Delek US (DK) 7 Nov 232023 Q3 Earnings call transcript

Welcome to the Delek US third Quarter Earnings Conference Call. [Operator instructios] After today's presentation, there will be an opportunity to ask questions. [Operator instructions]. Please note this event is being recorded. I would now like to turn the conference over to Rosy Zuklic, Vice President of Investor Relations. ahead. go Please

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

joining Thank performed for quarter for us results. We well. today. you, Rosy. strong Thank All delivered you segments us third

levels -- I focused CAC weakened. team perspective, remains markets. team we during at our diesel driven member thank lows. a continued businesses. inventory drove Delek X-year crack improvements of quarter, our Our remained significant for each From volatility across a contribution. saw their and macro the Gasoline the by in strong,

more We refinery which his the we quarter. led investing location, refining record growth peers, total during a ran will in achieved at permit our business. logistics, Given benefited provide well. record our distillate our a competitive to higher favorable segment remarks.In details advantage. operations another The relative of to we're are production quarter. our from our throughput continued in on Joseph We

year. Delek's in by quarterly fourth quarter confident exceed EBITDA performance, this strong ability are of the in our Given rate run portfolio to we $XXX million

X, Delek. Slide on as CEO year of to Moving the reflecting first my

outlined sum We areas: having value of When and to the our operations, of structure. of. reliable I focus my efficiency be Delek, and to have safe the much shareholder-friendly sheet, cost proud the part strong balance improving and unlocking I return being

very these are focused objectives. We on

to has Our wavered. see one to of them dedication each not completion

made have them. We all progress in of

the process the On refinery side, time toward we out with in in This Post structure experienced we a has the On and at record record on shareholder turnaround, throughput capturing. the and operations system. Earlier led and achieved enhanced and operation. Together, strong higher most a budget. team our our year, our with turn to successfully results. refining we streamlined We importantly, their Tyler total safety financial on recordables the completed is return. performing yield talent.

retail achieved record its since logistics business year, highest past the quarters. In Over COVID. EBITDA our achieved QX, EBITDA

$XXX million We be and cash using of increase million repurchased row. latest We a during to strategy, million our efforts of by continue sum to a shareholder-friendly. value our raised flow From part, and shares reduction seeing $XX our net way have are year. the our our are our debt of dividend reduce we underway, meet including unlocking Through in from objectives. results. strategic the well $XXX a we we point by position to strong improved On we early Xx financial view, cost clear October, the are on well and the

we see, resulted can tangible you in That consistent. As been have progress.

strong quarter. for market well with just outlined position I mid-cycle and pleased we both are an achievements the from environment, standpoint. In the operation financial us Importantly, closing, our

business. and improvements to unlock continue value our will from We further drive

the detail I Now on our operation. who like turn over provide will additional call would to Joseph, to

Avigal. you, Thank

cost the per barrels barrel quarter, expenses support in a In safe and our third high fourth to El per per In build yield people, quarter throughput Thailand of XXX,XXX Moving were throughput. in of organization focus process solid million the segment. third was Tyler, $XX.XX the and and throughput including Operating the of The quarter, and Dorado, Slide X. $X.XX adjusted operations. electricity quarter, is elevated the by to was XX,XXX helps total to in combination $XXX of recovery Production $X.XX the approximately quarter in reliability, led a XX,XXX favorable equipment Texas barrel in estimated per demand processed barrels for per refining In due In XX,XXX record per XX%. per the capture the to contribution rate was the in utility the XX,XXX us total reflecting EBITDA day at day. reliable throughput performance market total third margin In strong of team on day. approximately barrel, high strong improved approximately the in conditions operations total to barrels late a quarter barrels summer. range. to day state the

day, Our guidance $XX.XX Operating for per quarter still per were fourth well approximately barrels day In Big for range. quarter for Estimated by in per but total barrel. -- to work, the production range. was quarter throughput throughput expenses within our Spring, XX,XXX margin the barrels is driven the was barrel. XX,XXX $X.XX the maintenance per XX,XXX

