal function and as the company came together and matured.

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

Speaker #2: We wish Eric good and great times as he moves back, moves forward, back into retirement, and an announcement on Eric's successor will be forthcoming soon.

Speaker #2: We just want to express our appreciation. And thank you all for joining our call today.

Q2 2026 HF Sinclair Corp Earnings Call

Request DemoDemo

HF Sinclair

Earnings