What changed in this filing

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Item 1. Financial Statements

2021-05-07 compared with 2020-11-09 · 338 added, 525 removed, 690 unchanged (56% of the section changed)

3 unchanged sentences

(In millions, except share and per share data)

September 30, 2020 December 31, 2019

March 31, 2021 December 31, 2020

Current assets:

33 unchanged sentences

Preferred stock, $ 0.01 par value, 10,000,000 shares authorized, no shares issued and outstanding

Common stock, $ 0.01 par value, 110,000,000 shares authorized, 91,301,229 shares and 90,987,025 shares issued at September 30, 2020 and December 31, 2019, respectively

Common stock, $ 0.01 par value, 110,000,000 shares authorized, 91,450,724 shares and 91,356,868 shares issued at March 31, 2021 and December 31, 2020, respectively

Additional paid-in capital 1,188.6 1,185.1

Accumulated other comprehensive income — 0.1

Treasury stock, 17,575,527 shares and 17,516,814 shares, at cost, as of September 30, 2020 and December 31, 2019, respectively

Accumulated other comprehensive loss ( 7.4 ) ( 7.2 )

Treasury stock, 17,575,527 shares, at cost, as of March 31, 2021 and December 31, 2020, respectively

( 694.1 ) ( 694.1 )

6 unchanged sentences

Delek US Holdings, Inc.

Condensed Consolidated Statements of Operations (Unaudited)

Condensed Consolidated Statements of Income (Unaudited)

(In millions, except share and per share data)

Three Months Ended Nine Months Ended

September 30, September 30,

2020 2019 2020 2019

Three Months Ended

Net revenues $ 2,392.2 $ 1,821.2

9 unchanged sentences

Total operating costs and expenses 2,472.3 2,182.7

Operating (loss) income ( 75.2 ) 87.4 ( 413.9 ) 444.1

Operating loss ( 80.1 ) ( 361.5 )

Interest expense 29.6 36.3

1 unchanged sentence

Income from equity method investments ( 4.8 ) ( 5.1 )

Loss (gain) on sale of non-operating refinery 0.1 — ( 56.8 ) —

Other (income) expense, net ( 1.0 ) ( 0.2 ) ( 3.4 ) 3.3

Other income, net ( 1.0 ) ( 0.9 )

Total non-operating expense, net 23.6 28.6

(Loss) income before income tax (benefit) expense ( 92.5 ) 73.4 ( 420.0 ) 382.8

Income tax (benefit) expense ( 15.6 ) 13.4 ( 134.6 ) 83.8

(Loss) income from continuing operations, net of tax ( 76.9 ) 60.0 ( 285.4 ) 299.0

Discontinued operations:

Loss from discontinued operations, including loss on sale of discontinued operations — — — ( 1.0 )

Loss before income tax benefit ( 103.7 ) ( 390.1 )

Income tax benefit ( 12.4 ) ( 83.1 )

Loss from discontinued operations, net of tax — — — ( 0.8 )

Net (loss) income ( 76.9 ) 60.0 ( 285.4 ) 298.2

Net loss ( 91.3 ) ( 307.0 )

Net income attributed to non-controlling interests 7.3 7.4

Net (loss) income attributable to Delek $ ( 88.1 ) $ 51.3 $ ( 314.8 ) $ 277.9

Basic (loss) income per share:

(Loss) income from continuing operations $ ( 1.20 ) $ 0.68 $ ( 4.28 ) $ 3.64

Loss from discontinued operations — $ — — ( 0.01 )

Basic (loss) income per share $ ( 1.20 ) $ 0.68 $ ( 4.28 ) $ 3.63

Diluted (loss) income per share:

(Loss) income from continuing operations $ ( 1.20 ) $ 0.68 $ ( 4.28 ) $ 3.61

Loss from discontinued operations — — — ( 0.01 )

Diluted (loss) income per share $ ( 1.20 ) $ 0.68 $ ( 4.28 ) $ 3.60

Net loss attributable to Delek $ ( 98.6 ) $ ( 314.4 )

Basic loss per share $ ( 1.34 ) $ ( 4.28 )

Diluted loss per share $ ( 1.34 ) $ ( 4.28 )

Dividends declared per common share outstanding $ — $ 0.31

2 unchanged sentences

Delek US Holdings, Inc.

Condensed Consolidated Statements of Comprehensive Operations (Unaudited)

Condensed Consolidated Statements of Comprehensive Income (Unaudited)

(In millions)

Three Months Ended Nine Months Ended

September 30, September 30,

2020 2019 2020 2019

Net (loss) income $ ( 76.9 ) $ 60.0 $ ( 285.4 ) $ 298.2

Three Months Ended

Net loss $ ( 91.3 ) $ ( 307.0 )

Other comprehensive income (loss):

Commodity contracts designated as cash flow hedges:

Net loss related to commodity cash flow hedges ( 0.6 ) ( 19.8 ) ( 0.3 ) ( 23.2 )

Income tax benefit ( 0.1 ) ( 4.1 ) ( 0.1 ) ( 4.8 )

Net comprehensive loss on commodity contracts designated as cash flow hedges ( 0.5 ) ( 15.7 ) ( 0.2 ) ( 18.4 )

Other income, net of taxes — 0.1 0.1 0.5

Total other comprehensive loss ( 0.5 ) ( 15.6 ) ( 0.1 ) ( 17.9 )

Comprehensive (loss) income ( 77.4 ) 44.4 ( 285.5 ) 280.3

Net (loss) gain related to commodity cash flow hedges ( 0.2 ) 1.8

Income tax expense — 0.4

Net comprehensive (loss) income on commodity contracts designated as cash flow hedges ( 0.2 ) 1.4

Other loss, net of taxes — ( 0.3 )

Total other comprehensive (loss) gain ( 0.2 ) 1.1

Comprehensive loss ( 91.5 ) ( 305.9 )

Comprehensive income attributable to non-controlling interest 7.3 7.4

Comprehensive (loss) income attributable to Delek $ ( 88.6 ) $ 35.7 $ ( 314.9 ) $ 260.0

Comprehensive loss attributable to Delek $ ( 98.8 ) $ ( 313.3 )

See accompanying notes to condensed consolidated financial statements

3 unchanged sentences

(In millions, except share and per share data)

Three Months Ended September 30, 2020

Three Months Ended March 31, 2021

Common Stock Additional Paid-in Capital Accumulated Other Comprehensive Income Retained Earnings Treasury Stock Non-Controlling Interest in Subsidiaries Total Stockholders' Equity

Shares Amount Shares Amount

Balance at June 30, 2020 91,232,964 $ 0.9 $ 1,160.1 $ 0.5 $ 926.4 ( 17,575,527 ) $ ( 694.1 ) $ 165.5 $ 1,559.3

Balance at December 31, 2020

91,356,868 $ 0.9 $ 1,185.1 $ ( 7.2 ) $ 522.0 ( 17,575,527 ) $ ( 694.1 ) $ 118.4 $ 1,125.1

Net (loss) income — — — — ( 98.6 ) — — 7.3 ( 91.3 )

Other comprehensive loss related to commodity contracts, net — — — ( 0.2 ) — — — — ( 0.2 )

Common stock dividends ($ 0.31 per share)

— — — — ( 23.0 ) — — — ( 23.0 )

Distributions to non-controlling interests — — — — — — — ( 8.0 ) ( 8.0 )

Equity-based compensation expense — — 4.6 — — — — — 4.6

Repurchase of non-controlling interests — — ( 23.5 ) — — — — 0.4 ( 23.1 )

Impact from IDR Simplification transaction of Delek Logistics LP — — 37.2 — — — — ( 50.8 ) ( 13.6 )

Taxes paid due to the net settlement of equity-based compensation — — ( 1.1 ) — — — — — ( 1.1 )

Exercise of equity-based awards 93,856 — — — — — — — —

Balance at September 30, 2020 91,301,229 $ 0.9 $ 1,180.1 $ — $ 815.3 ( 17,575,527 ) $ ( 694.1 ) $ 118.1 $ 1,420.3

Financial Statements

Delek US Holdings, Inc.

Condensed Consolidated Statements of Changes in Stockholders' Equity (Unaudited)

(In millions, except share and per share data)

Three Months Ended September 30, 2019

Common Stock Additional Paid-in Capital Accumulated Other Comprehensive Income Retained Earnings Treasury Stock Non-Controlling Interest in Subsidiaries Total Stockholders' Equity

Shares Amount Shares Amount

Balance at June 30, 2019 90,861,698 $ 0.9 $ 1,140.3 $ 26.3 $ 1,165.9 ( 15,416,502 ) $ ( 618.9 ) $ 171.7 $ 1,886.2

Net income — — — — 51.3 — — 8.7 60.0

Other comprehensive loss related to commodity contracts, net — — — ( 15.7 ) — — — — ( 15.7 )

Common stock dividends ($ 0.29 per share)

— — — — ( 21.8 ) — — — ( 21.8 )

Distribution to non-controlling interest — — — — — — — ( 8.2 ) ( 8.2 )

Equity-based compensation expense — — 7.3 — — — — 0.1 7.4

Repurchase of common stock — — — — — ( 1,236,854 ) ( 43.0 ) — ( 43.0 )

Taxes paid due to the net settlement of equity-based compensation — — ( 1.5 ) — — — — — ( 1.5 )

Exercise of equity-based awards 78,695 — — — — — — — —

Other — — — — ( 0.2 ) — — — ( 0.2 )

Balance at September 30, 2019 90,940,393 $ 0.9 $ 1,146.1 $ 10.7 $ 1,195.3 ( 16,653,356 ) $ ( 661.9 ) $ 172.3 $ 1,863.4

Balance at March 31, 2021

91,450,724 $ 0.9 $ 1,188.6 $ ( 7.4 ) $ 423.2 ( 17,575,527 ) $ ( 694.1 ) $ 117.7 $ 1,028.9

Financial Statements

Delek US Holdings, Inc.

Condensed Consolidated Statements of Changes in Stockholders' Equity (Unaudited)

Condensed Consolidated Statements of Changes in Stockholders' Equity (Unaudited) (Continued)

(In millions, except share and per share data)

Nine Months Ended September 30, 2020

Three Months Ended March 31, 2020

Common Stock Additional Paid-in Capital Accumulated Other Comprehensive Income Retained Earnings Treasury Stock Non-Controlling Interest in Subsidiaries Total Stockholders' Equity

1 unchanged sentence

Balance at December 31, 2019

90,987,025 $ 0.9 $ 1,151.9 $ 0.1 $ 1,205.6 ( 17,516,814 ) $ ( 692.2 ) $ 169.0 $ 1,835.3

Cumulative effect of adopting accounting principle regarding measurement of credit losses on financial instruments, net — — — — ( 6.5 ) — — — ( 6.5 )

Net (loss) income — — — — ( 314.4 ) — — 7.4 ( 307.0 )

Other comprehensive loss related to commodity contracts, net — — — ( 0.2 ) — — — — ( 0.2 )

Other comprehensive income related to commodity contracts, net — — — 1.4 — — — — 1.4

Common stock dividends ($ 0.31 per share)

— — — — ( 23.1 ) — — — ( 23.1 )

Distributions to non-controlling interests — — — — — — — ( 25.0 ) ( 25.0 )

Distribution to non-controlling interest — — — — — — — ( 8.6 ) ( 8.6 )

Equity-based compensation expense — — 6.2 — — — — 0.1 6.3

1 unchanged sentence

Repurchases of non-controlling interests — — — — — — — ( 5.0 ) ( 5.0 )

Impact from IDR Simplification transaction of Delek Logistics LP — — 37.2 — — — — ( 50.8 ) ( 13.6 )

Taxes paid due to the net settlement of equity-based compensation — — ( 0.7 ) — — — — — ( 0.7 )

1 unchanged sentence

Other — — — ( 0.3 ) — — — — ( 0.3 )

Balance at September 30, 2020 91,301,229 $ 0.9 $ 1,180.1 $ — $ 815.3 ( 17,575,527 ) $ ( 694.1 ) $ 118.1 $ 1,420.3

Financial Statements

Delek US Holdings, Inc.