of and the and $X.XX we an additional a replace estimated Spring unplanned barrel, elevated Our to activities. production a the barrel maintenance completed impact cost. unfavorable $XX.XX per of including $X.XX to per per an utility $X.XX the approximately margin couple were including barrel reformer planned per barrel, outage from October, In in related reactors. barrel $X.XX activities a per expenses Operating was Big catalyst

day throughput the in estimated XX,XXX the XX,XXX fourth per Big quarter result, barrels range. to Spring a is in As

very are We progress with excited refinery. and Big Spring our

have forward, going in compared excellence and barrels controllable improved level. performance to capture In XX% Throughput We throughput, quarter, pushing third XX.X% level. Capture the the the year-to-date we level. with team our day at improvements up per approximately operational following year-to-date day per barrels up from the quarter. next for our and to right place, planning we the are X,XXX we XX% XX,XXX leadership second level. are already the OpEx And from

We are in was in throughput improvement expecting remaining XXXX. XX,XXX and total day. XXXX ionize In XX% XX% barrels the of approximately Krotz per the Springs, to

resilient compared allowed $XX downstream pull record million is XXX,XXX demand in even model. million our to fourth both are to to with Our the business Contribution With about production barrel. added expenses niche second were throughput $X in barrels in more us per operating is for with million businesses The and and inventory blending per strength $XX.XX barrel associated effort the compared per was quarter, $XX margin markets contributed from marketing capture asphalt barrels million the down but approximately and day of system XX,XXX the to our In margins quarter access of in in and Planned was Wholesale earnings second XX,XXX to million and the with integrated impacted the wholesale day rack high by the to quarter. system. the price, approximately quarter, their rates. importantly, results regards are significant about the of throughput the million, $XX quarter. in plant refining reported range. range. XXX,XXX marketing in per our third segment second refineries $XX refining rising quarter, fourth refining each $XX throughput about oil marketing of our These outside $XX the at contributed our

are environment capability. capture XX% We our to with distillate strong well positioned distillate margin yield

excellence to under a until another operational reminder, the the PKL, planned major financial I record now Krotz delivered quarter no XXXX for As is Rosy in quarter of over turnaround variance. will turn growth. focus call team fourth the In the Springs. and

X. Thanks, Joseph. Starting on Slide

to Slide For quarter $XXX quarter accruals. driven the cracks and million or $XX Adjusted quarter per adjusted bonus or waterfall income of increased our at XXXX, retail was was throughput from was improved quarter. last we refining, million. a strong was by another Corporate to $XX quarter, and segment nearly third of Logistics X, in million. provide largely million. compared third the $XXX flow segment The a million net EBITDA with $X.XX million from had with income increase $X.XX results per primarily of from U.S. the of Delek EBITDA EBITDA of third $XXX share. record net adjusted by a quarter operations Cash higher due quarter the and in had second had $XXX share XXXX. On costs

Slide of million paydown and dividends $XX This million $XXX distribution activities million capital favorable performance the strong spent cash to is Moving to ending to built million $XXX was debt of quarter, million discuss Year-to-date, and $XXX activities management. the X, payments.On We to quarter. cash largely to have inventory flow of improved year we we in estimate flow. third $XXX is total the any in balance in return mainly working of $XX in of debt shareholders. capital. $XXX range We Slide million primarily full million Financing this in for show amount million. in before company, of be $XX reflects million reflects expenditures. in from Included million reimbursement. This Investing $XXX capital a repayment, during cash the The X $XX includes the buybacks, operations from million million $XXX the with expenditures. CapEx $XX $XXX million. of quarter in

for CapEx and Net partially other as $XX this reimbursements. to million. $XXX producers XX. expect between proceeds, capital debt out approximately expenditures broken in to Slide We Including as on of range the is Delek year Logistics the is $XXX insurance receive net growth million of funded well by million Delek

million fourth ending XX the items built $XX for $XXX a outlook During of quarter, XXXX. quarter position. we of the debt, cash cash paid the quarter of covers and down with million Slide net

be and and we million be million guidance to $XX the expense million. $XX G&A $XX between and $XX million, be to between expect addition $XX expenses and million $XX net In to Joseph and million be $XXX between interest to million throughput operating million, $XXX D&A provided, between to

for line will open the We questions. now

you. Thank

assemble We will question-and-answer momentarily At time, now roster. this begin pause will [Operator to a the Instructions]. we session.

