Summary of Delek US Q1 2026 Earnings Call

1Key Financial Results and Metrics

Net Loss: $201 million, or $3.34 per share.

Adjusted Net Income: Approximately $5 million, or $0.08 per share.

Adjusted EBITDA: Approximately $212 million; excluding Small Refinery Exemptions (SREs), adjusted EBITDA was approximately $129 million.

Cash Flow from Operations: $461 million.

Capital Expenditures: $181 million primarily for the Big Spring turnaround.

Dividends Paid: Approximately $16 million.

2Strategic Updates and Business Highlights

Big Spring Turnaround: Successfully completed, enhancing reliability, cost structure, and product yields. The refinery is now operating at full capacity.

Enterprise Optimization Plan (EOP): Target raised to at least $220 million on an annual run rate, contributing approximately $60 million to Q1 results.

Midstream Business Strength: DKL reaffirmed its 2026 EBITDA guidance of $520 million to $560 million, with a focus on capturing growth opportunities in the Delaware Basin.

SRE Management: Proactive strategy to manage obligations under the Renewable Fuel Standard (RFS), with expectations of continued relief from the EPA.

3Forward Guidance and Outlook

Q2 2026 Throughput Guidance:

Tyler: 72,000 to 77,000 barrels per day

El Dorado: 78,000 to 83,000 barrels per day

Big Spring: 65,000 to 70,000 barrels per day

Krotz Springs: 78,000 to 83,000 barrels per day

Operating Expenses: Expected between $215 million and $225 million.

General & Administrative Expenses: Expected between $47 million and $52 million.

Depreciation & Amortization: Expected between $105 million and $115 million.

4Bad News, Challenges, or Points of Concern

Net Loss: The significant net loss of $201 million raises concerns about profitability.

Refining Segment Decline: Adjusted EBITDA in the refining segment declined due to the Big Spring turnaround and timing impacts in the Supply and Marketing segment.

Supply and Marketing Losses: A loss of approximately $61 million in this segment, with wholesale marketing and asphalt contributing significantly to the losses.

Market Volatility: Ongoing geopolitical tensions, particularly related to Iran, have created a challenging environment with elevated crude and product prices, impacting market dynamics.

5Notable Q&A Insights

Capital Allocation: Management emphasized a balanced approach between buybacks and maintaining dividends, expressing optimism about future performance.

Market Dynamics: Executives noted that U.S. refiners, particularly those with access to crude, are positioned to outperform in the current market, which is characterized by high distillate and jet yield.

SRE Expectations: There is an expectation for continued SRE relief from the EPA, which is seen as critical to managing compliance costs and maintaining affordability at the pump.

EOP Program: The EOP is viewed as a cultural initiative within the company, driving operational improvements and cost savings across the organization. Overall, while Delek US has made significant strides in operational efficiency and strategic positioning, it faces challenges related to profitability and market volatility, particularly in the refining segment. The outlook remains cautiously optimistic, with a focus on capital allocation and leveraging market conditions.