Condensed Consolidated Statements of Changes in Stockholders' Equity (Unaudited) (Continued)

(In millions, except share and per share data)

Nine Months Ended September 30, 2019

Common Stock Additional Paid-in Capital Accumulated Other Comprehensive Income Retained Earnings Treasury Stock Non-Controlling Interest in Subsidiaries Total Stockholders' Equity

Shares Amount Shares Amount

Balance at December 31, 2018 90,478,075 $ 0.9 $ 1,135.4 $ 28.6 $ 981.8 ( 12,477,780 ) $ ( 514.1 ) $ 175.5 $ 1,808.1

Net income — — — — 277.9 — — 20.3 298.2

Other comprehensive loss related to commodity contracts, net — — — ( 18.4 ) — — — — ( 18.4 )

Common stock dividends ($ 0.84 per share)

Balance at March 31, 2020

91,089,920 $ 0.9 $ 1,157.4 $ 1.2 $ 861.6 ( 17,575,527 ) $ ( 694.1 ) $ 162.9 $ 1,489.9

Distribution to non-controlling interest — — — — — — — ( 23.8 ) ( 23.8 )

Equity-based compensation expense — — 18.9 — — — — 0.3 19.2

Repurchase of common stock — — — — — ( 4,175,576 ) ( 147.8 ) — ( 147.8 )

Taxes paid due to the net settlement of equity-based compensation — — ( 8.4 ) — — — — — ( 8.4 )

Exercise of equity-based awards 462,318 — — — — — — — —

Other — — 0.2 0.5 ( 0.1 ) — — — 0.6

Balance at September 30, 2019 90,940,393 $ 0.9 $ 1,146.1 $ 10.7 $ 1,195.3 ( 16,653,356 ) $ ( 661.9 ) $ 172.3 $ 1,863.4

See accompanying notes to condensed consolidated financial statements

3 unchanged sentences

(In millions)

Nine Months Ended September 30,

Three Months Ended March 31,

Cash flows from operating activities:

Net (loss) income $ ( 285.4 ) $ 298.2

Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities:

Net loss $ ( 91.3 ) $ ( 307.0 )

Adjustments to reconcile net loss to net cash used in operating activities:

Depreciation and amortization 68.5 52.6

5 unchanged sentences

Non-cash lower of cost or market/net realizable value adjustment ( 20.4 ) 280.8

Gain on sale of non-operating refinery ( 56.8 ) —

Equity-based compensation expense 4.6 6.3

7 unchanged sentences

Non-current assets and liabilities, net ( 8.6 ) 1.1

Net cash (used in) provided by operating activities ( 399.8 ) 448.4

Net cash used in operating activities ( 34.3 ) ( 154.1 )

Cash flows from investing activities:

4 unchanged sentences

Proceeds from sale of property, plant and equipment 0.2 0.3

Proceeds from sale of retail stores — 9.9

Proceeds from sale of non-operating refinery 39.9 —

Net cash used in investing activities ( 46.1 ) ( 146.6 )

2 unchanged sentences

(In millions)

Nine Months Ended September 30,

Three Months Ended March 31,

Cash flows from financing activities:

1 unchanged sentence

Payments on long-term revolvers ( 568.1 ) ( 1,053.5 )

Proceeds from term debt 185.0 246.8

Payments on term debt ( 23.3 ) ( 27.9 )

5 unchanged sentences

Distribution to non-controlling interest ( 8.0 ) ( 8.6 )

Impact of IDR Simplification transaction of Delek Logistics LP ( 2.1 ) —

Dividends paid — ( 23.1 )

Deferred financing costs paid — ( 0.2 )

Net cash provided by (used in) financing activities 415.4 ( 11.8 )

Net decrease in cash and cash equivalents ( 147.4 ) ( 72.9 )

Net cash provided by financing activities 86.4 130.3

Net increase (decrease) in cash and cash equivalents 6.0 ( 170.4 )

Cash and cash equivalents at the beginning of the period 787.5 955.3

6 unchanged sentences

Non-cash investing activities:

(Decrease) increase in accrued capital expenditures $ ( 33.9 ) $ 19.1

Increase in accrued capital expenditures $ 18.8 $ 1.1

Non-cash financing activities:

Non-cash lease liability arising from recognition of right of use assets upon adoption of Accounting Standards Update ("ASU") 2016-02 $ — $ 211.0

Non-cash lease liability arising from obtaining right of use assets during the period $ 19.6 $ 6.8

11 unchanged sentences

Generally Accepted Accounting Principles ("GAAP") have been condensed or omitted, although management believes that the disclosures herein are adequate to make the financial information presented not misleading.

Our unaudited condensed consolidated financial statements have been prepared in conformity with GAAP applied on a consistent basis with those of the annual audited consolidated financial statements included in our Annual Report on Form 10-K filed with the Securities and Exchange Commission ("SEC") on February 28, 2020 (the "Annual Report on Form 10-K") and in accordance with the rules and regulations of the SEC.

Our unaudited condensed consolidated financial statements have been prepared in conformity with GAAP applied on a consistent basis with those of the annual audited consolidated financial statements included in our Annual Report on Form 10-K filed with the Securities and Exchange Commission ("SEC") on March 1, 2021 (the "Annual Report on Form 10-K") and in accordance with the rules and regulations of the SEC.

These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto for the year ended December 31, 2020 included in our Annual Report on Form 10-K.

Our condensed consolidated financial statements include Delek Logistics Partners, LP ("Delek Logistics"), which is a variable interest entity.

Our condensed consolidated financial statements include Delek Logistics Partners, LP ("Delek Logistics", NYSE:DKL), which is a variable interest entity ("VIE").

As the indirect owner of the general partner of Delek Logistics, we have the ability to direct the activities of this entity that most significantly impact its economic performance.

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With the exception of the policy updates below, there have been no new or material changes to the significant accounting policies discussed in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020.

Risks and Uncertainties Arising from the COVID-19 Pandemic and the OPEC Production Disputes

The outbreak of COVID-19 and its development into a pandemic in March 2020 (the "COVID-19 Pandemic") has resulted in significant economic disruption globally, including in the U.S.

Risks and Uncertainties Arising from the COVID-19 Pandemic

The outbreak of COVID-19 and its development into a pandemic in March 2020 (the "COVID-19 Pandemic" or the "Pandemic") continues to have an on-going impact.

The restrictions imposed to prevent its spread, the challenges with the vaccination rollout, and the spread of new variants of the virus, continue to cause significant economic disruption globally, including in the U.S.

and specific geographic areas where we operate.

Actions taken by various governmental authorities, individuals and companies around the world to prevent the spread of COVID-19 through social distancing have restricted travel, many business operations, public gatherings and the overall level of individual movement and in-person interaction across the globe.

This has in turn significantly reduced global economic activity and resulted in airlines dramatically cutting back on flights and a decrease in motor vehicle use at a time when seasonal driving patterns typically result in an increase of consumer demand for gasoline.

As a result, there has also been a decline in the demand for, and thus also the market prices of, crude oil and certain of our products.

In April and June 2020, an agreement was reached to cut oil production between the members of the Organization of Petroleum Exporting Countries ("OPEC") and other leading oil producing countries (together with OPEC, “OPEC+”), as part of the efforts to resolve the oil production disputes ("OPEC Production Disputes") that significantly affected crude oil prices beginning in first quarter of 2020 and to provide stability in the oil markets.

While OPEC+ have reached an agreement to cut oil production, uncertainty about the duration of the COVID-19 Pandemic has caused storage constraints in the United States resulting from over-supply of produced oil.

Therefore, downward pressure on commodity prices has remained and could continue for the foreseeable future.

Compared to the prior year, the first quarter of 2021 has witnessed economic recovery trends including a resumption of flights by major airlines and increased motor vehicle use.

As a result, there has also been an increase in the demand for, and thus also the market prices of, crude oil and certain of our products.

Uncertainty about the duration of the COVID-19 Pandemic has caused storage constraints in the United States resulting from over-supply of produced oil.

Therefore, downward pressure on commodity prices could exist for the foreseeable future.

Uncertainties related to the impact of the COVID-19 Pandemic and other events exist that could impact our future results of operations and financial position, the nature of which and the extent to which are currently unknown.

To the extent these uncertainties have been identified and are believed to have an impact on our current period results of operations or financial position based on the requirements for assessing such financial statement impact under GAAP, we have considered them in the preparation of our unaudited financial statements as of and for the three and nine months ended September 30, 2020.

The application of accounting policies impacted by such considerations include (but are not necessarily limited to) the following:

• The interim evaluation of the risk of credit losses and the determination of our allowance for credit losses, pursuant to GAAP;

• The interim evaluation of long-lived assets for potential impairment, where indicators exist, as defined by GAAP;

• The interim evaluation of indefinite-lived intangibles and goodwill for potential impairment, where indicators exist, as defined by GAAP;

Notes to Condensed Consolidated Financial Statements (Unaudited)

• The interim evaluation of long-lived assets for potential impairment, where indicators exist, as defined by GAAP;

• The interim evaluation of joint ventures for potential impairment, where indicators exist, as defined by GAAP;

1 unchanged sentence

• The evaluation of inventory valuation allowances that may be warranted under the lower of cost or net realizable value analysis, for first-in, first-out (“FIFO”), and the lower of cost or market analysis, for last-in, first-out ("LIFO"), pursuant to GAAP;

Notes to Condensed Consolidated Financial Statements (Unaudited)

• The consideration of debt modifications and/or covenant requirements, as applicable;

2 unchanged sentences

• The interim evaluation of our ability to continue as a going concern.

Credit Losses

Under ASU 2016-13, Financial Instruments - Measurement of Credit Losses on Financial Instruments (as codified in Accounting Standards Codification ("ASC") 326), we have applied the expected credit loss model for recognition and measurement of impairments in financial assets measured at amortized cost or at fair value through other comprehensive income including accounts receivables.

The expected credit loss model is also applied for notes receivables and contractual holdbacks to which ASU 2016-13 applies and which are not accounted for at fair value through profit or loss.

The loss allowance for the financial asset is measured at an amount equal to the lifetime expected credit losses.

If the credit risk on the financial asset has decreased significantly since initial recognition, the loss allowance for the financial asset is re-measured.

Changes in loss allowances are recognized in profit and loss.

For trade receivables, a simplified impairment approach is applied recognizing expected lifetime losses from initial recognition.

Reclassifications

1 unchanged sentence

New Accounting Pronouncements Adopted During 2021

ASU 2018-15, Intangible - Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract

In August 2018, the Financial Accounting Standards Board (the "FASB") issued guidance related to customers’ accounting for implementation costs incurred in a cloud computing arrangement that is considered a service contract.

This pronouncement aligns the requirements for capitalizing implementation costs in such arrangements with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software.

This pronouncement is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2019.

ASU 2020-01, Investments—Equity Securities (Topic 321), Investments—Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815)—Clarifying the Interactions between Topic 321, Topic 323, and Topic 815

In January 2020, the Financial Account Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2020-01 which is intended to clarify interactions between the guidance to account for certain equity securities under Topics 321, 323 and 815, and improve current GAAP by reducing diversity in practice and increasing comparability of accounting.

The pronouncement is effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2020.

We adopted this guidance on January 1, 2021 and the adoption did not have a material impact on our business, financial condition or results of operations.

ASU 2018-13, Fair Value Measurement - Changes to the Disclosure Requirements for Fair Value Measurement

In August 2018, the FASB issued guidance related to disclosure requirements for fair value measurements.

The pronouncement eliminates, modifies and adds disclosure requirements for fair value measurements.

The pronouncement is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2019, with early adoption permitted.

ASU 2019-12, Simplifying the Accounting for Income Taxes

In December 2019, the FASB issued guidance intended to simplify various aspects related to accounting for income taxes, eliminate certain exceptions within Accounting Standards Codification ("ASC") 740, Income Taxes (“ASC 740”) and clarify certain aspects of the current guidance to promote consistency among reporting entities.

The pronouncement is effective for fiscal years and for interim periods within those fiscal years beginning after December 15, 2020.

We adopted this guidance on January 1, 2021 and the adoption did not have a material impact on our business, financial condition or results of operations.

ASU 2016-13, Financial Instruments - Measurement of Credit Losses on Financial Instruments

In June 2016, the FASB issued guidance requiring the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts.

Organizations will now use forward-looking information to better inform their credit loss estimates.

This guidance is effective for interim and annual periods beginning after December 15, 2019.

We adopted this guidance on January 1, 2020 using the modified retrospective approach as of the adoption date.

The adoption did not have a material impact on the Company’s operating results, financial position or disclosures.

Notes to Condensed Consolidated Financial Statements (Unaudited)

ASU 2018-14, Compensation - Changes to the Disclosure Requirements for Defined Benefit Plans

In August 2018, the FASB issued guidance related to disclosure requirements for defined benefit plans.

The pronouncement eliminates, modifies and adds disclosure requirements for defined benefit plans.

The pronouncement is effective for fiscal years beginning after December 15, 2020.

We adopted this guidance on January 1, 2021 and the adoption did not have a material impact on our business, financial condition or results of operations.

Accounting Pronouncements Not Yet Adopted

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The pronouncement is effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2021, and early adoption is permitted.

The Company is evaluating the impact of this guidance but does not currently expect adopting this new guidance will have a material impact on its consolidated financial statements and related disclosures.

The Company is evaluating the impact of this guidance but does not currently expect adopting this new guidance will have a material impact on its condensed consolidated financial statements and related disclosures.

ASU 2020-04, Facilitation of the Effects of Reference Rate Reform on Financial Reporting (Topic 848)

1 unchanged sentence

This guidance is effective for all entities at any time beginning on March 12, 2020 through December 31, 2022 and may be applied from the beginning of an interim period that includes the issuance date of the ASU.

The Company is currently evaluating the impact this guidance may have on its consolidated financial statements and related disclosures.

In January 2020, the FASB issued ASU 2020-01 which is intended to clarify interactions between the guidance to account for certain equity securities under Topics 321, 323 and 815, and improve current GAAP by reducing diversity in practice and increasing comparability of accounting.

The pronouncement is effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2020, and early adoption is permitted.

The Company is currently evaluating the impact this guidance may have on its consolidated financial statements and related disclosures.

ASU 2019-12, Simplifying the Accounting for Income Taxes

In December 2019, the FASB issued guidance intended to simplify various aspects related to accounting for income taxes, eliminate certain exceptions within ASC 740 and clarify certain aspects of the current guidance to promote consistency among reporting entities.

The pronouncement is effective for fiscal years and for interim periods within those fiscal years beginning after December 15, 2020, with early adoption permitted.

We expect to adopt this guidance on the effective date and are currently evaluating the impact that adopting this new guidance will have on our business, financial condition and results of operations.

ASU 2018-14, Compensation - Changes to the Disclosure Requirements for Defined Benefit Plans

In August 2018, the FASB issued guidance related to disclosure requirements for defined benefit plans.

The pronouncement eliminates, modifies and adds disclosure requirements for defined benefit plans.

The pronouncement is effective for fiscal years beginning after December 15, 2020, and early adoption is permitted.

We expect to adopt this guidance on the effective date and do not expect adopting this new guidance will have a material impact on our business, financial condition or results of operations.

The Company is currently evaluating the impact this guidance may have on its condensed consolidated financial statements and related disclosures.

Note 2 - Segment Data

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• results of certain immaterial operating segments, including our Canadian crude trading operations (as discussed in Note 9);

Notes to Condensed Consolidated Financial Statements (Unaudited)

• wholesale crude operations;

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Segment contribution margin is defined as net revenues less cost of materials and other and operating expenses, excluding depreciation and amortization.

