HF Sinclair Corp (DINO) 2021 Q4 法說會逐字稿

Thank you, Julie. Good morning, everyone, and welcome to HollyFrontier Corporation's Fourth Quarter 2021 Earnings Call. This morning, we issued a press release announcing results for the quarter ending December 31, 2021. If you would like a copy of the press release, you may find one on our website at hollyfrontier.com.

謝謝你，朱莉。大家早上好，歡迎來到 HollyFrontier Corporation 的 2021 年第四季度財報電話會議。今天上午，我們發布了一份新聞稿，公佈了截至 2021 年 12 月 31 日的季度業績。如果您想要一份新聞稿，可以在我們的網站 hollyfrontier.com 上找到。

Before we proceed with remarks, please note the safe harbor disclosure statement in today's press release. In summary, it says 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.

在我們繼續發表評論之前，請注意今天新聞稿中的安全港披露聲明。總之，它表示有關管理層預期、判斷或預測的陳述是前瞻性陳述。這些聲明旨在包含在聯邦安全法的安全港條款中。有許多因素可能導致結果與預期不同，包括我們在 SEC 文件中提到的因素。

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.

該電話會議還可能包括對非 GAAP 措施的討論。請參閱收益新聞稿以了解與 GAAP 財務指標的對賬情況。另請注意，在任何網絡廣播重播或重讀文字記錄時，今天電話會議上提供的任何時間敏感信息可能不再準確。

And with that, I'll turn the call over to Mike Jennings.

有了這個，我會把電話轉給邁克詹寧斯。

Thanks, Craig. Good morning, everyone. 2021 was a momentous year for HollyFrontier. First and foremost, I want to recognize our employees for their commitment to safety. Despite the continuing challenges of the COVID-19 pandemic, the reportable injury rate for our employee and contractor workforce was a record low for HollyFrontier.

謝謝，克雷格。大家，早安。 2021 年對 HollyFrontier 來說是重要的一年。首先，我要表彰我們的員工對安全的承諾。儘管 COVID-19 大流行病的持續挑戰，我們的員工和承包商員工的可報告傷害率是 HollyFrontier 的歷史最低點。

Second, we delivered solid financial results, led by record earnings in our Lubricants segment, advanced our renewables projects, closed on the Puget Sound acquisition and announced our plans to acquire Sinclair. We believe the combination of these strategic initiatives will enhance our value to shareholders over the long term. These investments are significant, both in terms of capital and for our people. Our team has taken these strategic initiatives head-on and remain committed to execution.

其次，在我們的潤滑油部門創紀錄的收益的帶動下，我們取得了穩健的財務業績，推進了我們的可再生能源項目，完成了對 Puget Sound 的收購，並宣布了我們收購 Sinclair 的計劃。我們相信，這些戰略舉措的結合將長期提升我們對股東的價值。這些投資在資本和我們的員工方面都是重要的。我們的團隊已正面採取這些戰略舉措，並將繼續致力於執行。

Turning to our fourth quarter results. We reported net loss attributable to HollyFrontier shareholders of $40 million or $0.24 per diluted share. These results reflect special items that collectively increased net loss by $22 million. Excluding these items, adjusted net loss for the fourth quarter was $18 million or negative $0.11 per diluted share versus adjusted net loss of $119 million or $0.74 per diluted share for the same period in 2020. Adjusted EBITDA for the period was $126 million, an increase of $148 million compared to the fourth quarter of 2020.

轉向我們的第四季度業績。我們報告歸屬於 HollyFrontier 股東的淨虧損為 4000 萬美元或攤薄後每股虧損 0.24 美元。這些結果反映了共同使淨虧損增加 2200 萬美元的特殊項目。不包括這些項目，第四季度調整後淨虧損為 1800 萬美元或攤薄後每股負 0.11 美元，而 2020 年同期調整後淨虧損為 1.19 億美元或攤薄後每股負 0.74 美元。該期間調整後的 EBITDA 為 1.26 億美元，增加與 2020 年第四季度相比增加 1.48 億美元。

The Refining segment reported EBITDA of $25 million compared to $8 million for the fourth quarter of 2020 and consolidated refinery gross margin was $8.70 per produced barrel, a 116% increase compared to the same period last year. This increase was due to higher margins driven by strong product demand for transportation fuels as we continue on the path to recovery to pre-pandemic levels.

煉油部門報告的 EBITDA 為 2500 萬美元，而 2020 年第四季度為 800 萬美元，綜合煉油廠毛利率為每桶生產 8.70 美元，比去年同期增長 116%。這一增長是由於在我們繼續恢復到大流行前水平的道路上，對運輸燃料的強勁產品需求推動了更高的利潤率。

Fourth quarter crude throughput was approximately 421,000 barrels per day, below our initial guidance of 450,000 to 470,000 barrels per day due to heavy planned and unplanned refinery maintenance and weather-related downtime during the quarter.

第四季度原油吞吐量約為每天 421,000 桶，低於我們最初指導的每天 450,000 至 470,000 桶，原因是該季度煉油廠計劃內和計劃外的大量維護以及與天氣相關的停機。

Our Lubricants and Specialty Products business reported EBITDA of $75 million compared to $49 million, which is before the goodwill impairment charge of $82 million in the fourth quarter of 2020. For the full year 2021, our Lubricants and Specialties business achieved record financial results of $331 million in adjusted EBITDA, led by strong margins for base oils throughout most of the year.

我們的潤滑油和特種產品業務報告的 EBITDA 為 7500 萬美元，而 2020 年第四季度的商譽減值費用為 8200 萬美元之前為 4900 萬美元。在 2021 年全年，我們的潤滑油和特種產品業務實現了創紀錄的 331 美元的財務業績百萬美元的調整後 EBITDA，這得益於全年大部分時間基礎油的強勁利潤率。

Holly Energy Partners reported adjusted EBITDA of $80 million for the fourth quarter compared to $88 million in the fourth quarter of last year.

Holly Energy Partners 報告稱，第四季度調整後的 EBITDA 為 8000 萬美元，而去年第四季度為 8800 萬美元。

Despite the planned turnaround and unplanned maintenance at HollyFrontier's Navajo Refinery, HEP delivered another quarter of strong operational performance and financial results. HEP maintained its distribution in 2021 and ended the year with a coverage ratio of 1.8x and continued its deleveraging strategy, repaying over $70 million in debt and bringing HEP's leverage to 3.9x.

儘管 HollyFrontier 的 Navajo Refinery 進行了計劃中的檢修和計劃外維護，但 HEP 又交付了四分之一的強勁運營業績和財務業績。 HEP 在 2021 年維持其分配，並以 1.8 倍的覆蓋率結束了這一年，並繼續其去槓桿化戰略，償還了超過 7000 萬美元的債務，並將 HEP 的槓桿率提高到 3.9 倍。

Looking ahead, within our Refining segment, for the first quarter of 2022, we expect to run between 490,000 and 510,000 barrels per day of crude oil. This guidance reflects the impact of weather-related downtime at Puget Sound Refinery, a scheduled turnaround at the Woods Cross Refinery as well as maintenance activities at the Navajo Refinery throughout the first quarter. We believe that demand for transportation fuels will continue to strengthen as the global economy recovers from the pandemic.

展望未來，在我們的煉油部門，我們預計 2022 年第一季度的原油日產量將在 490,000 至 510,000 桶之間。該指南反映了 Puget Sound 煉油廠與天氣相關的停機時間、Woods Cross 煉油廠的計劃檢修以及整個第一季度 Navajo 煉油廠的維護活動的影響。我們相信，隨著全球經濟從大流行中復蘇，對運輸燃料的需求將繼續增強。

Within our Lubricants and Specialty Products segment, for the first quarter of 2022, we expect seasonal improvement in earnings and a continued shift in mix toward Rack Forward from Rack Back. We expect base oil prices and margins to continue to decline through the first quarter as base oil supply continues to recover.

在我們的潤滑油和特種產品部門，我們預計 2022 年第一季度收益將出現季節性改善，並且產品組合將繼續從 Rack Back 轉向 Rack Forward。我們預計，隨著基礎油供應持續復甦，基礎油價格和利潤率將在第一季度繼續下降。

In 2022, HEP expects to hold their quarterly distribution constant at $0.35 per unit or $1.40 on an annualized basis. HEP remains committed to its distribution strategy focused on funding all capital expenditures and distributions within operating cash flow and maintaining distributable cash flow coverage of 1.3x or greater, with the goal of reducing leverage to 3.0x to 3.5x.

