With a combined revenue of $21 trillion and $2.1 trillion in profits, the 2026 Fortune 500 is the definitive list of America's largest companies.

Fortune 500

Almost $20 trillion in revenue—and a record-breaking $1.87 trillion in profits. Introducing the 2025 Fortune 500, the definitive list of the biggest companies in America.

Energy sector dominated this year for the first time since 2008, with 28 companies featured on the list.

100 Fastest-Growing Companies

Industries included in the sector are mining, oil and gas exploration and services, pipelines, refining, and utilities.

Fortune Sector Leaders: Energy

The Fortune 500, in its 70th year in 2024, ranks the biggest U.S. companies by revenue.

The corporations on our annual list of the world’s largest companies delivered a record $41 trillion in aggregate revenues.

Fortune Global 500

The Fortune 500, in its 69th year in 2023, ranks the biggest U.S. companies by revenue.

Industrials came out on top this year, with 22 companies featured on the list.

This year’s Fortune 500 marks the 68th running of the list.

This year’s Fortune 500 marks the 67th running of the list.

Resulting from a merge of Holly Corporation and Frontier Oil in 2011, the petroleum refiner has operations in seven U.S. states.

This year's Fortune 500 marks the 66th running of the list.

F500-2020-184-HollyFrontier

This Dallas-based oil refiner produces gasoline, diesel, jet fuel, lubricants, and asphalt.

This year's Fortune 500 marks the 65th running of the list.

This year's Fortune 500 marks the 64th running of the list.

This year's Fortune 500 marks the 63rd running of the list.

This year's Fortune 500 marks the 62nd running of the list.

This year's Fortune 500 marks the 61st running of the list. Wal-Mart claims the top spot again. See who made the list.

Wal-Mart stayed on top as its sales crept closer to half-a-trillion dollars. Apple moved into the top five. And UnitedHealth Group continued its steady climb. 

Shale rules! That’s the lesson of the latest edition of our annual list of public companies with the most stellar three-year profit, revenue, and stock growth. 

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Oil refining and pipeline players HollyFrontier and Sinclair Oil merged in 2022, creating the combined HF Sinclair. The Dallas-based corporation maintains the legacy Sinclair apatosaurus (brontosaurus) logo that dates back nearly 100 years and the “DINO” stock ticker, harkening back to the storied history of fossil fuels. HF Sinclair processes almost 700,000 barrels of crude oil a day, counting refineries in Washington, New Mexico, Wyoming, Kansas, Oklahoma, and Utah. HF Sinclair also has lubricants and specialty products facilities in Canada and the Netherlands, and has branched out with renewable diesel production at its Wyoming and New Mexico refineries.

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Q3 2024

HF Sinclair (DINO): Company Profile, Stock Price, News, Rankings

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HF Sinclair

hf sinclair

Welcome to HF Sinclair Corporation's Third Quarter 2024 Conference Call and Webcast. Hosting the call today is Tim Goh, Chief Executive Officer of HF Sinclair. He is joined by Atanas Atanasov, Chief Financial Officer Steve Ledbetter, EVP of Commercial Valerie Pompa, EVP of Operations and Matt Joyce, SVP of Louvertants and Specialties. At this time, all participants have been placed in a listen only mode and the floor will be open for your questions following the presentation. 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. Craig, you may begin.

Thank you, Novi. Good morning, everyone, and welcome to HF Sinclair Corporation's Q3 2024 earnings call. This morning, we issued a press release announcing results for the quarter ending September 30, 2014. If you would like a copy of the earnings press release, you may find them on our website at hsinclair.com. Before we proceed with remarks, please note the Safe Harbor disclosure statement in today's press release.

In summary, it's the statements made regarding management expectations, judgments or predictions are forward looking statements. These statements are intended to be covered under the Safe Harbor provisions of federal security laws. There are many factors that could cause results to differ from expectations, including those noted in our SEC filings. The call also may include discussion of non GAAP measures. Please see the earnings press release for reconciliations to GAAP financial measures.

Also please note, any time sensitive information provided on today's call may no longer be accurate at the time of any webcast replay or rereading of the transcript. And with that, I'll turn the call over to Tim.

