Delek US Q1 2026 Earnings Call - Big Spring Turnaround Complete, EOP Target Raised to $220M, and Macro Tailwinds Favor High-Distillate Refiners

Operator: Hello, everyone. Thank you for joining us, and welcome to the Delek US First Quarter 2026 earnings call. After today’s prepared remarks, we will host a question and answer session. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, please press star one again. I will now hand the conference over to Robert Wright, EVP. Robert, please go ahead.

Avigal Soreq, President and Chief Executive Officer, Delek US Holdings, Inc.0: Good morning, welcome to the Delek US First Quarter Earnings conference call. Participants joining me on today’s call will include Avigal Soreq, President and Chief Executive Officer; Mark Hobbs, EVP, Chief Financial Officer; as well as other members of our management team. Today’s presentation material can be found on the Investor Relations section of the Delek US website. Slide two contains our safe harbor statement regarding forward-looking information. As a reminder, this conference call will contain forward-looking information as defined under the federal securities laws, including statements regarding guidance and future business outlook. Any forward-looking statements made during today’s call involve risks and uncertainties that may cause actual results to differ materially from today’s comments. Factors that could cause actual results to differ are included in our SEC filings. The company assumes no obligation to update any forward-looking statements. I will now turn the call over to Avigal for opening remarks.

Avigol?

Avigal Soreq, President and Chief Executive Officer, Delek US Holdings, Inc.: Thank you, Robert. Good morning, and thank you for joining us today. I’m extremely pleased with our strong execution in the first quarter. The quarter is a testament to our raising capability as demonstrated by, one, disciplined and successful execution of Big Spring turnaround. Second, continued progress on increase our free cash flow profile through restructuring of our intermediation agreement and continued success of EOP. Third, successful navigation of challenging macro events such as Winter Storm Fern and more recently, events in Iran. The events in Iran have created many ripple effects in the markets, resulting in around 10 million barrels of crude production and approximately 5 million barrels per day of refining capacity remaining offline. This has created an environment of elevated crude and product prices, dislocation between physical and paper grades, steep backwardation, and wide ranges of crude differentials.

We believe the structural product shortage created in this event will continue to impact the market well after the conflict comes to an end. In the meantime, under the current environment, we believe the refining companies which will have the biggest advantage are the ones which have direct access to crude, high distillate yield, high jet, and most importantly, ability to quickly respond to changing conditions. We believe because of our access to multiple grades of domestic crude, high distillate and jet yield, and access to both Gulf and Midcontinent product markets put us in a prime position to navigate the challenges and take advantage of the opportunities created by the ongoing disruption. Now, I will cover some of our first quarter highlights and strategic initiatives in detail. Starting with the planned turnaround in Big Spring. Big Spring successfully completed its planned turnaround.

This work was executed safely on budget, on time, and refinery is running at full capacity. The primary focus of the turnaround has been to improve Big Spring reliability, cost structure, and long-term margin capture. Post the turnaround, we expect improved reliability, crude slate optimization, improvement in overall product yields, and finally, higher octane and blending capabilities. With no further planned turnaround, we have the highest spending quarter behind us. Our system is well-positioned to capture the strong crack spread environment and respond to increasing demand as we move into the summer driving season. Moving on to EOP next. Enterprise Optimization Plan continue to drive significant value. We are once again raising our Enterprise Optimization Plan target to at least $220 million on an annual run rate basis. During the first quarter of 2026, we estimate approximately $60 million of EOP contribution to our P&L.

We are looking at ways to further advance the program and create another meaningful step change to our free cash flow profile. We’ll provide more details on this in the future. Our third-party initiative continued to advance with rising strength of our midstream business. DKL today reaffirmed its 2026 EBITDA guidance of $520 million-$560 million. DKL is currently seeing meaningful tailwinds in the business, and we are working hard to capture these opportunities in a prudent fashion. DKL is taking another meaningful step in completing its industry-leading comprehensive sour gas solution. It has completed the drilling of its first acid gas injection well. The comprehensive gathering, treatment, processing, and acid gas injection solution will provide DKL the ability to fully capitalize on the growth opportunities in the Delaware Basin and maintain its best-in-class EBITDA growth and yield.

