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DATE

Apr. 29, 2026 at 10 a.m. ET

CALL PARTICIPANTS

  • Chief Executive Officer — Avigal Soreq
  • Chief Financial Officer — Mark Hobbs
  • Executive Vice President, Commercial — Mohit Bhardwaj

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TAKEAWAYS

  • Net Loss -- $201 million, or $3.34 per share, reported for the quarter.
  • Adjusted Net Income -- Approximately $5 million, or $0.08 per share.
  • Adjusted EBITDA -- Approximately $212 million, with $129 million excluding SRE effects.
  • Refining Segment Driver -- Adjusted EBITDA decline was attributed to the Big Spring turnaround and supply timing in the Supply and Marketing segment.
  • Supply and Marketing Performance -- Loss of $61 million, including $27.1 million loss in wholesale marketing, $12.1 million loss in asphalt, and the remainder from supply.
  • Logistics Segment Record -- Adjusted EBITDA of approximately $132 million, including a $10 million negative impact from winter storm Fern.
  • Cash Flow from Operations -- $461 million, reflecting non-cash adjustments and a net inflow from working capital changes.
  • Capital Expenditures -- $181 million invested for Delek US Holdings (DK +13.72%) (mostly Big Spring turnaround), and $50 million invested in Delek Logistics (NYSE: DKL), of which $42 million was for growth projects.
  • Dividend Payments -- Approximately $16 million paid during the quarter.
  • Delek Logistics EBITDA Guidance -- Affirmed $520 million to $560 million for 2026.
  • Enterprise Optimization Plan (EOP) -- Annual target raised to at least $220 million with approximately $60 million expected contribution to 2026 P&L.
  • RFS/RIN Obligations -- At a blended $1.50 per gallon D4/D6/D3 RIN price, projected 2026 RVO compliance cost is $750 million.
  • System Throughput Guidance -- Target range of 293,000 to 313,000 barrels per day for the second quarter.
  • Operating Expense Guidance -- Expected $215 million to $225 million in operating expenses, $47 million to $52 million in G&A, $105 million to $115 million in D&A, and $80 million to $90 million in net interest expense for 2026.
  • Big Spring Turnaround -- Completed safely, on budget, and on schedule, resulting in full-capacity operations and positioning the system to capture anticipated market margins.
  • Delek Logistics Third-Party EBITDA -- Expected to exceed 80% on a pro forma basis in 2026 to advance deconsolidation efforts.
  • DKL Sour Gas Project -- Completion of the first acid gas injection well as part of a comprehensive solution for Delaware Basin growth.

SUMMARY

Management highlighted that third-party cash flow now drives most of Delek Logistics' EBITDA, aligning with its strategy to unlock midstream value and prepare for full deconsolidation. The call underscored that macro disruptions, particularly the ongoing Iran conflict and restricted global refining capacity, have led to persistent product shortages and a favorable crack spread environment for U.S. refiners with domestic crude access. Executives noted resilient demand for gasoline, diesel, and jet fuel, stating that "demand we see is pretty resilient," with no evidence of demand destruction in U.S. markets. The company also clarified that, after the completion of the major planned turnaround, no further significant capital projects will constrain capacity, and capital allocation flexibility will increase for buybacks and dividends throughout the year.

  • CEO Soreq emphasized, "separation has been a cornerstone of our sum-of-the-parts strategy, and it continues to bring us closer to our deconsolidation goal."
  • Management described a clear, multi-faceted approach to deconsolidation, including potential bolt-on acquisitions, asset sales, DKL share buybacks, or full DKL divestiture, depending on price and market conditions.
  • Executives pointed to industry structural advantages for U.S. refiners, citing low domestic natural gas prices and flexible crude sourcing as differentiators against global peers during continued geopolitical disruptions.
  • The company will continue advocating for SREs under the RFS framework, citing disproportionate economic harm to its refineries if relief is not granted by the EPA.