到 2022 年，HEP 預計其季度分配將保持在每單位 0.35 美元或年化 1.40 美元。 HEP 仍然致力於其分配戰略，重點是為運營現金流中的所有資本支出和分配提供資金，並將可分配現金流覆蓋率維持在 1.3 倍或更高，目標是將槓桿率降至 3.0 倍至 3.5 倍。

In our Renewables segment, we're pleased to announce that the 6,000 barrel per day Cheyenne RDU is now fully operational and we are aligning the unit out to produce on-spec product.

在我們的可再生能源部門，我們很高興地宣布，每天 6,000 桶的 Cheyenne RDU 現已全面投入運營，我們正在調整該裝置以生產符合規格的產品。

The Artesia pretreatment unit is expected to be completed in the first quarter of 2022 and the Artesia RDU is expected to be operational in the second quarter of '22. Once completed, we will have the ability to produce approximately 15,000 barrels per day of renewable diesel, with advantaged feedstock sourcing and flexibility through our own pretreatment unit.

Artesia 預處理裝置預計將於 2022 年第一季度完工，Artesia RDU 預計將於 2022 年第二季度投入運營。完成後，我們將有能力每天生產約 15,000 桶可再生柴油，並通過我們自己的預處理裝置獲得有利的原料採購和靈活性。

We ended 2021 with a robust financial foundation and bright prospects for continued growth and value. As we look to 2022, we are focused on one thing, execution. Execution will be critical as we ramp up to serve a recovering economy, start up our renewable diesel operations and work toward the closing of the Sinclair business acquisition and subsequent integration after the closing.

我們以穩健的財務基礎和持續增長和價值的光明前景結束了 2021 年。展望 2022 年，我們專注於一件事，即執行。執行將是至關重要的，因為我們正在努力為複蘇中的經濟服務，啟動我們的可再生柴油業務，並努力完成對辛克萊業務的收購以及收購後的後續整合。

With that, let me turn the call over to Rich.

有了這個，讓我把電話轉給 Rich。

Thank you, Mike. As previously mentioned, the fourth quarter included a few unusual items. Pretax earnings were negatively impacted by acquisition integration costs of $16 million, a lower of cost or market inventory valuation adjustment of $9 million and charges related to the Cheyenne Refinery conversion to renewable diesel production of $3 million. A table of these items can be found in our press release.

謝謝你，邁克。如前所述，第四季度包括一些不尋常的項目。稅前收益受到 1600 萬美元的收購整合成本、900 萬美元的成本或市場庫存估值調整以及與夏延煉油廠轉換為可再生柴油生產相關的 300 萬美元費用的負面影響。在我們的新聞稿中可以找到這些項目的表格。

Net cash used for operations totaled $333 million in the fourth quarter, which included $98 million of turnaround spending and $320 million of working capital headwinds, both planned and unplanned refinery maintenance, reduced throughputs, which was the single largest driver of the working capital consumption. We expect to recover $150 million to $200 million of this working capital as refinery operations normalize, and this will take us into the second quarter to fully recover.

第四季度用於運營的淨現金總計 3.33 億美元，其中包括 9800 萬美元的周轉支出和 3.2 億美元的營運資金逆風，包括計劃內和計劃外的煉油廠維護，吞吐量減少，這是營運資金消耗的最大單一驅動因素。隨著煉油廠運營正常化，我們預計將收回 1.5 億至 2 億美元的營運資金，這將使我們進入第二季度才能完全恢復。

HollyFrontier's stand-alone capital expenditures totaled $254 million for the quarter and $725 million for the full year 2021. As of December 31, 2021, our total liquidity stood at approximately $1.6 billion comprised of a cash balance of $234 million, along with our undrawn $1.35 billion unsecured credit facility. At December 31, we had $1.75 billion of stand-alone debt outstanding, with a debt-to-cap ratio of 24% and a net debt-to-cap ratio of 21%. We anticipate recovering $83 million in cash tax benefit in 2022 from the loss carryback potential under the CARES Act.

HollyFrontier 本季度的獨立資本支出總額為 2.54 億美元，2021 年全年的支出總額為 7.25 億美元。截至 2021 年 12 月 31 日，我們的流動資金總額約為 16 億美元，包括 2.34 億美元的現金餘額以及未提取的 1.35 美元億美元的無擔保信貸額度。截至 12 月 31 日，我們有 17.5 億美元的未償獨立債務，債務上限比率為 24%，淨債務上限比率為 21%。我們預計 2022 年將從 CARES 法案下的虧損結轉潛力中收回 8300 萬美元的現金稅收優惠。

HEP distributions received by HFC during the fourth quarter totaled $21 million. HollyFrontier owns 59.6 million HEP limited partner units, representing 57% of HEP's LP units and a market value of over $1 billion as of last night's close.

HFC 在第四季度收到的 HEP 分配總額為 2100 萬美元。 HollyFrontier 擁有 5960 萬個 HEP 有限合夥人單位，佔 HEP 有限合夥人單位的 57%，截至昨晚收盤時市值超過 10 億美元。

With respect to capital spending in 2022, we continue to expect spending between $250 million to $270 million at HollyFrontier Refining; $225 million to $300 million in renewables; $45 million to $60 million in HollyFrontier Lubes and Specialties and $70 million to $100 million for turnaround in catalysts. At HEP, we expect to spend $15 million to $20 million for maintenance capital, $5 million to $10 million for expansion capital and $35 million to $50 million in refinery processing unit turnarounds.

關於 2022 年的資本支出，我們繼續預計 HollyFrontier Refining 的支出在 2.5 億至 2.7 億美元之間； 2.25 億至 3 億美元的可再生能源； 4500 萬至 6000 萬美元用於 HollyFrontier Lubes and Specialties，7000 萬至 1 億美元用於催化劑的周轉。在 HEP，我們預計將花費 1500 萬至 2000 萬美元用於維護資本，500 萬至 1000 萬美元用於擴張資本，以及 3500 萬至 5000 萬美元用於煉油廠加工裝置的周轉。

Beginning in the first quarter of 2022, HollyFrontier will report a new Renewable segment that will contain all financial information related to the renewable diesel units at the Cheyenne and Artesia facilities as well as the Artesia pretreatment unit.

從 2022 年第一季度開始，HollyFrontier 將報告一個新的可再生能源部分，其中將包含與夏延和阿蒂西亞設施以及阿蒂西亞預處理單元的可再生柴油單元相關的所有財務信息。

And with that, we are ready to take questions.

有了這個，我們準備好接受提問了。

I guess, first, if we can go over the progress on the Sinclair deal, where you are in terms of working with FTC? And given your comments yesterday, Rich, on the HEP call of the modest delay in the closing, can you just talk about what's driving that?

我想，首先，如果我們可以回顧 Sinclair 交易的進展情況，您與 FTC 的合作進展如何？鑑於你昨天的評論，Rich，在關閉適度延遲的 HEP 電話會議上，你能談談是什麼推動了這一點嗎？

Yes. Theresa, this is Mike. We are working with Sinclair closely and collaboratively to satisfy all the closing conditions. The principal gating factor at this time is the FTC process. We're obviously cooperating with the FTC, and Sinclair is working closely with us to obtain that clearance. We expect to close the transaction as soon as we can. And at this point, we still expect closing in 2022, as we've said previously. We don't have update beyond that.

是的。特蕾莎，這是邁克。我們正與 Sinclair 密切合作以滿足所有的成交條件。此時的主要門控因素是 FTC 流程。我們顯然正在與聯邦貿易委員會合作，辛克萊正在與我們密切合作以獲得許可。我們希望盡快完成交易。在這一點上，正如我們之前所說，我們仍然預計在 2022 年關閉。除此之外，我們沒有更新。

Got it. And then maybe turning to Puget. Given the volatility in the fourth quarter and still some downtime reflected in the first quarter, can you just talk about your outlook for the asset from here and if the delay in TMX coming online, that further postponement of that, does that change the economics of your crude outlook for the area in general?