In 2026, on a pro forma basis, with a continued growth in third-party cash flow, we expect DKL third-party EBITDA to exceed 80%. Achieving this level of economic separation has been cornerstone of our sum-of-the-part strategy, and it continue to bring us closer to our de-consolidation goal. We are in the process of taking additional steps to ensure the strength of DKL third-party midstream service are fully reflected in DK share price and DKL unit price. As mentioned last quarter, we are pursuing a proactive strategy to manage our obligation under the RFS. SRE provision of the RFS serve the important purpose of mitigating the impact felt on small refineries from the RFS burden. We expect EPA to continue to provide relief for 2025 to refineries after clearing the backlog of pending petitions since 2019.

We also remain actively involved in our effort to get full value for our 2019 to 2022 RINs for which we were provided invalid relief. We believe that the current administration, Senate, Congress, and EPA realize the importance of SREs, not only for the refineries which qualify under the program, but also to the local communities they serve. The final piece of our strategy is being shareholder-friendly and having a strong balance sheet. During the quarter, we paid approximately $60 million in dividends. Our strong balance sheet, improved reliability, EOP, and confidence in our outlook continue to support a disciplined approach to capital allocation through continued dividend and buybacks. We remain committed to a balanced and disciplined capital allocation strategy and look forward to continuing to reward our shareholders.

In closing, thank you for our team for the hard work and dedication during the first quarter of 2026. I’m proud of the progress Delek has made and look forward to continue the progress throughout the remaining of the year. I will turn the call over to Mark, who will provide additional color on the quarter.

Mark Hobbs, Executive Vice President, Chief Financial Officer, Delek US Holdings, Inc.: Thank you, Avigal. For the first quarter, Delek had a net loss of $201 million or $3.34 per share. Adjusted net income was approximately $5 million or $0.08 per share, and adjusted EBITDA was approximately $212 million. On Slide 4, we showed the breakout of adjusted EBITDA and adjusted EPS for the first quarter. Excluding SREs, adjusted EBITDA and adjusted EPS were approximately $129 million and a loss of $0.98 per share, respectively. This removes the impact of our RVO exemption recognition for the first quarter of $82 million. On Slide 5, the breakdown of adjusted EBITDA, excluding SREs, from the fourth quarter of 2025 to the first quarter shows that there were two main drivers for the decrease in EBITDA.

The drivers were primarily in the refining segment, where adjusted EBITDA declined due to the big spring turnaround and the impacts of timing in our supply and marketing segment, which will reverse over time. Both impacts were partially offset by the increase in refining margins that we experienced in March after seasonally weak margins in January and February. Supply and marketing was a loss of approximately $61 million in the quarter. Of that amount, wholesale marketing had a loss of $27.1 million. Asphalt contributed a loss of $12.1 million, with the remaining loss coming from supply. In the logistics segment, we delivered our best first quarter to date, generating approximately $132 million of adjusted EBITDA, which includes an approximate $10 million negative impact from Winter Storm Fern. Moving to slide 18 to discuss cash flow.

Cash flow provided by operations was $461 million in the quarter. This includes our net income for the period, adjusted for non-cash items, and a net inflow related to changes in working capital. Investing activities was a use of $190 million. Financing activities was a use of $273 million, which includes payments on financing agreements and other activities, approximately $16 million in dividend payments, and approximately $22 million in DKL distribution payments to public unitholders. On slide 19, we outline our first quarter capital spending, with $181 million invested at Delek on a standalone basis, the majority of which was related to the plant-wide Big Spring turnaround.

With no additional turnarounds or major capital projects planned for the remainder of the year, Big Spring and the broader system are well-positioned to capture stronger margins and meet seasonal demand during the driving season. We also invested $50 million in Delek Logistics, of which approximately $42 million was for growth projects. Our net debt position is broken out between Delek and Delek Logistics on slide 20. Excluding Delek Logistics, our Delek standalone net debt remained largely in line with year-end 2025. Moving now to slide 21, where we cover second quarter outlook items. Our throughput guidance for the second quarter is 72,000-77,000 barrels per day for Tyler, 78,000-83,000 barrels per day at El Dorado. Big Spring will run 65,000-70,000 barrels per day. Lastly, Krotz Springs will run 78,000-83,000 barrels per day.