During the first quarter of 2020, we revised the structure of the internal financial information reviewed by management and began allocating the results of hedging activity associated with managing risks of our refineries, previously reported in corporate, other and

Notes to Condensed Consolidated Financial Statements (Unaudited)

eliminations, to our refining segment.

The historical results of this hedging activity have been reclassified to conform to the current presentation.

The assets and/or liabilities associated with this hedging activity have not been allocated to the refining segment.

Refining Segment

The refining segment processes crude oil and other feedstocks for the manufacture of transportation motor fuels, including various grades of gasoline, diesel fuel and aviation fuel, asphalt and other petroleum-based products that are distributed through owned and third-party product terminals.

The refining segment has a combined nameplate capacity of 302,000 barrels per day ("bpd") as of September 30, 2020, including the following:

The refining segment has a combined nameplate capacity of 302,000 barrels per day ("bpd") as of March 31, 2021, including the following:

• 75,000 bpd Tyler, Texas refinery (the "Tyler refinery");

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• 74,000 bpd Krotz Springs, Louisiana refinery (the "Krotz Springs refinery").

• a non-operating refinery located in Bakersfield, California, which was sold May 7, 2020.

The refining segment also owns and operates three biodiesel facilities involved in the production of biodiesel fuels and related activities, located in Crossett, Arkansas, Cleburne, Texas and New Albany, Mississippi (acquired in October 2019).

The biodiesel industry has historically been substantially aided by federal and state tax incentives.

1 unchanged sentence

The BTC provides a $1.00 refundable tax credit per gallon of pure biodiesel to the first blender of biodiesel with petroleum-based diesel fuel.

The blender's tax credit was re-enacted in December 2019 for the years 2020 through 2022 and was retroactively reinstated for 2018 and 2019.

On May 7, 2020, we sold our equity interests in Alon Bakersfield Property, Inc., an indirect wholly-owned subsidiary that owns our non-operating refinery located in Bakersfield, California, to a subsidiary of Global Clean Energy Holdings, Inc.

The blender's tax credit was re-enacted in December 2019 for the years 2020 through 2022.

On May 7, 2020, we sold our equity interests in Alon Bakersfield Property, Inc., an indirect wholly-owned subsidiary that owned our non-operating refinery located in Bakersfield, California, to a subsidiary of Global Clean Energy Holdings, Inc.

(“GCE”) for total cash consideration of $ 40.0 million.

As a result of this sale, we recognized a gain of $ 56.8 million, largely due to the buyer assuming substantially all of the asset retirement obligations and environmental liabilities associated with this refinery, which is included in gain on sale of non-operating refinery on the accompanying condensed consolidated statements of income.

As part of the transaction, GCE granted a call option to Delek to acquire up to a 33 1/3% interest in the acquiring subsidiary of GCE, exercisable by Delek through the 90th day after GCE demonstrates commercial operations, as contractually defined.

As a result of this sale, we recognized a gain of $ 56.8 million during 2020, none of which was recognized during the first quarter, largely due to the buyer assuming substantially all of the asset retirement obligations and environmental liabilities associated with this refinery.

As part of the transaction, GCE granted a call option to Delek to acquire up to a 33 1/3% limited member interest in the acquiring subsidiary of GCE for up to $ 13.3 million, subject to certain adjustments.

Such option is exercisable by Delek through the 90th day after GCE demonstrates commercial operations, as contractually defined, which has not yet occurred as of March 31, 2021.

The refining segment's petroleum-based products are marketed primarily in the south central, southwestern and western regions of the United States.

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Retail Segment

Our retail segment consists of 253 owned and leased convenience store sites as of September 30, 2020, located primarily in Central and West Texas and New Mexico.

Our retail segment consists of 253 owned and leased convenience store sites as of March 31, 2021, located primarily in Central and West Texas and New Mexico.

These convenience stores typically offer various grades of gasoline and diesel primarily under the Alon or Delek brand name and food products, food service, tobacco products, non-alcoholic and alcoholic beverages, general merchandise as well as money orders to the public, primarily under the 7-Eleven and Alon brand names.

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In November 2018, we terminated the license agreement with 7-Eleven, Inc.

This agreement was amended in April 2020 to extend the date for the required removal of all 7-Eleven branding on a store-by-store basis from December 31, 2021 to December 31, 2022.

Merchandise sales at our convenience store sites will continue to be sold under the 7-Eleven brand name until 7-Eleven branding is removed at such convenience store sites.

The terms of such agreement and subsequent amendments require the removal of all 7-Eleven branding on a store-by-store basis by December 31, 2023.

Significant Inter-segment Transactions

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• refining segment refined product sales to the retail segment to be sold through the store locations;

Notes to Condensed Consolidated Financial Statements (Unaudited)

• refining segment sales of asphalt and refined product to entities included in corporate, other and eliminations;

• logistics segment service fee revenue under service agreements with the refining segment based on the number of gallons sold and to share a portion of the margin achieved in return for providing marketing, sales and customer services;

Notes to Condensed Consolidated Financial Statements (Unaudited)

• logistics segment sales of wholesale finished product to our refining segment;

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The following is a summary of business segment operating performance as measured by contribution margin for the period indicated (in millions):

Three Months Ended September 30, 2020

Three Months Ended March 31, 2021

(In millions) Refining Logistics Retail Corporate,

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General and administrative expenses

Other operating loss, net 0.3

Other operating expense, net 1.9

Operating loss $ ( 80.1 )

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$ 57.8 $ 7.8 $ 0.8 $ 0.6 $ 67.0

Three Months Ended September 30, 2019

Logistics Retail Corporate,

Other and Eliminations (1)

Net revenues (excluding inter-segment fees and revenues)

$ 2,036.9 $ 71.4 $ 218.5 $ 7.5 $ 2,334.3

Inter-segment fees and revenues

139.9 66.2 — ( 206.1 ) —

Operating costs and expenses:

Cost of materials and other 1,906.0 72.6 176.4 ( 190.9 ) 1,964.1

Operating expenses (excluding depreciation and amortization presented below) 120.7 18.4 23.5 4.3 166.9

Segment contribution margin $ 150.1 $ 46.6 $ 18.6 $ ( 12.0 ) 203.3

Depreciation and amortization $ 34.6 $ 6.6 $ 3.0 $ 5.6 49.8

General and administrative expenses

Other operating loss, net 0.5

Operating income $ 87.4

Capital spending (excluding business combinations)

$ 63.3 $ 4.0 $ 3.8 $ 39.4 $ 110.5

Notes to Condensed Consolidated Financial Statements (Unaudited)

Nine Months Ended September 30, 2020

(In millions) Refining Logistics Retail Corporate,

Three Months Ended March 31, 2020

Refining Logistics Retail Corporate,

Other and Eliminations Consolidated

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Inter-segment fees and revenues

Operating costs and expenses:

Cost of materials and other 4,314.4 205.9 400.0 144.0 5,064.3

Operating expenses (excluding depreciation and amortization presented below) 302.5 41.5 66.8 11.2 422.0

Segment contribution margin $ ( 248.5 ) $ 175.9 $ 54.9 $ ( 49.0 ) ( 66.7 )

Depreciation and amortization $ 132.3 $ 24.4 $ 9.1 $ 11.6 177.4

General and administrative expenses

Other operating income, net ( 14.6 )

Operating loss $ ( 413.9 )

Capital spending (excluding business combinations)

158.6 106.6 — ( 265.2 ) —

Nine Months Ended September 30, 2019

Logistics Retail Corporate,

Other and Eliminations (1)

Net revenues (excluding inter-segment fees and revenues)

$ 6,096.7 $ 254.3 $ 640.2 $ 23.3 $ 7,014.5

Inter-segment fees and revenues

539.9 191.1 — ( 731.0 ) —

Operating costs and expenses:

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Other operating income, net ( 0.7 )

Operating income $ 444.1

Operating loss $ ( 361.5 )

Capital spending (excluding business combinations) $ 168.1 $ 3.0 $ 6.2 $ 12.9 $ 190.2

(1) The refining segment results of operations for the three and nine months ended September 30, 2019, includes hedging gains, a component of cost of materials and other, of $ 22.6 million and $ 50.0 million, respectively, which was previously included and reported in corporate, other and eliminations.

Notes to Condensed Consolidated Financial Statements (Unaudited)

Other Segment Information

Total assets by segment were as follows as of September 30, 2020:

Total assets by segment were as follows as of March 31, 2021:

Refining Logistics Retail Corporate,

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Total assets, excluding inter-segment notes receivable and right of use assets $ 4,808.7 $ 948.9 $ 255.3 $ 731.1 $ 6,744.0

Notes to Condensed Consolidated Financial Statements (Unaudited)

Property, plant and equipment and accumulated depreciation as of September 30, 2020 and depreciation expense by reporting segment for the three and nine months ended September 30, 2020 are as follows (in millions):

Property, plant and equipment and accumulated depreciation as of March 31, 2021 and depreciation expense by reporting segment for the three months ended March 31, 2021 are as follows (in millions):

Refining Logistics Retail Corporate,

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Property, plant and equipment, net $ 1,762.4 $ 462.1 $ 114.0 $ 29.3 $ 2,367.8

Depreciation expense for the three months ended September 30, 2020 $ 48.5 $ 9.5 $ 2.7 $ 2.6 $ 63.3

Depreciation expense for the nine months ended September 30, 2020 $ 127.3 $ 24.4 $ 8.5 $ 11.6 $ 171.8

Depreciation expense for the three months ended March 31, 2021 $ 50.4 $ 10.7 $ 3.0 $ 2.5 $ 66.6

I n accordance with ASC 360, Property, Plant and Equipment ("ASC 360"), Delek evaluates the realizability of property, plant and equipment as events occur that might indicate potential impairment.

T here were no indicators of impairment related to our property, plant and equipment as of September 30, 2020 (see Note 1 for further discussion on the impact of COVID-19 Pandemic and OPEC Production Disputes).

T here were no indicators of impairment related to our property, plant and equipment as of March 31, 2021 (see Note 1 for further discussion on the impact of COVID-19 Pandemic).

Note 3 - Earnings (Loss) Per Share

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The following table sets forth the computation of basic and diluted earnings per share.

Three Months Ended Nine Months Ended

September 30, September 30,

2020 2019 2020 2019

Three Months Ended

Numerator for EPS

(Loss) income from continuing operations, net of tax $ ( 76.9 ) $ 60.0 $ ( 285.4 ) $ 299.0

Income from continuing operations attributed to non-controlling interest 11.2 8.7 29.4 20.3

(Loss) Income from continuing operations attributable to Delek $ ( 88.1 ) $ 51.3 $ ( 314.8 ) $ 278.7

Numerator for EPS - discontinued operations

Loss from discontinued operations attributable to Delek $ — $ — $ — $ ( 0.8 )

Net loss $ ( 91.3 ) $ ( 307.0 )

Income attributed to non-controlling interest 7.3 7.4

Numerator for basic and diluted EPS attributable to Delek $ ( 98.6 ) $ ( 314.4 )

Weighted average common shares outstanding (denominator for basic EPS) 73,803,772 73,437,730

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Weighted average common shares outstanding, assuming dilution (denominator for diluted EPS) 73,803,772 73,437,730

Basic (loss) income per share:

(Loss) Income from continuing operations $ ( 1.20 ) $ 0.68 $ ( 4.28 ) $ 3.64

Loss from discontinued operations — — $ — ( 0.01 )

Basic (loss) income per share $ ( 1.20 ) $ 0.68 $ ( 4.28 ) $ 3.63

Diluted (loss) income per share:

(Loss) Income from continuing operations $ ( 1.20 ) $ 0.68 $ ( 4.28 ) $ 3.61

Loss from discontinued operations $ — — $ — ( 0.01 )

Diluted (loss) income per share $ ( 1.20 ) $ 0.68 $ ( 4.28 ) $ 3.60

Basic loss per share $ ( 1.34 ) $ ( 4.28 )

Diluted loss per share $ ( 1.34 ) $ ( 4.28 )

The following equity instruments were excluded from the diluted weighted average common shares outstanding because their effect would be antidilutive:

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Total antidilutive stock-based compensation 3,367,062 4,118,423

Notes to Condensed Consolidated Financial Statements (Unaudited)

Note 4 - Delek Logistics

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A substantial majority of Delek Logistics' assets are integral to Delek’s refining and marketing operations.

On August 13, 2020, Delek Logistics completed a transaction to eliminate the incentive distribution rights ("IDRs") held by Delek Logistics GP, LLC, the general partner, and convert the 2.0 % economic general partner interest into a non-economic general partner interest in exchange for total consideration consisting of $ 45.0 million cash and 14.0 million newly issued common limited partner units.

Contemporaneously, we repurchased 5.2 % ownership interest in the general partner from affiliates, who are also members of the general partner's management and board of directors, for $ 23.1 million, increasing our ownership interest in the general partner to 100.0 %.

As a result of these transactions, the non-controlling interest in our consolidated balance sheets decreased by $ 50.8 million, with a $ 37.2 million increase to additional paid-in capital which is net of $ 11.5 million related to deferred income taxes and $ 2.1 million of transaction costs.

In August 2020, Delek Logistics filed a shelf registration statement, which subsequently became effective, with the U.S.

Securities and Exchange Commission for the proposed re-sale or other disposition from time to time by Delek of up to 14.0 million common limited partner units representing our limited partner interests in Delek Logistics.

As of September 30, 2020, we owned an 80.0 % interest in Delek Logistics, consisting of 34,745,868 common limited partner units and the non-economic general partner interest.

As of March 31, 2021, we owned an 80.0 % interest in Delek Logistics, consisting of 34,745,868 common limited partner units and the non-economic general partner interest.