知道了。然後也許轉向 Puget。鑑於第四季度的波動以及第一季度仍有一些停機時間，您能否從這裡談談您對資產的展望，如果 TMX 延遲上線，進一步推遲，這是否會改變經濟狀況您對該地區的總體看法？

Yes, Lisa (sic) [Theresa]. This is Tim Go. Let me take a shot at that. We were disappointed that the Puget Sound Refinery had some unplanned maintenance in the first 90 days that we owned it, but it does not change our outlook for the profitability of that refinery. Puget Sound got impacted by 3 weeks of the crude pipeline flooding event that occurred in the fourth quarter, as you guys may have heard. It was then followed by a record freeze event that occurred under freezing temperatures for basically 7 to 10 days that basically impacted the operation and still carries into the first quarter, as Mike mentioned in his prepared remarks.

是的，麗莎（原文如此）[特蕾莎]。這是蒂姆戈。讓我試一試。我們對 Puget Sound 煉油廠在我們擁有它的頭 90 天內進行了一些計劃外維護感到失望，但這並沒有改變我們對該煉油廠盈利能力的展望。正如你們可能聽說的那樣，普吉特海灣受到了第四季度發生的為期 3 週的原油管道洪水事件的影響。隨後是創紀錄的凍結事件，該事件在凍結溫度下發生了基本上 7 到 10 天，這基本上影響了運營，並且仍然延續到第一季度，正如邁克在他準備好的發言中提到的那樣。

But none of that changes. They're all isolated events, nothing that changes our long-term view of Puget Sound. We still think it has a mid-cycle EBITDA of $150 million to $200 million. And we believe that we are still in that mid-cycle -- at or above mid-cycle conditions for the rest of the year. So if you look at that on an annualized basis, we still think that Puget Sound will deliver that.

但這一切都沒有改變。它們都是孤立的事件，不會改變我們對普吉特海灣的長期看法。我們仍然認為它的中期 EBITDA 為 1.5 億至 2 億美元。我們相信我們仍處於那個中期週期 - 在今年剩餘時間里處於或高於中期週期條件。因此，如果您按年化來看，我們仍然認為 Puget Sound 會做到這一點。

As far as the delayed TMX, we've got lines based on the existing TMPL that is providing us with a large portion of our crude runs today. The rest we bring in over the waters through our dry dock. And we believe that the delay is not going to impact our long-term outlook on PSR.

至於延遲的 TMX，我們有基於現有 TMPL 的生產線，這些生產線為我們提供了今天大部分的原油運行。其餘的我們通過乾船塢從水域運來。我們相信延遲不會影響我們對 PSR 的長期展望。

Rich, I think in the past you have been talking about a capital return to shareholders, there call it up to $1 billion in the 12 months after first quarter, I would say. Can you give an update, given the market condition? And also Sinclair is being delayed. And also Puget Sound, quite frankly, that operation has not been living up to expectations, at least during the first 90 days or 100 days of your ownership. That's the first question.

Rich，我認為過去你一直在談論向股東返還資本，我會說在第一季度後的 12 個月內最高可達 10 億美元。鑑於市場狀況，您能否提供最新信息？辛克萊也被推遲了。還有 Puget Sound，坦率地說，該操作沒有達到預期，至少在您擁有的前 90 天或 100 天是這樣。這是第一個問題。

Sure, Paul. So I don't think there's any change to our capital return plans consistent with what we announced at the time of both the Puget Sound and then the Sinclair acquisition, we expect to reinstate the dividend in May at that $0.35 per share level. And we expect to then return $1 billion of cash in total, inclusive of both dividends and repurchase into the first quarter of '23. And in the long term, we think a 50% payout ratio in the combination of dividend and repurchase is appropriate for a business like ours.

當然，保羅。因此，我認為我們的資本回報計劃沒有任何變化，與我們在收購 Puget Sound 和隨後收購 Sinclair 時宣布的一致，我們預計將在 5 月份恢復每股 0.35 美元的股息水平。我們預計屆時將總共返還 10 億美元現金，包括股息和 23 年第一季度的回購。從長遠來看，我們認為 50% 的股息和回購相結合的派息率適合像我們這樣的企業。

So even though the Sinclair delay could be -- because I think previously the expectation is that you may be able to close Sinclair by midyear, but it doesn't look like that's likely. And so if that's further delayed beyond 2022, does that change the way how you look at the capital return?

因此，即使 Sinclair 延遲可能——因為我認為之前的期望是你可以在年中之前關閉 Sinclair，但看起來不太可能。因此，如果這進一步推遲到 2022 年以後，這是否會改變您看待資本回報的方式？

No, Paul, I don't think it does.

不，保羅，我認為不會。

Okay. And second question. Can we go back into the Puget Sound operating issue? Fourth quarter, at least we can understand you have a sub-zero temperature, which, from what I understand, never happened in at least the last 40 years plus. And then you have Trans Mountain shut down.

好的。第二個問題。我們可以回到 Puget Sound 的運營問題嗎？第四季度，至少我們可以了解到你的體溫低於零度，據我所知，這至少在過去 40 多年裡從未發生過。然後你關閉了 Trans Mountain。

But you still into January that you had the hydrocracker problem in north end or at the coker maybe. Can you tell us that, I mean, what's causing in the first quarter downtime? And what is the game plan that you -- perhaps to make the operation to be better?

但是你仍然到一月份，你可能在北端或煉焦廠遇到了加氫裂化問題。你能告訴我們，我的意思是，是什麼導致了第一季度的停機時間？你的遊戲計劃是什麼——也許是為了讓操作變得更好？

And Mike, quite frankly, in your prepared remarks, you talked about execution. For the past 7 years, I think every year, the CEO has talked about execution is the most important priority for the company. But unfortunately, it seems like the company has been [getting] periodically by a set of issues. And so what gives you the confidence that this time you will get it right?

邁克，坦率地說，在你準備好的發言中，你談到了執行力。在過去的 7 年裡，我認為每年，CEO 都會談到執行力是公司最重要的優先事項。但不幸的是，該公司似乎定期 [getting] 一系列問題。那麼，是什麼讓您相信這次您會做對呢？

That's a loaded question, Paul. Thanks. As a starting point, the issue in Puget Sound was weather-induced, and the remaining issue pertains to the coker unit and a compressor that effectively needed major maintenance following damage by the weather. So that is, Tim, to this point, if you want to take it from there?

保羅，這是一個沉重的問題。謝謝。首先，Puget Sound 的問題是由天氣引起的，剩下的問題與焦化裝置和壓縮機有關，在天氣損壞後實際上需要進行大修。就是說，蒂姆，到目前為止，如果你想從那裡開始？

Yes. Let me jump in, Paul, on this, and then I'll turn it back over to Mike. But I can tell you that, that issue has been resolved. And so when we say that the Puget Sound issue will carry into the first quarter, it has been resolved now and we are in the process of returning to full rates at Puget Sound. But it has impacted the first quarter.

是的。保羅，讓我先談談這個，然後我會把它轉回給邁克。但我可以告訴你，那個問題已經解決了。因此，當我們說 Puget Sound 問題將延續到第一季度時，它現在已經得到解決，我們正在恢復 Puget Sound 的全額收費。但它影響了第一季度。

And I guess beyond that, we operate a network of inland refineries, where the degrees of freedom during unit downtime are pretty limited. And so we get it, the operational results matter perhaps more in that context than plants that are among a coastal network. And so effectively, we have to be better. And we have had operational issues, obviously affected our fourth quarter results. And we've told you they will roll into the first. But we have people on the ground in asset strategies I think that carry us forward toward improvement. And the proof is going to be in the future results more than what I say on this call, so I think I'll leave it at that. But we certainly put a high priority on it, and we're working the issues hard.

我想除此之外，我們還經營著一個內陸煉油廠網絡，在這些煉油廠中，裝置停機期間的自由度非常有限。所以我們明白了，在這種情況下，運營結果可能比沿海網絡中的工廠更重要。如此有效，我們必須變得更好。而且我們遇到了運營問題，顯然影響了我們第四季度的業績。我們已經告訴過你，他們將進入第一個。但是我認為我們在資產戰略方面有實地人員，這使我們朝著改進的方向前進。未來的結果將比我在這次電話會議上所說的更能證明這一點，所以我想我會把它留在那兒。但我們當然非常重視它，我們正在努力解決這些問題。

Your next question is coming from Phil Gresh from JPMorgan.

