HF Sinclair (DINO) 2 Nov 232023 Q3 Earnings call transcript

Welcome to HF Sinclair and Holly Energy Partners 3rd Quarter 2023 Conference Call and Webcast. Hosting the call today is Tim Go, Executive Officer of HF Sinclair. He is joined by Atanas Atanasov of Chief Financial Officer; Steve Ledbetter, VP of Commercial; Valerie Pompa, EVP of Operations; and Matt Joyce, SVP of Lubricants and Specialties. Along with John Harrison, Chief Financial Officer of Holly Energy Partners. [Operator Instructions] 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. begin. may you Greg,

ending and Xrd HF This Quarter releases the issued everyone, Holly morning, Corporation Energy press quarter for results Partners XXXX announcing XX, welcome morning, XXXX. Sinclair to and we September Good Earnings Call.

copy would at hfsinclair.com the you If of hollyenergy.com. earnings a like and

are harbor statements. Please judgments summary, Laws. to we statements GAAP in for Tim I'll it provided of intended including Before of press longer safe our call made replay accurate Go. with These SEC measures. call or today's those the in regarding financial on may provisions that, noted no results be filings. The factors any expectations, please remarks, the the And transcript. differ statement proceed expectations, to measures. the predictions There at that says reconciliations today's forward-looking are see press statements release to also the management time-sensitive under from harbor to include covered over note disclosure releases. with many turn please non-GAAP Also be or the cause time are note earnings In could may rereading information safe of Security Federal webcast call of any discussion

am solid HEP I and segments. to execution morning. Marketing operations pleased quarter our by Xrd Lubricants, Refining, Good of report reliable results driven strong across safe and

increased or by our we attributable $X.XX delivering million portfolio, income results We continue reported with optimizing income shareholders XXXX to shareholders. progress that quarter special net items share. These Sinclair diluted million. to of along and initiatives our cash collectively reflect integrating Xrd return net strategic per strong $XX HF of $XXX to Today,

for Xrd the that XXXX. In same of million of for $X.XX improve quarter or Renewables of Xrd segment per to year our executing our reliability focused The we quarter the the period in XX $XX was ramping million XXXX adjusted share Mid-Con reported for quarter the $X the decrease strategy across In same we the items, portfolio. XXXX. share, last on Xrd compared year our as were operations quarter day in per was same quarter completed pleased million million report the to costs, in diluted per lower billion refinery. gallons EBITDA in barrels turnaround sales compared was gallons $X.XX Operating XXX,XXX lower million. Total charge positive by adjusted barrels primarily higher $X.X in Xrd million the our period or Adjusted the of our for XXX,XXX was behind XXXX Refining quarter XX% successful quarter $X of to remained at the and to us decrease that maintenance of compared the And EBITDA XXXX. period. I'm to maintenance as Xrd and on negative budget. oil higher due by income natural operating billion refined of are we XXXX XXXX in EBITDA the for in billion, refining of XX to $XXX and versus million volumes these maintenance the West Tulsa, This last refinery Xrd net compared expenses in was to at for XXXX. lower decrease higher to adjusted process Xrd Excluding the of $X.X primarily day million a were recorded quarter and contributed in of $XXX Xrd quarter both Xrd compared And Xrd normal turnaround regions the the at Casper offset turnaround cost net per volumes costs. Crude quarter the adjusted the due up activity diluted the for on margins XXXX Xrd major product after gas averaged refining our all $XXX the during income to time sales the year. segment, to driven activity. $XXX compared of quarter period

normalized continue We our improved target of towards and progress make to end feedstock rates through reliability of achieving by the run XXXX optimization.