The limited partner interests in Delek Logistics not owned by us are reflected in net income attributable to non-controlling interest in the accompanying condensed consolidated statements of income and in non-controlling interest in subsidiaries in the accompanying condensed consolidated balance sheets.

On August 13, 2020, Delek Logistics completed a transaction to eliminate the incentive distribution rights ("IDRs") held by Delek Logistics GP, LLC, the general partner, and convert the economic general partner interest into a non-economic general partner interest in exchange for total consideration consisting of $ 45.0 million cash and 14.0 million newly issued common limited partner units.

Contemporaneously, we repurchased the 5.2 % ownership interest in the general partner from affiliates, who are also members of the general partner's management and board of directors, for $ 23.1 million, increasing our ownership interest in the general partner to 100.0 %.

In August 2020, Delek Logistics filed a shelf registration statement, which subsequently became effective, with the SEC for the proposed re-sale or other disposition from time to time by Delek of up to 14.0 million common limited partner units representing our limited partner interests in Delek Logistics.

No units were sold as of March 31, 2021.

We have agreements with Delek Logistics that, among other things, establish fees for certain administrative and operational services provided by us and our subsidiaries to Delek Logistics, provide certain indemnification obligations and establish terms for fee-based commercial logistics and marketing services provided by Delek Logistics and its subsidiaries to us.

The revenues and expenses associated with these agreements are eliminated in consolidation.

Delek Logistics is a variable interest entity, as defined under GAAP, and is consolidated into our condensed consolidated financial statements, representing our logistics segment.

Notes to Condensed Consolidated Financial Statements (Unaudited)

Delek Logistics is a VIE, as defined under GAAP, and is consolidated into our condensed consolidated financial statements, representing our logistics segment.

The assets of Delek Logistics can only be used to settle its own obligations and its creditors have no recourse to our assets.

Exclusive of intercompany balances and the marketing agreement intangible asset between Delek Logistics and Delek which are eliminated in consolidation, the Delek Logistics condensed consolidated balance sheets as presented below are included in the condensed consolidated balance sheets of Delek (unaudited, in millions).

Notes to Condensed Consolidated Financial Statements (Unaudited)

September 30, 2020 December 31, 2019

March 31, 2021 December 31, 2020

Cash and cash equivalents $ 13.4 $ 4.2

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Total liabilities and deficit $ 948.9 $ 956.4

Effective May 1, 2020, Delek through its wholly owned subsidiaries Lion Oil Company (“Lion Oil”) and Delek Refining, Ltd.

Effective May 1, 2020, Delek through its wholly owned subsidiaries Lion Oil Company, LLC (“Lion Oil”) and Delek Refining, Ltd.

(“Delek Refining”) contributed certain leased and owned tractors and trailers and related assets used in the provision of trucking and transportation services for crude oil, petroleum and certain other products throughout Arkansas, Oklahoma and Texas to Delek Trucking, LLC (“Delek Trucking”), a direct wholly owned subsidiary of Lion Oil.

Following this contribution, Lion Oil sold all of the issued and outstanding membership interests in Delek Trucking (the “Acquisition”) to DKL Transportation, LLC (“DKL Transportation”), a wholly owned subsidiary of Delek Logistics.

Promptly following the consummation of the Acquisition, Delek Trucking merged with and into DKL Transportation, with DKL Transportation continuing as the surviving entity.

Total consideration for the Acquisition was approximately $ 48.0 million in cash, subject to certain post-closing adjustments, financed primarily with borrowings under Delek Logistics’ revolving credit facility.

In connection with the Acquisition, Delek Refining, Lion Oil and DKL Transportation entered into a Transportation Services Agreement pursuant to which DKL Transportation will gather, coordinate the pickup of, transport and deliver petroleum products for Delek Refining and Lion Oil, as well as provide ancillary services as requested.

Prior periods have not been recast in our Segment Data Note 2, as these assets did not constitute a business in accordance with ASU 2017-01, Clarifying the Definition of a Business , and the transaction was accounted for as an acquisition of assets between entities under common control.

Following this contribution, Lion Oil sold all of the issued and outstanding membership interests in Delek Trucking (the “Trucking Acquisition”) to DKL Transportation, LLC (“DKL Transportation”), a wholly owned subsidiary of Delek Logistics.

Promptly following the consummation of the Trucking Acquisition, Delek Trucking merged with and into DKL Transportation, with DKL Transportation continuing as the surviving entity.

Total consideration for the Trucking Acquisition was approximately $ 48.0 million in cash, subject to certain post-closing adjustments, financed primarily with borrowings on the Delek Logistics Credit Facility (as defined in Note 8).

In connection with the Trucking Acquisition, Delek Refining, Lion Oil and DKL Transportation entered into a Transportation Services Agreement pursuant to which DKL Transportation will gather, coordinate the pickup of, transport and deliver petroleum products for Delek Refining and Lion Oil, as well as provide ancillary services as requested.

Prior periods have not been recast in our Note 2 - Segment Data, as these assets did not constitute a business in accordance with ASU 2017-01, Clarifying the Definition of a Business ("ASU 2017-01"), and the transaction was accounted for as an acquisition of assets between entities under common control.

Effective March 31, 2020, Delek Logistics, through its wholly-owned subsidiary DKL Permian Gathering, LLC, acquired the Big Spring Gathering System, located in Howard, Borden and Martin Counties, Texas, from Delek, which included the execution of related commercial agreements.

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Under the T&D Agreement, Delek Logistics will operate and maintain the Big Spring Gathering System connecting our interests in and to certain crude oil production with the Delek Logistics' Big Spring, Texas terminal and provide gathering, transportation and other related services.

The total consideration was subject to certain post-closing adjustments and was comprised of $ 100.0 million in cash and 5.0 million common units representing limited partner interest in Delek Logistics.

The cash component of this dropdown was financed with borrowings on the DKL Credit Facility (as defined in Note 8).

The total consideration was subject to certain post-closing adjustments and was comprised of $ 100.0 million in cash and 5.0 million common units representing a limited partner interest in Delek Logistics.

The cash component of this dropdown was financed with borrowings on the Delek Logistics Credit Facility (as defined in Note 8).

Notes to Condensed Consolidated Financial Statements (Unaudited)

Prior periods have not been recast in our Segment Data Note 2, as these assets did not constitute a business in accordance with ASU 2017-01 and the transaction was accounted for as an acquisition of assets between entities under common control.

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The purchase price of the units amounted to approximately $ 5.0 million.

Notes to Condensed Consolidated Financial Statements (Unaudited)

Note 5 - Equity Method Investments

On July 30, 2019, we, through our wholly-owned direct subsidiary Delek US Energy, Inc.

("Delek Energy" or "Delek Member"), entered into a limited liability company agreement (the “LLCA”) and related agreements with multiple joint venture members of Wink to Webster Pipeline LLC (“WWP”).

Pursuant to the LLCA, Delek Energy acquired a 15 % ownership interest in WWP.

Wink to Webster Pipeline

On July 30, 2019, we, through our wholly-owned direct subsidiary Delek Energy, entered into a limited liability company agreement (the “LLCA”) and related agreements with multiple joint venture members of Wink to Webster Pipeline LLC (“WWP”).

Pursuant to the LLCA, Delek Energy acquired a 15 % ownership interest in WWP ("WWP Joint Venture").

WWP intends to construct and operate a crude oil pipeline system from Wink, Texas to Webster, Texas along with certain pipelines from Webster, Texas to other destinations in the Gulf Coast area.

Pursuant to the LLCA, Delek Energy will be required to contribute its percentage interest of the applicable construction costs (including certain costs previously incurred by WWP) and, at the date we acquired our ownership interest, it was anticipated that Delek Energy’s capital contributions would total approximately $ 340 million to $ 380 million over the course of construction (expected to be two to three years ).

Construction of the crude oil pipeline system remains ongoing, where the main segment of the pipeline system connecting the Permian Basin to Houston, Texas was recently completed and began transporting crude oil in October 2020.

During the nine months ended September 30, 2020 and September 30, 2019, we made capital contributions totaling $ 18.9 million and $75.3 million, respectively.

As of December 31, 2019, Delek's investment balance in WWP totaled $ 125.3 million and we recognized a nominal amount of income on the investment for the three and nine months ended September 30, 2019.

On February 21, 2020, we, through our wholly-owned direct subsidiary Delek Energy, entered into the W2W Holdings LLC ("HoldCo") Agreement with MPLX Operations LLC ("MPLX") (collectively, with its wholly-owned subsidiaries, the "WWP Project Financing Joint Venture" or the "WWP Project Financing JV").

The WWP Project Financing JV was created for the specific purpose of obtaining financing, through its wholly-owned subsidiary, W2W Finance LLC, to fund the majority of our combined capital calls resulting from and occurring during the construction period of the pipeline system under the WWP Joint Venture, and to service that debt.

Construction of the crude oil pipeline system remains ongoing, where the main segment of the pipeline system connecting the Permian Basin to Houston, Texas was completed and began transporting crude oil in October 2020, and where other construction continues to progress.

During the three months ended March 31, 2020, we made capital contributions totaling $ 18.9 million.

Additionally, during the three months ended March 31, 2021, we made additional capital contributions totaling $ 0.1 million based on capital calls received.

On February 21, 2020, we, through our wholly-owned direct subsidiary Delek Energy, entered into the W2W Holdings LLC Agreement with MPLX Operations LLC ("MPLX") (collectively, with its wholly-owned subsidiaries, the "WWP Project Financing Joint Venture" or the "WWP Project Financing JV").

The WWP Project Financing JV was created for the specific purpose of obtaining financing to fund our combined capital calls resulting from and occurring during the construction period of the pipeline system under the WWP Joint Venture, and to service that debt.

In connection with the arrangement, both Delek Energy and MPLX contributed their respective 15 % ownership interests to the WWP Project Financing JV as collateral for and in service of the related project financing.

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The obligations of the members under the W2W Holdings LLC Agreement are guaranteed by the parents of the members of the WWP Project Financing JV.

The Company evaluated Delek Member's investment in HoldCo and determined that HoldCo is a variable interest entity.

The Company evaluated Delek Energy's investment in W2W Holdings LLC ("HoldCo") and determined that HoldCo is a VIE.

The Company determined it is not the primary beneficiary since it does not have the power to direct activities that most significantly impact HoldCo.

The Company does not hold a controlling financial interest in HoldCo because no single party has the power to direct the activities that most significantly impact HoldCo’s economic performance since power to make the decisions about the significant activities is shared equally with MPLX and all significant decisions require unanimous consent of the Board of Directors.

The Company accounts for its investment in HoldCo using the equity method of accounting due to its significant influence with its 50 % membership interest.

The Company's maximum exposure to any losses incurred by HoldCo is limited to its investment.

As of September 30, 2020, except for the guarantee of member obligations under the W2W Holdings LLC Agreement, the Company does not have other existing guarantees with or to HoldCo, or any third-party work contracted with it.

As of September 30, 2020, Delek's investment balance in WWP Project Financing Joint Venture totaled $ 73.3 million and is included as part of total assets in corporate, other and eliminations in our segment disclosure.

During the nine months ended September 30, 2020, we received distributions of $ 69.3 million from WWP Project Financing Joint Venture to return excess contributions made.

In addition on the investment, we recognized income totaling $ 0.2 million and a loss of $ 1.8 million for the three and nine months ended September 30, 2020, respectively.

As of March 31, 2021, except for the guarantee of member obligations under the W2W Holdings LLC Agreement, the Company does not have other existing guarantees with or to HoldCo, or any third-party work contracted with it.

As of March 31, 2021 and December 31, 2020, Delek's investment balance in WWP Project Financing Joint Venture totaled $ 66.4 million and $ 66.6 million, respectively, and is included as part of total assets in corporate, other and eliminations in our segment disclosure.

During the three months ended March 31, 2020, we received distributions of $ 69.3 million from WWP Project Financing Joint Venture to return excess contributions made.

In addition, we recognized a loss on the investment totaling $ 0.3 million and $ 1.1 million for the three months ended March 31, 2021 and 2020, respectively.

Delek Logistics Investments

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In August 2020, Red River completed a planned expansion project to increase the pipeline capacity which commenced operations on October 1, 2020.

Delek Logistics contributed an additional $ 3.5 million related to such expansion project in May 2019.

During the nine months ended September 30, 2020, we made additional capital contributions totaling $ 11.8 million based on capital calls received.

As of September 30, 2020 and December 31, 2019, Delek's investment balance in Red River totaled $ 143.5 million and $ 131.0 million, respectively.

We recognized income on the investment totaling $ 2.0 million and $ 6.8 million for the three and nine months ended September 30, 2020, respectively and $4.7 million and $7.0 million for the three and nine months ended September 30, 2019, respectively.

This investment is accounted for using the equity method and is included as part of total assets in our

Delek Logistics contributed an additional $ 3.5 million related to such

Notes to Condensed Consolidated Financial Statements (Unaudited)

logistics segment.

expansion project in May 2019 and during 2020 made additional capital contributions of $ 12.2 million based on capital calls received.

During the three months ended March 31, 2021, we made additional capital contributions totaling $ 1.4 million based on capital calls received.

As of March 31, 2021 and December 31, 2020, Delek's investment balance in Red River totaled $ 140.1 million and $ 141.8 million, respectively.

We recognized income on the investment totaling $ 2.7 million and $ 1.8 million for the three months ended March 31, 2021 and 2020, respectively.

This investment is accounted for using the equity method and is included as part of total assets in our logistics segment.

In addition to Red River, Delek Logistics has two joint ventures that own and operate logistics assets, and which serve third parties and subsidiaries of Delek.

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to operate one of these pipeline systems (the "Caddo Pipeline") and a 33 % membership interest in Andeavor Logistics Rio Pipeline LLC which operates the other pipeline system (the "Rio Pipeline").