你的下一個問題來自摩根大通的 Phil Gresh。

First one, Rich, could you just talk about how you expect the cash balances to progress in the first half of this year? You mentioned the working capital tailwinds. You mentioned the cash tax benefit at some point in '22. I'm just trying to think about getting back to those minimum cash levels of $500 million that would then allow for the dividend reinstatement.

第一個，里奇，你能談談你對今年上半年現金餘額的預期嗎？你提到了營運資金的順風。你在 22 年的某個時候提到了現金稅收優惠。我只是想考慮回到 5 億美元的最低現金水平，然後允許恢復股息。

Sure, Phil. So look, obviously, we're going to have a hard first quarter. Take this in pieces. We expect to see Renewables really delivering on the income statement, the cash line, in the second half of this year. Obviously, as we ramp things up through the first half, we're not going to see a lot of cash generated there. We clearly expect our refinery performance to be significantly better starting with the second quarter, which will clearly generate a lot of cash, both from earnings as well as a recovery in working capital. So that gives us the comfort around dividend in the second quarter.

當然，菲爾。所以看，很明顯，我們將有一個艱難的第一季度。把這個分成幾塊。我們希望看到可再生能源在今年下半年真正實現損益表，即現金線。顯然，隨著我們在上半年加快步伐，我們不會看到那裡產生大量現金。我們顯然預計，從第二季度開始，我們的煉油廠業績將明顯好轉，這顯然會產生大量現金，包括收益和營運資金的恢復。因此，這讓我們對第二季度的股息感到放心。

To your question on the tax refund, we are extremely frustrated at this point, to be honest. The government is still not back in the office and their speed of work reflects that. So we are diligently working this issue. It's about all I have. I can't -- it's not in our control, to be honest. We'd obviously expected to have this money back 9 months ago, so. So really showing to your point, we'd expect that second quarter is when we'll really start seeing cash start to accumulate and that gives us comfort around that dividend number in particular.

對於您關於退稅的問題，老實說，我們目前非常沮喪。政府仍未回到辦公室，他們的工作速度反映了這一點。所以我們正在努力解決這個問題。這是我的全部。我不能——老實說，這不在我們的控制之下。我們顯然希望在 9 個月前收回這筆錢，所以。所以真正表明你的觀點，我們預計第二季度是我們真正開始看到現金開始積累的時候，這讓我們對股息數字感到特別欣慰。

Am I still correct in saying that the minimum target cash would be the $500 million?

我說最低目標現金為 5 億美元是否仍然正確？

Yes. I think that's a good target. I think as we're doing some of this work now, as we close and integrate Sinclair, I would expect we'll seek more liquidity probably through an expanded revolver. But that $500 million target cash balance will remain. We still think that's a good number in an expanding company.

是的。我認為這是一個很好的目標。我認為當我們現在正在做一些這樣的工作時，當我們關閉和整合 Sinclair 時，我預計我們可能會通過擴大左輪手槍尋求更多的流動性。但 5 億美元的目標現金餘額將保持不變。我們仍然認為，對於一家正在擴張的公司來說，這是一個不錯的數字。

Okay. Okay. My follow-up would just be on some of your comments you just said on renewable diesel, with the startup and now that we're almost 2 months through this first quarter, you said you don't expect much of a contribution in the first half. But I mean, I guess, as we look at the first quarter, would you say that with start-up costs and things like that, that you're trending towards positive EBITDA? Or should we be thinking that there are start-up expenses and things that would make that take some time?

好的。好的。我的後續行動只是針對您剛剛就可再生柴油發表的一些評論，對於這家初創公司，現在第一季度已經快 2 個月了，您說您預計第一季度不會有太大貢獻一半。但我的意思是，我想，當我們看第一季度時，你會說啟動成本和類似的東西，你正趨向於正 EBITDA 嗎？還是我們應該考慮啟動費用和需要一些時間的事情？

No, I think it's going to take a little while. So I'd expect small negative EBITDA in the first quarter, probably into the second quarter, to be honest. We're being very careful, and I'll ask Tom to chime in on how we start these units up. Obviously, we've seen others have major issues. So we're babying them a little bit, if you will. But we think that's the prudent way to approach this so that we have the earnings power in the next several years.

不，我認為這需要一段時間。因此，老實說，我預計第一季度的負 EBITDA 可能會持續到第二季度。我們非常小心，我會請 Tom 插話我們如何啟動這些單元。顯然，我們已經看到其他人有重大問題。因此，如果您願意，我們會稍微照顧他們。但我們認為這是處理這個問題的謹慎方式，這樣我們在未來幾年就有盈利能力。

Yes, Phil, this is Tom. Just to parrot Richard's comments, we are going slow on purpose. These are somewhat new units to us. Although we understand hydrotreating process from the refinery operations, this is still something new for us, so we're going slow. We want to do it right, and we want to do it one time, and that's our goal here.

是的，菲爾，這是湯姆。只是重複理查德的評論，我們故意放慢速度。這些對我們來說有些新。雖然我們了解煉油廠的加氫處理過程，但這對我們來說仍然是新事物，所以我們進展緩慢。我們想做對，我們想做一次，這就是我們的目標。

As you can appreciate, as we start up a new business, we have virtually no volumes in the tanks of renewable diesel, that we're going to have to build up, we're going to have to get working stock in place before we can even look at entertaining sales to customers. So that does take some time and it's going to extend -- even though that we're running, it's going to extend the period of time until we can generate revenue. So it's going to be a slow process.

正如您所理解的那樣，當我們開始一項新業務時，我們的可再生柴油罐中幾乎沒有體積，我們將不得不建立起來，我們將必須在我們之前獲得工作庫存甚至可以看看對客戶的娛樂銷售。所以這確實需要一些時間，而且它會延長——即使我們正在運行，它也會延長時間，直到我們能夠產生收入。所以這將是一個緩慢的過程。

Got it. And does Sinclair have their pretreatment? Where is Sinclair in their pretreatment start-up?

知道了。辛克萊有他們的預處理嗎？辛克萊在他們的預處理初創公司中處於什麼位置？

To the best of our knowledge, and this is just public information, is that they're looking sometime between the second and third quarter of this year for start-up.

據我們所知，這只是公開信息，他們正在尋找今年第二季度和第三季度之間的某個時間啟動。

Your next question is coming from Roger Read from Wells Fargo.

你的下一個問題來自富國銀行的 Roger Read。

I'd just like to maybe dig a little deeper in just how the renewable diesel start-up process will go. I mean I recognize we've seen others have problems and you all want to be careful with it. But as you look at running -- I guess maybe here's the question. Where are you in terms of running any kind of a feedstock through the units and getting comfort? And where are you in terms of security of the feedstock across all types?

我只是想更深入地了解一下可再生柴油的啟動過程將如何進行。我的意思是我知道我們已經看到其他人有問題，你們都希望小心處理。但是當你看跑步時——我想也許這就是問題所在。在通過裝置運行任何類型的原料並獲得舒適感方面，你在哪裡？就所有類型的原料安全性而言，你在哪裡？

Okay. From a high level -- Roger, this is Tom. First of all, in the start-up process, we have to heat up the units and we have to get them warm, and we do that by introducing hydrogen. And once we reach certain temperatures, then we can start to introduce feed, at which time then we start increasing the feed. And it's just a slow process. We just have to walk up these units very slowly and make sure all the instrumentation is working properly so we know where levels are within the various units. So it's a slow process.

好的。從高層看——羅傑，這是湯姆。首先，在啟動過程中，我們必須加熱這些裝置，我們必須讓它們變暖，我們通過引入氫氣來做到這一點。一旦我們達到一定的溫度，我們就可以開始添加飼料，然後我們開始增加飼料。這只是一個緩慢的過程。我們只需要非常緩慢地走上這些單元，並確保所有儀器都正常工作，這樣我們就可以知道各個單元中的水平位置。所以這是一個緩慢的過程。

So it's not like flipping a switch and these things run. It usually takes multiple days to get everything lined out and make sure that we're operating properly and we have stability at various temperatures throughout the whole units, both the reactor and the isoms.