INDUSTRY GLOSSARY

  • SRE (Small Refinery Exemption): A regulatory exemption under the Renewable Fuel Standard (RFS) that allows qualifying small refineries temporary relief from federal biofuel blending mandates, often cited as critical for operational economics in mid- and small-cap U.S. refiners.
  • RIN (Renewable Identification Number): Tradable compliance credits used to track renewable fuel production and blending under the RFS program; RIN prices directly influence RFS compliance costs for refiners.
  • RVO (Renewable Volume Obligation): The annual amount of renewable fuel a refiner or importer is mandated to blend into gasoline or diesel fuel under the RFS, commonly expressed as a dollar obligation relative to RIN prices.
  • EOP (Enterprise Optimization Plan): Delek's internal initiative aimed at maximizing free cash flow by optimizing operational, commercial, and value chain decisions across the enterprise.
  • Crack Spread: The difference between the purchase price of crude oil and the selling prices of refined products, serving as an indicator of refining margin profitability.
  • Third-party EBITDA: Earnings before interest, taxes, depreciation, and amortization generated from transactions involving unaffiliated customers, excluding intercompany revenues, significant for demonstrating Delek Logistics' economic separation from Delek US Holdings.

Full Conference Call Transcript

Avigal Soreq: Thank you, Robert. Good morning, and thank you for joining us today. I am extremely pleased with our strong execution in the first quarter. The quarter is a testament to our refining capability as demonstrated by, one, disciplined and successful execution of the Big Spring turnaround; second, continued progress on increasing our free cash flow profile through restructuring of our intermediation agreement and continued success of EOP; third, successful navigation of challenging macro events such as workers on-prem and, more recently, events in Iran. The events in Iran have created many ripple effects in the market, resulting in around 10 million barrels of crude production and approximately 5 million barrels per day of refining capacity remaining offline.

This has created an environment of elevated crude and product prices, dislocation between physical and paper grades, steep backwardation, and wide ranges of crude differentials. We believe the structural product shortage created in this event will continue to impact the market well after the conflict comes to an end. In the meantime, under the current environment, we believe the refining companies which will have the biggest advantage are the ones which have direct access to crude, high distillate yield, high jet, and, most importantly, the ability to quickly respond to changing conditions.

We believe because of our access to multiple grades of domestic crude, high distillates and jet yield, and access to both Gulf and Mid-Continent product markets, we are in a prime position to navigate the challenges and take advantage of the opportunities created by the ongoing disruption. Now, I will cover some of our first quarter highlights and strategic initiatives in detail. Starting with the planned turnaround in Big Spring. Big Spring successfully completed its planned turnaround. This work was executed safely, on budget, and on time, and the refinery is running at full capacity. The primary focus of the turnaround has been to improve Big Spring reliability, cost structure, and long-term margin capture.

Post the turnaround, we expect improved reliability, crude slate optimization, improvement in overall product yields, and, finally, higher octane and blending capabilities. With no further planned turnarounds, we have the highest spending quarter behind us. Our system is well positioned to capture the strong crack spread environment and respond to increases in demand as we move into the summer driving season. Moving on to EOP next. Enterprise optimization spend continues to drive significant value. We are once again raising our enterprise optimization plan target to at least $220 million on an annual run rate basis. During 2026, we estimate approximately $60 million of EOP contribution to our P&L.

We are looking at ways to further advance the program and create another meaningful step change to our free cash flow profile. We will provide more details on this in the future. Our sum-of-the-parts initiative continues to advance with rising strength of our midstream business. DKL today reaffirmed 2026 EBITDA guidance of $520 million to $560 million. DKL is currently seeing meaningful tailwinds in the business, and we are working hard to capture these opportunities in a prudent fashion. DKL is taking another meaningful step in completing its industry-leading comprehensive sour gas solution. It has completed the drilling of its first acid gas injection well.

The comprehensive gathering, treatment, processing, and acid gas injection solution will provide DKL the ability to fully capitalize on the growth opportunities in the Delaware Basin and maintain its best-in-class EBITDA growth and yield. In 2026, on a pro forma basis, with continued growth in third-party cash flow, we expect DKL third-party EBITDA to exceed 80%. Achieving this level of economic separation has been a cornerstone of our sum-of-the-parts strategy, and it continues to bring us closer to our deconsolidation goal. We are in the process of taking additional steps to ensure the strength of DKL third-party midstream services are fully reflected in DK share price and DKL unit price.