As of September 30, 2020 and December 31, 2019, Delek Logistics' investment balances in these joint ventures totaled $ 111.8 million and $ 116.0 million, respectively, and were accounted for using the equity method.

We recognized income on these investments totaling $ 2.9 million and $ 10.1 million for the three and nine months ended September 30, 2020, respectively and $ 3.7 million and $ 7.9 million for the three and nine months ended September 30, 2019, respectively.

As of March 31, 2021 and December 31, 2020, Delek Logistics' investment balances in these joint ventures totaled $ 111.8 million and $ 111.9 million, respectively, and were accounted for using the equity method.

We recognized income on these investments totaling $ 1.8 million and $ 3.8 million for the three months ended March 31, 2021 and 2020, respectively.

Other Investments

We have a 50 % interest in a joint venture that owns an asphalt terminal located in Brownwood, Texas.

As of September 30, 2020 and December 31, 2019, Delek's investment balance in this joint venture was $ 40.7 million and $ 30.7 million, respectively.

We recognized income on this investment totaling $ 7.5 million and $ 13.0 million for the three and nine months ended September 30, 2020, respectively and $ 7.9 million and $ 13.1 million for the three and nine months ended September 30, 2019, respectively.

As of March 31, 2021 and December 31, 2020, Delek's investment balance in this joint venture was $ 38.2 million and $ 39.3 million, respectively.

We recognized income on this investment totaling $ 0.9 million and $ 0.4 million for the three months ended March 31, 2021 and 2020, respectively.

This investment is accounted for using the equity method and is included as part of total assets in corporate, other and eliminations in our segment disclosure.

Delek Renewables, LLC, a wholly-owned subsidiary of Delek, has a joint venture that owns, operates and maintains a terminal consisting of an ethanol unit train facility with an ethanol tank in North Little Rock, Arkansas.

As of September 30, 2020 and December 31, 2019, Delek Renewables, LLC's investment balance in this joint venture was $ 3.8 million and $ 4.3 million, respectively, and was accounted for using the equity method.

As of March 31, 2021 and December 31, 2020, Delek Renewables, LLC's investment balance in this joint venture was $ 4.2 million and $ 4.0 million, respectively, and was accounted for using the equity method.

We recognized income on this investment totaling $ 0.2 million for both the three months ended March 31, 2021 and 2020.

The investment in this joint venture is reflected in the refining segment.

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Carrying value of inventories consisted of the following (in millions):

September 30, 2020 December 31, 2019

March 31, 2021 December 31, 2020

Refinery raw materials and supplies $ 528.0 $ 270.7

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Total inventories $ 1,034.6 $ 727.7

At September 30, 2020, we recorded a pre-tax inventory valuation reserve of $ 67.5 million, $ 65.0 million of which related to LIFO inventory, due to a market price decline below our cost of certain inventory products.

At March 31, 2021, we recorded a pre-tax inventory valuation reserve of $ 10.7 million, $ 8.9 million of which related to LIFO inventory, due to a market price decline below our cost of certain inventory products.

At December 31, 2020, we recorded a pre-tax inventory valuation reserve of $ 31.1 million, $ 30.3 million of which related to LIFO inventory, which reversed in the first quarter of 2021 due to the sale of inventory quantities that gave rise to the December 31, 2020 reserve.

We recognized a net reduction (increase) in cost of materials and other in the accompanying condensed consolidated statements of income related to the change in pre-tax inventory valuation of $ 9.5 million and $( 65.6 ) million for the three and nine months ended September 30, 2020, respectively, and $( 20.0 ) million and $ 31.5 million for the three and nine months ended September 30, 2019, respectively.

We recognized a net reduction (increase) in cost of materials and other in the accompanying condensed consolidated statements of income related to the change in pre-tax inventory valuation of $ 20.4 million and $( 280.8 ) million for the three months ended March 31, 2021 and 2020, respectively.

Note 7 - Crude Oil Supply and Inventory Purchase Agreement

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Baseline Volumes pursuant to the respective Supply and Offtake Agreements 2.0 0.8 1.3

Barrels of inventory consigned under the respective Supply and Offtake Agreements as of September 30, 2020 (1)

Barrels of inventory consigned under the respective Supply and Offtake Agreements as of March 31, 2021 (1)

Barrels of inventory consigned under the respective Supply and Offtake Agreements as of December 31, 2020 (1)

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The Supply and Offtake Agreements have certain termination provisions, which may include requirements to negotiate with third parties for the assignment to us of certain contracts, commitments and arrangements, including procurement contracts, commitments for the sale of product, and pipeline, terminalling, storage and shipping arrangements.

The Supply and Offtake Agreements were amended in December 2018 for Big Spring and in January 2019 for El Dorado and Krotz Springs so that the Baseline Step-Out Liabilities, as defined below, were based upon a fixed price.

As a result, we recorded gains on the change in fair value resulting from the modification in cost of materials and other in the periods in which the amendments occurred, including a gain of $ 7.6 million which was recognized in the first quarter of 2019.

As a result of these amendments, the subsequent changes in fair value of the Baseline Step-Out Liabilities were recorded in interest expense.

In January 2020, we amended our three Supply and Offtake Agreements so that the repurchase of Baseline Volumes at the end of the Supply and Offtake Agreement term (representing the "Baseline Step-Out Liability" or, collectively, the "Baseline Step-Out Liabilities") was based on market-indexed prices subject to commodity price risk.

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The Baseline Step-Out Liabilities are reflected as non-current liabilities on our consolidated balance sheet to the extent that they are not contractually due within twelve months.

Pursuant to the Periodic Price Adjustments provision in the Supply and Offtake Agreements, the Company may be required to pay down all or a portion of the fixed component of the Baseline Step-Out Liabilities or may receive additional proceeds depending on the change in fair value of the inventory collateral subject to a threshold at certain specified Periodic Pricing Dates, which occur on October 1st and May 1st, annually, not to extend beyond expiration of the Supply and Offtake Agreements.

Pursuant to the Periodic Price Adjustments provision in the Supply and Offtake Agreements, the Company may be required to pay down all or a portion of the fixed component of the Baseline Step-Out Liabilities or may receive additional proceeds depending on the change in fair value of the inventory collateral subject to a threshold at certain specified periodic pricing dates (the "Periodic Pricing Dates"), which occur on October 1st and May 1st, annually, not to extend beyond expiration of the Supply and Offtake Agreements.

Additionally, at the Periodic Pricing Dates, if a Periodic Price Adjustment is triggered, the prospective pricing underlying the fixed component of the Baseline Step-Out Liabilities will be adjusted to reflect either the pay-down or the incremental proceeds, accordingly.

As of September 30, 2020, the fixed component of the Baseline Step-Out Liabilities subject to the Periodic Price Adjustments amounted to approximately $58.8 million.

All or some portion of that amount may become due or payable in periods occurring within twelve months, if Periodic Price Adjustments are triggered in October 2020 and May

See Note 19 - Subsequent Events , for details on the subsequent Periodic Price Adjustment and paydown triggered on October 1, 2020.

Monthly activity resulting in over and short volumes continue to be valued using market-indexed pricing, and are included in current liabilities (or receivables) on our consolidated balance sheet.

On October 1, 2020, the provision was triggered and a paydown amounting to $ 20.8 million was made to J.

Aron on October 30, 2020.

The prospective pricing underlying the fixed component of the Baseline Step-Out liabilities was adjusted accordingly to reflect this payment, resulting in a reduction to the fixed differential component of our long-term Supply and Offtake Obligation totaling $ 20.8 million and a prospective contractual reset of the fixed differentials subject to future Periodic Price Adjustments.

Contemporaneous with the payment, J.

Aron separately refunded to us the $ 10.0 million of deferred additional monthly fees.

As of both March 31, 2021 and December 31, 2020, the fixed component of the Baseline Step-Out Liabilities subject to the Periodic Price Adjustments amounted to approximately $ 33.1 million.

All or some portion of that amount may

become due or payable in periods occurring within twelve months, if Periodic Price Adjustments are triggered on the Periodic Pricing Dates.

Monthly activity resulting in over and short volumes continue to be valued using market-indexed pricing, and are included in current liabilities (or receivables) on our condensed consolidated balance sheet.

Net balances payable (receivable) under the Supply and Offtake Agreements were as follows as of the balance sheet dates:

(in millions) El Dorado Big Spring Krotz Springs Total

Balances as of September 30, 2020:

Balances as of March 31, 2021:

Baseline Step-Out Liability $ 136.8 $ 60.1 $ 90.2 $ 287.1

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Obligations Under Supply and Offtake Agreements - Noncurrent portion $ 136.8 $ 60.1 $ 90.2 $ 287.1

Other current payable for monthly activity true-up $ 12.6 $ 1.0 $ — $ 13.6

Other current payable (receivable) for monthly activity true-up $ 1.4 $ 4.7 $ ( 7.0 ) $ ( 0.9 )

(in millions) El Dorado Big Spring Krotz Springs Total

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Baseline Step-Out Liability $ 106.3 $ 47.9 $ 70.7 $ 224.9

Revolving over/short inventory financing liability 93.0 73.5 40.5 207.0

Revolving over/short inventory financing liability (receivable) 102.0 25.3 ( 4.5 ) 122.8

Total Obligations Under Supply and Offtake Agreements 208.3 73.2 66.2 347.7

Current portion (1)

102.0 25.3 ( 4.5 ) 122.8

Obligations Under Supply and Offtake Agreements - Noncurrent portion $ 106.3 $ 47.9 $ 70.7 $ 224.9

Other current receivable for monthly activity true-up $ ( 16.4 ) $ ( 3.1 ) $ ( 3.5 ) $ ( 23.0 )

Other current payable for monthly activity true-up $ 6.6 $ 7.0 $ — $ 13.6

(1) Current portion for Krotz Springs includes $ 1.9 million of current portion of obligations under Supply and Offtake Agreements and $ 6.4 million of current assets presented in our condensed consolidated balance sheet.

The Supply and Offtake Agreements require payments of fixed annual fees which are factored into the interest rate yield under the fair value accounting model.

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(in millions) El Dorado Big Spring Krotz Springs Total

Recurring cash fees paid during the three months ended September 30, 2020 $ 1.5 $ 0.7 $ 1.1 $ 3.3

Recurring cash fees paid during the three months ended September 30, 2019 $ 2.9 $ 1.5 $ 2.5 $ 6.9

Recurring cash fees paid during the nine months ended September 30, 2020 $ 7.4 $ 2.8 $ 3.1 $ 13.3

Recurring cash fees paid during the nine months ended September 30, 2019 $ 8.5 $ 4.4 $ 7.6 $ 20.5

Recurring cash fees paid during the three months ended March 31, 2021

$ 2.4 $ 0.7 $ 1.1 $ 4.2

Recurring cash fees paid during the three months ended March 31, 2020

$ 3.2 $ 1.0 $ 1.0 $ 5.2

Interest expense recognized under the Supply and Offtake Agreements includes the yield attributable to recurring cash fees, one-time cash fees (e.g., in connection with amendments), as well as other changes in fair value, which may increase or decrease interest expense.

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(in millions) El Dorado Big Spring Krotz Springs Total

Interest expense for the three months ended September 30, 2020 $ 1.5 $ 0.7 $ 1.1 $ 3.3

Interest expense for the three months ended September 30, 2019 $ 3.7 $ 2.0 $ 2.7 $ 8.4

Interest expense for the nine months ended September 30, 2020 $ 7.8 $ 5.9 $ 3.5 $ 17.2

Interest expense for the nine months ended September 30, 2019 $ 10.9 $ 3.6 $ 8.8 $ 23.3

Reflected in interest expense are losses totaling $ 3.9 million for the nine months ended September 30, 2020, and gains totaling $ 7.7 million and gains totaling $ 11.4 million for the three and nine months ended September 30, 2019, respectively, related to the changes in fair value in the Baseline Step-Out Liabilities component of Obligations Under Supply and Offtake Agreements.

There were no such gains

or losses for three months ended September 30, 2020.

Interest expense for the three months ended March 31, 2021

$ 2.4 $ 0.7 $ 1.1 $ 4.2

Interest expense for the three months ended March 31, 2020

$ 3.6 $ 4.1 $ 1.4 $ 9.1

There were losses totaling $ 3.9 million for the three months ended March 31, 2020, reflected in interest expense related to the changes in fair value in the Baseline Step-Out Liabilities component of Obligations Under Supply and Offtake Agreements.

There were no such losses for the three months ended March 31, 2021.

We maintained letters of credit under the Supply and Offtake Agreements as follows:

(in millions) El Dorado Big Spring and Krotz Springs

Letters of credit outstanding as of September 30, 2020 $ 170.0 $ 10.0

Letters of credit outstanding as of March 31, 2021

$ 145.0 $ 10.0

Letters of credit outstanding as of December 31, 2020

$ 195.0 $ 10.0

Note 8 - Long-Term Obligations and Notes Payable

Outstanding borrowings, net of unamortized debt discounts and certain deferred financing costs, under Delek’s existing debt instruments are as follows (in millions):

September 30, 2020 December 31, 2019

March 31, 2021 December 31, 2020

Revolving Credit Facility $ 50.0 $ —

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1,245.2 1,246.8

Delek Logistics Credit Facility 760.7 588.4

Hapoalim Term Loan (2)

Delek Logistics Credit Facility 737.5 746.6

Delek Logistics Notes (3)

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$ 2,354.4 $ 2,315.0

(1) Net of deferred financing costs of $ 3.0 million and $ 3.5 million and debt discount of $ 24.7 million and $ 12.5 million at September 30, 2020 and December 31, 2019, respectively.

(2) Net of deferred financing costs of $ 0.2 million and $ 0.3 million and debt discount of $ 0.2 million and $ 0.2 million at September 30, 2020 and December 31, 2019, respectively.