Manav question with Gupta comes UBS. first Our from

El from First big of congratulations all, improvement Dorado. Tyler both and

over what running helping relates out some you So as Big and in a to were hard help shouldn't us saw we worried turnaround, of behind XQ, was when issues actually understand then be Springs, factors it you you just And the start would that there? you. it be the

about could things? if So talk you those

the yield. see deploy great. the there. We areas you places Thank lot question. for a you're that's on can Avigal. address both big it, being for both We and product Tyler it's a over the we Manav, Obviously, very Dale, market and to We growing is the that the right. And a product we the see turnaround. of a yes, over are mix work and the our on fruit city see Hey It's done fortunate of with improvement few ability

So solid of to very what that's to reformer we Dorado asset with great a make can into that out asset about is honest, well. as tap El it, that Dorado, hydrogen market. El just great other a capabilities, we we In very and are optimistic plant, be starting and are

remarks, I prepared touched finish Joseph on Big think Joseph but bit a answer. his I’ll Spring allow that in little the to

Thank you.

are excited our poles. We with very

very you plus, With look a especially lower the supported when our we to the El new. for progress in the price end distillate are Spring, Dorado. with of curve also to Tyler, future this margin big is at the Tyler So our Obviously, going Big the regards and capture, XX% environment better oil and both happy the yield quarter quarter side. and third

question, turnaround things to from to the you years X a best at to right And we it have being under good Big the implement very answer your confident rate. our integrity expecting feel management about Spring a with are control capture much in feel about now. higher the our we share that increasing plans and We ability throughput worried And mechanical bar. are We as about higher team. and practice. We operate are we not

So excited.

that which I scenes, quick and follow-up to here if reasons the was working has metrics to there the this hard you My in been some supply. Street of quarter-over-quarter. know performance. Rosy A segment could your marketing quarter-over-quarter. big swing what swing Perfect. as it and formally supply, relates in behind is, the big other, the such help understand trying a that very drive us But trading was are explain

you volatility bit Yes. I it, lines. than that know line, Manav. wider there obviously, be view. don't of would give that other a a lot question but have -- you more And Thanks, Joseph, a around why And in

Okay.

So asphalt wholesale we marketing results. provided and information about the

a that are you headwind million for provide made know million. to made Asphalt $XX lag quarter wholesale increase. And and results of previous marketing oil $XX businesses. price lower pricing Both this in always due than type

a and derivatives to the mitigate The management risk. supply other the is and really component in marketing results inventory

pay good on Thank to you debt. quarter on down see win. and and guys it of good congratulations appreciate a We a

Neil Our Sachs. with next Goldman Mehta comes from question

you. Thank Yes.

there XXXX? on just you between again, structural? your something how gasoline winter see the the more at seasonal, gasoline would side now. gas in does cracks see How So is then We much grade markets love weakness perspective a play very into good the switch. I in we're versus and dislocation do in we of weakness normalizing the this of the right quarter equation out given trading And through yield And as this distillate. Tyler. distillate as just move big

how we just they evolve up markets XXXX. as into So talk product through set us and the

on X-year ULSD, that terms Obviously, majority the of low the Obviously, know can but I what Yes. see another to yield, the distillate. it's in as winter don't we the for determined Europe to you see way really would yield in that. is colder crack inventories in going we all winter. the of upside do it going if love to that that's the a

a have that side, we a seen prepared said in gasoline the On seen weakness. -- we've remarks, obviously, the we

Some -- that believe as gasoline of you of solid. and demand that We the is is mentioned, for seasonal is it think of most that, some seasonal. I

