HF Sinclair Corporation

Welcome to the HF Sinclair Corporation and Holley Energy Partners second quarter 2022 conference call and webcast. Hosting the call today is Mike Jennings, Chief Executive Officer of HF Sinclair and Holley Energy Partners. He is joined by Rich Volova, Executive Vice President and Chief Financial Officer of HF Sinclair and President of Holley Energy Partners, and Tim Goh, President and Chief Operating Officer of HF Sinclair. 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 that time, please press star 1 on your touchtone phone. If at any point your question has been answered, you may remove yourself from the queue by once again pressing star 1. If you should require operator assistance, please press star 0. We ask that you limit yourself to one question and one follow-up. Additionally, 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 Beery, Vice President, Investor Relations. Craig, you may begin.

Thank you, Rex. Good morning, everyone, and welcome to HF Sinclair Corporation and Holley Energy Partners' second quarter 2022 earnings call. This morning, we issued press releases announcing results for the quarter ending June 30th, 2022. If you would like a copy of the press release, you may find them on our website at hfsinclair.com and hollyenergy.com. Before we proceed with remarks, please note the safe harbor disclosure statement in today's press releases. 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 releases for reconciliations to GAAP financial measures. 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. And with that, I'll turn the call over to Mike Jennings. Great. Thanks, Greg. Good morning, everyone.

Today we reported second quarter net income attributable to HF Sinclair shareholders of $1,221,000,000, or $5.43 per diluted share. These results reflect special items that collectively decreased net income by $37 million. Excluding these items, adjusted net income for the second quarter was $1,259,000,000, or $5.59 per diluted share. As compared to adjusted net income of $144 million or 87 cents per diluted share for the same period in 21. Adjusted EBITDA for the current quarter was 1.9 billion, an increase of more than 1.5 billion compared to the second quarter of 2021. Our second quarter results reflect the combined benefits of an improved global economy and demand picture. refined product and lubricant supplies that are constrained by the actions taken in response to both the COVID-19 pandemic and sanctions due to the Ukraine conflict and our successful and countercyclical acquisitions of the Puget Sound refinery and the Sinclair assets. To date, we have achieved annualized run rate synergies of over $90 million related to the Sinclair acquisition and over $100 million of working capital synergies. We're on pace to exceed our target of approximately 100 million in annual run rate synergies within two years of the acquisition close date through a combination of commercial improvements, operating expense reductions, and SG&A optimization. We also announced today that our board of directors declared a regular dividend of 40 cents per share payable on September 1st, 2022 to holders of record August 18th. During the quarter, we returned over $200 million to shareholders through dividends and share repurchases. We repurchased 2.7 million shares of common stock, totaling $132 million in connection with our share repurchase program. As of June 30, 2022, we have remaining authorization to repurchase up to $868 million under this stock repurchase program, and we expect to remain active throughout the second half of 2022. We remain fully committed to our capital allocation strategy of returning $1 billion to shareholders no later than the first quarter of 2023, while maintaining our solid balance sheet and investment grade rating. Heading into the second half of the year, we're constructive on the outlook for transportation fuels supported by low product inventories and healthy global demand. Looking forward, we will continue executing our strategic initiatives. We remain focused on the integration of our recently acquired assets from Sinclair while maintaining safe and reliable operations. We see great value with the Dyno brand as we look to grow the marketing segment within our existing geographies. With all of our previously announced renewables projects complete, we will continue to ramp up production of these assets as we expect to reach full production levels by the end of the third quarter and quarter of 2022. As one of the largest producers of renewable diesel, we are excited about the opportunity of providing low-carbon fuels to our customers while realizing the incremental earnings uplift from our investments. So with that, let me turn the call over to Rich.