Our implied system throughput target for the second quarter is in the 293,000-313,000 barrels per day range. In addition to the throughput guidance, for the second quarter of 2026, we expect operating expenses to be between $215 million and $225 million, G&A to be between $47 million and $52 million. D&A is expected to be between $105 million and $115 million, and net interest expense to be between $80 million and $90 million. With that, we will now open the call for questions.

Operator: Your first question comes from the line from Alexa Petrick from Goldman Sachs. Your line is now open.

Alexa Petrick, Analyst, Goldman Sachs: Good morning, team, and thank you for taking our question. With the big spring turnaround complete, how should we be thinking about your capital allocation priorities? Recognize this quarter had higher spend, but as we look to the rest of the year, how are you thinking about buybacks and then use of SRE cash and flow?

Avigal Soreq, President and Chief Executive Officer, Delek US Holdings, Inc.: Yeah. Alexa Petrick, first, good morning, thank you for everything. listen, we, first of all, we are very, very proud of our performance of capital allocation during 2025. We are performed around 4% versus our peers. We gave more capital back to investor, around 4% more than the peer group. It’s a very good outcome in our mind. We have a very clear, crisp capital allocation program. First, we want to have a balanced approach between buyback and balance sheet that we obviously achieved. Second, we want to maintain dividend through the cycle that we obviously maintain. Third, we wanna make it very, very clear we see a lot of value in our share price and more to come. We have a very good quarter ahead of us, and we are very optimistic.

Alexa Petrick, Analyst, Goldman Sachs: Okay, that’s helpful. Our follow-up is just on QQ. There’s definitely a lot of moving pieces in the macro right now. Can you just talk about how we should think about captures and some of these different dynamics?

Avigal Soreq, President and Chief Executive Officer, Delek US Holdings, Inc.: Yeah, yeah. Alexa, in your permission, I will take a step back and talk about the macro in more detail just a little bit because there is a lot of moving parts, and it’s a different macro environment versus regular macro environment. I will start with the facts and then we’ll take it from there. I think it’s pretty obvious that we’ve seen the state of our moves close to, I don’t know, close to 2 months now. It’s a continued period of time. I think the consensus in the market that we stick around 10, maybe a bit more of crude offline and around 5 million barrels of refined capacity remain offline. SPR offset the crude portion just a little bit, but not to a very meaningful way.

That’s on the fact side. On the effect side, obviously we see elevated crude and product by market. We see this allocation between physical and paper, which is very meaningful for some. We see steep backwardation that obviously it’s impacting the capture rate for everyone almost. We see a wide swing in crude differentials, and especially around Brent WTI. What does it really mean? On the product side, we start with that, we believe that the product market will outlast the event, we’ll see a lingering effect on the crack spread. We also see that the risk premium after the event between Brent and WTI gonna be different.

The risk element of Brent putting itself into the market now and probably gonna outlast the event as well. That’s a second point. What does it really mean? That actually mean higher call on U.S. Shell that present a lower premium risk versus Brent, and that’s something that we’ll see more coming into effect. Being a bit more specific on the Delek side, obviously, we have a big operation on the midstream side that very correlated to what’s happening in the impairment at any given point. Obviously, we have direct access to crude, which make us coming to the market and making changes as needed very quickly.

Then third, we have access to product market both on the Gulf and on the group, which give us flexibility around that. I want to finish with very important point. We have a very good distillate and jet yield, Part of that is due to the EOP we’ve done last year. I think you remember a slide I put together. We put together, not I. That present a great project that the El Dorado team conduct to basically do more jet with zero cost capital, That’s paying us very nice dividends today. Mohit, you want to finish here something?

Mohit, Management Team Member, Delek US Holdings, Inc.: Yeah, Alexa, just one thing to add. I think in this current market environment, as Avigal rightly pointed out, there’ll be winners and losers in terms of capture rates. You have to think about, you know, people who have access to barrels who are closer to the well and who have very high distillate and jet yield. They are going to be the winners in this environment, and we are very well positioned to capture the opportunities in front of us.