fuel the of our the of quarter EBITDA the Xrd $XX Xrd margin reported And in quarter Gross total segment Xrd set Marketing regions. strong for quarterly of by supported million gallons. another record quarter, million per compared in demand was $X.XX of to branded Our in $XX sales XXXX volumes XXXX. XXX million gallon

and added per year. the more by we to During sites or continue to our quarter, we XX sites, X% new grow expect branded branded

that period our earnings agreement $XX increase reported was compared effect XX, proposed of driven EBITDA Lubricants increase last was of from largely by of and strong the quarter August driven to XXXX of of Lubricants into million EBITDA to million $XX the in of reported $XXX Xrd compared for entered a FIFO closing million consumption XXXX, to Products second XXXX. This Xrd year, of quarter from million this XXXX HEP, $XX the Our with segment quarter Specialty a quarter close X, conditions. of for the went tariff EBITDA of expect million of XXXX benefit to business. HEP mix into $XX across Xrd a on to $XX weakening the sales the period, transaction quarter merger million of fourth mainly optimization Despite satisfaction Xrd of in charge the year. during XXXX. definitive oil in base On finished resulted products prices subject portfolio efforts quarter we in for inventory increases improve XXXX. contribution to the and in compared same July feedstock our the lower-priced continued by This the we

X%. In quarter results of [ repurchases, $X.XX billion, diversification $XXX reduced and share the over is Xrd share share the stockholders spent per closing, and paid count have return, third regular During $X.X of $XX we Year-to-date, September share on our a quarter, to of our and XX, of portfolio quarterly and total dividends assets. cash totaling as we our our ] highlight and dividend million quality including by million repurchases. our announced

Our the during continued ratio payout demonstrates period maintaining long-term to return investment-grade cash strong while and strategy our rating. long-term cash an mitment our return

our turn of assets we on remain as reliable portfolio. integrate safe and our With forward, we focused our strategy Atanas. executing me across optimize to operations Looking continue over that, to let the call and

good Thank morning, you, everyone. Tim, and

spend by for third provided the begin XXXX. Let's Sinclair's third operations billion $XX quarter financial XXXX for highlights. stand-alone included turnaround HF capital the flows of quarter. which million totaled Net Sinclair's cash HF of quarter of totaled by $XXX in expenditures million the $X.X reviewing

$X.XX XXXX, of As unsecured stood XX, a Sinclair liquidity balance billion, with $X.XX HF of approximately of stand-alone at our facility. September undrawn billion, along cash credit billion comprised $X.X

aggregate of the approximately last $XX during units, owns September at XXXX X.XXX% $X.X of billion million Sinclair XX, Limitd maturity we $XX third of Sinclair HF debt at received of close. HEP we LP market billion Partner of XX.X totaled of million. senior amount HEP 'XX, of HF of outstanding value which in quarter stand-alone october a debt-to-cap units our $X.XX million 'XX as repaid As XX% notes. HEP's with night's have a outstanding XX%, principal ratio by distributions represents

guidance spending, items. With to lowered some range $X.XX let's $XXX billion. we go quarter, million capital respect year through to our to Now guidance XXXX last full

maintenance end plant at spend expect for our of majority of lower our activity the up XXXX. behind range end the us, to we capital With

at plant For between refining maintenance in oil of segment XXXX, run during barrels period. quarter reflects our XXX,XXX we the to day which fourth Refinery the per our expect to XXX,XXX of crude Tulsa

an on to Let me now HEP. update turn for call the John? John over

Thanks, XXXX. nonrecurring to Partners income that quarter and Each million, $XX period respectively. third reflected Xrd Holly expenses Atanas. decreased XXXX million income net of net to HEP's $X attributable compared was quarter the in by million million Energy $XX $XX

with compared reconciliation was these higher the quarter which offset during these period increases be table $XXX and on went attributable adjusted primarily higher $XXX HEP's by effect interest XXXX, quarter million Excluding in into associated July can the reflecting EBITDA HEP's in year-over-year expenses items, adjustments XXXX release. X, XXXX. partially that expense tariff were of to Xrd same G&A was increase year. A higher revenues Xrd press last the million found to

XXXX. October of which expenditures maintenance cash $X CapEx. For the of of of expansion were million, as on comprised and million, Capital the $X.XX generated payable XX, unit of distributable quarter to $X Xrd million during a $X and is distribution record per announced LP $XX we flow quarter, November $X reimbursable unitholders HEP million approximately XX, million XXXX, third in of of

million the and During debt approximately available Xrd with of we million. quarter, liquidity repaid quarter the of $XX $XXX ended

questions. now the are operator ready to to We the call any turn over for

Manav Gupta UBS. open now [Operator Our question first is from is floor Instructions] for The coming questions. from