As mentioned last quarter, we are pursuing a proactive strategy to manage our obligations under the RFS. SRE provisions of the RFS serve the important purpose of mitigating the impact felt on small refineries from the RFS burden. We expect EPA to continue to provide relief for 2026 to refineries after clearing the backlog of pending petitions since 2019. We also remain actively involved in our effort to get full value for our 2019 to 2022 RINs for which we were provided invalid relief. Finally, we believe that the current administration, Senate, Congress, and EPA realize the importance of SREs not only for the refineries which qualify under the program, but also to the local communities they serve.

The final piece of our strategy is being shareholder-friendly and having a strong balance sheet. During the quarter, we paid approximately $16 million in dividends. Our strong balance sheet, improved reliability, and EOP, and confidence in our outlook continue to support a disciplined approach to capital allocation through continued dividends and buybacks. We remain committed to a balanced and disciplined capital allocation strategy and look forward to continuing to reward our shareholders. In closing, thank you to our team for their hard work and dedication during 2026. I am proud of the progress Delek US Holdings, Inc. has made and look forward to continuing the progress through the remainder of the year.

Now I will turn the call over to Mark, who will provide additional color on the quarter.

Mark Hobbs: Thank you, Avigal. For the first quarter, Delek US Holdings, Inc. had a net loss of $201 million, or $3.34 per share. Adjusted net income was approximately $5 million, or $0.08 per share, and adjusted EBITDA was approximately $212 million. On slide four, we show the breakout of adjusted EBITDA and adjusted EPS for the first quarter. Excluding SREs, adjusted EBITDA and adjusted EPS were approximately $129 million and a loss of $0.98 per share, respectively. This removes the impact of our RVO exemption recognition for the first quarter of $82 million. On slide five, the breakdown of adjusted EBITDA excluding SREs from 2025 to the first quarter shows that there were two main drivers for the decrease in EBITDA.

The drivers were primarily in the refining segment, where adjusted EBITDA declined due to the Big Spring turnaround, and the impacts of timing in our Supply and Marketing segment, which will reverse over time. Both impacts were partially offset by the increase in refining margins that we experienced in March after seasonally weak margins in January and February. Supply and Marketing was a loss of approximately $61 million in the quarter. Of that amount, wholesale marketing had a loss of $27.1 million, asphalt contributed a loss of $12.1 million, with the remaining loss coming from supply.

In the Logistics segment, we delivered our best first quarter to date, generating approximately $132 million of adjusted EBITDA, which includes an approximate $10 million negative impact from winter storm Fern. Moving to slide 18 to discuss cash flow. Cash flow provided by operations was $461 million in the quarter. This includes our net income for the period, adjusted for noncash items, and a net inflow related to changes in working capital. Investing activities were a use of $190 million. Financing activities were a use of $273 million, which includes payments on financing agreements and other activities, approximately $16 million in dividend payments, and approximately $22 million in DKL distribution payments to public unitholders.

On slide 19, we outline our first quarter capital spending, with $181 million invested at Delek on a standalone basis, the majority of which was related to the plant-wide Big Spring turnaround. With no additional turnarounds or major capital projects planned for the remainder of the year, Big Spring and the broader system are well positioned to capture stronger margins and meet seasonal demand during the driving season. We also invested $50 million in Delek Logistics, of which approximately $42 million was for growth projects. Our net debt position is broken out between Delek and Delek Logistics on slide 20. Excluding Delek Logistics, our Delek standalone net debt remained largely in line with year-end 2025.

Moving now to slide 21, where we cover second quarter outlook items. Our throughput guidance for the second quarter is 72,000 to 77,000 barrels per day for Tyler; 78,000 to 83,000 barrels per day at El Dorado; Big Spring will run 65,000 to 70,000 barrels per day; and, lastly, Krotz Springs will run 78,000 to 83,000 barrels per day. Our implied system throughput target for the second quarter is in the 293,000 to 313,000 barrels per day range.