Good morning, everyone, and Happy Halloween. We are pleased with our Q3 financial and operational performance in all of our businesses and especially by the strong and consistent earnings in our Marketing, Midstream and Lubricants and Specialty segments. These contributions from our differentiated business segments highlight the value of our diversified portfolio, especially as global refining margins weaken. We continue to execute our strategy to integrate and optimize our portfolio in order to strengthen the earnings power and competitive advantage of our businesses, while focusing on improving safe and reliable operations. During the Q3, we returned $222,000,000 in cash to shareholders and today announced a $0.50 quarterly dividend, demonstrating our continued commitment to shareholder returns.

Now let me cover our segment highlights before turning over to Agnes. In refining, for the Q3 of 2024, we continued our streak of improved reliability by completing the turnaround at our Parkho Refinery on time and on budget. Year to date, we've made progress on lowering our operating expenses and we'll continue to focus on cost management and improving utilization as we drive towards achieving our near term target of $7.25 per throughput barrel. Our optimization efforts resulted in a quarterly record for jet production across our fleet and our Woods Cross Refinery set a quarterly record for premium production. In Renewables, for the Q3 of 2024, we set a record for the highest quarterly sales volumes of renewable diesel and achieved our lowest operating expenses per gallon.

Our team's optimization and reliability efforts resulted in another quarter of positive adjusted EBITDA despite continued headwinds from weak RINs and LCFS credit prices. Our strategy for the Renewable Diesel business remains centered on the things we can control to 1, reduce the level of high cost inventories 2, increase our low CI feedstock mix and 3, lower our operating expenses. In marketing, in the Q3 of 2024, we continued to grow our store count with the addition of 22 net new branded sites. And on a year to date basis, we have added a net of 46 fully branded sites to our portfolio. Our strong third quarter results reflects the growth strategies we are executing since the Sinclair acquisition.

Looking forward, we continue to expand our growth pipeline and now have new signed contracts to convert 168 stores to Branded Wholesale over the next 6 to 12 months, and we continue to target 10% annual growth for Branded Sites. In Lubricants and Specialties, we reported another strong quarter of results despite the FIFO headwinds from falling oil prices. Our strategic initiatives of 1, optimizing our sales mix 2, operational efficiency and 3, furthering our base oil integration efforts continue to strengthen our lubricants business. In addition to our efforts to organically grow the business by high grading our finished products portfolio, we have also introduced digital tools, providing better visibility to our supply chain and manufacturing cost structures and have developed new product offerings to serve growing end use markets. In our midstream business, for the Q3 of 2024, we delivered another strong quarter of performance as we continue our integration work to drive our growth in this segment.

Year to date, we have set record affiliate and third party transportation volumes, supported by strength in our crude pipeline systems in the Rockies and Southwest. In the Q3, we returned $222,000,000 to shareholders through share repurchases and dividends. Since the Sinclair acquisition in March 2022, we have returned over $3,900,000,000 in cash to shareholders and have reduced our share count by over 57,000,000 shares, which represents 71% of the shares we issued for both the Sinclair and HEP transactions. As of September 30, 2024, we have approximately $800,000,000 outstanding on our share repurchase authorization, and we remain committed to our long term cash return strategy and long term payout ratio, while maintaining a strong balance sheet and investment grade credit rating. As I mentioned earlier, we also announced that our Board of Directors declared a regular quarterly dividend of $0.50 per share payable on December 4, 2024 to holders of record on November 21, 2024.

Looking forward, we remain committed to improving our safe and reliable operations, and we believe our diversified business portfolio positions us to generate attractive through cyclical cash flows and continued strong returns to our shareholders. With that, let me turn the call over to Adnanis.

Thank you, Tim, and good morning, everyone. Let's begin by reviewing HF Sinclair's financial highlights. Today, we reported 3rd quarter net loss attributable to HF Sinclair shareholders of $76,000,000 or negative $0.40 per diluted share. These results reflect special items that collectively decreased net income by $172,000,000 Excluding these items, adjusted net income for the Q3 was 97,000,000 dollars or $0.51 per diluted share compared to adjusted net income of $760,000,000 or $4.06 per diluted share for the same period in 2023. Adjusted EBITDA for the Q3 was 316,000,000 compared to $1,200,000,000 in the Q3 of 2023.