(3) Net of deferred financing costs of $ 3.5 million and $ 4.0 million and debt discount of $ 1.1 million and $ 1.3 million at September 30, 2020 and December 31, 2019, respectively.

(1) Net of deferred financing costs of $ 2.7 million and $ 2.9 million and debt discount of $ 21.9 million and $ 23.3 million at March 31, 2021 and December 31, 2020, respectively.

(2) Net of deferred financing costs of $ 0.2 million and $ 0.2 million and debt discount of $ 0.1 million and $ 0.1 million at March 31, 2021 and December 31, 2020, respectively.

(3) Net of deferred financing costs of $ 3.1 million and $ 3.3 million and debt discount of $ 1.0 million and $ 1.0 million at March 31, 2021 and December 31, 2020, respectively.

Delek Revolver and Term Loan

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Proceeds under the Term Loan Credit Facility, as well as proceeds of approximately $ 300.0 million in borrowings under the Revolving Credit Facility on the Closing Date, were used to repay certain indebtedness of Delek and its subsidiaries (the “Refinancing”), as well as certain fees, costs and expenses in connection with the closing of the New Credit Facilities, with any remaining proceeds held in cash.

Proceeds of future borrowings under the Revolving Credit Facility will be used for working capital and general corporate purposes of Delek and its subsidiaries.

Proceeds of future borrowings under the Revolving Credit Facility may be used for working capital and general corporate purposes of Delek and its subsidiaries.

Notes to Condensed Consolidated Financial Statements (Unaudited)

On May 22, 2019 (the "First Incremental Effective Date"), we amended the Term Loan Credit Facility agreement pursuant to the terms of the First Incremental Amendment to Term Loan Credit Agreement (the "Incremental Amendment").

Pursuant to the Incremental Amendment, the Company borrowed $ 250.0 million in aggregate principal amount of incremental term loans (the “Incremental Term Loans”) at an original issue discount of 0.75 %, increasing the aggregate principal amount of loans outstanding under the Term Loan Credit Facility on the First Incremental Effective Date to $ 943.0 million.

On November 12, 2019 (the "Second Incremental Effective Date"), we amended the Term Loan Credit facility agreement pursuant to the terms of the Second Incremental Amendment to the Term Loan Credit Agreement (the "Second Incremental Amendment") and borrowed $ 150.0 million in aggregate principal amount of incremental term loans (the "Incremental Loans") at an original issue discount of 1.21 %, increasing the aggregate principal amount of loans outstanding under the Term Loan Credit Facility on the Second Incremental Effective Date to $ 1,088.3 million.

The terms of the Incremental Term Loans and Incremental Loans are substantially identical to the terms applicable to the initial term loans under the Term Loan Credit Facility borrowed in March 2018.

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On May 19, 2020, we amended the Term Loan Credit Facility agreement and borrowed $ 200.0 million in aggregate principal amount of incremental term loans (the “Third Incremental Term Loan”) at an original issue discount of 7.00 %.

The Third Incremental Term Loan constitutes a separate class of term loan (the "Class B Loan") under the Term Loan Credit Facility from those initially borrowed in March 2018 and the incremental term loans borrowed in May 2019 and November 2019 (collectively, the "Class A Loans").

The Third Incremental Term Loan constitutes a separate class of term loans (the "Class B Loans") under the Term Loan Credit Facility from those initially borrowed in March 2018 and the incremental term loans borrowed in May 2019 and November 2019 (collectively, the "Class A Loans").

Delek will be required to pay a make-whole prepayment fee if the Third Incremental Term Loan is prepaid pursuant to an optional prepayment, in connection with a non-permitted debt issuance or in connection with an acceleration within one year of the incurrence of the Third Incremental Term Loan.

Delek may voluntarily prepay the outstanding Third Incremental Term Loans at any time subject to customary “breakage” costs with respect to LIBOR loans and subject to a prepayment premium of 1.00 % in connection with certain customary repricing events that may occur during the period from the day after the first anniversary of the Third Incremental Term Loan through the second anniversary of the Third Incremental Term Loan.

Delek may voluntarily prepay the outstanding Third Incremental Term Loan at any time subject to customary breakage costs with respect to LIBOR loans and subject to a prepayment premium of 1.00 % in connection with certain customary repricing events that may occur during the period from the day after the first anniversary of the Third Incremental Term Loan through the second anniversary of the Third Incremental Term Loan.

The other terms of the Third Incremental Term Loan are substantially identical to the terms applicable to the Class A Loans.

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The interest rates applicable to borrowings under the Term Loan Credit Facility and the Revolving Credit Facility are based on a fluctuating rate of interest measured by reference to either, at Delek’s option, (i) a base rate, plus an applicable margin, or (ii) a reserve-adjusted LIBOR, plus an applicable margin (or, in the case of Revolving Credit Facility borrowings denominated in Canadian dollars, the Canadian dollar bankers' acceptances rate ("CDOR")).

The initial applicable margin for all Term Loan Credit Facility borrowings was 1.50 % per annum with respect to base rate borrowings and 2.50 % per annum with respect to LIBOR borrowings.

On October 26, 2018, Delek entered into an amendment to the Term Loan Credit Facility (the “First Amendment”) to reduce the margin on certain borrowings under the Term Loan Credit Facility and incorporate certain other changes.

The First Amendment decreased the applicable margins for Class A Loans under (i) Base Rate Loans from 1.50 % to 1.25 % and (ii) LIBOR Rate Loans from 2.50 % to 2.25 %, as such terms are defined in the Term Loan Credit Facility.

The First Amendment decreased the applicable margins for Class A Loans under (i) Base Rate Loans by 0.25 % to 1.25 % and (ii) LIBOR Rate Loans by 0.25 % to 2.25 %, as such terms are defined in the Term Loan Credit Facility.

Class B Loans incurred under the Third Incremental Term Loan bear interest at a rate that is determined, at the Company’s election, at LIBOR or at base rate, in each case, plus an applicable margin of 5.50 % with respect to LIBOR borrowings and 4.50 % with respect to base rate borrowings.

Additionally, Class B loans that are LIBOR borrowings are subject to a minimum LIBOR rate floor of 1.00 %.

The initial applicable margin for Revolving Credit Facility borrowings was 0.25 % per annum with respect to base rate borrowings and 1.25 % per annum with respect to LIBOR and CDOR borrowings, and the applicable margin for such borrowings after September 30, 2018 is based on Delek’s excess availability as determined by reference to a borrowing base, ranging from 0.25 % to 0.75 % per annum with respect to base rate borrowings and from 1.25 % to 1.75 % per annum with respect to LIBOR and CDOR borrowings.

The applicable margin for Revolving Credit Facility borrowings is based on Delek’s excess availability as determined by reference to a borrowing base, ranging from 0.25 % to 0.75 % per annum with respect to base rate borrowings and from 1.25 % to 1.75 % per annum with respect to LIBOR and CDOR borrowings.

In addition, the Revolving Credit Facility requires Delek to pay an unused line fee on the average amount of unused commitments thereunder in each quarter, which the fee is at a rate of 0.25 % or 0.375 % per annum, depending on average commitment usage for such quarter.

As of September 30, 2020, the unused line fee was 0.375 % per annum.

As of March 31, 2021, the unused line fee was 0.375 % per annum.

Maturity and Repayments

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The Term Loan Credit Facility matures on March 30, 2025 and requires scheduled quarterly principal payments on the last business day of the applicable quarter.

Pursuant to the Incremental Amendment, quarterly payments increased from $ 1.75 million to $ 2.38 million.

Pursuant to the Second Incremental Amendment, the quarterly payments increased to $ 2.75 million commencing with December 31, 2019.

Pursuant to the Second Incremental Amendment, the quarterly payments increased to $ 2.75 million commencing with December 31, 2019 on the Class A Loans.

Additionally, the Term Loan Credit Facility requires prepayments by Delek with the net cash proceeds from certain debt incurrences, asset dispositions and insurance or condemnation events with respect to Delek’s assets, subject to certain exceptions, thresholds and reinvestment rights.

The Term Loan Credit Facility also requires annual prepayments with a variable percentage of Delek’s excess cash flow, ranging from 50.0 % to

Notes to Condensed Consolidated Financial Statements (Unaudited)

0 % depending on Delek’s consolidated fiscal year end secured net leverage ratio.

The Term Loan Credit Facility also requires annual prepayments with a variable percentage of Delek’s excess cash flow, ranging from 50.0 % to 0 % depending on Delek’s consolidated fiscal year end secured net leverage ratio.

The Third Incremental Term Loan requires quarterly payments on the Class B Loans of $ 0.5 million commencing June 30, 2020.

Notes to Condensed Consolidated Financial Statements (Unaudited)

Guarantee and Security

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Borrowings under the New Credit Facilities are also guaranteed by DK Canada Energy ULC, a British Columbia unlimited liability company and a wholly-owned restricted subsidiary of Delek.

The Revolving Credit Facility is secured by a first priority lien over substantially all of Delek’s and each guarantor's receivables, inventory, renewable identification numbers, instruments, intercompany loan receivables, deposit and securities accounts and related books and records and certain other personal property, subject to certain customary exceptions (the "Revolving Priority Collateral"), and a second priority lien over substantially all of Delek's and each guarantor's other assets, including all of the equity interests of any subsidiary held by Delek or any guarantor (other than equity interests in certain MLP Subsidiaries) subject to certain customary exceptions, but excluding real property (such real property and equity interests, the "Term Priority Collateral").

The Revolving Credit Facility is secured by a first priority lien over substantially all of Delek’s and each guarantor's receivables, inventory, renewable identification numbers ("RINs"), instruments, intercompany loan receivables, deposit and securities accounts and related books and records and certain other personal property, subject to certain customary exceptions (the "Revolving Priority Collateral"), and a second priority lien over substantially all of Delek's and each guarantor's other assets, including all of the equity interests of any subsidiary held by Delek or any guarantor (other than equity interests in certain MLP Subsidiaries) subject to certain customary exceptions, but excluding real property (such real property and equity interests, the "Term Priority Collateral").

The Term Loan Credit Facility is secured by a first priority lien on the Term Priority Collateral and a second priority lien on the Revolving Priority Collateral, all in accordance with an intercreditor agreement between the Term Administrative Agent and the Revolver Administrative Agent and acknowledged by Delek and the subsidiary guarantors.

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Additional Information

At September 30, 2020, the weighted average borrowing rate under the Revolving Credit Facility was 3.50 % and was comprised entirely of a base rate borrowing, and the principal amount outstanding thereunder was $ 110.0 million.

Additionally, there were letters of credit issued of approximately $ 227.3 million as of September 30, 2020 under the Revolving Credit Facility.

Unused credit commitments under the Revolving Credit Facility, as of September 30, 2020, were approximately $ 662.7 million.

At September 30, 2020, the weighted average borrowing rate under the Term Loan Credit Facility was approximately 3.04 % comprised entirely of LIBOR borrowings, and the principal amount outstanding thereunder was $ 1,276.3 million.

As of September 30, 2020, the effective interest rate related to the Term Loan Credit Facility was 3.57 %.

At March 31, 2021, the weighted average borrowing rate under the Revolving Credit Facility was 3.50 % and was comprised entirely of a base rate borrowing, and the principal amount outstanding thereunder was $ 50.0 million.

Additionally, there were letters of credit issued of approximately $ 314.6 million as of March 31, 2021 under the Revolving Credit Facility.

Unused credit commitments under the Revolving Credit Facility, as of March 31, 2021, were approximately $ 635.4 million.

At March 31, 2021, the weighted average borrowing rate under the Term Loan Credit Facility was approximately 3.00 % comprised entirely of LIBOR borrowings, and the principal amount outstanding thereunder was $ 1,269.8 million.

As of March 31, 2021, the effective interest rate related to the Term Loan Credit Facility was 3.61 %.

Delek Hapoalim Term Loan

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Any such additional borrowings must be completed by December 31, 2021.

At September 30, 2020, the weighted average borrowing rate under the term loan was approximately 3.15 % comprised entirely of a LIBOR borrowing and the principal amount outstanding thereunder was $ 39.7 million.

As of September 30, 2020, the effective interest rate related to the BHI Term Loan was 3.58 %.

On December 30, 2020, we amended the BHI Term Loan to modify one of the required quarterly financial covenant metrics;

there were no other changes as a result of this amendment.

At March 31, 2021, the weighted average borrowing rate under the term loan was approximately 3.11 % comprised entirely of a LIBOR borrowing and the principal amount outstanding thereunder was $ 39.5 million.

As of March 31, 2021, the effective interest rate related to the BHI Term Loan was 3.54 %.

Delek Logistics Credit Facility

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The obligations under the Delek Logistics Credit Facility remain secured by first priority liens on substantially all of Delek Logistics' tangible and intangible assets.

Additionally, a subsidiary of Delek provided a limited guaranty of Delek Logistics' obligations under the Delek Logistics Credit Facility.

The guaranty was (i) limited to an amount equal to the principal amount, plus unpaid and accrued interest, of a promissory note made by Delek in favor of the subsidiary guarantor (the "Holdings Note") and (ii) secured by the subsidiary guarantor's pledge of the Holdings Note to the Delek Logistics Credit Facility lenders.

Effective March 30, 2020, the limited guaranty and pledge of the Holdings Note was terminated pursuant to a guaranty and pledge release approved by the required lenders under the Delek Logistics Credit Facility.

Notes to Condensed Consolidated Financial Statements (Unaudited)

The Delek Logistics Credit Facility has a maturity date of September 28, 2023.

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The applicable margin in each case and the fee payable for the unused revolving commitments vary based upon Delek Logistics' most recent total leverage ratio calculation delivered to the lenders, as called for and defined under the terms of the Delek Logistics Credit Facility.

At September 30, 2020, the weighted average borrowing rate was approximately 2.69 %.

At March 31, 2021, the weighted average borrowing rate was approximately 2.45 %.