But My system, have to the that we higher. have the within hidden XX,XXX question XX,XXX seen throughput and of have And and progress your refinery run mentioned you In understand that you refineries. are higher. more is where your And is you you barrels broader. assets past, can the in two of do making direction. one help some they competitors the please us shut X that it

So you can uncover refining your within system? refinery the hidden

Tim. This is

right unlock that integration you and mentioned. refinery, and main are hidden optimization As try stated, now, that you is priorities commercial reliability to to as and

on. Let Valerie of have reliability efforts to bit that some little about the going a talk me we ask

and of is then is all to help within of of that's innovation assessing time. our back been of that and availability by with stepping will Which equipment, you. industry that, site. we coupling will looking some starting reliability us capacity work tools within new and our really Thank assets all individual where our plans unlock a And Yes, a process have what at doing Those some around sites. at a improve looking our full We're assessment that availability. we're completed each execution then assets. the of long for the

of rounds our coming done know team helps a load, lot I'll fantastic to improvement reliability that actual us to for schedule, this could and help in was addition executing our thing Val those it we've about turnaround. on turnarounds of full year mention other there have calls, a her the during we we talked but the in importance does was well. work the on as That's get executing done wanted post concern all budget. And turnaround of to turnarounds the on to about the really turnaround, And that planned with us get Manav, get Val this talked turnaround year's previous the just I about execute job only the of the cycle. heavy well. that what execution that help not whether

from us cycle. allow to, hope will another of again, the turnarounds that kind better that And good, through we clean execution getting so demonstrate that's this of we're benefit reliability as

it inventory, that quick a quarter. My for was on is even follow-up the Lubes much here stronger adjusting

Your vision XQ reasons such was on those a to make more of strong quarter had Help in and are specialty us in help us side. how understand also understand plans the the this business business? progressing Lubes the some you

Yes.

Let me of to strength our Matt comment on the Lubes business. ask

how the really Thanks, and a are the done hats here. therefore, part more perspective. our footprint of positive customers to They've stickier U.S. of regional operational markets signs of of products we're getting better in where successful. regional be the nice Manav. is serve that our U.S. Joyce bit have strategy. focus a enabling and nice and focus think solutions And we can We've Petro-Canada and from us markets, successful on And we business looking the growth understanding lot and some expanding allowing done on seeing gained job that's where there to team a team really a mix we higher-value which particular. in off our on job is traction, be see Matt to of their where mixing a and a growth. been has real into getting to I our excellence working after and nice

and the would have finished Manav, just base Matt oil continuing really integrate a the team business business. and Yes. with of Specialties done say, to I his Lubes job nice

that continue sales and just Specialists see of increase, You index. in to finished us past Lubes our resiliency, which can, calls, reported seeing continue HF base filling base on this cracks oils more more, those about the earnings you to we've is to giving oil talked you're intercompany but

generate As installation to margins us come more down, allows are, to those seeing. and the gives continue we that base oil integrated us strong you're more the cracks

doing. are that a that's his improvement So structural Matt team and

Your next question comes from Ryan the from Todd of Sandler. line Piper

are Can up utilization on Manav's where in rate. the Congrats and I'll Maybe process the making still of you underlying there factor. RD improving low relatively out shot turnarounds, follow improvement cetera. margin on is the of levels? sales remain catalyst there. Whether extending through on time yield, for product utilization et you walk Throughput the increasing up progress to you're limiting between process hydrogen normalized sourcing business. How a

granularity So you maybe you getting the want just a to be? on process are it little more of that in where where

Yes, profitable the the turned business Renewable this quarter. think Ryan, show we've Diesel we're pleased to corner We here.

ask Steve Lead it. our talk me Ledbetter, to Let Commercial about

encouraged thanks the that few quarter. positive things Ryan, are as the us you There's for We're question. a deliver also a quarter. positive helped by

margin of The be first our markets during the then our was sites, optimizing cycle a looking had performance and highest putting improved and quarter. the out that to CI at feedstock pretreatment quarter We and Low really part unit. the throughout the into the into of yield taking selling the our advantage on of acquisition

levers path have OpEx we are somewhat availability. by But improve hydrogen coming and were opportunity SMR finished there took just availability and those. Those We the CAT limited and taking change a at some Artesia. of well As at at large forward. part pulling to out of our we the Artesia, all hydrogen as our

me operational and improvements. availability Let Val on hydrogen to it hand

Yes.