In our Refining segment, 3rd quarter adjusted EBITDA was $110,000,000 compared to $1,000,000,000 in the Q3 of 2023. This decrease was primarily driven by lower adjusted refinery gross margins in both the West and Mid Con regions as a result of high global supply across the industry, which were partially offset by higher refined product sales volumes. Crude oil charge averaged 607,000 barrels per day for the Q3 compared to 602,000 barrels per day for the Q3 of 2023. This increase was primarily a result of improved reliability and decreased turnaround activities at our refineries compared to the Q3 of 2023. In our Renewables segment, we reported adjusted EBITDA of $2,000,000 for the Q3 compared to $5,000,000 in the Q3 of 2023.

This decrease was primarily due to lower indicator margins despite increased sales volumes and feedstock optimization in the Q3 of 2024. Total sales volumes were 69,000,000 gallons for the Q3 as compared to 55,000,000 gallons for the Q3 of 2023. Our Marketing segment reported EBITDA of $22,000,000 for the Q3 compared to $21,000,000 for the Q3 of 2023. This increase was primarily driven by higher margins in the Q3 of 2024. Our Lubricants and Specialties segment reported EBITDA of $76,000,000 for the Q3 compared to EBITDA of $118,000,000 for the Q3 of 2023.

This decrease was primarily driven by a $27,000,000 FIFO charge from consumption of high priced feedstock inventory in the Q3 of 2024 compared to a $30,000,000 FIFO benefit in the Q3 of 2023, partially offset by improvements in the underlying business, including increased sales volumes, sales mix optimization and Basel integration in the Q3 of 2024. Our Midstream segment reported adjusted EBITDA of $112,000,000 in the Q3 compared to $101,000,000 in the same period of last year. This increase was primarily driven by higher revenues from increased volumes and higher tariffs in the Q3 of 2024. Net cash provided by operations totaled $708,000,000 which includes $90,000,000 of turnaround spend in the quarter. HF Sinclair capital expenditures totaled $124,000,000 for the Q3.

As of September 30, 2024, HF Sinclair's total liquidity stood at approximately $3,700,000,000 which includes a cash balance of $1,230,000,000 our undrawn $1,650,000,000 unsecured credit facility and $850,000,000 availability on the HEP credit facility. As of September 30, we have $2,700,000,000 of debt outstanding with a debt to cap ratio of 22% and net debt to cap ratio of 12%. Let's go through some guidance items. With respect to capital spending for full year 2024, we still expect to spend approximately $800,000,000 in sustaining capital including turnarounds and catalysts. In addition, we expect to spend $75,000,000 in growth capital investments across our business segments.

For the Q4 of 2024, we expect to run between 500 and 65,600,000 barrels per day of crude oil in our refining segment, which reflects the planned turnaround at our El Dorado refinery. We're now ready to take some questions from the audience.

The floor is now open for questions. Thank you. Our first question is coming from Ryan Todd with Piper Sandler. Please go ahead.

Congrats on the quarter. Maybe a question first of all in terms of kind of cash allocation. You got a great balance sheet. You've maintained an attractive level of shareholder returns in the quarter. As we think about going forward, if margins stay weak, how should we expect you to manage the balance sheet and the trade offs between how you approach shareholder returns versus the possibility of increasing that debt or managing that debt?

Yes. Good morning, Ryan. This is Tim. Let me ask Atnus to jump right in.

Ryan, thank you for your question. I would point to history and to what we're doing this year in a weakened crack environment. We're able to maintain a very strong balance sheet with net debt of net leverage of under one times. And if you look at our year to date owing cash return, we're at 11%. On a 12 month trailing basis, we're at 14%.

In the continued weakness, We believe we're still able to maintain a competitive owing cash return to our shareholders. We're certainly committed to our dividend 100% as well as our buybacks and total return to our shareholders. That coupled with our investment grade rating, which is a key differentiator for us at 2 priorities. We believe we can maintain a prudently conservative balance sheet and continue to return cash to our shareholders.

Yes. And Ryan, this is Tim. I'll just jump in and say, remember, one of the reasons we bought in our HEP business last year was for the free cash flow and was for times like this where we knew that having that cash flow within our portfolio was going to be better. And so we're very happy we did that and we're positioned better for it.