In addition to the throughput guidance, for 2026, expect operating expenses to be between $215 million and $225 million, G&A to be between $47 million and $52 million, D&A is expected to be between $105 million and $115 million, and net interest expense to be between $80 million and $90 million. With that, we will now open the call for questions.

Operator: We will now begin the question and answer session. Please limit yourself to one question and one follow-up. If you would like to ask a question, please press star 1 to raise your hand. To withdraw your question, please press star 1 again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of Alexa Patrick from Goldman Sachs. Your line is now open.

Alexa Patrick: Good morning, team, and thank you for taking our question. With the Big Spring turnaround complete, how should we be thinking about your capital allocation priorities? Recognize this quarter had higher spend, but as we look to the rest of the year, how are you thinking about buybacks and then use of SRE cash inflow?

Avigal Soreq: Yes, Alexa, first, good morning, and thank you. First of all, we are very proud of our performance of capital allocation during 2025. We have outperformed around 4% versus our peers. We gave more capital back to investors, around 4% more than the peer group, so it is a very good outcome in our mind. We have a very clear capital allocation program. First, we want a balanced approach between dividend, buyback, and balance sheet, which we have achieved. Second, we want to maintain dividend through the cycle, which we have maintained. And third, we want to make it very clear: we see a lot of value in our share price and more to come.

We have a very good quarter ahead of us, and we are very optimistic.

Alexa Patrick: Okay. That is helpful. And then our follow-up is just on 2Q. There is definitely a lot of moving pieces in the macro right now. So can you just talk about how we should think about captures and some of these different dynamics?

Avigal Soreq: Yes, Alexa, with your permission, I will take a step back and talk about the macro in more detail because there is a lot of moving parts and a different macro environment versus a regular macro environment. I will start with the facts, and then we will take it from there. We have seen the Strait of Hormuz closed or constrained for close to two months now. The consensus in the market is that we are seeing around 10 million barrels per day of crude supply effectively offline and around 5 million barrels per day of refining capacity remaining offline. SPR offset the crude portion just a little bit, but not in a very meaningful way.

On market effects, we see elevated crude and product prices, dislocation between physical and paper, which is very meaningful for some, steep backwardation that is impacting capture rates for almost everyone, and wide swings in crude differentials, especially around Brent. On the product side, we believe that the product market will outlast the event and there will be a lingering effect on crack spreads. We also see that the risk premium after the event between Brent and WTI will be different; the risk element of Brent has put itself into the market and will probably outlast the event as well.

That means a higher call on U.S. shale that presents a lower premium risk versus Brent, and we will see more of that coming into effect. Being specific on the Delek side, we have a big operation on the midstream side that is very correlated to what is happening in the Permian at any given point. We have direct access to crude, which lets us come to the market and make changes as needed very quickly. And we have access to product markets both on the Gulf and in the Group, which gives us flexibility. I want to finish with a very important point.

We have a very good distillate and jet yield, and part of that is due to the EOP we executed last year. You may remember a slide we put together that presented a great project the El Dorado team conducted to basically produce more jet with zero capital cost, and that is paying us very nice dividends today.

Mohit Bhardwaj: And we are very well positioned to capture the opportunities in front of us.

Operator: Thank you for your question. Your next question comes from the line of Manav Gupta from UBS. Your line is now open.

Manav Gupta: Good morning, guys. I am also going to ask a little bit of a macro question here. What my question here is, when we look at 2Q, Delek is very well positioned, there is no doubt about it. But I am also trying to understand from the perspective of what you said. I think 2Q will be a story of haves and have-nots. Haves are people like Delek who have the crude, and have-nots are people who may have the best refining system in the world but have no crude.

From my perspective, obviously, Delek is a winner, but do you also think the situation we are in, generally U.S. refining as such is a winner because you have the crude, you have the demand, you are not really dependent on the Strait of Hormuz? So we have this dynamic playing out where relative to global peers, U.S. refiners and Delek can actually show a lot of outperformance. Can you talk a little bit about it?

Avigal Soreq: Yes, absolutely. First, a very smart question. Mohit and I and Mark and the team speak about it all the time. Mohit has a lot of energy around the topic, so I will let Mohit chime in.