Operator: Thank you for your question. Your next question comes from the line of Manav Gupta from UBS. Your line is now open.

Manav Gupta, Analyst, UBS: Good morning, guys. I’m also gonna ask a little bit of a macro question here.

Avigal Soreq, President and Chief Executive Officer, Delek US Holdings, Inc.: Morning, Manav.

Manav Gupta, Analyst, UBS: What my question, sir, here is, when we look at two Q, Delek is very well-positioned. There’s no doubt about it. I’m also trying to understand from the perspective of what you said. I think two Q will be a story of haves and have-nots. Haves are people like Delek who have the crude and have-nots are people who may have the best refining system in the world, but have no crude. From my perspective, obviously Delek is a winner, but do you also think the situation we are in, generally U.S. refining as such is a winner because you have the crude, you have the demand, you’re not really dependent on straight or firm moves. We have this dynamic playing out where relative to global peers, U.S. refiners and Delek can actually show a lot of out-performance.

If you can talk a little bit about it.

Avigal Soreq, President and Chief Executive Officer, Delek US Holdings, Inc.: Yeah. Yeah, absolutely, Manav. A very, very smart question. Mohit and I, and Mark, and the team speak about it all the time. Mohit has a lot of tones of energy around the topic, so I’ll let Mohit chime in.

Mohit, Management Team Member, Delek US Holdings, Inc.: Yeah. Thanks, Avigal. Manav, you know, thanks for all the good work you’re doing. You’re absolutely right. U.S. refining will have an advantage because U.S. is one of the largest crude producers in the world. U.S. has the most flexible refining system in the world. Most importantly, you see U.S. natural gas prices are very low. You know, from an OPEX standpoint, we are also at an advantage. You rightly pointed out the biggest winners will be the guys, you know, who have access to barrels, even within the U.S., and who have very high distillate and jet yield, which is why we like our position versus anybody else in the U.S. refining system right now.

Manav Gupta, Analyst, UBS: Well, perfect. My second quick follow-up, Mohit or Avigal, is that, you know, when we look at the price of the RIN, that’s going up, and that does impact the price of gasoline. In my opinion, there is a higher probability of SREs in 2026 than there was even in 2025 and 2024. If you don’t issue SREs, you can cause the price of RIN to get to a point where gasoline can go to $5. Can you talk about those dynamics, why the possibility of SREs is even higher now than what it was in 2025 and 2024? Thank you.

Avigal Soreq, President and Chief Executive Officer, Delek US Holdings, Inc.: Yeah, absolutely. Manav, with your permission, I will take a step back and give you a wider answer about the SREs. SRE is a way bigger topic. SRE, it’s not a Delek issue, and it’s directly impacting close to 4 refineries, and I would say it’s impacting around half of our industry more or less. It’s a very big, big, big deal. I want to make it very clear, the SRE, the whole point of the law is disproportionate economic harm. Disproportionate economic harm. It’s for each asset and each community. It’s not related to companies. The essence of the law is to maintain high-paying job, to maintain local communities and affordable fuel.

When we are looking at compliance costs of a small midcap in the last 5 years, it’s 85% of the whole market number. The big hope is freaks. That’s a little different dynamic. Risking SRE, as you smartly stated, will lead to higher price at the pump. Very clear. It’s very clear. Just coupling critical topic of SRE, which is that we just mentioned with E15, is like putting square peg in a round hole. It’s very, very obvious and clear. Mohit, please chime in.

Mohit, Management Team Member, Delek US Holdings, Inc.: Yeah, Manav. Again, a very good question. Look, as Avigal rightly pointed out, RFS and RIN issue is an issue about disproportionate economic harm. We show in our slide deck at a $1.50 a gallon blended RIN price, our 2026 RVO compliance is close to $750 million. If you think about that number, for us, you know, people like us who stay in compliance, it’s not like, you know, you get SREs as cash. You know, you have to stay in compliance, you get the money that you spent on buying RINs back. For us, this is not just an issue about how RFS is working. It’s only an issue about disproportionate economic harm.