Great. And then maybe just a question on refining operations. I mean throughput was very strong in the quarter, continuous trend of strong reliability in year end. I mean, can you talk about what's working well in terms of the efforts you've made to improve operational reliability? What you're still focused on?

What are areas that are still maybe further improvements that

Yes, Ryan, thanks for the question. As you know, focusing on improving our reliability has been our core priority here for the last several years. And it is good to see the fruits of that labor starting to show. So let me ask Valerie to comment.

Good morning. Yes, so remember, we've talked about our strategy before. We're focused on heavy we've had heavy turnaround last few years and each of those turnarounds making improvements. And so what's working is our turnaround performance. Every turnaround we're addressing reliability opportunities.

We're putting in the right capital, the right scope and we're getting very predictable on those as demonstrated this year with Parco and the turnarounds we've completed. We also what's working what's also working is our STRIVE our technology driven efficiency improvements. We're doing a lot of technology improvements to drive efficiency in our operations and maintenance work at the ground floor. And that's starting to produce dividends in terms of lowering our operating costs by equipment count. So all of the strategies we've been talking about and continue to talk about are just now starting to produce dividends.

And Ryan, I would just say not only is that showing up in turnaround performance, it's showing up in throughput, but it's also showing up in OpEx per barrel. And even though our OpEx was a little bit higher this quarter, it was mostly due to the maintenance items that we had. Year to date, we're $0.66 a barrel lower than we were last year. And that's a tribute to the improved reliability that Val and her team are delivering to the bottom line.

Right. Your next question comes from Manav Gupta with UBS.

Good morning, team. Looks like you guys are very focused on growing your marketing business. Help us understand why there is a strategic focus here. Is it does it give you ability to place the product, some pipelines are being built into your regions? Does that allow you to offset that, those pipelines, those product pipelines?

Help us understand the real reason you are so focused on growing your marketing business.

Yes. Thanks for the question, Manav. As you know, when we merged with Sinclair and brought them into the family, growing the marketing business was our core priority. And again, we're really starting to see that find its legs. And Steve, why don't you talk a little bit more about the value and the benefit of doing that?

Yes, sure. Thanks, Manav. This is Steve. Following on with Tim's comments, we really believe that there's a significant opportunity here to increase our branded put. We think there are logistical advantages to producing in markets that we serve and being connected through our midstream assets, and we're looking to exploit that.

And the final piece is we think that the brand is undervalued in terms of how we get value out of it. So that brand to put gives us some resiliency through the cycle. And to be honest, there's quite a bit of interest and demand for Dyno. And so what we've seen so far in our growth, as Tim mentioned earlier, we have an additional signed sites of 168 that will be on the ground between 6 12 months. And that, coupled with what we're doing in terms of getting more value out of the brand, we believe should be an increased value to the overall enterprise.

So Manav, as you noticed, we're on a run rate of, call it, dollars 75,000,000 to $80,000,000 of EBITDA in our marketing business, which is much higher than the $50,000,000 of mid cycle that we started with at the acquisition. But what you're seeing in that marketing segment is really only the tip of the iceberg because what's happening is for every branded barrel we're able to place, it really comes out of the marginal bulk barrel that we have to sell and that at a much lower price. And those bulk barrels and the uplift associated with that is actually in the refining business. And so what you see reported in the marketing segment is really just a piece of the value of these branded foot barrels because it's also uplifting the refining netback on the wholesale barrels too.

My second question here is on lubes. When we adjust for the FIFO impact, it's again a pretty strong quarter. And you have improved continue to improve this business. And it's starting to get to a run rate of about $350,000,000 of EBITDA. So despite what the underlying volatile commodity is doing, so help us understand some of the projects you have undertaken or measures you have undertaken to which is allowing you to get to that run rate of about $350,000,000 of EBITDA in this business?

Yes. Thanks, Manav. The Lubes business just continues to perform quarter over quarter. It's really our poster child of what we can do when we focus on integration and optimization. And I think Matt and his team have really done a great job.

Matt, you want to talk about what's going on?

Sure. Manav, Matt here. What we saw is, of course, we had a lot of FIFO headwinds, which, of course, means that we're going to use those feedstock inventories and consume older and more expensive feed versus our replacement costs. But in any case, these tend to balance out throughout the year. And the underlying business remains very healthy.