Our demand. markets much are resilient pretty for

to deploy problem another companies that see can other were You inventory, our testimony deploy a able while products. we to -- to had reduce

resilience, off I something they're and note. macro micro mentioned market, that as correct very doing don't is market the few going I Covid still The we in the see to testimony change to to we a the more than going -- think demand. another itself. demand I So that's solid, that's U.S. another in more but think times, as versus see supply it, is the and market our I this

think be. So right place the it's overall, to we

of The follow-up is parts the thinking we're on value. just how unlocking about some

it about this stepped in. spent actually do what at that strategies How accrue that time You--Avigal, that the And at approaching with. value you DK you level? to of about different in, inning fits of talking plenty some transfer unlocking as you're parent Talk value? and in you this are the the the DKL terms

Yes.

level. in and able obviously say make EBITDA So reliability to reduction or both team shareholders order and for thing that make went it other And I of and great And at an that's happen. the I X will allowing a some happen hard, start Neil, a on came value that, want wants Mark, with debt net my change and We're our then I words be Saying the know on Mark that times, wants working about all going Delek to you going and on around the said of to detail didn't side is But going to happen. the that the have to energy right to DK say you still a to -- and that. a to the direction in many in throughput. the safe that -- balance of are Reuven up we higher sheet. a know well. we I'm that itself, the his we We're we on mind few going be remember proud is it which few being while reduction, things happen. words to the very lot a for cost initiative be And do as very to maybe, commitment. mid-cycle have if and presents of to our and yields enhance that's parts please

thanks, for Neil, Thanks, Avigal, the sure. and question. Yes,

accretive anything myriad the have evaluated available to And that we've we we on mentioned tell prior preserving and ability of for -- through want parts. we've liquidity what all the we specific, on focused But are point we that would all believe in feel we specific is the remarks, see do love we take thing that to of that mentioned we us. our perform of anything just the in Avigal at around to I've and call to significant advantage to that around discussions conviction across in committed more some than saying, that look, like a steps going on And cycle and well opportunities as that focus would take we calls hard have where we alternatives us the to working finish truly be timing. so. really strong options and can other growth can of you through are say to opportunities mentioned. amount But preserving I are achieve very had our I As prepared through don't forward. objectives. specifically, we extracting front others we're with so Avigal the need on those don't would actions is we And across do, in businesses value look, his have time, business towards of other just that our and anything to our this I we're

Our Todd Ryan next from with question Sandler. Piper comes

on until we question look view, a don't have for maintenance major in you I a that another you from XXXX. crops as rate think about about as about next the we had know into you talk into think that point of CapEx year? quarter and would fourth said you look next pieces the Can Maybe how turnaround the in we you moving some a how maybe on there XXXX year. of run capital should of

deployment. about and demonstrated And both shareholder Ryan, over, debt. over for the disciplined question. we on and the Yes, thanks are We've very capital

puzzle all that's that working are the on we day day. So every

we want than lower XXXX. myself XXXX. But are our don't I still to specific we finalizing -- plan on ahead directionally, for XXXX, to number your looking a be question, Regarding are XXXX to of

should on about in think just follow-up And then debt. been Okay. here? priorities Delek debt You've at unconsolidated balance an net a comments. Obviously, your maybe your a Perfect. How on position X sheet you're basis. there down paying we

buying towards balance flow maybe You've to about that about back that some the been expect an in want are think or the we of a Or you on towards level, how as high shift returns Is we do? there sheet you shares. directed shareholder share cash quarters? work further coming should increase thinking

more capital And Yes, Ryan. we think about kind the will I provide allocation. of absolutely, way overview about

you Xx cycle. dividend towards dividend as increased we can be And to all, of to first our is in maintain able a row, So intent see.

pretty said many So we clear times. that's it

a and that and that, going between the still balanced big Regarding that's to took be shareholder, in back role top opportunity we have But approach, we're forward. to that to to going of a Obviously, that to a the shy, approach with give and going that's well. as priority. a equation have do we approach balanced We're return do we parts. in the aggressive were we some that, the when very executing to were investor, not It's and we X. going play going to

stay tuned. So

from comes Leggate question next of Bank Our Doug with America.