the said renewables our to our from of before, invest the business completed in to refining. we're particularly plants, in hydrogen starting MR. CCR see in as our we the We those As in all at and as our upgrades Artesia. in systems turnaround We well continue benefits made we just

quarter. advantaged margins look Can West on and terms about Great. you in and side there how what And the there out gears to at Coast, [indiscernible] Pugget Refining talk profitability year, the source forward maybe in And Crudes at shifting TMX seeing next to just that, if dynamics? you of capture strong the strong start-up impact all, you're as market ability of refinery? will your to the

Steve. is, This again, Yes.

diesel, Through the softness West environment it's and we think think quarter see of normal in We I we particularly in coming of going is Coast. the But but the on and length in there both into particularly cracks there margin that with be quarter. in, seasonal. we on a enjoyed Jet, to think but overall, look will we next bit Coast, QX short and first and gas the a to advantage be gas, coming that. the structure West some in RDU this take

call water some particularly happens, believe line differentials, as it our far that will for temporarily. barrels Pacific refinery TMX reliably, and we for more in But out actually coming that the fill line give us on, As gets an advantage up as think Northwest. the a that put when bit running on compress of and when they the we it will of

over focused I'd to serve in is XX we that on months. terms that for and And markets particular, to continues integration been demograph in be effort Yes. we here strategic let we've believe say, a us just refining Coast say The and just me portfolio beneficiary the up follow Ryan, advantage in last competitive the advantage West a and serve, of this of our markets. we X the our

We Legacy West. that, continue good with and the Sound, HollyFrontier Sinclair have come we to the the we're that to portfolio out that of the a the really a, you're underappreciated in assets addition with of continuing of West is the results unlock see to believe potential and going Puget

from . Leggate Your line comes next of Bank Doug the from question of America.

on evolved? I'm that on quarters were the the your expected is Sinclair first opportunity you've a of synergies. the deal, for under This that Doug. set got now wondering time question at miilion Kalei how My but belt, has is $XXX few

very be able million $XXX Yes, Tim. pretty capture were is just to to quickly. that Kalei, pleased this We

that look in for, really That's capture at to us our ability exceeded much for we've calls, asset. the portfolio in to the I it across but look optimization and to when across Sound for look to the that's to timing about legacy Puget that. for we've optimization looking see, really the expectations reliability opportunity on We In then code the we're our terms our priorities entire now optimize assets are as synergies, across more on of our it looking say integration portfolio assets, improve continue previous to more at talked fact, and mix really, our much, more those mix. portfolio entire across broadened and

see specific, We about with also that. haven't did guys results gone for know out come the all, able the regions. West but and his throughput, and said you bit we be already $XXX of like that our anything hard. for that little is have of will to talked out the capture Mid-Con million synergies, a Steve but we're working not and both hoping and our we're And just that the what group

My guess more keep we'll I next housekeeping. question watching with is interest.

So while tailwinds. on a to CapEx there? highlight other the itself, be seems a some to Wondering some peers touch your And if anything working capital there's low. high, reporting are quarter looked touch of

So those wondering if could just two things. you address

Sure. working we're CapEx working our spending, of time this respect variance. With that this our just contingency on pleased capital our on is, we're quarter capital. just coming prices completing impact a plans as gone, There's also saw on program had and, capital with some our very discipline some of we're capital. tailwinds beneficial positive respect to is out how capital in manifests our a Atanas. budget. We has inventory always and these demonstrating working turnarounds working function rising built to our budget into This is and With out and turnarounds this a

cash see you that to tailwinds flow that in from operations. could our So with mind,