You rightly pointed out, and a lot of market participants are pointing this out, that if you don’t have 2026, you know, SREs granted based upon the current Renewable Volume Obligations, you will have a deep deficit in 2027 RIN bank. As Avigal Soreq pointed out, that’s going to impact affordability at the pump, which is, you know, squarely against this administration’s energy dominance agenda. We definitely want, or we definitely expect SREs to continue. You know, that’s up to the EPA to decide. Our expectation is, you know, in line with the government’s agenda, they will be granting these SREs on a go-forward basis.

Avigal Soreq, President and Chief Executive Officer, Delek US Holdings, Inc.: Yeah. I think the EPA put a very clear, clean framework together, that it has all the credibility in the world to follow through. As Mohit pointed very, very well, the administration put a energy dominance program together, that this SRE is a very important part of it.

Operator: Thank you for your question. Your next question comes from the line of Matthew Blair from TPH. Matthew, your line is now open.

Matthew Blair, Analyst, TPH: Thank you, and good morning, and congrats on the strong results. Could you talk about?

Avigal Soreq, President and Chief Executive Officer, Delek US Holdings, Inc.: Morning

Matthew Blair, Analyst, TPH: Could you talk about how the Big Spring refinery is running post the turnaround? Are you seeing any operational improvements? I guess we would have thought. Did the turnaround stretch into the second quarter at all? We would have thought that the Q2 throughput guidance might have been a touch higher. Could you address that?

Avigal Soreq, President and Chief Executive Officer, Delek US Holdings, Inc.: Yeah. The point of the turnaround, which we are very happy about the turnaround, was to improve reliability, to improve crude optimization, higher octane blending option, margin and cost. We are very happy about what we see. We have a very good team over there, and we are very optimistic about Big Spring going forward. We leave it to that. More to come. We have a very strong guidance and more to come.

Mohit, Management Team Member, Delek US Holdings, Inc.: Yeah, Matthew, you rightly pointed out our guidance. You know, we are, you know, Big Spring coming out of the turnaround, we are just being a little bit more conservative. Hopefully, you know, things will play out the way we expect them to.

Matthew Blair, Analyst, TPH: Sounds good. Could you talk about what you’re seeing in end market demand so far in the second quarter, both for gasoline as well as diesel, and I guess for jet as well? Is there any evidence of demand destruction given the higher price environment? Does demand still look pretty strong?

Avigal Soreq, President and Chief Executive Officer, Delek US Holdings, Inc.: Yeah. In all the markets we operate, we see strong demand. We see a decent net backs. The group dynamics improving as we speak, that’s a very positive. We do not see a demand destruction this ten seconds. I think that the demand we see is pretty resilient at this junction. Please, Mohit.

Mohit, Management Team Member, Delek US Holdings, Inc.: Yeah, no, again, a good question. If you look at Europe, we have seen some talks around people reducing capacity as far as the airlines are concerned. The US demand remains very strong. We are seeing there’s going to be potentially a very strong summer gasoline driving season. Gasoline remains the part of the battle right now. As people are focused on distillate and jet, we also think gasoline cracks also have a room to move higher. We don’t see any demand destruction in the US just yet. You know, I think we do see the outlook for cracks, especially in Q3, to move higher, is very evident based upon where things are right now.

Operator: Thank you for your question. Your next question comes from the line of Jason Gabelman from TD Cowen.

Jason Gabelman, Analyst, TD Cowen: Hey, thanks for taking my questions. First, just on, I guess, regional product prices. It’s looking right now like Group Three is still a bit discounted versus the Gulf Coast. Typically, I think you’d see Group Three already strengthen at this time of year. Can you just talk about your forward outlook for the relative values between those two markets and if you expect normal seasonality to take hold?

Avigal Soreq, President and Chief Executive Officer, Delek US Holdings, Inc.: Absolutely, Jason. Thank you for the great question. The way we see a group today is actually stronger coming this morning. We just checked it before the call. That’s positive. Obviously, the group has dynamic of its own. Even if you are putting your long-term view on that, you see the group dynamic in the near and midterm future gonna be different. We’ve just seen two pipelines. One is coming second half of the year, and the other one coming, like, three, four years down the road, that’s gonna make move barrels from the group into PADD 4 and PADD 5.

