Delek US Holdings, Inc.

After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star then the number one on your telephone keypad. If you'd like to withdraw your question, press star one again. I would now like to turn the conference over to Rosie Zuclick, Vice President, Investor Relations. Please go ahead.

Good morning and welcome to the DELIC U.S. First Quarter Earnings Conference Call. Participants on today's call will include Avigal Sorek, President and CEO, Joseph Israel, EVP Operations, Reuben Spiegel, EVP and Chief Financial Officer, Mark Hobbs, EVP Corporate Development. Today's presentation material can be found on the investor relations section of the DELIC US website. Slide two contains our safe harbor statement regarding forward-looking statements. We'll be making forward-looking statements during today's call. These statements involve risks and uncertainties that may cause actual results to differ materially from today's comments. Factors that could cause actual results to differ are included here as well as in our SEC filings. The company assumes no obligation to update any forward-looking statements. I will now turn the call over to Abigail for opening remarks.

Thank you, Ozzy. Good morning and thank you for joining us today. During the first quarter, Our adjusted EBITDA was $159 million, an improvement over Q4. In refining, our operation ran well. I would like to congratulate Quartz Springs and Eldorado Refinery for receiving the Elite Silver Safety Award from AFPM. Congratulations. Our logistics segment delivered another strong quarter. DKL continued to have a strong contribution for Midland Gathering System. operation in the Delaware Basin have started to consistently exceed expectations. VKR's continued solid performance in the Midland and Delaware Basin validate its strong position in the Permian Basin. The retail segment operated as expected in line with the typical first quarter seasonality. Turning to our strategic priorities. As I've outlined in our previous calls, Focus areas are, first, safe and reliable operation, second, being a shareholder friendly while having a strong balance sheet, and third, unlocking some of the power value inherent in our system. I will now discuss each of these key priorities in detail. Safe and reliable operation is the core of everything we are trying to achieve. We continue to make good progress this quarter in our safety performance. BigSpring is on track to achieve the throughput rates and operating cost levels we have shared with you in the past. Joseph will provide more details on our progress. We remain committed to shareholder return and maintaining a strong balance sheet. During the quarter, we paid $60 million in dividends. In May, the Board approved another half a cent per share increase to the regular dividend. Our quarterly dividend now is 25 cents per share. In addition, we made progress this quarter on the DKL balance sheet. We'll continue to look for ways to make our balance sheet stronger. Next, I would like to talk about our sum of the part efforts. It has three components. First, highlighting the value of our mid-term assets. Second, highlighting the value of our retail segment. and third, creating value through internal improvements. Now, let me give you some color. Regarding midstream, during the quarter, DKL made a significant progress improving its financial position. Liquidity was increased from approximately $300 million to $800 million. The leverage ratio was reduced from $434 to $401, and additional units were added into the marketplace, increasing public float. I would like to give a bit more context around the value DKL's operation. DKL now is around $400 million plus annual run rate EBITDA. DKL started back in 2012 as a classic drop-down story and has evolved into something bigger. Today, DKL Zbida is around 50% third-party business, largely focused in the Midland and the Delaware Basins. The Midland Gathering System is a premier asset in the heart of the Midland Basin. DKL built this system organically. It now gathered up to 230,000 barrels per day and has around 350,000 of dedicated acreage contracted until 2030. It is an attractive asset that remains the growth engine of the Midland midstream operations. Moving to the Delaware Gathering business, we are proud of the development the DKL team has done since acquiring the system. The system provides complete food, gas, and water gathering to customers. We have significant growth opportunities in the system. Lastly, we have interest in three joint venture and fully-owned pipelines. The pipelines mainly focus on long-haul crude and long-term contracts. All these assets, the Midland and the Delaware gathering systems, as well as the pipelines, could be a key part of a bigger system. Our sum-of-the-part effort for the midstream business are tied to ensuring the right ownership structure to maximize value for DK and DKL holders, evaluating tax implications of those options, and maintaining the right level of growth, liquidity, and leverage at DKL. Our intention to continue to highlight the value of our midstream operation is unwavering. and we intend to take more constructive steps in the near future. Moving on to highlighting the value of our retail assets. We initiate the process during the quarter to unlock the value inherent in the retail business. We engage investment bankers to review strategic opportunities and making good progress. We will provide more details in the near future. Lastly, I would like to conclude the discussion on the sum of the part by highlighting cost efficiency and process improvement effort. There are two parts to it. First, optimization. We have shared in the past that we reduced our inventory carrying level to free up working capital. We continue to look for ways for further reduced working capital. Today, I want to highlight that our commercial and refining groups are working together on several initiatives. We see opportunities in optimizing crude and product slates and being more efficient with our product placement. These efforts will require little to no capital and we expect to see enhance in the overall company EBITDA. Second, managing cost to our system. We have talked about our cost efficiency effort before. As we exit 2024, we expect to be between $90 to $100 million run rate in cost savings. And we see potential for additional savings in 2025. Overall, the steps we are taking position us well for strong 2024. We have plans in place to deliver a long-term value. We will be focused and disciplined towards achieving these goals. In closing, I would like to thank our entire team of over 3,500 employees. Their hard work and dedication are driving our success. I would like to thank our investors and board of directors for their continued support. Now, I will turn the call over to Joseph, who will provide additional color on our operation. Thank you, Avigal.