CapEx the range Yes. the his we now. end coming that anticipate remarks, prepared mentioned Kalei, in of low Atanas on in

again, performance our so better on and turnarounds. result solid And of, that execution a is

line Scotia from the Cheng next Bank. of Paul comes Your from question

help if gap. the me bridge to you trying can to see that

unique on get be longer-term that company that XXX the improve co-unitone reasonable annual you expect reliability running about target will cost about it day, your that an your down see the I to is doesn't expecting by go reliability XXX. And to you basis XXX around able the first think may the XXX barrels we on that that cost, West look XXX Mid-Con to should that by self to the is your so to That's your us can is to and just will in XXX unit on that what to initiatives seem at for at Xrd that go about basis quartter you're bridge a order are that question. improving XXX,XXX So the down to the the to down get level? cost? we you side and cost in gap unit and better maybe per

Paul, barrel only prioritize just We get does as as OpEx get of denominator maintenance which not will any to Again, do per on going at And your will the that get has to it reduces reliability on in good also color numerator, good you lot of that? down, reliability. kind your believe will on area your the OpEx but least down Val, the costs, throughput, that there's of mentioned question. you effort benefits, continue we be you improving and have it to higher which also down. a reducing OpEx provide math of want

very risk improving and focused and to money improvement ultimately up. down the operating forward asset, Yes, we plans. right get will as our we said is spend, are reliability, making which focused improve going right sure on our reliability on to places competitive putting buy dollars, reliability both utilization We're earlier, each in

assets Along West, Cross Sinclair get They're And our we our in is again, biggest challenged Woods structure on We better and all focus outcome are safer. and primary a working are in facilities a opportunity TSR those are produce more and assets. efforts, for But barrels. particularly improved execution. performance the reliable cost. more

On unit West you number have at? you the basis with case can real targeting that on share longer-term you do guys are a that the that

after. Paul, we out opportunities or in in do But there's going of believe specific any plenty we're that give not that ready guidance numbers to the we're West area.

Okay.

you that that? is that to rolled you that Just the say, Or you back actual just HEP that your about improvement copy we is and Second reducing question have or corporate is whether capacity? going business simplify see structure close done as that to Is structure? to One that's usual it benefit? and as operating expect was just real want see should some up,

Atanas. is this Paul, question. you Yes, Thank your for

seeing be would times simplification which used opportunities optimizing what Your give contracts, at complicated more help opportunities. observation to contracts and a process, an just efficiencies to example, us and commercial simplified you to portfolio. on is correct. focus is our now To We're really intercompany negotiation be on going

is also respect public us. goal on mill level. see with that with opposed So to your going you running run meaningful get the And the simplification two to of the rolled to as but Good to the essentially the on be of synergies that, part as corporate benefit savings the structure, some having public us. And companies. will out, outcomes of top respect gets debt we for DINO to company

you of in can share terms number the Any synergies. operating

lower I debt the you like I Excluding understand. a content also share? number we mean, can Is But benefit? operating mean, the well that I interest, can the

We close will better the shed position after transaction. to of the a in light that more on be

comes question next of Matthew Blair line from TPH. Your from the

Xth around tailwinds discounts, XX%. the it any like QX some you capture considerable I early butane seems have lower would then Xth wider refining was in like like pretty on It refinery RINs Do from quarter? quarter the and maintenance. looks things blending, think thoughts WCS include lower

the thesis have always questions that terms this answer, Matt, of appreciate was And of always I that Steve. those. in is and the included one Yes, the

forward the So And up also finishing think We're We in planned ] Tulsa the quarter see maintenance. has have particular, QX. strip. out ahead DIF and turnaround. blow do minimal WCS, the already do that a will we [ TI we in cleaner in

jet around be QX. and diesel jet MAX for mode distillate a gas structure diesel we'll moving and of supportive more So terms margin and in

that ahead. but see ahead, So we guidance number we path cleaner a think have is, good have giving do we some we're explicit quarter what but not on opportunities a to

little you on some the seasonally, We've always be quarter Matt. lower because just mentioned, margins But Xth a to X good tends compress. tailwinds, capture got as

some be that tailwinds So the to of that the will offset we're seeing.