We are looking at the group also on a very tactical basis as today, but we have the obligation and the duty to and the opportunity to look at the group down the road. I think the group that we remember versus gonna be very different versus the group that we’re gonna see starting second half of this year. Probably even more importantly, when the next line is gonna be executing and move a product into a PADD 5. That’s a very good dynamic on the short term, midterm, and long term to our position.

Jason Gabelman, Analyst, TD Cowen: Great. Thanks for that. Maybe if I could go back to the Small Refinery Exemptions. Do you have a sense around timing of when you should expect to receive those? I know you’ve kind of presented cases where you think you’re able to get up to $400 million, the full, I guess, amount of exemptions for all your plants. How do you square that with kind of the EPA publishing an expected amount of exemptions they’ll grant the next 2 years, which seems consistent with the past few years?

Avigal Soreq, President and Chief Executive Officer, Delek US Holdings, Inc.: It’s a great question. We have a tremendous amount of trust in the EPA. I think the EPA put a very strong, strict guidance. The EPA was able to clear a backlog of 2019 to 2022, and we are confident the EPA are gonna do what it says it’s gonna do. It’s a very reliable administration in this regard. I am sure the administration see the correlation between Small Refinery Exemption and the price at the pump, and we leave it to that.

Operator: Thank you for your question.

Doug, Analyst: Hey, guys. I had some connection problems. I apologize for dialing in a bit late. Guys, I know the SREs have been fairly well flogged on the call, but I just want to make sure I understand something. The guidance you’ve given for not the guidance, but the indication you’ve given for 2026, what are you assuming for the RIN? It’s basically doubled since the beginning of the year, and I’m trying to get a feel for if you...

You know, I don’t know what the scenario is where you don’t get the RIN or the SRE in the duration, at least for the Trump administration. What, if you were to roll forward the current RIN price into 2027 and 2028, you know, basically the four years, I guess of that period, the Trump administration, what would your number be?

Avigal Soreq, President and Chief Executive Officer, Delek US Holdings, Inc.: Yeah. Thank you, Doug, and thank you for joining us. It’s really important for us. I will let the Mohit that stay very close to the topic to take this one.

Mohit, Management Team Member, Delek US Holdings, Inc.: Doug, as we’ve talked about in the past, you know, the way EPA is looking at a lot of these issues is trying to have a happy medium. It’s a mathematical equation that they have in their minds. Looking at SREs, they’re looking at RVO, they’re looking at imports, and they’re looking at you know, all of these issues together and reallocation as well to come up with a price which is so that affordability at the pump remains. As far as our 2026 numbers are concerned, we show that very clearly in our slide based upon our current estimates and a $1.50 a gallon blended D4, D6, D3 RIN price, we should have a $750 million RVO obligation in 2026.

Doug, Analyst: Just to be clear, the RIN, Mohit, isn’t $1.50, it’s $1.90.

Mohit, Management Team Member, Delek US Holdings, Inc.: Yeah. Yes, Doug, you’re absolutely right about that.

Doug, Analyst: Yeah, that’s what I was confused about your previous answer to the when Manav asked the question ’cause what in your mind then, if you don’t mind my follow-up, what would drive what would cause the RIN value from the RIN bank standpoint to move back significantly lower from here?

Mohit, Management Team Member, Delek US Holdings, Inc.: Yeah, look, Doug, from our vantage point, you know, based upon the numbers, and Jason Gabelman was talking about those numbers in the previous question, you would have a significant 2027 deficit if those are the level of SREs which are granted. That is one toggle that EPA does have, and that is why, you know, I think our 2026 SREs are extremely important to manage 2027 RIN bank. What exactly EPA will do, and they’re extremely smart, honest people working at the EPA, they will figure it out. For us, we’re just trying to manage our situation and highlight the fact that, you know, SREs, are an issue about disproportionate economic harm, and we just are trying to manage our position based upon that.

Operator: Thank you for your question. Your final question comes from the line of Joe Laetsch from Morgan Stanley.

Joe Laetsch, Analyst, Morgan Stanley: Hey, good morning, Avigal Soreq and team, and thanks for taking my questions. I wanted to start on the EOP.

Avigal Soreq, President and Chief Executive Officer, Delek US Holdings, Inc.: Thank you, Joe, for doing this.

