What changed in this filing

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Item 1A. Risk Factors

2026-04-29 compared with 2025-11-07 · 37 added, 32 removed, 0 unchanged (100% of the section changed)

Except as described below, there were no material changes during the nine months ended September 30, 2025 to the risk factors identified in the Company’s fiscal 2024 Annual Report on Form 10-K.

The availability and cost of RINs and other required credits could have an adverse effect on our financial condition and results of operations.

Pursuant to the 2007 Energy Independence and Security Act, the EPA promulgated the RFS-2 (“RFS”) regulations reflecting the increased volume of renewable fuels mandated to be blended into the nation's fuel supply.

The regulations, in part, require refiners to add annually increasing amounts of “renewable fuels” to their petroleum products or purchase credits, known as RINs, in lieu of such blending.

The RFS imposes a substantial financial obligation on each of our four small refineries.

The cost of complying with the RFS is one of our highest operational costs, including significant additional costs to finance our compliance.

These costs are highly volatile and unlike other refining companies Delek is not able to pass through its high compliance costs to its customers.

Delek is an obligated party under the RFS, which requires us to obtain RINs to satisfy our annual Renewable Volume Obligation (“RVO”).

While we are able to obtain many of the RINs required for compliance by blending renewable fuels manufactured by third parties or by our own biodiesel plants, we must also purchase RINs on the open market in order to comply with the quantity of renewable fuels we are required to blend under the RFS.

The price and number of RINs an obligated party must acquire are impacted by government regulation requiring such credits, and also may be impacted by small refiner exemptions (“SREs”) granted by the EPA.

In past years, the price of RINs has been highly volatile and the EPA’s decisions on SRE hardship petitions have been unduly delayed.

Increasing RINs prices, inconsistent administration of the RFS by the EPA, and Delek’s market position has prevented us from passing through compliance costs of the program in the past and will likely continue in the future.

While we cannot predict the future prices of RINs, the costs to obtain the necessary number of RINs could be material.

Our future operating results are significantly dependent on the EPAs granting of SREs on a timely basis.

If we are unable to pass the costs of compliance with the RFS on to our customers, if sufficient RINs are unavailable for purchase, if we have to pay a significantly higher price for RINs or if we are otherwise unable to meet the RFS mandates, our refinery operations, financial condition and results of operations could be adversely affected.

In the past, we have received SREs under the RFS program for certain of our refineries.

In August 2025, the EPA granted full and partial exemptions for certain of our refineries related to obligations for the 2019-2024 calendar years.

We were able to use some of these RINs to satisfy our obligation for previous compliance periods.

However, because RINs are valid for a one-year period, a majority of the refunded RINs had expired and therefore cannot be used or sold for value to offset future compliance obligations.

The relief received also was not sufficient to offset our 2025 compliance obligation and thus Delek’s refineries will need to seek relief from the EPA for the hardship imposed by the RFS for the 2025 compliance year.

In September and October 2025, certain of our subsidiaries filed lawsuits against the EPA in the United States Court of Appeals for the District of Columbia seeking to overturn the EPA’s August 2025 denial that the Krotz Springs Refinery was ineligible for an exemption for the 2024 compliance year, and seeking additional relief for the EPA’s decision to refund expired RINs.

These lawsuits remain pending, and we are unable to estimate the outcome or the costs we may incur at this time.

In August 2025, the EPA provided an updated framework for evaluation of future SRE petitions, which may ultimately include reallocating waived volumes to other obligated parties.

This updated framework may be subject to legal challenge, and we cannot predict the extent to

which any such challenge may impact the EPA’s timeliness in responding to such petitions in the future.

Moreover, even if the new approach survives any future legal challenges, we cannot guarantee that such an exemption will be obtained for any of our refineries in future years, which could result in increased costs and adversely impact future results of operations and our business strategy.

In addition, the RFS regulations are highly complex and evolving, requiring us to periodically update our compliance systems.

The RFS regulations require the EPA to determine and publish the applicable annual volume and percentage standards for each compliance year by November 30 for the forthcoming year, and such blending percentages could be higher or lower than amounts estimated and accrued for in our consolidated financial statements.

The future cost of RINs is difficult to estimate until such time as the EPA finalizes the applicable standards for the forthcoming compliance year.

Moreover, in addition to increased price volatility in the RINs market, there have been multiple instances of RINs fraud occurring in the marketplace over the past several years.

The EPA has initiated several enforcement actions against refiners who purchase fraudulent RINs, resulting in substantial costs to the refiner.

While the EPA promulgated a rule in June 2019 aiming to improve transparency in the market for RINs, we cannot predict with certainty our exposure to increased RINs costs in the future, nor can we predict the extent by which costs associated with RFS-2 regulations will impact our future results of operations.

There were no material changes during the three months ended March 31, 2026 to the risk factors identified in the Company’s fiscal 2025 Annual Report on Form 10-K with the exception of the following:

Developments which impact the global oil markets have had, may continue to have, or may have an adverse impact on our business, o ur futur e results of operations and our overall financial performance.

