Summary of Delek US Q3 2025 Earnings Call

1Key Financial Results and Metrics

Adjusted EPS: $1.52

Adjusted EBITDA: Approximately $319 million (excluding Small Refinery Exemptions - SREs).

Net Income: $178 million or $2.93 per share; adjusted net income was $434 million or $7.13 per share.

Total Adjusted Refining Margin: $688.6 million, which includes SRE benefits.

Cash Flow from Operations: $44 million, with a net outflow related to working capital changes of $106 million. Adjusted cash flow from operations was $150 million, an improvement of $202 million year-over-year.

Capital Expenditures: $91 million, with $50 million allocated to logistics growth projects.

2Strategic Updates and Business Highlights

Enterprise Optimization Plan (EOP): Continued success with an estimated contribution of $60 million to P&L in Q3. Annual run rate guidance for EOP increased to at least $180 million.

SRE Developments: EPA approved several SRE petitions from 2019 to 2024, with expected proceeds of approximately $400 million from monetization over the next 6 to 9 months.

Logistics Performance: Delek Logistics (DKL) increased full-year EBITDA guidance to between $500 million and $520 million, driven by strong operational progress and commissioning of the Libby 2 plant.

Operational Reliability: Record throughput achieved in Krotz Springs and strong operational performance across refining units.

3Forward Guidance and Outlook

Fourth Quarter Expectations: Estimated operating expenses between $205 million and $220 million, G&A between $52 million and $57 million, and D&A between $100 million and $110 million.

Refining Throughput Guidance: Expected throughput for Q4 across refineries is projected to be in the range of 271,000 to 303,000 barrels per day.

Continued EOP Momentum: Management expressed optimism about sustaining EOP improvements into Q4 and beyond.

4Bad News, Challenges, or Points of Concern

SRE Risks: While the company is optimistic about SREs, there are inherent risks related to regulatory changes and compliance with RVO obligations.

Market Sensitivity: Questions arose regarding the reliance on market conditions for refining margins, with management emphasizing a shift towards structural improvements rather than market dependencies.

Increased Operating Expenses: Anticipated higher operating expenses associated with the ramp-up of the new Libby 2 plant could impact profitability.

5Notable Q&A Insights

SRE Clarifications: Management confirmed expectations for 100% SRE qualification for 2025, emphasizing confidence in legal standing and regulatory compliance.

Wholesale and Supply Performance: The strong performance in wholesale was attributed to structural improvements and renegotiated contracts, with a breakdown indicating $40 million from market conditions and the remainder from EOP initiatives.

Future Cash Flow from SREs: Management reiterated the expected $400 million cash inflow from SRE monetization, maintaining a disciplined capital allocation strategy. Overall, Delek US reported a strong quarter with robust financial performance, strategic advancements in operations and logistics, and a positive outlook for the remainder of 2025, while also navigating regulatory risks and market dependencies.