DK — Delek US Holdings, Inc.

Summary of Delek US Q1 2026 Earnings Call

1. Key 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.

2. Strategic Updates and Business Highlights:

• Big Spring Turnaround: Successfully completed, enhancing reliability, cost structure, and product yields. The refinery is now running at full capacity.
• Enterprise Optimization Plan (EOP): Target raised to at least $220 million in annual run rate; approximately $60 million contribution to Q1 P&L.
• Midstream Business Strength: DKL reaffirmed 2026 EBITDA guidance of $520 million to $560 million, with significant growth opportunities in the Delaware Basin.
• Shareholder Returns: Continued commitment to dividends and share buybacks supported by a strong balance sheet.

3. Forward Guidance and Outlook:

• Q2 2026 Throughput Guidance: Expected throughput of 72,000 to 77,000 barrels per day for Tyler, 78,000 to 83,000 for El Dorado, 65,000 to 70,000 for Big Spring, and 78,000 to 83,000 for Krotz Springs, totaling 293,000 to 313,000 barrels per day.
• Operating Expenses: Expected between $215 million and $225 million; G&A between $47 million and $52 million; D&A between $105 million and $115 million; net interest expense between $80 million and $90 million.

4. Bad News, Challenges, or Points of Concern:

• Net Loss: The significant net loss reflects challenges in the refining segment and impacts from the Big Spring turnaround.
• Supply and Marketing Losses: A loss of approximately $61 million, primarily due to wholesale marketing and asphalt segments.
• RIN Prices: Rising RIN prices could impact profitability; the company highlighted the importance of SREs to mitigate economic harm and maintain competitive pricing.
• Market Volatility: Ongoing geopolitical tensions, particularly related to Iran, have created market dislocations and uncertainty in crude and product pricing.

5. Notable Q&A Insights:

• Capital Allocation: Management emphasized a balanced approach between buybacks and maintaining dividends, with a focus on shareholder value.
• Market Dynamics: Executives noted that U.S. refiners, particularly those with access to crude, are well-positioned to outperform in the current environment.
• SRE Expectations: There is optimism regarding the continuation of SREs, which are seen as crucial for maintaining affordability at the pump and supporting the refining industry.
• Operational Improvements Post-Turnaround: Management expressed confidence in the operational enhancements at Big Spring and the potential for improved margins moving into the summer driving season.

Overall, while Delek US faced challenges in Q1 2026, particularly reflected in its net loss and segment-specific losses, the company remains optimistic about its strategic initiatives, market positioning, and future cash flow potential.