this And but not has thoughts addressed from Sounds if then HF good. sure been here? for M&A large-scale potential on I'm yet, the Sinclair any refinery

has Matt. we've transaction HEP. It's What earlier a closing tell the that asked focused and question completing. that would been that, yet, been we're on No, started is on you in I we're year first laser-focused

believe Atanas mentioned we As we earlier, the be to here end year. will of able before that the close

internally that Our We've before. really We're looking assets. our priorities are as talked well improve to about focused. integration our across internal as our reliability optimization and

countercyclically, So our now don't right kind of where is. be that M&A is looking time described focus like at think more really we standpoint, that's it, think valuations perspective, are pretty internal as I finding the main both than externally. we're from now, importantly, market really we're you an from right high. We a more to large But internally to focused look right

just be marketed look there's starting a to Now are but table on take assets right priority not everyone else will the us a Matt. know that I like it's for now, some is,

question next line Securities. from Your of Fargo the Read Wells from Roger comes

getting to that, the as turnarounds been you're And you've go? for market your to then has for over XX time? one on, uptime think been? last was you what and about the Ex trying your were refining up catch a where marker to available reliability Just maybe curious where target for just all to say months, we up. I in comments if about what XX of available is that a

of a the use. measures don't we internal lot that provide Roger, we

regional measures as level We at tracking that lot don't But have the internal a both the of levels. disclose at well as we're refinery that. we

about about talked feeling we're Is We that progress are making We're progress. the making. that. good

progress. seeing are We

is I improved set one a standpoint. safety our as safety safety year personnel business progress just always well the a of you record a standpoint And think on we both rest tell another on biggest which pace process doing the environmental the our believe and that safety can we're doing. in and performance leading seeing and of our I to reliability we're is ways assets, is of is indicator

Roger. any feel we the prepared So indicators. of share about We're just good internal those, not to

Okay. something looking point mean I along a XXX, little if those Well, basis we if absolute mean, maybe are dig lines, XXX, numbers. a I can improvement. deeper? I XXX, not at

this you you Atanas. focused on Roger, and And I progress reliability. those along to lines. tuned, is would process, just see improving stay encourage will a Yes, graduated we're

Renewable Diesel business. gears Okay. Switching the to slightly back

all that. you costs, of curious stuff able was through relative of earlier mix, to that how questions, market changing went control keeping But with down were quarter-to-quarter, things if the that in you just thought help. to factors the So one broke do you year-over-year, things the I maybe like

have So just what might the helped on out Lubes front?

The is, question on Atanas. Roger, renewables, is this Yes.

of One was is mind comes business running early this to were high we that things first getting the and priced working a off as up on, feedstock in backward-dated market.

that low we good progress managing to ensuring using on CI are inventory So the lot focusing with team has and of respect a done feedstocks.

would availability. team performance One. improvements technical the be, number on Number of hydrogen result three, is Number and our that's catalyst focus So turnarounds and optimization. a the around as two improving

I or Val so color. And to ask come additional Steve the the those mind. that to three add of And are could things kind

you're be. the No, it people apart X most feeling we business our I configuration. I profitable facilities this make to mean to co-located. in right. think can we're We remind sure like are that make our it of that can current

keen focus. low we've as beyond a as started so Atanas advantaged of pull mentioned, feedstock. hydrogen CI But terms levers, availability that, And to

value value full and we've across aspect a of on get in coming that, then are to another levers that molecules waste As very our that. Catalyst is optimization, lot hyperfocus chain we OpEx got of that terms important integrated a driving of pathways really part and see forward. value, getting our

QX, all believe we And to can hitting and by still areas, So our business not have rate. a the we've expect year. path the those of of we end focus with the getting profitable normalized demonstrated be see that to there year. run in We renewables profitable next

same think, And turn effort business draw believe we the around right been is way over we same and our around, type resources effort, lot for what business lot spent into And that our got mid-cycle performance analogy want right would have pouring type way we've of Lubes just Lube business. performing business our now. I business. we we we to We will I to that and a renewable the want, the like well Roger, of focus lubes years, turned performing that the successful at we've now. of in an last diesel getting just that be of above a business that

of line the from Jason from comes question next Your Gabelman Cowen. TD

right And as the get about the buybacks the framework cap, you're first the closing consolidated of It on I to get then financial to back about on as you're on that company for looks HEP think Is a wanted close to debt. market $X close? of how billion the following you basis, hold into a to net basis? hit holding like deal do HEP the you the number able consolidated transaction.