I management Is capital? that that permanent the move capital me for mentioned And having if may, thoughts also looking -- working you said which reset Neil think I guys I earlier. the to effect? in at my downward what said and in housekeeping are offer on a inventory think now working a reverse? hit I in we Rosy quarter. Or first, for Thanks there. better like point is I'd was will that or it you

Mark about just capital Hobbs, a little bit. working talk

So it revert included that few itself. the a zero-based longer will The budget a is components. initiatives on have working is been we that answer short not answer

reduction after was changing the was quarter, it this execute inventory. the tested, on X.X quarter. we also why helped to it change how was we that's and on But roughly until that about barrels. was the executed us not inventory initiative this one it and manage by on if million process our new of reduce process tested, That did process them and One cost we other

revert to some back will be we're there old inventory. but going Now going of levels to fluctuations the forward, not

treat we can flow So as then cash permanent? that additional

of it, yes. Most

capital of reliability the what on portfolio is really is flow the I to I'm things wondering, a And is improvements. input like capacity key about and cash mean, follow-up And My mid-cycle. obviously, think -- obviously capital key we the operating at costs. free that sustaining costs the one of Okay. looks

things it give So wondering I'm some for just it for us mean what the guidepost sustaining both achieve OpEx? does higher to capital? What you if can those reliability, mean on does of

in. Doug, will So let I will start, chime I and Rouven Joseph or

the On that's beginning, long are going that to cost the the started et be on But Joseph, were based we both any or Obviously, and versus time, when that? wash that much for pretty mid-cycle what fluctuation going in right. the itself. runway reduction. to on Joseph and all-time at very obviously us the at performance That's have -- base, outlined. ready always no to power OpEx making that one we're make cetera, to you add doing, wanted into we're you the OpEx like cost order high, really didn't us present -- on we to -- the want electricity start. -- what much, G&A to remember the understood to the OpEx do want might in it a relative program over on what margins that. and upon basis Gas a and in doing. upon side, have going we But We improve we to our a why And

previous only add of we call, earnings per in year. discussed $X just by the this will OpEx half that of Spring everyone second the Big barrel reminding for I additional

So address opportunities are to giving integrity, it fruits. XQ that really the reliability us those will include

to need all benefits discussed to that much CapEx that that the not So get earlier... on we than nothing really side the accomplish we more and

capital gives on of we is started time. more So initiative working you kind some balance ahead Joseph overview, the as the sheet, Obviously, Doug, of the parts. P&L the that the said, in of

And week. to you waited also to we seeing for -- were So the for preparing clock of and look term. ahead next ourselves the not it's game forward us,

from Blair Matthew Pickard. Our with comes Tudor next question

Spring Joseph, sort what's little that refining perhaps Does refining improvements Big of big to Or more exposure on you about capture. in yield the expected efforts side in that? you Could to and terms margin commercial is Arizona? outlined reliability talk your bit of driving some increase a improvement? involve this any

will at rocket fruits, improve reliability Phase Mathew, better and fundamentals really is comes and low-hanging science are team -- to the this the it and you the OpEx no to What the this about practice by And on know, really really be really there, and comes III. will and is this logistics the on as beauty selection in other the fundamentals. and the side. implementing leadership point, fun. process it of the the there talking start it right out opportunities, side, and best you is and it's the II reliability commercial putting and refining crude capture side, my When

quarter Looking normalized million versus the a business? million forward to the quarter. I or it. contribution, And quarter second like wholesale the it What was third $XX $XX year in either in then on this believe asphalt is for and

Yes. We guidance, up in when quarter marketing previous that you guys line opened and model. we I supply the think, provided to for

to So quarter, going million the is million average, not in It's a quarter. about more is first $XX $X our between price you you $XX more changes. fourth then and quarter. going be is And season second in quarter fate third stable. per to as oil $XX million contribution like to and million be know, including season, the Wholesale

Scotiabank. Cheng question Our with Paul from comes next

much in impact the on that question the benefit that third is wind mark-to-market the from open meaningful the Several there lower to quarter, quick due RVO of any prices?