Joe Laetsch, Analyst, Morgan Stanley: Absolutely. I wanted to start on the EOP program where you’ve made good progress to increase the target again to over $220 million. I think it was the 6th raise if I heard you right. Could you just talk through some of the initiatives that help drive this improvement and how we should think about the potential upside and maybe potential 7th raise from here?

Avigal Soreq, President and Chief Executive Officer, Delek US Holdings, Inc.: Yeah, absolutely. Thank you for that question. It’s a question I really like because EOP, first and foremost, Joe, and you know that we spoke about it privately in the past, it’s all about lifestyle. When we, it was really important for us, and we are extremely proud of the ability to push EOP to the entire organization. You see the buy-in, you see people talking about it in the hallways. It’s not a project, it’s not a spreadsheet. It’s people really think how to make more of what we have. If I’m going to refinery, I hear it between the units. If I’m going to the accounting team, I hear them speaking about this. If we are going to commercial, it’s across the company.

It’s not just about cost saving, as we said in the past. It’s what we make, where we sell, and all the value chain that we are owning A to Z. As you probably can see very easily, Joe, it’s very clear in our financial results. You can see it very clearly in El Dorado, in G&A, in the capture rate of the rest of the refinery. That’s very obvious that we can all see it. We are always looking, I said it on my prepared remarks, we are always looking, Joe, how to make it better, what else we can do, how else we can improve.

I’m very proud of the team here that taking the high road on that and making that a part of our DNA. I want to finish with important comment. If you look in our deck slide, in our deck that we prepared, we are seeing around $600 million-$700 million on a mid-cycle environment of a free cash flow. That’s around 20%-30% of our current market price. That’s a tremendous opportunity. I want to capture this comment and the comment that I answer, Alexa Petrick, and put those together, that we see a tremendous amount of value about where we are. Thank you for that great question.

Joe Laetsch, Analyst, Morgan Stanley: Perfect. That’s helpful. I wanna just ask on the sum of the parts side, can you talk through latest thinking about current deconsolidation, value unlock options from here, as well? You’ve done a good job with bolt-ons and organic growth at DKL. Just any thoughts on the path forward here would be helpful. Thank you.

Avigal Soreq, President and Chief Executive Officer, Delek US Holdings, Inc.: Absolutely. You’re absolutely right. Deconsolidation is our ultimate goal, and we’re gonna do it on the right price, on the right condition. We see tremendous amount of value in our DKL story, performer basis, 80% of parity. It’s unheard of versus what we used to be. We’ve done, as you said, the acquisition that we are extremely pleased. We’ve built a gas plant that we are extremely pleased. We have a very clear, clean strategy of being a premier provider of crude gas and water in the most prolific area of the Permian Basin, and we have created something here very beautiful that we are very proud of. We see that the current value based upon the intrinsic asset base in DKL needs to have a seven handle on this unit.

For the right price, we will deconsolidate and reward investors going forward. We need to make sure that the great value creation that was created in the Midstream business, vis-a-vis the EBITDA performance, third party is fully reflected both on the DK share price and DKL unit price. We’re gonna do one or more of four ways that we are doing. Keep doing bolt-on acquisition deconsolidation because people see the value in the DKL unit price. Fifty-three consecutive increases in distribution, it’s pretty much unheard of in our ability to reward investors. Second, for the right price, we might be selling assets.

For the right price, DKL has the ability to buy own its unit from DK, and we can always sell DKL for the right price. As I mentioned, we see the intrinsic value of seven handle on the unit price. We are extremely aggressive and disciplined around this opportunity and more to come.

Operator: There are no further questions at this time. We have reached the end of the Q&A session. I will now turn the call back to Avigal Soreq, CEO, for closing remarks.

Avigal Soreq, President and Chief Executive Officer, Delek US Holdings, Inc.: Thank you. Thank you for everyone to join the call. Thank you for my colleagues here around the table that did great job. Thank you for the investors that sticking with the story and like what we are doing. I want to thank the board of directors and most importantly, our great employees that make this company what it is. Thank you.

Operator: This concludes today’s call. Thank you for attending. You may now disconnect.