Mohit Bhardwaj: Thanks, Avigal. And Manav, thanks for all the good work you are doing. You are absolutely right. U.S. refining will have an advantage because the U.S. is one of the largest crude producers in the world. The U.S. has the most flexible refining system in the world. And, most importantly, U.S. natural gas prices are very low. So from an OpEx standpoint, we are also at an advantage. But you rightly pointed out, the biggest winners will be the companies who have access to barrels even within the U.S., who have very high distillate and jet yield. That is why we like our position versus anybody else in the U.S. refining system right now.

Manav Gupta: Perfect. My second quick follow-up is that when we look at the price of the RIN, that is going up, and that does impact the price of gasoline. In my opinion, there is a higher probability of SREs in 2026 than there was even in 2025 and 2024. If you do not issue SREs, you can cause the price of RINs to get to a point where gasoline can go to $5. Can you talk about those dynamics? Why the possibility of SREs is even higher now than what it was in 2025 and 2024? Thank you.

Avigal Soreq: Yes, absolutely. With your permission, I will take a step back and give you a wider answer about the SREs. Granting SREs is a way bigger topic. SRE is not a company-level issue; it is an asset-level issue, and it directly impacts close to a third to half of our industry, more or less. It is a very big deal, and I want to make it very clear. The whole point of the law is disproportionate economic harm. It is for each asset and each community. It is not related to companies. The essence of the law is to maintain high-paying jobs, to maintain local communities, and to maintain affordable fuel.

When we are looking at compliance costs for a small/mid-cap refiner over the last five years, it is roughly 85% of the market number on a proportional basis, whereas for the biggest book it is single digits. That is a very different dynamic. Risking SREs, as you stated, will lead to higher prices at the pump. It is very clear. And coupling the critical topic of SRE with E15 is like putting a square peg in a round hole. Mohit, please chime in.

Mohit Bhardwaj: Yes, Manav. Again, a very good question. As Avigal rightly pointed out, RFS and RIN issues are about disproportionate economic harm. We show in our slide deck that, at a $1.50 per gallon blended D4/D6/D3 RIN price, our 2026 RVO compliance is close to $750 million. For companies like us who stay in compliance, you do not get SREs as cash; you have to stay in compliance, and then you get money that you spent on buying RINs back. So for us, this is not just an issue about how RFS is working; it is an issue about disproportionate economic harm.

And you rightly pointed out, a lot of market participants are pointing out that if you do not have 2026 SREs granted based upon the current renewable volume obligations, you will have a deep deficit in the 2027 RIN bank, and, as Avigal pointed out, that is going to impact affordability at the pump, which is squarely against this administration’s energy dominance agenda. So we definitely expect SREs to continue, but that is up to the EPA to decide. Our expectation is that, in line with the government’s agenda, they will be granting these SREs on a go-forward basis.

I think the EPA has put a very clear, clean framework together that has all the credibility in the world to follow through.

Operator: Thank you for your question. Your next question comes from the line of Matthew Blair from TPH. Matthew, your line is now open.

Matthew Blair: Thank you, and good morning, and congrats on the strong results. Could you talk about how the Big Spring refinery is running post the turnaround? Are you seeing any operational improvements? And did the turnaround stretch into the second quarter at all? We would have thought that the Q2 throughput guidance might have been a touch higher. Could you address that?

Avigal Soreq: The point of the turnaround, which we are very happy about, was to improve reliability, improve crude optimization, add higher octane blending options, margin, and cost. We are very happy with what we see. We have a very good team over there, and we are very optimistic about Big Spring going forward. We will leave it at that—more to come. We have a very strong guidance and more to come.

Mohit Bhardwaj: Yes, Matthew, you rightly pointed out our guidance, but with Big Spring coming out of the turnaround, we are just being a little bit more conservative, and hopefully things will play out the way we expect them to.

Matthew Blair: Sounds good. And then could you talk about what you are seeing in end-market demand so far in the second quarter, both for gasoline as well as diesel? And for jet as well—any evidence of demand destruction given the higher price environment? Or does demand still look pretty strong?