While our operations are focused primarily in the Gulf Coast Region (PADD III), our business is impacted by events and developments that impact the global markets for oil and other energy products.

Any regional or global event or development that destabilizes worldwide economic and commercial activity, financial markets, or the demand for and prices of oil and gas products could materially adversely affect our business and operations.

In recent years, the outbreak of a pandemic, the Russia-Ukraine War, Organization of Petroleum Exporting Countries ("OPEC")-Russia relationship, and the conflicts in the Middle East have been sources of uncertainty in the global oil markets, substantial global supply chain issues, and significant disruptions in the labor market.

Global economic growth drives demand for energy from all sources, including fossil fuels.

Should the U.S.

or global economies experience weakness, demand for energy may decline.

Should growth in global energy production outstrip demand, excess supplies may arise.

Declines in demand and excess supplies may result in accompanying declines in commodity prices and deterioration of our financial position along with our ability to operate profitably and our ability to obtain financing to support operations.

Conversely, should demand for energy outstrip global supply, commodity prices are likely to rise.

With respect to our business, we have experienced periodic declines in demand thought to be associated with slowing economic growth in certain markets coupled with new oil and gas supplies coming on line and other circumstances beyond our control that resulted in oil and gas supply exceeding global demand which, in turn, resulted in steep declines in prices of oil and natural gas.

At times, we have also experienced declines in the supply of inputs thought to be associated with supply chain issues and disruptions in the labor market.

There can be no assurance as to how long such uncertainty will persist or that a recurrence of price weakness will not arise in the future.

The ongoing conflict between the United States and Iran, including the disruption to shipping through the Strait of Hormuz, has introduced significant volatility into global energy markets, causing crude oil prices to spike materially from levels seen at the start of 2026.

Although we do not have direct operations or exposure in the Middle East, sustained commodity price volatility and broader macroeconomic uncertainty could indirectly affect our business, including demand for our services.

In addition, elevated energy prices and supply uncertainty may affect refinery utilization rates, which could reduce demand for the transportation, storage and terminalling services we provide under our commercial agreements.

The ultimate duration and resolution of the conflict, including the status of the Strait of Hormuz and any ceasefire arrangements, remains uncertain.

The ultimate extent of the impact of volatile conditions in the oil and gas industry on our business, financial condition, results of operation and liquidity will depend largely on future developments which are outside of our control, including the extent and duration of any price reductions,

Other Information

any additional decisions by OPEC and disputes between the members of other leading oil producing countries (together with OPEC, “OPEC+”).

Furthermore, developments in the global oil markets may also have the effect of heightening many of the other risks described below.

Acts of terror or sabotage, threats of war, armed conflict, or war may have an adverse impact on our business, our future results of operations and our overall financial performance.

Acts of sabotage or terrorist attacks (including cyber-attacks), threats of war, armed conflict, or war, as well as events occurring in response to or in connection with them, including political instability in significant oil producing regions such as the Middle East, Africa, the former Soviet Union and South America, may harm our business or have an adverse impact on our future results of operations and financial condition.

This risk, and others dependent on geopolitical factors, may be heightened as a result of ongoing conflicts such as the Russia-Ukraine war and the conflicts in the Middle East and events occurring in response thereto.

Energy-related assets (which could include refineries, pipelines and terminals) may be at greater risk of future terrorist attacks than other possible targets in the U.S.

direct attack on our assets, or the assets of others used by us, could have a material adverse effect on our business, financial condition and results of operations.

Uncertainty surrounding new or continued global hostilities or other sustained military campaigns, sanctions brought by the U.S.

and other countries, and the possibility that infrastructure facilities could be direct targets of, or indirect casualties of, an act of terror, armed conflict or war may affect our operations in unpredictable ways, including disruptions of crude oil supplies and markets for refined products.

In addition, any terrorist attack, armed conflict, war or political instability in significant oil producing regions such as the Middle East, Africa, the former Soviet Union and South America could have an adverse impact on energy prices, including prices for crude oil, other feedstocks and refined petroleum products, and an adverse impact on the margins from our refining and petroleum product marketing operations.

The long-term impacts of terrorist attacks and the threat of future terrorist attacks on the energy transportation industry in general, and on us in particular, are unknown.

Increased security measures taken by us as a precaution against possible terrorist attacks or vandalism could result in increased costs to our business.

In addition, disruption or significant increases in energy prices could result in government-imposed price controls.

Any one of, or a combination of, these occurrences could have a material adverse effect on our business, financial condition and results of operations.

Further, changes in the insurance markets attributable to terrorist attacks or acts of sabotage could make certain types of insurance more difficult for us to obtain.

Moreover, the insurance that may be available to us may be significantly more expensive than our existing insurance coverage.

Instability in the financial markets as a result of terrorism, sabotage or war could also affect our ability to raise capital, including our ability to repay or refinance debt.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1A. Risk Factors