Actually, absent of that FIFO in this quarter, it was one of our strongest quarters since we've held the businesses over the past many years. And it's really driven through a focus on operational efficiencies that we've talked about. The team has done a tremendous job getting after some digital tools that are allowing us to get a better visibility of transportation,

and of pricing management. And that's a big part of the secret sauce that we're using. I referred to it in past quarters as our housekeeping, but we've done a really nice job of that. And on top of it, we've gone out with some regional core growth opportunities and developed new offerings that place our base oils in the highest value applications that we can. And one that we're really proud of is in our specialties portfolio, We introduced a new ingredient rubber processing technology for the tire and construction industry this past quarter called Circosol 5,100.

That will provide a much needed source of TDAE, treated distillate aromatic extracts in North American market and provide significant improvement in the tire industry. And that's under test right now. We're going to see some modest sales start in early 2025. And then the other one that we've just introduced is really exciting called Innovate, which is a new dielectric immersion cooling fluid technology intended for use in the data centers and digital mining space. So again, looking for new different areas to grow and see where our molecules and our technologies can be used to better improve our business and those businesses and markets we serve.

So Madhav, as you can hear, we've talked a lot about integration of our base oil business in with our finished lubes business. And that's driving a lot of our resiliency in terms of through the base oil crack cycle. But what Matt's talking about is growth. And you're really seeing a lot of really good growth in the finished lubes business, in particular in North America, double digits in North America for the last several years. And that's really what's driving the good numbers you're seeing.

Thank you so much for taking my questions.

Our next question comes from Paul Cheng with Scotiabank. Please go ahead.

Can I have two questions? The first one, I want to go back into lubricant. In the past, I think you guys have mentioned that in the long haul, this may not be a core business or that may not be part of your core portfolio. But I'm just curious that with your improvement in the business and you gained the expertise in there, Is there any reason why it cannot be part of your core portfolio in the long run? Is there any particular reason what you don't like about this business and as such that you think in the long haul it may be better off that to be in someone else's portfolio other than, yes, the valuation could be maybe a little bit higher multiple.

But I mean, after you pay tax and everything, is it really that much value added? So that's the first question.

No, it's a good question, Paul. And let me just say, no, we've never been unhappy with our lubes business. And the only real complaint that we made was that we weren't getting credit for the value of our lubes business. And so when we had conversations in the past about is to maximize shareholder value is the lubes business better in someone else's portfolio, That was under the premise that the lubes business wasn't getting the proper valuation in our portfolio. I think you can see over the last several quarters that the appreciation and the valuation of the lubes business has been getting more attention in our portfolio lately.

And especially now with refining margins weakening, I think you're seeing a lot more appreciation for that business in our portfolio. So I so the answer to your question is, yes, we can see it as a core business long term. We continue to grow it. That's what our main focus is going to be. And as our as the stock and as the shareholders appreciate the value of that business, then yes, we can continue to grow it and keep it for a while.

Thank you. The second question is that a number of your peers that have specifically announced some kind of cost reduction programs, One of your peers that this morning just announced a $200,000,000 of cost saving efforts. I know that you guys obviously that continue to work on in that space. Is there any number you can share over the next several years that your initiative that is there any area, major area that you're focusing that is going to drive down costs? And then if there is, could you quantify for us?

Yes, Paul, good question. Obviously, as we go into a downturn, everyone's going to be worried about costs. I've already mentioned that our OpEx per barrel in refining is down versus a year ago. But Valerie is not finished yet and is continuing to work down those costs. I'll let her talk a little bit more about what she's doing there.

Yes. Again, we are continuing to push our OpEx through and focused on maintenance. A good portion of our operating expenses go towards maintenance and the activities that support our maintenance staff and those activities. And as we get more reliable, we expect to continue to see those costs come off our books. We're starting to see where we have more matured those programs faster.

Those sites in the West are producing very good OpEx and we see that that is going to go across the rest of the fleet. So in terms of an exact dollar amount, we will not we're not going to provide that. We have internal goals, but our goal first is $725,000,000 on a consistent basis.