Avigal Soreq: In all the markets we operate in, we see strong demand. We see decent netbacks. The Group dynamics are improving as we speak, and that is very positive. We do not see demand destruction at this juncture. The demand we see is pretty resilient. Mohit?

Mohit Bhardwaj: Good question. In Europe, we have seen some talks around airlines reducing capacity. But U.S. demand remains very strong. We are seeing potentially a very strong summer gasoline driving season. Gasoline remains the part of the barrel right now. As people are focused on distillate and jet, we also think gasoline cracks have room to move higher. We do not see any demand destruction in the U.S. just yet, and we think the outlook for cracks in Q3 to move higher is very evident based upon where things are right now.

Operator: Thank you for your question. Your next question comes from the line of Jason Daniel Gabelman from TD Cowen. Your line is now open.

Jason Daniel Gabelman: Thanks for taking my questions. First, on regional product prices. It is looking right now like Group 3 is still a bit discounted versus the Gulf Coast. Typically, I think you would see Group 3 already strengthen at this time of year. Could you talk about your forward outlook for the relative values between those two markets, and if you expect normal seasonality to take hold?

Avigal Soreq: Absolutely, Jason. Thank you for the question. The way we see the Group today is actually stronger coming into this morning—we just checked it before the call—so that is positive. Obviously, the Group has dynamics of its own. Even if you look longer term, you see the Group dynamic in the near- and mid-term future will be different. We have just seen two pipelines: one is coming in the second half of the year, and the other is coming later on, in three to four years. That will allow movements from the Group into PAD 4 and PAD 5.

We are looking at the Group on a very tactical basis today, but we also have the obligation and the opportunity to look at the Group down the road. I think the Group that we remember is going to be very different versus the Group we will see starting second half of this year, and probably even more importantly when the next line is executed and moves product into PAD 5. That is a very good dynamic on the short term, midterm, and long term for our position.

Jason Daniel Gabelman: Great. Thanks for that. And maybe if I could go back to the small refinery exemptions. Do you have a sense around timing of when you should expect to receive those? And I know you have presented cases where you think you are able to get up to $400 million—the full, I guess, amount of exemptions for all your plants. How do you square that with the EPA publishing an expected amount of exemptions to grant the next two years, which seems consistent with the past few years?

Avigal Soreq: It is a great question. We have a tremendous amount of trust in the EPA. I think the EPA put very strong, strict guidance in place. The EPA was able to clear the backlog of 2019 to 2022, and we are confident the EPA is going to do what it says it is going to do. It is a very reliable administration in this regard. I am sure the administration sees the correlation between small refinery exemptions and the price at the pump and will look into that.

Operator: Thank you for your question. Your next question comes from the line of Analyst from Wolfe Research. Your line is now open.

Analyst: Hi. Hey, guys. I had some connection problems. I apologize for dialing in a bit late. I know that the SREs have been fairly well flogged on the call, but I just want to make sure I understand something—the indication you have given for 2026. What are you assuming for the RIN? Because it has basically doubled since the beginning of the year. I am trying to get a feel for, if you roll forward the current RIN price into 2027 and 2028, what would your number be?

Mark Hobbs: Thank you for joining us.

Avigal Soreq: This is really important for us, and I will let Mohit, who stays very close to the topic, take this one.

Mohit Bhardwaj: Yes. As we have talked about in the past, the way EPA is looking at a lot of these issues is trying to have a happy medium. It is a mathematical equation that they have in their minds—looking at SREs, looking at RVO, looking at imports, and looking at reallocation as well—to come up with a price so that affordability at the pump remains. As far as our 2026 numbers are concerned, we show that very clearly in our slide based upon our current estimates. At a $1.50 per gallon blended D4, D6, D3 RIN price, we would have a $750 million RVO obligation in 2026.

Analyst: But just to be clear, the RIN is not $1.50; it is $1.90.

Mohit Bhardwaj: Yes, you are absolutely right about that.

Analyst: That is what I was confused about in your previous answer. So what, in your mind, would cause the RIN value, from the RIN bank standpoint, to move back significantly lower from here?

