Delek US (NYSE:DK) executives highlighted what they called a “transformational year” in 2025, pointing to stronger free cash flow initiatives, steps to increase the economic separation between Delek and Delek Logistics Partners (DKL), and fourth-quarter results that benefited from small refinery exemption (SRE) developments and operational improvements.
Fourth-quarter results and the impact of SREs
For the fourth quarter of 2025, Delek reported net income of $78 million, or $1.26 per share. Adjusted net income was $143 million, or $2.31 per share, and adjusted EBITDA was approximately $375 million, CFO Mark Hobbs said.
For full-year 2025, Delek’s adjusted EBITDA excluding SREs was approximately $763 million, management said.
Enterprise Optimization Plan target raised again
CEO Avigal Soreq emphasized progress under the company’s Enterprise Optimization Plan (EOP), describing it as a company-wide effort focused on free cash flow and continuous improvement. Delek increased its EOP target again, raising its expectation for EOP-related cash flow improvement to at least $200 million annually on a run-rate basis.
Soreq said Delek initially launched EOP targeting an $80 million to $120 million run-rate cash flow improvement starting in the second half of 2025, but that “strong buy-in” across the organization enabled the company to continue lifting its expectations. Management estimated approximately $50 million of EOP contribution in the P&L during the fourth quarter of 2025.
On the call, executives said the EOP’s impact has been visible in several areas, including:
- Performance at the El Dorado refinery
- Supply and marketing results
- General and administrative costs
In response to analyst questions about the drivers behind raised cash flow expectations, Soreq said the company intends to keep expanding EOP efforts across gross margin, G&A, supply and marketing, and other parts of the business.
RIN monetization and Inventory Intermediation Agreement restructuring
A key theme of the call was monetization of renewable identification numbers (RINs) tied to SREs and the downstream effects on Delek’s financing structure. Soreq said the company pursued a proactive strategy to monetize 2023 and 2024 RINs granted after the EPA cleared a backlog of pending 2019–2024 SRE petitions. He said Delek monetized a large portion of those RINs faster than expected and used proceeds to reduce its Inventory Intermediation Agreement (IAA), which management said improves free cash flow generation “on top of EOP” by at least $40 million per year.
Hobbs provided additional detail, stating the company raised approximately $360 million during the fourth quarter by monetizing a “vast majority” of RINs from the 2023 and 2024 SREs—faster than an earlier estimate of six to nine months. Near the end of the quarter, Delek used these proceeds and available cash to pay down approximately $380 million under the IAA and associated inventory financing.
Management said the transactions will reduce annual interest expense associated with the IAA by at least $40 million. Executives also indicated there is still some monetization remaining from the 2023 and 2024 RINs, which they expect to complete in the first half of 2026, “most likely in Q1.”
On the call, Soreq also addressed the company’s pursuit of “full value” for 2019–2022 RINs, describing the relief provided as “invalid” and referencing the term “zombie RINs” that has circulated in the market. He said Delek believes eligibility and relief “are coming together” and that the company believes in its case to recover the value of what it already paid.
Looking forward, Soreq argued that SREs are broader than any one company, affecting dozens of refineries and communities, and said Delek believes SREs will remain part of the administration’s energy policy. He added that decisions on the company’s 2025 petitions are ultimately “in EPA’s hands.”
Segment performance, cash flow, and capital spending
Excluding SREs, management said the primary driver of a quarter-over-quarter decline in adjusted EBITDA from Q3 2025 to Q4 2025 was the refining segment, where adjusted EBITDA declined by $91 million, “largely due to seasonality.”
In supply and marketing (excluding SREs), the segment contributed approximately $23 million in the quarter. Hobbs said about $35 million was generated by wholesale marketing, while asphalt posted a loss of $4.2 million, with the remaining contribution coming from supply.
In logistics, Delek reported another strong quarter, delivering approximately $142 million in adjusted EBITDA.
Delek’s cash flow provided by operations in the fourth quarter was $503 million, which Hobbs said included net income, non-cash items, SRE monetization, and a net working-capital inflow of $26 million. Adjusting for working capital and SREs, cash flow from operations was $119 million, up $211 million versus the fourth quarter of the prior year, driven by higher net margin and EOP progress, management said.
Investing activities were $117 million in the quarter, including about $26 million for growth projects primarily at DKL. Fourth-quarter capital spending included $82 million at Delek standalone and $31 million at DKL, “largely for growth projects,” according to Hobbs.
2026 operational outlook, turnarounds, and shareholder returns
Soreq said Delek had a “strong operational quarter” across its four refineries and noted that a planned turnaround at Big Spring in the first quarter of 2026 was progressing and on track. He said the turnaround is intended to enhance reliability and operational flexibility, which management expects will improve cost structure and margin capture once the refinery returns to full operation. Delek said this is its only planned turnaround in 2026.
For the first quarter of 2026, Delek provided refinery throughput guidance by site:
- Tyler: 70,000–74,000 barrels per day
- El Dorado: 66,000–71,000 barrels per day
- Big Spring: 22,000–28,000 barrels per day (turnaround)
- Krotz Springs: 82,000–86,000 barrels per day
The implied system throughput target for the first quarter is 240,000–259,000 barrels per day. The company also guided to first-quarter operating expenses of $210 million–$220 million, including increased costs tied to preparations for Winter Storm Fern. Additional Q1 guidance included G&A of $47 million–$52 million, D&A of $100 million–$110 million, and net interest expense of $75 million–$85 million.
On capital allocation, management said it paid about $15 million in dividends and repurchased approximately $20 million of shares during the quarter. Soreq said Delek remains committed to maintaining its dividend through the cycle and taking a balanced approach between balance sheet priorities and buybacks.
About Delek US (NYSE:DK)
Delek US Holdings, Inc (NYSE: DK) is an independent downstream energy company engaged in the refining, logistics, and marketing of petroleum products. Headquartered in Brentwood, Tennessee, the company operates a network of inland refineries, storage terminals and pipelines, and convenience store locations. Delek US focuses on converting crude oil into a variety of finished products, including gasoline, diesel, jet fuel, asphalt and renewable fuels, serving wholesale and retail customers across the United States.
In its refining segment, Delek US owns and operates four inland refineries located in Texas and Arkansas.