And that's refining, Paul. I'll just point out a couple other things. I mean, we're working, hard to reduce costs. That's part of our integration and optimization priority. But I can just point out a couple of things like in the Louvre's business that Matt just talked about.

If you look at their OpEx, I think they're underrunning $15,000,000 this year versus last year. I think that's not by accident. It's by the efforts that have been going on and hitting the bottom line. I think if you look at our G and A, we're running about 20,000,000 dollars this year below what we ran last year. And again, that's not by accident.

That's all associated with the integration and optimization efforts that we've got going on. Midstream has got the same thing with the integration efforts that we have going on. And then of course, Renewables has the lowest OpEx per barrel this quarter that we've been able to demonstrate. So we're not going out there with a flashy program, but instead, we're trying to show in the bottom line numbers what we're doing to reduce costs.

Our next question comes from Doug Leggate with Wolfe Research. Please go ahead.

Good morning. Thank you for taking my questions. Tim or I'm not sure who wants to take this one, but obviously your market, your refining market is probably seeing some of the biggest changes it's seen in quite some time with Cenovus bringing back capacity with slightly out of your realized, but Whiting running at full tilt. And obviously, there's a lot of changes going on with TMX in terms of crude availability. So I guess, I'm looking at the reset you gave us in your mid cycle margin assumption some quarters ago on Slide 8 of your latest deck.

I just wonder how we think about risking that in light of these changes. Are you still confident that this is a reasonable baseline? Or how would you think about the risk of that $15 gross margin assumption?

Yes, Doug, good to hear from you. Yes, we're confident in our mid cycle numbers. And remember, that's a cycle. And we know that there's going to be ups and downs in the cycle. And right now, we're below mid cycle, as you're pointing out.

But that doesn't change our view of the strengthening of the business that we've done in our refining business in particular. There is a lot going on. I'll let Steve talk a little bit about that. But the bottom line is we're still confident in our mid cycle numbers. Steve, do you want to cover?

Sure. Doug, it's Steve. Thanks for the question. You mentioned 2 things specifically. 1, I think, relates to supply.

And so I'll talk about that a little bit. First of all, Q4, we're heading into the obvious winter demand slump and seasonal driving coming off and refiners finishing maintenance. But when we look in 2025, we believe it will be closer to mid cycle for a couple of reasons. And on a larger basis, we think there's a lot of puts and takes in terms of shutdown and then demand coming or capacity coming on to the tune of around 300,000 barrels net new capacity. But we think demand should outpace that.

Obviously, timing matters, but we feel like we'll be in a normal balanced margin environment for 2025, which is around mid cycle. You also mentioned TMX, and we've seen some impacts clearly there with regards to crude values. Just as an example, the diffs have narrowed. And when you look out through next year, we think that, that light to heavy diff kind of stands at around $12.50 to $15 range, obviously, depending on several things. By example, Q1 of $25 on the Strip looks like it's roughly $6 less than it was in terms of Q1 'twenty four.

But we also see that our position in the Pacific Northwest, our ability to have be close to the dock, have plenty of dock capacity, the ability to take multiple crudes as more barrels get out over the water, we will be in a good position to go compete for those barrels. And then through the balance of next year, while the diffs are slightly compressed until the production outruns pipeline capacity there at TMX, we will have some compression in those diffs and it will impact our Mid Con and Parco refineries. But again, we're well connected to many hubs and we're working hard to optimize the crude slate

flexibility there. But as a lot on balance, we believe that our 2025 is a bit more supportive towards mid cycle. And that's how we're calling it right now.

I guess we're going to watch the dynamics, but I appreciate the confidence and I hope you're right for sure. But my follow-up is on renewable diesel. And I guess it's just really specific to your portfolio mix. As the BTC goes away at the end of this year and we have more of a CI based credit system, how do you see your system set up in terms of taking advantage of that or not is the case for now?

Yes. So I'll take that one as well. We're watching the BTC very closely as it goes away and the PTC comes on in a CI based, as you mentioned. We've continued to push very hard to get more CI low CI feedstock in our kit through better sourcing our capability on the PTU and actually a few small tweaks in the plants. And so we think we could compete with our current setup.