the Yes. publicly in Atanas. respect leverage. for been target and capital leverage. question. we stated net Thank in that to we The is particular, debt, And you way has net have is This net structure of leverage your think terms with our Xx

we're we're that pleased. very see, As you quite and now, can right below

our with our With priority where and is of mindset. much our Given foremost debt, is structure anything the will return very that dividends. And buybacks I pleased first in priority. terms very continue Both today, to where we're is debt think shareholder shareholder with capital and we we're is and return. respect around

couple the part could the particular, that? now one be better clarification. that, guess, I terms capital would for you of as could And other good is the have that indicators is how for It at premiums, is come I would couple actually just in think west then looking any driven? cash run components of the years don't in relative And structural premiums pricing Mid-Con posted provide they're working off-line maybe Rockies, the more and October. inflow, like you provided in there were of of great. in seems a you be number And to pretty the question assets, in That past that a there after my of back? If seasonally you that of the much great. answer just if

Yes.

with the the last part. This is start here. fresh Let's Atanas. is This

for we to terms the million tailwind of quarter. capital, of In Xrd $XXX tune the working saw

just than be think those don't Jet. markets, then there'll gas and of Yes. good well portion see coming think don't particularly seeing therefore, patterns. anything of on we be that And structure the now in materially right answer anything the what honest, you're we structurally and other RD diesel environment to as as necessarily margin structural Coast, we a opportunity with to to length West seasonal diesel think normal is we But there's

pretty And production quarter. helped record I right had continue record now. West regions, jet boost and you jet would and in seasonal just We're tell weakness quarter, Yes. the Mid-Con the sales that jump in premiums seeing Xrd in Xth a we season I comes of Jason. jet a the tourism this see we seeing close. seeing as both the is that to the driving What point. typically for strong unusual and not kind would in, are we're capture and at here anything the

opportunities to continue continue types for optimize to portfolio. of just we'll our So look those to

question Morgan next line Stanley. from Joe Laetsch the Your of from comes

RINs on of hoping a I next seen feedstock capacity decline just online we've offset. Just margins year, had your the get follow-up to as was outlook industry RD also seen we've just some as coming the I well for fall, here? an but RD. cost given

your just the on credit side the as side feedstock was well to get hoping I thoughts as please. here, So

Yes.

it I hit think you right.

and will of there. on, value some LCFS. weakness There's We of With additional some adjust the capacity delays production the time. larger on, and think in been coming there's RVO coming release some RIN of that the been view both announcements some

do create And reduction we it that's finding and into take put we a our support try has the into proximity them to things are barrels that terms created pricing That feedstock terms of we change markets in near bit opportunities that LCFS, have advantage when, terms don't our but the the think and products pricing only match to of value. some but know we'll the to overall think but think RVO in structure, those so of can and in take those the out. And of there we temporary. we adjust. of opportunities think that additional find profitable. And will of that markets will we to other that continue not We when that, ultimately, think also will channels but adjust, to, seen normal and you've does we it RIN margin some term, where we're that

longer-term we're chain unlocking outlook, in value untapping and So the we're our RD pretty complete comfortable with and what business. doing

our margins testament margins improve our, and gross team increased. to what here in RD doing to quarter just actually and yet And you base business. try And the the to that net margin that's a saw, our Xrd is tightened Joe,

at turn We questions in closing for I have over the no Tim queue remarks. the to further time. call this back will

Christa. you, Thank

this the returned executed Specialty time of turnarounds Marketing shareholders shareholder budget. delivered for strong $XXX me returns competitive million a our mid-cycle above year. These by we our Refining profits testament our to deliver in so these execute and segment. We our total to recap segment hard Let in portfolio and that of our Xrd strategies & on $X.X our employees on work Lubricants to and business the far quarter, of a saying advantages on results. billion and of and we segment, the are results

improve to and of number remain priorities day to our Have Go our Our call. number and you optimize integrate our Rangers. same: our reliability, and great to cash portfolio for joining excess a assets; one, Thank new #X. two, to return shareholders, the

this does teleconference. time, you. disconnect and conclude lines wonderful day. Thank have at your Please This today's a