所以這不像撥動開關，這些東西就會運行。通常需要好幾天才能把所有東西都排好，並確保我們正常運行，並且我們在整個裝置（包括反應器和同分異構體）的不同溫度下都具有穩定性。

So in terms of feed, let me -- we haven't had any problem whatsoever in acquiring feed for Cheyenne, Artesia or the PTU. It has not been a problem. We have secured some volumes to get it through the remainder of this year and even early into 2023 by long-term contracts. We don't foresee any problems going forward. We still believe in our strategy of having the PTU in place, so that gives us more flexibility to buy different feeds. And we will continue on start-up to buy the feeds that give us the highest return by balancing price versus carbon index.

因此，就飼料而言，讓我 - 我們在為 Cheyenne、Artesia 或 PTU 獲取飼料方面沒有任何問題。這不是問題。我們已經通過長期合同獲得了一些數量，以在今年剩餘時間甚至 2023 年初獲得它。我們預計未來不會出現任何問題。我們仍然相信我們實施 PTU 的策略，這樣我們就可以更靈活地購買不同的飼料。我們將繼續啟動，通過平衡價格與碳指數來購買給我們帶來最高回報的飼料。

Okay. Great. And then just a final question for me on the renewable diesel side. In terms of the CapEx guidance and the original CapEx guidance, I don't want to say original, but the most recent, which was $800 million to $900 million total, kind of where do you think you're going to come in at this point on CapEx at the total level?

好的。偉大的。然後是關於可再生柴油方面的最後一個問題。就資本支出指南和最初的資本支出指南而言，我不想說是原始的，但最近的，總計 8 億至 9 億美元，你認為你會從哪裡參與進來資本支出在總水平上的指向？

Roger, it's Rich. We will be within that range.

羅傑，它是豐富的。我們將在該範圍內。

Your next question is coming from Neil Mehta from Goldman Sachs.

你的下一個問題來自高盛的 Neil Mehta。

And your next question is coming from Connor Lynagh from Morgan Stanley.

你的下一個問題來自摩根士丹利的 Connor Lynagh。

I wanted to stay on the feedstock sourcing question for renewable diesel. You had said last quarter you were kind of evaluating options to participate in -- up the value chain. So I'm just curious where your head is at on that, any options you've been exploring?

我想繼續討論可再生柴油的原料採購問題。你在上個季度說過你正在評估參與價值鏈的選擇。所以我很好奇你的想法是什麼，你一直在探索的任何選擇？

Sure. Connor, this is Tom again. We're currently tracking over 20 soybean oil processing plant investment opportunities that have been presented to HollyFrontier. We have been looking at strategic opportunities, 2 ways, either long-term offtakes or equity investments. And we've had equity -- I'm sorry, active discussions are underway with possible counterparties.

當然。康納，這又是湯姆。我們目前正在跟踪已提交給 HollyFrontier 的 20 多個豆油加工廠投資機會。我們一直在尋找戰略機會，有兩種方式，長期承購或股權投資。我們有股權——對不起，正在與可能的交易對手進行積極討論。

What -- like I said before, we want to optimize the best netback, give us the most flexibility. So there's no shortage of crush plant announcements, as you're probably well aware. And we're trying to touch base with everything that comes across to see if it presents value for HollyFrontier.

什麼——就像我之前說的，我們想要優化最好的淨回，給我們最大的靈活性。因此，正如您可能很清楚的那樣，不乏壓榨廠公告。我們正在嘗試接觸所遇到的一切，看看它是否為 HollyFrontier 帶來價值。

What type of criteria would you say are important to you in determining that? I mean you certainly manage your feedstock independent of production on the refining side. So I guess the question is, do you see the ultimate value creation shifting to that side? Or is it more of a hedge? Just basically, what would make you want to invest?

在確定這一點時，您認為哪種類型的標準對您很重要？我的意思是，您肯定會在精煉方面獨立於生產來管理您的原料。所以我想問題是，你是否看到最終的價值創造正在轉移到那一邊？或者它更像是一種對沖？基本上，是什麼讓您想投資？

Probably more of a hedge. It's vertical integration, so it allows us to capture profitability throughout the chain as a part to (sic) [as opposed to] One specific point. And certainly along the same lines is the PTU and why we entered into that market.

可能更像是一種對沖。這是垂直整合，因此它允許我們在整個鏈條中獲取盈利能力，作為（原文如此）[而不是]一個特定點的一部分。當然，PTU 以及我們進入該市場的原因也是如此。

Just to pile on there, Connor. Look, obviously, our criteria is returns against cost of capital, whether those returns come in the form of a reduction in price or return on the investment. And we're just -- so far, we have not seen returns that are clearing any sort of hurdle.

只是在那裡堆積，康納。顯然，我們的標準是相對於資本成本的回報，無論這些回報是以降價還是投資回報的形式出現。我們只是 - 到目前為止，我們還沒有看到清除任何障礙的回報。

Which is pushing us back towards just an outright lifting or an offtake agreement.

這將我們推回到完全解除或承購協議的方向。

Your next question is coming from Manav Gupta from Credit Suisse.

你的下一個問題來自瑞士信貸的 Manav Gupta。

Question more on inland refining. It seems like people love the coastal a lot more now with some of the Ukraine crisis. And then you're looking at Exxon saying they want to grow Permian 25%, Chevron 10%, and all these guys are looking to accelerate Permian. Do we see a scenario where we could have a resurgence of a -- a reemergence of some of these inland differentials as it looks like the rig counts are accelerating and the production is expected to go up in '22, '23?

更多關於內陸煉油的問題。由於烏克蘭危機，現在人們似乎更喜歡沿海地區。然後你看到埃克森美孚說他們想在二疊紀發展 25%，雪佛龍 10%，所有這些人都希望加速二疊紀。我們是否會看到這樣一種情況，即我們可能會重新出現 - 這些內陸差異中的一些重新出現，因為看起來鑽機數量正在加速並且預計產量將在 22 年和 23 年上升？

Yes, Manav, this is Tim, I'll take a first shot at that. We've been pleased to see the increased production in the Permian. I think they hit over 5 million barrels a day here this last month and setting new records. Takeaway capacity is still greater than that. So we still continue to see that dynamic playing out. But certainly, as the volatility in the rest of the world plays out, the one certainty that seems to be out there is that the Permian production seems to be where most of the focus is on growth here in the U.S. And that's going to benefit us, both in our Mid-Con refinery as well as our Southwest refinery.

是的，馬納夫，我是蒂姆，我會首先嘗試。我們很高興看到二疊紀的產量增加。我認為他們上個月在這裡每天達到 500 萬桶以上，並創造了新的記錄。外賣容量還是大於那個。所以我們仍然繼續看到這種動態在發揮作用。但可以肯定的是，隨著世界其他地區的波動性逐漸顯現，似乎可以肯定的是，二疊紀的生產似乎是美國這裡增長最受關注的地方，這將使我們受益，在我們的 Mid-Con 煉油廠和我們的西南煉油廠。

So you've seen some short-term blowout in the Brent TI spread here just in the last day or so. We don't expect that to necessarily hold at these levels, but we do think that long term, Brent TI about $3 makes a lot of sense. And if you look at the strip going out, it seems like the market feels the same way, if not even a little bit more bullish.

因此，就在最後一天左右，您已經看到這裡的布倫特 TI 價差出現了一些短期井噴。我們不認為一定會保持在這些水平，但我們確實認為從長期來看，布倫特 TI 約 3 美元很有意義。而且，如果您觀察帶狀物的走勢，似乎市場也有同樣的感覺，甚至更加看漲。

How much Permian can you run in your system, if you could remind us?

如果你能提醒我們，你能在你的系統中運行多少 Permian？

Well, we run all -- our whole Southwest refinery, Navajo Refinery, runs on basically Permian. And then we can send some additional, call it, 50,000 barrels a day down into our Mid-Con refineries through the Centurion pipeline. So we've got good exposure, good optionality to be exposed to Permian crudes.

好吧，我們全部運行 - 我們整個西南煉油廠 Navajo 煉油廠基本上都在二疊紀運行。然後我們可以通過 Centurion 管道每天向我們的 Mid-Con 煉油廠輸送一些額外的，稱之為 50,000 桶。所以我們有很好的風險敞口，可以很好地選擇二疊紀原油。

A quick policy follow up. I think Rich, when you initially put out your renewable diesel projections, I remember very clearly, you did not have BTC in 2023. And then we got to a situation with Build Back Better and everything and people started assuming BTC most likely will be extended. Now like I just want to understand from the policy perspective, there is a lot of support for BTC. But do you see a scenario like before year-end where BTC could be extended, so it kind of takes off that uncertainty from RD margins?