No.

standpoint -- that fourth the opposing maybe from economy market, butane are are branding the and pending branding line this forces, margin at the good. And we quarter, is have Joseph. some we gas the for In a in extremely

gas the your hand, pool. other sell On or crack that the

dynamic yield what fourth to given industry But sequentially. when see is suggesting? Historically, I increase gasping that that, how the like? of a see the the the think is combine versus look currently your quarter is probably operating So we quarter third in couple we your plan going

You're right. absolutely

the crux the a favor, other is So for headwinds butane our is us. but tailwind the Also, the RVO growing than going other is way.

seen we Big but charts historical the off So versus XX still versus QX. a course what low picture, year, on last basis have golf gasoline it's at gadspread not

optimistic very you future. about that. remain if we add So the anything have don't Joseph, I to to know,

Yes.

to wrap it Just up.

to which participate what system Colonial the And us other pipeline, rest is rack sales opportunity is our the really this provides than So of versus our blending access products the the light this to and us peer opportunity. KrotzSprings, is in based. gives producing average to

are into definitely then say, the blending, butane cost us in the different to on side going fourth the things quarter looking sour at we you the as So on and we're on like lower spreads it from the and look heavy crude will motivate take grades advantage it.

going to the than Joseph, third do you in be expect the gas quarter? yield higher fourth quarter

think don't so. I

probably will to close we can as be and mode, distillate we a XX%. are as We

Okay.

that and So to be expecting even branding going you're the with more building yield not not higher?

which distillate not later agree. change on in -- believe. be to quarter, in going I there enough economics significant is gasoline It's a to how the

Spring, one the of the up what's it, also cash And should can operating going is we that company cost the that us? run Big say, an your me. any A on Okay. for give And that expect like? One guidance final refinery what look is annual CapEx sustaining low you to call fixed you under for Henry the sort let's what system? kind longer-term for $X -- of Hub, basis

Spring Big with throughput. the start I'll Yes,

the going wheels. the low-hanging back to reinvent We're our was to in is Big again Spring So basically the Unfortunately, trying not past. we're plan, it in fruit. most of

were how estimates at looking things. precise very gave we we So

per about day. I'm adding XX.X% talking barrels about We yield is So peak. X,XXX calendar the not I'm throughput, about type to-date spoke throughput. of talking And

starting 'XX, looking and new the in So really XXs at 'XX. XX, we're really ongoing talking a you're about as on low team,

please long So So really It's not surprises, your repeat the for run we're to for are the this downtime you industry going coming. run. utilization right? it And XX, normal the the we rate. something in potential leaving hub...? with X% is Can X%, area still normal

assume Yes, Big normal also for I'm Henry around CapEx what what is just way not abase total can in facility be $X, system? refining assume? sustaining at annual will we Hub that normalized your looking just we is system under your a but assume that annualized a we what if for your And then system? And status, one on operating refining the Spring, even cash can cost

our probably to that for more about we the is the that talk still energy trying maintenance, forward, will And issues barrel per I'm unplanned things gave we We say elevated dollar and pricing reliability. this the OpEx the happen this big and with affected utility XXX going system quarter looking system. gas cost like What the per $X.XX happened Big for think $X was costs. long several Our for $X.XX in we us overall even the with for And Spring. XXX.So the barrel. at OpEx is you're -- term for for under then and have spring natural $X.XX

CapEx? Okay. about How sustaining

So the the without turnaround, question turnaround is question turnaround. it's obviously, sometimes a scope and of there bigger because is it's with the

number do think don't by we a you to good are giving a service going it's -- context. I So without going just to

number... hope… what capital my -- very it's to that's So very earlier the say disciplined to to like we to going a is be to comment capital our and But I pin going back with to demonstrate, about hard deployment, commitment we're do.

Yes. Thank you.