Additionally, the Delek Logistics Credit Facility requires Delek Logistics to pay a leverage ratio dependent quarterly fee on the average unused revolving commitment.

As of September 30, 2020, this fee was 0.40 % on an annualized basis.

As of March 31, 2021, this fee was 0.35 % on an annualized basis.

Notes to Condensed Consolidated Financial Statements (Unaudited)

In connection with the elimination of IDRs in August 2020, Delek Logistics entered into a First Amendment to the Delek Logistics Credit Facility which, among other things, permitted the transfer of cash and equity consideration for the elimination of IDRs.

It also modified the total leverage ratio and the senior leverage ratio (each as defined in the Delek Logistics Credit Facility) calculations to reduce the total funded debt (as defined in the Delek Logistics Credit Facility) component thereof by the total amount of unrestricted consolidated cash and cash equivalents on the balance sheet of the Delek Logistics and its subsidiaries up to $ 20.0 million.

As of September 30, 2020, Delek Logistics had $ 760.7 million of outstanding borrowings under the Delek Logistics Credit Facility, with no letters of credit in place.

Unused credit commitments under the Delek Logistics Credit Facility, as of September 30, 2020, were $ 89.3 million.

As of March 31, 2021, Delek Logistics had $ 737.5 million of outstanding borrowings under the Delek Logistics Credit Facility, with no letters of credit in place.

Unused credit commitments under the Delek Logistics Credit Facility, as of March 31, 2021, were $ 112.5 million.

Delek Logistics Notes

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Interest on the Delek Logistics Notes is payable semi-annually in arrears on each May 15 and November 15, commencing November 15, 2017.

Beginning on May 15, 2020, th e Issuers may, subject to certain conditions and limitations, redeem all or part of the Delek Logistics Notes, at a redemption price of 105.063 % of the redeemed principal for the twelve-month period beginning on May 15, 2020, 103.375 % for the twelve-month period beginning on May 15, 2021, 101.688 % for the twelve-month period beginning on May 15, 2022 and 100.00 % beginning on May 15, 2023 and thereafter, plus accrued and unpaid interest, if any.

In May 2018, the Delek Logistics Notes were exchanged for new notes with terms substantially identical in all material respects with the Delek Logistic Notes except the new notes do not contain terms with respect to transfer restrictions.

All or part of the Delek Logistics Notes are currently redeemable, subject to certain conditions and limitations, at a redemption price of 105.063% of the redeemed principal, plus accrued and unpaid interest, if any.

Beginning on May 15, 2021, th e Issuers may, subject to certain conditions and limitations, redeem all or part of the Delek Logistics Notes, at a redemption price of 103.375 % of the redeemed principal for the twelve-month period beginning on May 15, 2021, 101.688 % for the twelve-month period beginning on May 15, 2022, and 100.00 % beginning on May 15, 2023 and thereafter, plus accrued and unpaid interest, if any.

In the event of a change of control, accompanied or followed by a ratings downgrade within a certain period of time, subject to certain conditions and limitations, the Issuers will be obligated to make an offer for the purchase of the Delek Logistics Notes from holders at a price equal to 101 % of the principal amount thereof, plus accrued and unpaid interest.

In May 2018, the Delek Logistics Notes were exchanged for new notes with terms substantially identical in all material respects with the 2025 Notes except the new notes do not contain terms with respect to transfer restrictions.

As of September 30, 2020, we had $ 250.0 million in outstanding principal amount under the Delek Logistics Notes.

As of September 30, 2020, the effective interest rate related to the Delek Logistics Notes was 7.22 %.

As of March 31, 2021, we had $ 250.0 million in outstanding principal amount under the Delek Logistics Notes, and the effective interest rate was 7.25 %.

Reliant Bank Revolver

Delek has an unsecured revolving credit agreement with Reliant Bank (the "Reliant Bank Revolver").

On December 16, 2019, we amended the Reliant Bank Revolver to extend the maturity date to June 30, 2022, reduce the fixed interest rate from 4.75 % to 4.50 % per annum and increase the revolver commitment amount from $ 30.0 million to $ 50.0 million.

There were no other significant changes to the agreement .

On December 16, 2019, we amended the Reliant Bank Revolver to extend the maturity date to June 30, 2022, reduce the fixed interest rate to 4.50 % per annum and increase the revolver commitment amount to $ 50.0 million.

There were no other significant changes to the agreement in connection with this amendment .

On December 9, 2020, we amended the Reliant Bank Revolver to modify one of the required quarterly financial covenant metrics;

there were no other changes as a result of this amendment.

The revolving credit agreement requires us to pay a quarterly fee of 0.50 % on an annualized basis on the average unused revolving commitment.

As of September 30, 2020, we had $ 50.0 million outstanding and had no unused credit commitments under the Reliant Bank Revolver.

As of March 31, 2021, we had $ 50.0 million outstanding and had no unused credit commitments under the Reliant Bank Revolver.

Promissory Notes

Delek has four notes payable (the "Promissory Notes") with various assignees of Alon Israel Oil Company, Ltd., the holder of a predecessor consolidated promissory note, which bear interest at a fixed rate of 5.50 % per annum and which, collectively, require annual principal amortization payments of $ 25.0 million to be made each January through 2020, followed by a final principal amortization payment of $ 20.0 million at maturity on January 4, 2021.

As of September 30, 2020, a total principal amount of $ 20.0 million was outstanding under the Promissory Notes.

Delek had four notes payable (the "Promissory Notes") with various assignees of Alon Israel Oil Company, Ltd., the holder of a predecessor consolidated promissory note, which bore interest at a fixed rate of 5.50 % per annum and which, collectively, required annual principal amortization payments of $ 25.0 million to be made each January with a final payment of $ 20.0 million which was paid at maturity on January 4, 2021.

Restrictive Covenants

Under the terms of our Revolving Credit Facility, Term Loan Credit Facility, Delek Logistics Credit Facility, Delek Logistics Notes, Reliant Bank Revolver and BHI Agreement, we are required to comply with certain usual and customary financial and non-financial covenants.

Notes to Condensed Consolidated Financial Statements (Unaudited)

terms and conditions of the Revolving Credit Facility include periodic compliance with a springing minimum fixed charge coverage ratio financial covenant if excess availability under the revolver borrowing base is below certain thresholds, as defined in the credit agreement.

The terms and conditions of the Revolving Credit Facility include periodic compliance with a springing minimum fixed charge coverage ratio financial covenant if excess availability under the revolver borrowing base is below certain thresholds, as defined in the credit agreement.

The Term Loan Credit Facility does not have any financial maintenance covenants.

We believe we were in compliance with all covenant requirements under each of our credit facilities as of September 30, 2020.

We believe we were in compliance with all covenant requirements under each of our credit facilities as of March 31, 2021.

Certain of our debt facilities contain limitations on the incurrence of additional indebtedness, making of investments, creation of liens, dispositions and acquisitions of assets, and making of restricted payments and transactions with affiliates.

These covenants may also limit the payment, in the form of cash or other assets, of dividends or other distributions, or the repurchase of shares with respect to the equity of certain of our subsidiaries.

These covenants may also limit the payment, in the form of cash or other assets, of dividends or other distributions, or the repurchase of shares with respect to our equity.

Notes to Condensed Consolidated Financial Statements (Unaudited)

Additionally, some of our debt facilities limit our ability to make investments, including extensions of loans or advances to, or acquisitions of equity interests in, or guarantees of obligations of, certain other entities.

2 unchanged sentences

As such, our use of derivative contracts is aimed at:

• limiting the exposure to price fluctuations of commodity inventory above or below target levels at each of our segments;

• managing our exposure to commodity price risk associated with the purchase or sale of crude oil, feedstocks and finished grade fuel products at each of our segments;

• managing the cost of our credits for commitments required by the U.S.

Environmental Protection Agency ("EPA") to blend biofuels into fuel products ("RINs Obligation") using future commitments to purchase or sell renewable identification numbers ("RINs") at fixed prices and quantities;

• limiting our exposure to commodity price fluctuations on inventory above or below target levels (where appropriate) within each of our segments;

• managing our exposure to commodity price risk associated with the purchase or sale of crude oil, feedstocks/intermediates and finished grade fuel within each of our segments;

• managing our exposure to market crack spread fluctuations;

• managing the cost of our credits required by the U.S.

Environmental Protection Agency ("EPA") to blend biofuels into fuel products ("RINs Obligation") using future commitments to purchase or sell RINs at fixed prices and quantities;

• limiting the exposure to interest rate fluctuations on our floating rate borrowings.

We primarily utilize commodity swaps, futures, forward contracts and options contracts, generally with maturity dates of three years or less, and from time to time interest rate swap or cap agreements, to achieve these objectives.

Futures contracts are standardized agreements, traded on a futures exchange, to buy or sell the commodity at a predetermined price at a specified future date.

Futures contracts are standardized agreements, traded on a futures exchange, to buy or sell a commodity at a predetermined price and location at a specified future date.

Options provide the right, but not the obligation to buy or sell the commodity at a specified price in the future.

Commodity swap and futures contracts require cash settlement for the commodity based on the difference between a fixed or floating price and the market price on the settlement date, and options require payment of an upfront premium.

Commodity swaps and futures contracts require cash settlement for the commodity based on the difference between a fixed or floating price and the market price on the settlement date, and options require payment/receipt of an upfront premium.

Because these derivatives are entered into to achieve objectives specifically related to our inventory and production risks, such gains and losses (to the extent not designated as accounting hedges and recognized on an unrealized basis in other comprehensive income) are recognized in cost of materials and other.

Forward contracts are agreements to buy or sell a commodity at a predetermined price at a specified future date, and for our transactions, generally require physical delivery.

Forward contracts where the underlying commodity will be used or sold in the normal course of business qualify as normal purchases and normal sales pursuant to ASC 815 and are not accounted for as derivative instruments.

Rather, such forward contracts are accounted for under other applicable GAAP.

Forward contracts entered into for trading purposes that do not meet the normal purchases, normal sales exception are accounted for as derivative instruments at fair value with changes in fair value recognized in earnings in the period of change.

As of September 30, 2020 and December 31, 2019, and for the three and nine months ended September 30, 2020 and September 30, 2019, all of our forward contracts that were accounted for as derivative instruments primarily consisted of contracts related to our Canadian crude trading operations.

Forward contracts where the underlying commodity will be used or sold in the normal course of business qualify as normal purchases and normal sales pursuant to ASC 815.

If we elect the normal purchases and normal sales exception, such forward contracts are not accounted for as derivative instruments but rather are accounted for under other applicable GAAP.

Commodity forward contracts accounted for as derivative instruments are recorded at fair value with changes in fair value recognized in earnings in the period of change.

As of March 31, 2021 and December 31, 2020, and for the three months ended March 31, 2021 and March 31, 2020, our commodity fixed-price forward contracts that were accounted for as derivative instruments primarily consisted of contracts related to our Canadian crude trading operations.

Since Canadian crude trading activity is not related to managing supply or pricing risk of the actual inventory that will be used in production, such unrealized and realized gains and losses are recognized in other operating income, net rather than cost of materials and other on the accompanying condensed consolidated statements of income.

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From time to time, we also enter into future commitments to purchase or sell RINs at fixed prices and quantities, which are used to manage the costs associated with our RINs Obligation.

These future RIN commitment contracts meet the definition of derivative instruments under ASC 815 , and are recorded at estimated fair value in accordance with the provisions of ASC 815.

Changes in the fair value of these future RIN commitment contracts are recorded in cost of materials and other on the condensed consolidated statements of income.

As of September 30, 2020, we do not believe there is any material credit risk with respect to the counterparties to any of our derivative contracts.

These future RINs commitment contracts meet the definition of derivative instruments under ASC 815 , and are recorded at estimated fair value in accordance with the provisions of ASC 815.

Changes in the fair value of these future RINs commitment contracts are recorded in cost of materials and other on the condensed consolidated statements of income.

As of March 31, 2021, we do not believe there is any material credit risk with respect to the counterparties to any of our derivative contracts.

In accordance with ASC 815, certain of our commodity swap contracts have been designated as cash flow hedges and the change in fair value between the execution date and the end of period has been recorded in other comprehensive income.

The fair value of these contracts is recognized in income in the same financial statement line item as hedged transaction at the time the positions are closed and

Notes to Condensed Consolidated Financial Statements (Unaudited)

the hedged transactions are recognized in income.

The following table presents the fair value of our derivative instruments as of September 30, 2020 and December 31, 2019.

The fair value of these contracts is recognized in income in the same financial statement line item as hedged transaction at the time the positions are closed and the hedged transactions are recognized in income.

The following table presents the fair value of our derivative instruments as of March 31, 2021 and December 31, 2020.

The fair value amounts below are presented on a gross basis and do not reflect the netting of asset and liability positions permitted under our master netting arrangements, including cash collateral on deposit with our counterparties.

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See Note 10 for further information regarding the fair value of derivative instruments (in millions).

September 30, 2020 December 31, 2019

Notes to Condensed Consolidated Financial Statements (Unaudited)

March 31, 2021 December 31, 2020

Derivative Type Balance Sheet Location Assets Liabilities Assets Liabilities

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Other current assets — — 0.5 ( 0.3 )

Commodity derivatives (1)

Other long-term assets — — 0.2 ( 0.1 )

Total gross fair value of derivatives $ 2,248.3 $ ( 2,118.2 ) $ 1,431.3 $ ( 1,409.5 )

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Total net fair value of derivatives $ 150.6 $ ( 22.3 ) $ 73.0 $ ( 36.4 )

(1) As of September 30, 2020 and December 31, 2019, we had open derivative positions representing 193,693,716 and 86,484,065 barrels, respectively, of crude oil and refined petroleum products.

Of these open positions, contracts representing 90,000 and 600,000 barrels were designated as cash flow hedging instruments as of September 30, 2020 and December 31, 2019, respectively.

