HF Sinclair Corporation

Welcome to HF Sinclair Corporation's second quarter 2026 conference call and webcast. Hosting the call today is Franklin Myers, who is serving as Chief Executive Officer of HF Sinclair. He is joined by Steve Ledbetter, President and COO, Vivek Garg, Acting Chief Financial Officer, Valeria Pompa, President, Growth, Technology and Transformation, 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 this 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 star 1 again. 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 Biery, Vice President, Investor Relations. Craig, you may begin.

Thank you, Kelsey. Good morning, everyone, and welcome to HF Sinclair Corporation's second quarter 2026 earnings call. This morning we issued a press release announcing results for the quarter ending June 30th, 2026. If you would like a copy of the earnings press release, you may find it on our website at hfsinclair.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. For any forward-looking non-GAAP measures, the company is unable to provide a reconciliation without unreasonable effort due to the unpredictability and uncertainty of certain items. 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 Franklin.

Okay, thank you, Craig. Let me start by thanking the 5000 plus employees at HS Sinclair for delivering a really good quarter. The teams at the plants and across our businesses did an excellent job of being safe, compliant and reliable throughout the quarter. As we know, our markets expect us to keep them supplied with the fuels and lubricants necessary to complete their own vital task of life and business and the dyno team perform well. We'll get to the numbers in a moment or two, but let me discuss a few other matters first. You're aware of the announcement earlier this month in which we provided information about adjustments to our senior leadership responsibilities. They were made in order to align certain responsibilities toward the direct long-term goals of the company. Steve Ledbetter was appointed our President and Chief Operating Officer. With this change, Steve will be responsible for overseeing the company's operations and commercial organizations while improving safety and reliability, enhancing cost efficiency, and unlocking value across our integrated platform. We have made several internal promotions in both the commercial and operating teams to work with Steve as he leads these efforts to continue the excellent performance we've been experiencing. Val Pompa, who's done an excellent job leading and improving our operations for the last few years, will take on the responsibility of working on the growth and organic improvement of our operating assets. She will have both information and operating technology as part of her mandate as well as applying new technologies to our existing operations in order to improve performance. We believe that there are technological improvements that can be brought to our assets that can advance the effectiveness of our performance in our plants and within our financial framework and commercial operations. Val is uniquely qualified seasoned technical executive. She has both vast experiences and thorough understanding of refining processes as well as will be key in leading this effort. She will also have executive oversight of both the retirement of the Mississauga refining assets and the build out of our Go West initiative, both very important to the future of the company. We certainly note that we're first out among the refiners, so we'd be remiss in not making a comment on the macro environment for the refining complex. There's been much written, probably by even some of those on this call, a few on this call, analyzing the changes in our market as a result of both the war in Ukraine and the Middle East. I'll not repeat what's been said. What we know is there's about five to seven million barrels of refining capacity offline from where we started five months ago. The conflicts continue with no clear resolution seemingly near on either. and now we see witness to damage of other infrastructure assets which would be necessary for the repairs to the damage refining assets in order to restore their operability. We certainly have no crystal ball as to when the kinetic events in either conflict end with certainty. Therefore, we expect to have tighter refining markets as well into 2027. There is a bit of a wild card in the mix, however. China withdrew from buying crude in typical size at the beginning of the Mid-East conflict. The reduced consumption has led to stabilized prices in crude, and China has also suspended exporting products. If they reverse these decisions, products exported from China will certainly impact the products market. The canary in the coal mine to watch would be the Singapore crack spreads. They tend to react first with China increasing exports. Otherwise, we see markets being constructed for the next several quarters, potentially into 2028. These events have had similar, if not more, dire effects on the lube space oils markets, As much as 20% of the world's base oil supply for lubes is being offline. Which brings me to our lubes business. It has been an important and meaningful contributor to the success of Sinclair. But today we announced plans to pursue a separation of the segment through the capital markets, creating a new independent public company. We believe these two companies will benefit from enhanced strategic focus and operational agility, greater alignment of capital deployment within each specific growth priorities, Thank you for joining us today. First, that the base oil refining assets in Mississauga will be retired. The team there has done an excellent and outstanding job operating the assets throughout the years, but a combination of location, size, and scope of the assets have reached a point that their long-term economic contributions to the business causes us to make this very difficult decision to retire the assets. Second, with the retirement, our finished product business will need base oils to continue the successful efforts in their markets. The business will continue to deliver base oil solutions through new strategic commercial agreements with two premier global base oil manufacturers complemented by continued access to products from our Tulsa refinery. Finally, as a potential separate organization under Matt Joyce's leadership, an independent business, an independent loose business will operate in a capital light business model for greater financial flexibility and stronger, more consistent free cash flow while leveraging its core strength and technology globally recognized brands and extensive channels to market. We are early in the separation process and will provide additional information as appropriate. Finally, it would be natural to ask about our company's plans for use of excess cash. We are mindful of our past indications for delivering a portion of free cash back to our stockholders and will endeavor to continue to do so. We also have efforts going on where we see opportunities to enhance our existing assets. In other words, we already have things in progress. We will be discussing this with our board in our upcoming board meeting. As the board reaches decisions and the actions become actionable, we'll continue to share that information with our ownership community. I'm going to go off script here. Let's face it. Last fall, when all the refining complex were putting their plans together, we had no clue that a war was going to go on in the Middle East. We've got excess capital now, and we've got to be prudent and diligent in looking at how we spend this excess capital. Nobody had a plan for what we're looking at right now, and we've got to make sure that we look at it. Our organizational changes and putting Val over the growth initiatives is exactly that. We're going to look at the specifics within our organization and and see where we can add values over the future. And she's got that skill set and knowledge to be able to lead the team to do that while Steve runs the day-to-day operations. That's the fundamental drivers behind our changes there. I'll now turn it over to Steve for additional comments.