Mohit Bhardwaj: From our vantage point, based upon the numbers—and Jason was talking about those numbers in the previous question—you would have a significant 2027 deficit if those are the level of SREs which are granted. That is one toggle that EPA does have, and that is why we think the 2026 SREs are extremely important to manage the 2027 RIN bank. What exactly EPA will do—and there are extremely smart, honest people working at the EPA—they will figure it out. For us, we are just trying to manage our situation and highlight the fact that SREs are an issue about disproportionate economic harm, and we are trying to manage our position based on that.

Operator: Thank you for your question. Your final question comes from the line of Joseph Gregory Laetsch from Morgan Stanley. Your line is now open.

Joseph Gregory Laetsch: Hi, good morning, Avigal and team, and thanks for taking my questions. I wanted to start on the EOP program, where you have made good progress and increased the target again to over $220 million. Could you just talk through some of the initiatives to help drive this improvement and how we should think about the potential upside and maybe a potential seventh raise from here?

Avigal Soreq: Absolutely. Thank you for that question—that is one I really like. EOP, first and foremost, is about lifestyle and culture. It was really important for us, and we are extremely proud of the ability to push EOP across the entire organization. You see the buy-in. You see people talking about it in the hallway. It is not a project; it is not a spreadsheet. People really think about how to make more of what we have. If I am going to the refinery, I hear it between the units. If I am going to the accounting team, I hear them speaking about it. If we are going to commercial, it is across the company.

So it is not just about cost savings. As we have said in the past, it is about what we make, where we sell, and the whole value chain that we own A to Z. You can see it very clearly in our financial results—in El Dorado, in G&A, and in the capture rate of the rest of the refineries. We are always looking, as I said in my prepared remarks, at how to make it better—what else we can do, how else we can improve. I am very proud of the team here that is taking the high road on that and making it a part of our DNA. I want to finish with an important comment.

If you look at our slide deck, we are seeing around $600 million to $700 million in a mid-cycle environment of free cash flow, and that is around 20% to 30% of our current market price. That is a tremendous opportunity. I want to connect this comment with the comment that I answered to Alexa: we see a tremendous amount of value in where we are.

Joseph Gregory Laetsch: Perfect. That is helpful. And then I wanted to ask on the sum-of-the-parts side. Can you talk through the latest thinking about deconsolidation, value unlock options from here as well? You have done a good job with bolt-ons and organic growth at DKL. Any thoughts on the path forward here would be helpful. Thank you.

Avigal Soreq: Absolutely. You are right—deconsolidation is our ultimate goal. We are going to do it at the right price, under the right conditions. We see a tremendous amount of value in our DKL story. On a pro forma basis, 80% third-party is unheard of versus what we used to be. We have done acquisitions that we are extremely pleased with. We built a gas plant that we are extremely pleased with. We have a very clear, clean strategy of being a premier provider of crude, gas, and water in the most prolific area of the Permian Basin. We have created something very strong here that we are proud of.

Based upon the intrinsic asset value in DKL, we believe the unit should have a seven handle. For the right price, we will deconsolidate and reward investors going forward. We need to make sure that the value creation in the midstream business—vis-à-vis the 80% pro forma third-party—is fully reflected both in the DK share price and the DKL unit price.

We are pursuing one or more of four ways: keep doing bolt-on acquisitions; deconsolidation, because people see the value in the DKL unit—53 consecutive distribution increases is pretty much unheard of in terms of our ability to reward investors; for the right price, we might sell assets; for the right price, DKL has the ability to buy its own units from DK; and we can always sell DKL for the right price. As I mentioned, we see the intrinsic value of a seven handle on the unit price. We are extremely aggressive and disciplined around this opportunity.

Operator: There are no further questions at this time, and we have reached the end of the Q&A session. I will now turn the call back to Avigal Soreq, CEO, for closing remarks.

Avigal Soreq: Thank you. Thank you to everyone who joined the call. Thank you to my colleagues here around the table—they did a great job. Thank you to the investors who are sticking with the story and like what we are doing. I want to thank the board of directors and, most importantly, our great employees that make this company what it is.

Operator: This concludes today's call. Thank you for attending. You may now disconnect.