快速政策跟進。我認為 Rich，當你最初提出可再生柴油預測時，我記得非常清楚，你在 2023 年沒有 BTC。然後我們遇到了重建更好的情況，一切和人們開始假設 BTC 很可能會延長.現在就像我只想從政策的角度理解，對BTC有很多支持。但是你是否看到像年底前那樣可以延長 BTC 的情況，從而消除研發利潤率的不確定性？

So Manav, from a government affairs perspective, if you will, I think our view is that there is a lot of support for the BTC, and we will see it extended in some form or fashion, consistent with the [manner] rate that's been done historically in one of these last-minute tax extender package type events. But to your point, our original project economics were not predicated on long-term BTC.

所以 Manav，從政府事務的角度來看，如果你願意的話，我認為我們的觀點是 BTC 有很多支持，我們將看到它以某種形式或方式擴展，與一直以來的 [方式] 率一致歷史上是在這些最後一分鐘的稅收擴展程序包類型事件之一中完成的。但就您的觀點而言，我們最初的項目經濟學並不是以長期 BTC 為基礎的。

But our long-term expectation around BTC wasn't affected by Build Back Better. It was -- it preceded that, the political support for this extension. So we don't see those 2 as necessarily tied.

但我們對 BTC 的長期預期並未受到 Build Back Better 的影響。在此之前，是對這次延期的政治支持。所以我們不認為這 2 個有必然聯繫。

Your next question is coming from Doug Leggate from Bank of America.

您的下一個問題來自美國銀行的 Doug Leggate。

Note to self, don't hit star 1 more than once, it lowers your hand apparently. But anyway, thanks for getting on, fellas. I hate to ask about Sinclair, but I know you don't want to talk too much about it, but I just want to ask a hypothetical question. When Marathon was trying to sell Speedway, they satisfied all their filing requirements and they still didn't get a formal answer, so they went ahead and did the deal anyway. I'm just curious how you -- where you guys are in the process of satisfying all the back and forth on filing?

自我注意，不要多次擊打 1 號星，它顯然會降低你的手。但無論如何，謝謝你繼續前進，伙計們。我不想問關於 Sinclair 的事，但我知道你不想談論太多，但我只想問一個假設性的問題。當 Marathon 試圖出售 Speedway 時，他們滿足了所有的備案要求，但仍然沒有得到正式答复，所以他們還是繼續進行了交易。我只是很好奇你們——你們在滿足所有來回提交申請的過程中處於什麼位置？

Well, explicitly, we have complied with the second request, and we're in discussions with the staff. And Paul -- Doug, I'm sorry, I can't share more than that. It's a continuing conversation and our tactics and strategy aren't going to be public for this call. But we expect this transaction to close in 2022, and we're really excited about it. So that's as much as I'll go.

那麼，明確地說，我們已經滿足了第二個要求，我們正在與工作人員進行討論。保羅——道格，對不起，我不能分享更多。這是一場持續的對話，我們的戰術和戰略不會在這次電話會議上公開。但我們預計這筆交易將在 2022 年完成，我們對此感到非常興奮。這就是我要去的地方。

Yes. I apologize for asking. I just wanted to see if there was any additional color. Well, maybe if I may take two quick ones, one is macro and one specific to you. And it's a follow-up to Paul's question about operational improvement. I'm just curious, when you think about Puget Sound and Sinclair, who has the best operating best practice? I'm thinking in terms of transfer of best practice. Does Sinclair make Holly better? Does Holly make Sinclair better and [same] with the Puget Sound? How do you think about the generic operational reliability of the go-forward combined company?

是的。我很抱歉問。我只是想看看有沒有額外的顏色。好吧，也許我可以拿兩個快速的，一個是宏觀的，一個是針對你的。這是保羅關於運營改進問題的後續行動。我很好奇，當您想到 Puget Sound 和 Sinclair 時，誰擁有最佳運營最佳實踐？我在考慮最佳實踐的轉移。辛克萊會讓霍莉變得更好嗎？ Holly 是否使 Sinclair 變得更好並且與 Puget Sound [相同]？您如何看待合併後公司的一般運營可靠性？

Doug, this is Tim. Let me take a shot at it. I think the answer is yes to both questions. Puget Sound and Sinclair make HollyFrontier better and the HollyFrontier make Puget Sound and Sinclair better. I think there are opportunities to basically share both forward and backwards with each of these assets.

道格，這是蒂姆。讓我試一試。我認為這兩個問題的答案都是肯定的。 Puget Sound 和 Sinclair 讓 HollyFrontier 變得更好，HollyFrontier 讓 Puget Sound 和 Sinclair 變得更好。我認為有機會基本上與這些資產中的每一個共享前向和後向。

Puget Sound, as we've talked about before, has a very talented workforce, advantaged assets, a growing market that it sits in. I think they have a lot to offer HollyFrontier, but I think we have some additional things we can offer them as well in terms of an independent refiner mindset, a way to try to not have to work within a larger system but try to optimize the asset within its individual region. I think there's a lot of opportunity there to work together.

Puget Sound，正如我們之前談到的那樣，擁有非常有才華的員工隊伍、優勢資產以及它所處的不斷增長的市場。我認為他們可以為 HollyFrontier 提供很多東西，但我認為我們可以為他們提供一些額外的東西以及在獨立的煉油廠心態方面，一種嘗試不必在更大的系統中工作但嘗試在其單個區域內優化資產的方法。我認為那裡有很多合作的機會。

Sinclair, it's -- we're still looking to close, as you know, so I'll limit my comments on Sinclair. But Sinclair has a very attractive market that they operate in. They obviously have a very different model in their branded marketing outlets that we will benefit tremendously from. And we're looking forward to attaching that to our merchant refining portfolio to take full advantage.

辛克萊，正如你所知，我們仍在尋求關閉，所以我將限制對辛克萊的評論。但 Sinclair 擁有一個非常有吸引力的市場，他們在其中開展業務。他們顯然在品牌營銷渠道中採用了非常不同的模式，我們將從中受益匪淺。我們期待將其附加到我們的商業精煉產品組合中以充分利用。

On the other hand, we think we have some systems and processes and people that we can offer to help Sinclair as well to try to get their assets to run better as well. So I think it goes both ways.

另一方面，我們認為我們可以提供一些系統、流程和人員來幫助 Sinclair 以及嘗試讓他們的資產也更好地運行。所以我認為這是雙向的。

I appreciate that answer. My last one, guys, is a macro one, and I don't know if you want to take this. But we all remember the golden age, so to speak, back in 2000s. My question is this, Europe and Asia has got a very different natural gas supply dependency today than it did back then. So I'm curious, if the European U.S. gas premium persists, maybe not at current levels, but on a go-forward basis, how do you -- how does that impact your thinking of, let's say, go-forward mid-cycle margins?

我很欣賞這個答案。伙計們，我的最後一個是宏觀的，我不知道你們是否想接受這個。但我們都記得黃金時代，可以這麼說，回到 2000 年代。我的問題是，歐洲和亞洲如今對天然氣供應的依賴程度與當時截然不同。所以我很好奇，如果歐洲和美國的天然氣溢價持續存在，也許不是目前的水平，而是在未來的基礎上，你如何 - 這如何影響你的想法，比方說，在周期中期邊距？

Doug, we're bullish on refining this year. I think natural gas is just one component that will continue to advantage the U.S. refining system versus the European one, for example, in this case. We think low product supply, if you look at inventories, they're 5-year lows right now in the U.S. We think this is going to be a heavy maintenance and turnaround year associated with a lot of the majors and a lot of the other competitors out there who already announced heavy maintenance workload this year.

道格，我們看好今年的煉油。我認為天然氣只是將繼續有利於美國煉油系統而不是歐洲煉油系統的一個組成部分，例如，在這種情況下。我們認為產品供應量低，如果你看一下庫存，它們目前在美國處於 5 年低點。我們認為這將是與許多專業和許多其他公司相關的大量維護和轉機的一年那裡的競爭對手今年已經宣布了繁重的維護工作量。

As we've talked about before, we do not have a heavy turnaround load for this year. Aside from this unplanned maintenance and then some smaller planned maintenance throughout the year, we're actually looking to be in pretty good shape to take full advantage of this environment. And so we think this year is going to be at or above mid-cycle. We think the natural gas situation will only strengthen that and help improve that. Whether that's going to persist, I think will depend on a lot whether the geopolitical risks out there play out or not.

