Delek US Holdings, Inc.

My name is Desiree and I will be your conference operator today. At this time, I would like to welcome everyone to the DELEC second quarter earnings call. All lines have been placed on mute to prevent any background noise. 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 followed by the number one on your telephone keypad. If you would like to withdraw your question, again, press the star one. I would now like to turn the conference over to Robert Wright, Deputy CFO. Please go ahead.

Good morning, and welcome to the DELAC U.S. Second Quarter Earnings Conference Call. Participants joining me on today's call will include Abigail Sorek, President and CEO, Joseph Israel, EVP Operations, Ruben Spiegel, EVP and Chief Financial Officer, and Mark Hobbs, EVP Corporate Development. Today's presentation material can be found on the investor relations section of the DELEC U.S. website. Slide two contains our safe harbor statement regarding forward-looking statements. Any forward-looking statements made during today's call 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. Abigail?

Thank you, Robert. Good morning, and thank you for joining us today. During the second quarter, our adjusted EBITDA was $108 million. Despite a challenging market environment, we ran our operation well. I'm proud of the ongoing progress our team is making. Turning to our strategic priorities. As I have outlined on our previous calls, DELEC key focus areas are First, safe and reliable operation. Second, unlocking the sum of the part value inherent in our system. And third, being shareholder friendly and having a strong partnership. I will now focus on each one of these key priorities in detail. Safe and reliable operation is the core of everything we are trying to achieve. We have made further progress and achieved our highest throughput ever this quarter. Big Spring showed additional strong improvement, and it's on track to meet previously communicated throughput and OPEX guidance. Joseph and Robert will provide more details on this. Next, I would like to talk about the progress that we have made in our sum-of-the-part efforts. We have announced a series of transactions that will allow us to further improve our position as a safe, reliable, and efficient refinance. On August 1st, we announced the sale of our retail business for a total price of around $385 million. We are pleased with the transaction and the value it unlocked for DK shareholders. Our supply agreement with PEMSA is for 10 years. We are building a great relationship with the company and exploring additional strategic opportunities. We intend to use the proceeds from the sale to improve our balance sheet and return cash to stakeholders. Now, I would like to cover the transaction between DK and DKL. We execute an amend and extend agreement. We've also decided to drop our interest in Winked Webster into DKL. These agreements are win-win for stakeholders of both companies. From a DK perspective, it will bring value back to DK refineries. And from a DKL perspective, it allows DKL acquire high quality assets without significant strain on its balance sheet. Today, we also announced a number of transactions for DKL. This transaction will enhance DKL position as a full service cooled natural gas and water provider in the most prolific areas of the Permian Basin. DKL announced the FID of a new gas processing plant. The plant is synergetic, highly subscribed, and expected to exceed 20% cash on cash return. We expect the plant to come online during the first half of 2025. On the M&A front, DKL announced the acquisition of H2O Midstream for around $160 million of cash and $70 million of convertible preferred. The transaction is immediately accretive to DKL on an EBITDA and free cash flow basis. For synergies, the transaction should be in the acquired multiple of around five times. This transaction put us on a test to midstream independence and allow us to enhance the margin profile of our refineries and the asset quality of our midstream businesses. The overall impact of the transaction announced by DK and DKL is cash infusion to DK of over $500 million on a standalone basis for little to no loss in EBITDA. For DKL, it's a high-quality third-party EBITDA of around $70 million making DKL largely independent third-party midstream service providers. This transaction moves us closer along our path to midstream deconsolidation. We look forward to sharing with the market further steps we are taking on this road over the coming months. Next, I would like to highlight the progress we are making on our cost reduction efforts. When we announced our ZBB effort, we had a target to reduce our costs by around $100 million. I am pleased to announce that we have completed this process ahead of time and are exceeding our original estimates. Robert will provide more details around that. In addition, we are looking at ways to further increase the overall profitability of our company. The new project is not just about cost reduction, but it's about making Decale a structurally leaner and more profitable company. We look forward to providing you with more details in the near future. The final piece of our strategy is our commitment to shareholder return and maintaining strong balance sheets. During the quarter, we paid $16 million in dividends. On July 31st, the Board approved another half a cent per share increase to regular dividend. Our quarterly dividend is now 25.5 cents per share. Before closing, I also want to highlight that the DC Circuit overturned the EPA denial of the small refinery exemption petition under the RFS last week. Our petitions have been sent back to the EPA for reconsideration. The case, along with the Chevron difference ruling, give us important direction to the EPA as it reconsiders our request. We believe the EPA should grant us the exemption we deserve under the RFS rules. In closing, I would like to thank our entire team of over 3,500 employees, especially our DECAL retail employees. On a personal note, I started my journey in DELEC back in 2011 in the retail division, and I have special appreciation for their hard work and dedication. Now, I would like to turn the call over to Joseph, who will provide the additional color on our operation. Thank you, Avigal.