HF Sinclair Corporation

Welcome to HF Sinclair Corporation's third quarter 2024 conference call and webcast. Hosting the call today is Tim Goh, Chief Executive Officer of HF Sinclair. He is joined by Atanas Atanasoff, Chief Financial Officer, Steve Ledbetter, EVP of Commercial, Valerie Pompa, EVP of Operations, and Matt Joyce, SVP of Lubricants and Specialties. 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 pressing the pound key. If you should require operator assistance, please press star 0. We ask that you please 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, Novi. Good morning, everyone, and welcome to HF Sinclair Corporation's third quarter 2024 earnings call. This morning, we issued a press release announcing results for the quarter ending September 30, 2014. If you would like a copy of the earnings press release, you may find them on our website at hsinclair.com. Before we proceed with remarks, please note the safe harbor disclosure statement in today's press release. 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 release 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 Tim.

Good morning, everyone, and happy Halloween. We are pleased with our third quarter financial and operational performance in all of our businesses, and especially by the strong and consistent earnings in our marketing, midstream, and lubricants and specialty segments. These contributions from our differentiated business segments highlight the value of our diversified portfolio, especially as global refining margins weaken. We continue to execute our strategy to integrate and optimized our portfolio in order to strengthen the earnings power and competitive advantage of our businesses while focusing on improving safe and reliable operations. During the third quarter, we returned $222 million in cash to shareholders and today announced a 50 cent quarterly dividend, demonstrating our continued commitment to shareholder returns. Now let me cover Our segment highlights before turning over to Agnes. In refining for the third quarter of 2024, we continued our streak of improved reliability by completing the turnaround at our Parco refinery on time and on budget. Year to date, we've made progress on lowering our operating expenses and will continue to focus on cost management and improving utilization as we drive towards achieving our near-term target of $7.25 per throughput barrel. Our optimization efforts resulted in a quarterly record for jet production across our fleet, and our Woods Cross Refinery set a quarterly record for premium production. In renewables, for the third quarter of 2024, we set a record for the highest quarterly sales volumes of renewable diesel and achieved our lowest operating expenses per gallon. Our team's optimization and reliability efforts resulted in another quarter of positive adjusted EBITDA despite continued headwinds from weak RINs and LCFS credit prices. Our strategy for the renewable diesel business remains centered on the things we can control to, one, reduce the level of high-cost inventories, two, increase our low CI feedstock mix, and three, lower our operating expenses. In marketing, in the third quarter of 2024, we continued to grow our store count with the addition of 22 net new branded sites. And on a year-to-date basis, we have added a net of 46 fully branded sites to our portfolio. Our strong third quarter results reflects the growth strategies we are executing since the Sinclair acquisition. Looking forward, we continue to expand our growth pipeline and now have new signed contracts to convert 168 stores to branded wholesales. over the next six to 12 months, and we continue to target 10% annual growth for branded sites. In lubricants and specialties, we reported another strong quarter of results despite the FIFO headwinds from falling oil prices. Our strategic initiatives of one, optimizing our sales mix, two, operational efficiency, and three, furthering our base oil integration efforts continue to strengthen our lubricants business. In addition to our efforts to organically grow the business by high-grading our finished products portfolio, we have also introduced digital tools, providing better visibility to our supply chain and manufacturing cost structures, and have developed new product offerings to serve growing end-use markets. In our midstream business, for the third quarter of 2024, we delivered another strong quarter of performance as we continue our integration work to drive our growth in this segment. Year to date, we have set record affiliate and third-party transportation volumes supported by strength in our crude pipeline systems in the Rockies and Southwest. In the third quarter, we returned $222 million to shareholders through share repurchases and dividends. Since the Sinclair acquisition in March 2022, we have returned over $3.9 billion in cash to shareholders. and have reduced our share count by over 57 million shares, which represents 71% of the shares we issued for both the Sinclair and HEP transactions. As of September 30th, 2024, we have approximately $800 million outstanding on our share repurchase authorization, and we remain committed to our long-term cash return strategy and long-term payout ratio. while maintaining a strong balance sheet and investment grade credit rating. As I mentioned earlier, we also announced that our board of directors declared a regular quarterly dividend of 50 cents per share, payable on December 4th, 2024, to holders of record on November 21st, 2024. Looking forward, we remain committed to improving our safe and reliable operations, and we believe our diversified business portfolio positions us to generate attractive through cycle cash flows and continue strong returns to our shareholders. With that, let me turn the call over to Agnes.