正如我們之前談到的，我們今年的周轉負荷並不重。除了這種計劃外維護和全年一些較小的計劃維護之外，我們實際上希望處於良好狀態以充分利用這種環境。因此，我們認為今年將處於或高於週期中期。我們認為天然氣形勢只會加強並有助於改善這一點。這是否會持續下去，我認為這在很大程度上取決於地緣政治風險是否會出現。

Your next question is coming from Neil Mehta from Goldman Sachs.

你的下一個問題來自高盛的 Neil Mehta。

So look, product inventories in PADD 2, I'd be curious on your views, Mike and team. We see that happen from time to time in the winter where the inventories do get elevated relative to rest of the country and then you work through it. But it is notable that the Mid-Con margins are a little bit softer than other PADDs. Just your observation there. And is this anything we should be concerned about or is it just normal seasonality?

所以看，PADD 2 中的產品清單，我很好奇你的觀點，Mike 和團隊。我們看到這種情況在冬季時不時發生，那裡的庫存相對於該國其他地區確實有所增加，然後你就可以解決這個問題。但值得注意的是，Mid-Con 利潤率比其他 PADD 略微軟一些。只是你在那裡的觀察。這是我們應該關注的事情還是只是正常的季節性？

Neil, let me take the first shot. The Mid-Con inventories are definitely high right now. We do attribute that to seasonal behaviors. We see this typically every winter. We don't think this will be any different. And we obviously, again, think that this summer is going to be strong in the Mid-Con, certainly mid-cycle or above, despite the higher inventories that we're seeing today.

尼爾，讓我拍第一槍。 Mid-Con 的庫存現在肯定很高。我們確實將其歸因於季節性行為。我們通常每年冬天都會看到這種情況。我們認為這不會有任何不同。顯然，我們再次認為，儘管我們今天看到的庫存較高，但今年夏天在中期，肯定是周期中期或以上，將會很強勁。

All right. That's helpful. And then just your thoughts on shape of curve with the time spreads being so strong right now up at the front, given all the geopolitical stuff. Just your thoughts on how that affects capture rates, the market structure. And is that something that we should think of as a deduct relative to the margins?

好的。這很有幫助。然後，考慮到所有地緣政治因素，您對曲線形狀的想法與時間利差現在如此強勁。只是您對這如何影響捕獲率和市場結構的想法。我們是否應該將其視為相對於利潤率的扣除？

Yes, I mean, you're right on there, Neil, the steep backwardation is not helpful from a capture standpoint. But we obviously would prefer a contango-shaped market. But that's not what we've got. And for the next few months, it looks like we are going to continue to face some higher-than-normal backwardation here with all the geopolitical risk that's out there.

是的，我的意思是，你說得對，尼爾，從捕獲的角度來看，急劇的溢價沒有幫助。但我們顯然更喜歡正價差形態的市場。但這不是我們所擁有的。在接下來的幾個月裡，我們似乎將繼續面臨高於正常水平的現貨溢價，同時存在所有地緣政治風險。

So yes, you should factor that into your models, but we don't think -- we do think it's going to line back out here the rest of the year.

所以是的，你應該把它考慮到你的模型中，但我們不認為——我們確實認為它會在今年餘下的時間裡重新出現。

Yes. I think I'll jump in, and that is to add perhaps the obvious. But the product cracks, even RVO adjusted, are seasonally strong. If you look at Mid-Con as an example, they're depressed relative to the remainder of the country but still pretty decent for a February time frame for gasoline. If you look elsewhere in the country, other served markets, it's certainly better. And I think what we're seeing is either a snapback or a steady road back from COVID. You're seeing it in vehicle miles traveled. You certainly see it in distillate demand and inventories.

是的。我想我會加入，那就是添加一些顯而易見的內容。但產品裂縫，即使是 RVO 調整後，季節性很強。如果您以 Mid-Con 為例，它們相對於該國其他地區而言是低迷的，但對於 2 月份的汽油時間框架而言仍然相當不錯。如果你看看這個國家的其他地方，其他服務市場，那肯定更好。而且我認為我們看到的是從 COVID 中快速恢復或穩步回歸的道路。您會在車輛行駛里程中看到它。您肯定會在餾分油需求和庫存中看到它。

And so while backwardation hurts capture, the overall level of product margin is pretty good. And as we look forward into this year, we expect it to be a strong financial year for our sector.

因此，儘管現貨溢價不利於捕獲，但產品利潤率的整體水平相當不錯。展望今年，我們預計這將是我們行業強勁的財政年度。

And your next question is coming from Jason Gabelman from Cowen.

你的下一個問題來自 Cowen 的 Jason Gabelman。

I had two on the renewable diesel business. First, on the financial projections, I think when you sanctioned the renewable diesel projects, there was $165 million annual free cash flow forecast. Is that still the right number? There's been a lot of moving pieces with environmental credits. So wondering if that's the right number, excluding the BTC.

我有兩個關於可再生柴油業務的。首先，關於財務預測，我認為當你批准可再生柴油項目時，每年的自由現金流預測為 1.65 億美元。那還是正確的數字嗎？有很多具有環保功勞的動人作品。所以想知道這是否是正確的數字，不包括 BTC。

And then secondly, just thinking about M&A on renewable diesel. You mentioned potentially looking to take an equity stake in upstream business. Is there a market for you to potentially sell a stake in your renewable diesel project once you get it up and running? Are those conversations you've had? Or maybe you could just discuss potential interested parties or types of parties that could be out there.

其次，只考慮可再生柴油的併購。您提到可能希望入股上游業務。一旦您的可再生柴油項目啟動並運行，您是否有可能出售其股份的市場？你有過這些對話嗎？或者，也許您可以只討論潛在的利益相關方或可能存在的各方類型。

Jason, it's Rich. So high level, look, there's some puts and takes, as you mentioned. But I think those -- that free cash flow on our earnings projections remain the same with respect to renewable diesel. Obviously, we expect to see those second half of '22 and really going into '23. BTC looks like a tailwind in the near term. LCFS is probably a little bit of a headwind, but we are very bullish on that market in the long run.

傑森，它是豐富的。這麼高的水平，看，正如你提到的，有一些投入和投入。但我認為那些——我們對可再生柴油的盈利預測的自由現金流保持不變。顯然，我們希望看到 22 年下半年並真正進入 23 年。 BTC 在短期內看起來像是順風。 LCFS 可能有點不利，但從長遠來看，我們非常看好該市場。

With respect to M&A, look we are focused on executing the projects we've got in front of us. There's really nothing to speak to -- no activity to speak to here. But look, we are always open to anything that will create more value for our shareholders.

關於併購，看我們專注於執行我們面前的項目。真的沒有什麼可說話的——這裡沒有可說話的活動。但是看，我們總是對任何能為我們的股東創造更多價值的事情持開放態度。

Yes. Jason, this is Tom. Yes. We've got a busy road ahead of us, not only starting up our own units, but integrating the Sinclair facilities to make it one happy family, or contiguous project. We've got some optimization to do after the acquisition of Sinclair. So we've got a full plate from a renewable standpoint. So to Rich's comments, we really haven't looked at any kind of potential of spinning off the renewables or spinning off an equity share in it.

是的。傑森，這是湯姆。是的。我們前面有一條繁忙的道路，不僅要啟動我們自己的單位，還要整合 Sinclair 設施，使其成為一個幸福的家庭或連續的項目。收購 Sinclair 後，我們需要進行一些優化。所以從可再生的角度來看，我們已經有了一個完整的盤子。因此，根據 Rich 的評論，我們真的沒有考慮任何剝離可再生能源或剝離其中股權的潛力。

(Operator Instructions) Your next question is coming from Paul Cheng from Scotiabank.