We also have the ability to go take barrels to different markets that are not as dependent on low CI for that value. And we've been able to move barrels into Canada and some local markets as well where there has been some uplift. So there's some uncertainty heading into the 1st part of the year and we think that it's going to end up having to settle out with some more support from RINs. And so that's a bit of a how does that happen and when does that happen. And then on the positive side associated with this, there'll be fewer imported finished barrels.

So we think the supply structure and demand structure tighten up a bit that shows some supportive margin for 2025. But there's still a bit of uncertainty in the 1st part of the year, but we're watching it

very closely and we'll manage that risk carefully.

And Doug, that's, of course, commentary around the BTC and the PTC. But if you look at the overall renewable diesel factors and market, of course, we believe the LCFS credit prices are headed higher in 2025. I think that will be a tailwind for our business. The New Mexico LCFS program is being finalized here over the next few months.

And we think when that comes online here at the end of 2025, maybe the early of 2016 that, that will be a tailwind for us given our will be the only renewable diesel producer in New Mexico. And we think overall RINs prices are going to be going up as well. So we've shown that even in these current bottom low cycle conditions, we can produce positive EBITDA and we're positioned well for those tailwinds to show themselves next year and maybe the year after too.

Got it. Thank you guys. Appreciate the answers.

Our next question comes from Neil Mehta with Goldman Sachs. Please go ahead.

Yes. Good morning, Tim and team. The first question is just around capital as we think about next year. This year, I think you got to 8.75 of which 75 is growth 800 sustaining.

of those moving pieces as we go into 2025? And is this a reasonable run rate as we think about next year?

Good morning. This is Atmos. Thank you for your question. I think this is a reasonable assumption over the next couple of years in that zip code of 800 to 875 including some growth CapEx in it. So I think you're right.

We're in the process of putting our budget together, Neil, as you know. So no official guidance at this time. We'll put that out in December like we normally do. But we're not seeing any major peak coming here next year. I just I think that's what Adonis is trying to signal and we'll give you a better number here at the end of the year.

Perfect. Yes, that helps us frame it out. And then as we think about the midstream side of your business, just talk about priorities from here? And how do you see that as part of the business going forward? Is this a free cash flow engine?

Or can it be a vehicle for growth? So big priorities around the midstream side of your business over the next year or so.

Yes, Neal, this is Steve. Thanks. I look after our midstream business as well. As part of the proposition of buying it in, we feel like there was an untapped opportunity there, and I think we're starting to see that. We really believe that there is utilization to go get, and we think there are some pieces of the kit that we can optimize or go add to, to really allow us to unlock the integrated value chain and operate our kits as such.

So we're focused on how do we go make sure that we're touching the molecules early and often and getting them on our system. Perfect example is things that we can unlock now because we are under one umbrella. Our Permian Southwest gathering asset, we're working and investing to go move more barrels from 3rd party or alternative modes of transport onto our system and helping that all the way through to our plants and in between the plants. And that's just one example that we see as an opportunity. So we think it is a growth engine, and we think that this is something we'll continue to focus on as well as improving our overall cost profile.

And we believe that there are some things that we can do between the operating platforms and refining as well as midstream where we can share the best practices and learn and do things common solutions for common problems. But we're pretty excited about the opportunities ahead of us and what we can go do with the midstream sector.

Yes. And Neil, I would just chime in too. We talked about buying in the HEP business a year ago, And one of the reasons was for the free cash flow accretion associated with that. That's going to pay us dividends now. The other one was for the growth, and that's what you're pointing out.

This quarter, I think we had record pipeline volumes. Last quarter, I think we had record total volumes going through. If you look at our run rate, our run rate is $50,000,000 EBITDA higher than it was a year ago. And that's associated with not just higher tariffs, which we knew were coming, but also these higher volumes, lower op costs as we've talked about and higher third party volumes that go with that as well. So we do think midstream is going to be a growth engine.

We've talked a lot about lubes and how lubes has been a real bright spot for us over the last several years. I really believe that you're going to see the same thing in midstream and you're going to see the same thing in marketing as we continue to grow those what we call higher multiple businesses in our portfolio.

Tim, the one quick follow-up on that is that when you talk about as a growth engine, do you mean primarily organically? Or do you see the potential for bolt on as well in midstream?

HF Sinclair (DINO) Q3 2024 Earnings Call Transcript

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