Wells from Our comes Read Roger next with Fargo. question

late. little for joining Apologies a Yes.

maybe what performance I'm into me is its juxtapose a operations, call turnaround in deeper please been brought that asking Spring improve Joseph, and know Spring to question a let were Big quarters, Tyler I out that's digging at kind let's little a it, if the But there know. So quarter. you at scheduled Tyler see like this of with the to years we months, turnaround? you'd do from versus coming, coming the what Big in at of takeaway next until asked,

Joseph Joseph -- turnaround add by. the to big as with around it. improve MTBF good as Tyleris how of Big Roger, capture has start you good from IRR that something after turnaround goes plan. will and and permission, to maybe around comments can that's operations energy and obviously Yes. lot that the some we I add a also at in terms and Spring see another then take both want to one long and the way will time of become

I we about little bit. but... spoke it, think A

and it's the fundamentals. processes the It costly of and us on reform a place team food us the us and These scope right. are are the think it's bottoms The right not but what the the the people and and exactly leading WickSpring, we're much things, for efforts that and allow procedures. turnaround the system with improved the about maintenance, to type right performance, and focus beyond is -- the culture bringing right BigSpring the and tower the the the yields on mainly and we was rest better was see the and to about quality allowing results. better just excellent. it's needed, replacement the providing just all I for investments, commit forward... catalyst of vacuum especially FCC in on And we going was the better going Regio in

terms to distillate its market? And the curious into that Krotz yield a a yield. terms less of in just anything to I move total changes in Any little is had historically seeing yield, its of able follow-up, product product Springs it's relative Okay. know being diesel or there you're as of a with clean how then

a speaking, basically KSR is Generally that No. the on is colonial. refinery

the So that's that's the channel deployment, we distribution have.

obviously great we to the with seeing a record We're our had hard some safety it, of commitment great labor but discussion. the that over and For a the the yield. great operation -- fruits was a and great and there nothing improvements meaningful

improvement So very we with time. are over see the pleased we KSR,and

it's to All uses. thing configuration in to other the yield a remember about the term. distillate XXs, one fuel them in come. lot Krotprin, in in product The in still to barrels compete is that allow sulfur this special diesel, you're high Gulf jet all, high even have will though the almost more crude and with the And customers Krotpring in the plenty in on it. XX,XXX day Yes. value thing, of area, see of of is unit very code So which Coast long you per different

with from question John next Royall JPMorgan. Our is

follow-up one the on first allocation question. capital my is So a

allocation a the up spot lower X by today at great in. from be at sitting lever pace? capital which should in the to spoken crack little how about, capital impacted if environment. returns You're And to a debt, a which net could is you're parent here, strong you've be And just wondering willing I'm a of deteriorate environment interest keeping

be feel to If we check that in will allocation back, of we we're we the -- the in the that -- thank like -- -- capital cycle, again. to one we'll once maintain remain will John, to so not thing box. obviously want Obviously, that's to to for opportunity that do did believe is the We're not towards the And at dividend disciplined. need themselves you So the do buy looking to first be all, we able we shy we going there question. past. the presented market. we

priority on a all right have is deploy toolbox a very return the we to high the good So keeping to for opportunity us. shareholders and

you maybe give And quarter, broadly, next relatively about those high Great. just And on hit presumably think call. are little? And refining touched may and then what last just this very around mentioned you some and some for projects very on returning again I color it opportunities just you that projects had on year. you expand had us think a you those can quick in

Yes.

again, return table. want once we around of give to capital of -- again, and and But process projects because and it Disciplined can. finish we to the encouraging very one Board ahead shareholders. don't we right? them -- So is Directors. to some thing ourselves improving with we'll the have didn't definitely them planning we and disclose about disciplined, exactly But number on we our get

we're So capital be want to maintaining our way add shareholders. you very good steward Joseph, want that? disciplined and of the we about deploy to

return than fund They are type are themselves I will XX us cycle expect less just very this all they about look say to projects Yes, months. of you will that all project that type of in low closely. liquid yield recovery and

question Jason next with comes Our Cowen. Gabelman from

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