（操作員說明）您的下一個問題來自豐業銀行的 Paul Cheng。

Mike, just two quick follow-up. Just curious that if the Cheyenne facility, wondering in for today, is today economic that you guys are making money in that facility? And also that in the long haul, what is the game plan for that business? I mean how do you look at it? Do you want to build substantially more capacity? Or that this is really one-off because of some opportunity you see in Navajo and Cheyenne and so you will just stick with the existing -- these 2 facility end up the unit but not with the expense. So what is the longer-term game plan for this business?

邁克，只有兩個快速跟進。只是好奇，如果夏安工廠，今天想知道，今天你們在那個工廠賺錢是經濟的嗎？而且從長遠來看，該業務的遊戲計劃是什麼？我的意思是你怎麼看它？你想建立更多的能力嗎？或者這真的是一次性的，因為你在納瓦霍和夏延看到了一些機會，所以你會堅持現有的——這 2 個設施最終成為單位，但沒有費用。那麼這項業務的長期遊戲計劃是什麼？

Yes. Paul, this is Tom Creery. In today's economics, there's still a lot of factors. We still don't have, for example -- we don't have operating costs or operating expenses because we have yet to operate, so there's a lot of unknowns.

是的。保羅，這是湯姆·克里裡。在今天的經濟學中，仍然有很多因素。例如，我們仍然沒有——我們沒有運營成本或運營費用，因為我們還沒有運營，所以有很多未知數。

It would still be profitable under today's circumstances. We are seeing some headwinds, as you're aware, through lower LCFS prices. However, we don't expect those to continue into the long term, and that's not -- we're not -- we didn't build these units on today's economics, we've built them over 20-year economics. So we think over the long run, they will be profitable and will hit our financial targets.

在今天的情況下，它仍然是有利可圖的。正如您所知，我們看到了一些不利因素，通過較低的 LCFS 價格。然而，我們不期望這些會持續到長期，而且那不是 - 我們不是 - 我們沒有在今天的經濟基礎上建立這些單位，我們已經建立了超過 20 年的經濟。所以我們認為從長遠來看，他們將盈利並達到我們的財務目標。

Paul, looking forward, within our Renewables segment, what we would say is -- we have a lot on our plate right now to get these projects completed and businesses up and running as we've constructed them. With that said, we also like to look forward and try to participate in future profitable opportunities. Most likely, those would be in and around our existing asset facilities, meaning brownfield. But as of today, the focus is critically on the 3 assets that we're building and bringing up to operate.

保羅，展望未來，在我們的可再生能源領域，我們要說的是——我們現在有很多事情要做，以完成這些項目，並在我們建造這些項目時啟動和運行業務。話雖如此，我們也期待並嘗試參與未來的盈利機會。最有可能的是，這些將在我們現有的資產設施內和周圍，即棕地。但截至今天，重點主要放在我們正在建設和運營的 3 項資產上。

Your next question is coming from Phil Gresh from JPMorgan.

你的下一個問題來自摩根大通的 Phil Gresh。

I just had one follow-up on lubes. With your commentary around Rack Back, and some of the headwinds there with Group II that we're starting to see here in the first quarter relative to what we saw in 2021, just curious how you're thinking about Rack Forward and the potential benefits there? And sometimes in the past, you've been willing to give a range of guidance for what you think Rack Forward could be. And curious if you have any thoughts there. I know 2021 was a bit of a different kind of year for Rack Forward.

我剛剛對潤滑油進行了一次跟進。根據您對 Rack Back 的評論，以及我們在第一季度開始看到的與我們在 2021 年看到的情況相關的第 II 組的一些逆風，只是想知道您如何看待 Rack Forward 及其潛在好處那裡？有時在過去，您願意為您認為 Rack Forward 可能是什麼提供一系列指導。好奇你是否有任何想法。我知道 2021 年對於 Rack Forward 來說有點不同。

Yes. So this is Tim, let me take a shot at that. Last year was a very strange year of market fluctuations between Rack Forward and Rack Back, as you saw. It's continuing into this year and that's why we didn't provide any guidance on this year for Rack Forward. In fact, I think what we would tell you is we still believe that our lubes business is a $250 million EBITDA business in a mid-cycle environment. And we would tell you that for 2022, we expect the year to be at or above mid-cycle on a combined basis. And that's probably how we would suggest you look at the lubes business for this year.

是的。所以這是蒂姆，讓我試一試。如您所見，去年是 Rack Forward 和 Rack Back 之間市場波動非常奇怪的一年。它一直持續到今年，這就是為什麼我們今年沒有為 Rack Forward 提供任何指導。事實上，我想我們會告訴你的是，我們仍然相信我們的潤滑油業務在周期中期的環境中是一項 2.5 億美元的 EBITDA 業務。我們會告訴你，對於 2022 年，我們預計這一年將處於或高於週期中期。這可能就是我們建議您查看今年潤滑油業務的方式。

We are seeing some base oil margin compression starting to show signs of happening. That will allow the Rack Forward business to return to more normal conditions. But at the same time, we're hearing of unplanned events and heavy turnarounds in the base oil producing market here, especially in the U.S., that we think will continue to keep base oil prices tight. And at the same time, we're seeing recovery in our Rack Forward business, and we think that business will continue to strengthen. And so we're optimistic certainly here in the first half of the year that we're going to see above mid-cycle profitability from our lubes business.

我們看到一些基礎油利潤率壓縮開始顯示出發生的跡象。這將使 Rack Forward 業務恢復到更正常的狀態。但與此同時，我們聽說這裡的基礎油生產市場發生了意外事件和重大轉變，我們認為這將繼續保持基礎油價格緊張，尤其是在美國。與此同時，我們看到 Rack Forward 業務正在復蘇，我們認為該業務將繼續加強。因此，我們在今年上半年當然樂觀，我們將看到我們的潤滑油業務的盈利能力高於中期週期。

And there are no further questions at this time. I will turn the floor back over to Craig for closing remarks.

目前沒有其他問題。我將把發言權交還給克雷格，讓他發表閉幕詞。

Thank you, operator. This is Mike. And thank you all for participating. I'd like to wrap up the call this morning emphasizing a couple of points.

謝謝你，運營商。這是邁克。感謝大家的參與。我想在今天早上結束電話會議時強調幾點。

The first is that the fourth quarter included some significant operational challenges, many of which were brought about by extraordinary weather, but all of which we own and need to manage. On one hand, I'll recognize the major events made by our team to recover from these issues. And on the other, I'm going to say that my expectations are for better reliability and throughput.

首先是第四季度包括一些重大的運營挑戰，其中許多是由異常天氣帶來的，但我們擁有並需要管理所有這些挑戰。一方面，我會認識到我們的團隊為從這些問題中恢復而做出的重大事件。另一方面，我要說我的期望是更好的可靠性和吞吐量。

I will note that with respect to employee and contractor safety, our 2021 year was the best ever for our company, and our recordable injury rate was less than half of the industry average. This is a reflection of what we're achieving on the ground.

我要指出的是，在員工和承包商安全方面，我們的 2021 年是我們公司有史以來最好的一年，我們可記錄的傷害率不到行業平均水平的一半。這反映了我們在實地取得的成就。

We're nearing the completion of our renewable diesel investments and look forward to the transition from project management to operations management. This is a really exciting new venture for our company, and I believe it's going to be an attractive business for our owners.

我們即將完成可再生柴油投資，並期待從項目管理過渡到運營管理。這對我們公司來說是一個非常令人興奮的新冒險，我相信這對我們的所有者來說將是一個有吸引力的業務。

And the final point is that the Sinclair transaction is truly transformative for HollyFrontier. It's an incredibly exciting time for us. And while the lag from announcement to close may take some of the limelight away from this deal, internally, we're working really aggressively to plan for the closing and the integration. And we continue to view the combined company as strategic and compelling as an investment, a supplier and an employer.

最後一點是，辛克萊交易對 HollyFrontier 來說是真正的變革。這對我們來說是一個令人難以置信的激動人心的時刻。雖然從宣佈到完成的滯後可能會從這筆交易中奪走一些風頭，但在內部，我們正在非常積極地工作以計劃完成和整合。我們繼續將合併後的公司視為具有戰略意義和吸引力的投資、供應商和雇主。

So thanks all for participating today, and we look forward to talking with you again.

感謝大家今天的參與，我們期待與您再次交談。

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

謝謝。今天的電話會議到此結束。此時請斷開您的線路，祝您有美好的一天。