Additionally, as of September 30, 2020 and December 31, 2019, we had open derivative positions representing 13,180,000 and 40,050,000 One Million British Thermal Units ("MMBTU") of natural gas products, respectively.

(2) As of September 30, 2020 and December 31, 2019, we had open RIN commitment contracts representing 59,200,000 and 147,000,000 RINs, respectively.

(3) As of September 30, 2020 and December 31, 2019, $ 9.1 million and $ 38.8 million, respectively, of cash collateral held by counterparties has been netted with the derivatives with each counterparty.

Total gains on our hedging derivatives and RIN commitment contracts recorded in the condensed consolidated statements of income are as follows (in millions):

Three Months Ended September 30, Nine Months Ended September 30,

2020 2019 2020 2019

Gains (losses) on commodity derivatives not designated as hedging instruments recognized in cost of materials and other (1)

$ 5.1 $ 34.2 $ ( 85.8 ) $ 118.5

Gains (losses) on commodity derivatives not designated as hedging instruments recognized in other operating income, net (1) (2)

(1) As of March 31, 2021 and December 31, 2020, we had open derivative positions representing 160,365,527 and 159,682,606 barrels, respectively, of crude oil and refined petroleum products.

There were no open positions designated as cash flow hedging instruments as of March 31, 2021 and December 31, 2020.

Additionally, as of December 31, 2020, we had open derivative positions representing and 22,130,000 MMBTU of natural gas products.

There were no open natural gas positions as of March 31, 2021.

(2) As of March 31, 2021 and December 31, 2020, we had open RINs commitment contracts representing 281,608,496 and 282,150,000 RINs, respectively.

(3) As of March 31, 2021 and December 31, 2020, $( 1.8 ) million and $ 14.8 million, respectively, of cash (obligation) collateral held by counterparties has been netted with the derivatives with each counterparty.

Total gains (losses) on our hedging derivatives and RINs commitment contracts recorded in the condensed consolidated statements of income are as follows (in millions):

Three Months Ended March 31,

Gains on derivatives not designated as hedging instruments recognized in cost of materials and other (1)

$ 57.2 $ 77.2

Realized gains (losses) reclassified out of accumulated other comprehensive income and into cost of materials and other on commodity derivatives designated as cash flow hedging instruments 0.8 ( 21.1 ) 3.7 ( 55.0 )

Total gains (losses) $ 6.0 $ 12.8 $ ( 74.2 ) $ 63.7

(1) Gains (losses) on commodity derivatives that are economic hedges but not designated as hedging instruments include unrealized (losses) gains of $( 19.4 ) million and $ 9.2 million for the three and nine months ended September 30, 2020, respectively, and $ 0.5 million and $( 30.1 ) million for the three and nine months ended September 30, 2019, respectively.

Of these amounts, approximately $ 0.4 million and $( 13.0 ) million as of September 30, 2020 and September 30, 2019, respectively, represent unrealized gains (losses) where the instrument has matured but where it has not cash settled as of period end.

Derivative instruments that have matured but not cash settled at the balance sheet date continue to be reflected in derivative assets or liabilities on our balance sheet.

Losses on commodity derivatives not designated as hedging instruments recognized in other operating income, net (1) (2)

Realized gains reclassified out of accumulated other comprehensive income and into cost of materials and other on commodity derivatives designated as cash flow hedging instruments 0.2 0.7

Total gains $ 56.3 $ 77.9

(1) Gains on commodity derivatives that are economic hedges but not designated as hedging instruments include unrealized gains of $ 11.2 million and $ 52.0 million for the three months ended March 31, 2021 and 2020, respectively.

(2) See separate table below for disclosures about "trading derivatives."

The effect of cash flow hedge accounting on the condensed consolidated statements of income is as follows (in millions):

Notes to Condensed Consolidated Financial Statements (Unaudited)

Three Months Ended September 30, Nine Months Ended September 30,

2020 2019 2020 2019

Three Months Ended March 31,

Gain (loss) on cash flow hedging relationships recognized in cost of materials and other:

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Total $ — $ —

For cash flow hedges, no component of the derivative instruments’ gains or losses was excluded from the assessment of hedge effectiveness for the three and nine months ended September 30, 2020 or 2019.

Gains, net of tax, on settled commodity contracts of $ 0.7 and $ 3.0 million during the three and nine months ended September 30, 2020, respectively, and $( 16.6 ) million and $( 43.4 ) million during the three and nine months ended September 30, 2019, respectively, were reclassified into cost of materials and other in the condensed consolidated statements of income.

As of September 30, 2020, we estimate that $ 1.2 million of deferred gains related to commodity cash flow hedges will be reclassified into cost of materials and other over the next 12 months as a result of hedged transactions that are forecasted to occur.

Total (losses) gains on our trading physical forward contract derivatives (none of which were designated as hedging instruments) recorded in other operating loss (income), net on the condensed consolidated statements of income are as follows (in millions):

Three Months Ended September 30, Nine Months Ended September 30,

2020 2019 2020 2019

Realized (losses) gains

$ ( 0.4 ) $ ( 1.4 ) $ ( 3.4 ) $ 3.3

Unrealized (losses) gains

0.2 4.5 ( 0.5 ) 6.6

Notes to Condensed Consolidated Financial Statements (Unaudited)

For cash flow hedges, no component of the derivative instruments’ gains or losses was excluded from the assessment of hedge effectiveness for the three months ended March 31, 2021 or 2020.

Gains, net of tax, on settled commodity contracts of $ 0.2 million and $ 0.6 million during the three months ended March 31, 2021 and 2020, respectively, were reclassified into cost of materials and other in the condensed consolidated statements of income.

As of March 31, 2021, we estimate that no amount of deferred gains related to commodity cash flow hedges will be reclassified into cost of materials and other over the next 12 months as a result of hedged transactions that are forecasted to occur.

Total losses on our trading physical forward contract derivatives (none of which were designated as hedging instruments) recorded in other operating income, net on the condensed consolidated statements of income are as follows (in millions):

Three Months Ended March 31,

Realized losses $ ( 0.4 ) $ ( 1.7 )

Unrealized losses ( 0.4 ) ( 1.0 )

Total $ ( 0.8 ) $ ( 2.7 )

Note 10 - Fair Value Measurements

Our assets and liabilities that are measured at fair value include commodity derivatives, investment commodities, environmental credits obligations and Supply and Offtake Agreements.

Delek applies the provisions of ASC 820, Fair Value Measurements ("ASC 820"), which defines fair value, establishes a framework for its measurement and expands disclosures about fair value measurements.

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Our commodity derivative contracts, which consist of commodity swaps, exchange-traded futures, options and physical commodity forward purchase and sale contracts (that do not qualify as normal purchases or normal sales exception under ASC 815), are valued based on exchange pricing and/or price index developers such as Platts or Argus and are, therefore, classified as Level 2.

Investment commodities, which represent those commodities (generally crude oil) physically on hand as a result of trading activities with physical forward contracts, are valued using published market prices of the commodity on the applicable exchange and are, therefore, classified as Level 1.

Such investment stores, included in other current assets on the condensed consolidated balance sheets, are maintained on a weighted average cost basis for determining realized gains and losses on physical sales under forward contracts, and ending balances are adjusted to fair value at each reporting date.

The unrealized gain (loss) on commodity investments for the three and nine months ended September 30, 2020 totaled $ 0.1 million and $ 1.0 million, respectively, and totaled $ 0.1 million and $( 1.9 ) million for the three and nine months ended September 30, 2019, respectively.

In April 2020, we entered into a contract with the Department of Energy to deposit one million barrels of crude oil into one of the Strategic Petroleum Reserve ("SPR") storage locations where they will be stored on our behalf until October 2020 for a fee of approximately 100,000 barrels.

The fee of 100,000 barrels was recorded as a prepaid asset at cost, and the right to receive the 900,000 barrels was recorded as a financial asset (the "Right to receive crude oil barrels"), measured at fair value based on the value of the underlying commodity using published market prices of the commodity on the applicable exchange.

Such asset is, therefore, classified as Level 2.

The unrealized gain

Notes to Condensed Consolidated Financial Statements (Unaudited)

on the underlying commodity related to the SPR financial asset for the three and nine months ended September 30, 2020 of $ 0.9 million and $ 10.6 million was recorded in other (income) expense, net.

Our RIN commitment contracts are future commitments to purchase or sell RINs at fixed prices and quantities, which are used to manage the costs associated with our RINs Obligation.

These RIN commitment contracts are categorized as Level 2, and are measured at fair value based on quoted prices from an independent pricing service.

Our environmental credits obligation surplus or deficit is based on the amount of RINs or other emissions credits subject to fair value accounting that we must purchase, net of amounts internally generated and purchased and the price of those RINs or other emissions credits as of the balance sheet date, by refinery/obligor.

Our RINs commitment contracts are future commitments to purchase or sell RINs at fixed prices and quantities, which are used to manage the costs associated with our Consolidated Net RINs Obligation (as defined in the Annual Report on Form 10-K).

These RINs commitment contracts (which are forward contracts accounted for as derivatives – see Note 9) are categorized as Level 2, and are measured at fair value based on quoted prices from an independent pricing service.

Our environmental credits obligation surplus or deficit includes the Consolidated Net RINs Obligation surplus or deficit, as well as other environmental credit obligation surplus or deficit positions subject to fair value accounting pursuant to our accounting policy (see Note 14).

The environmental credits obligation surplus or deficit is categorized as Level 2 if measured at fair value either directly through observable inputs or indirectly through market-corroborated inputs.

As of and for the nine months ended September 30, 2020 and 2019, we elected to account for our J.

As of and for the three months ended March 31, 2021 and 2020, we elected to account for our J.

Aron step-out liability at fair value in accordance with ASC 825 , as it pertains to the fair value option.

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Gains (losses) related to the change in fair value are recorded as a component of cost of materials and other in the condensed consolidated statements of income.

Before the January 2020 amendments, we determined the fair value for the fixed price step-out liability based on changes to interest rates reflecting changes to the interest rate risk, with obligation categorized as Level 2.

Notes to Condensed Consolidated Financial Statements (Unaudited)

For all other financial instruments, the fair value approximates the historical or amortized cost basis comprising our carrying value and therefore are not included in the table below.

The fair value hierarchy for our financial assets and liabilities accounted for at fair value on a recurring basis was as follows (in millions):

September 30, 2020

March 31, 2021

Level 1 Level 2 Level 3 Total

Commodity derivatives $ — $ 2,125.8 $ — $ 2,125.8

Commodity investments 1.0 — — 1.0

Right to receive crude oil barrels — 36.6 — 36.6

RIN commitment contracts — 2.9 — 2.9

RINs commitment contracts — 122.5 — 122.5

— 2,248.3 — 2,248.3

Commodity derivatives — ( 2,106.6 ) — ( 2,106.6 )

RIN commitment contracts — ( 1.1 ) — ( 1.1 )

RINs commitment contracts — ( 11.6 ) — ( 11.6 )

Environmental credits obligation deficit — ( 220.8 ) — ( 220.8 )

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Net assets (liabilities) $ — $ ( 501.4 ) $ — $ ( 501.4 )

Notes to Condensed Consolidated Financial Statements (Unaudited)

December 31, 2020

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Commodity derivatives $ — $ 1,397.7 $ — $ 1,397.7

Investment commodities 12.1 — — 12.1

RIN commitment contracts — 0.6 — 0.6

Environmental credits obligation surplus — 16.8 — 16.8

RINs commitment contracts — 33.6 — 33.6

Total assets — 1,431.3 — 1,431.3

Commodity derivatives — ( 1,387.0 ) — ( 1,387.0 )

RIN commitment contracts — ( 1.9 ) — ( 1.9 )

RINs commitment contracts — ( 22.5 ) — ( 22.5 )

Environmental credits obligation deficit — ( 59.6 ) — ( 59.6 )

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This differs from the presentation in the financial statements which reflects our policy, wherein we have elected to offset the fair value amounts recognized for multiple derivative instruments executed with the same counterparty and where the legal right of offset exists.

As of September 30, 2020 and December 31, 2019, $ 9.1 million and $ 38.8 million, respectively, of cash collateral was held by counterparty brokerage firms and has been netted in the financial statements with the net derivative positions with each counterparty.

As of March 31, 2021 and December 31, 2020, $( 1.8 ) million and $ 14.8 million, respectively, of cash (obligation) collateral was held by counterparty brokerage firms and has been netted with the net derivative positions with each counterparty.

See Note 9 for further information regarding derivative instruments.

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Certain environmental matters that have or may result in penalties or assessments are discussed below in the " Environmental, Health and Safety" section of this note.

On April 8, 2021, an action titled CVR Energy Inc.

Delek US Holdings, Inc., Case No.

2021-0297-JTL, was filed in the Court of Chancery of the State of Delaware.

The complaint asserts claims arising out of the Company's response to the plaintiff's demand to inspect certain books and records of the Company purportedly pursuant to Section 220 of the Delaware General Corporation Law.

The complaint seeks

Notes to Condensed Consolidated Financial Statements (Unaudited)

an order from the court compelling the Company to provide certain books and records to the plaintiff for purposes of inspection and copying.

One of our Alon subsidiaries was the defendant in a legal action related to an easement dispute arising from a purchase of property that occurred in October 2013.

In June 2019, the court found in favor of the plaintiffs and assessed damages against such subsidiary, which were reduced in the fourth quarter of 2019 to $ 6.4 million.

Such amount is included as of September 30, 2020 in accrued expenses and other current liabilities on the accompanying condensed consolidated balance sheet.

Such amount is included as of March 31, 2021 and December 31, 2020 in accrued expenses and other current liabilities on the accompanying condensed consolidated balance sheet.

Self-insurance

Delek records a self-insurance accrual for workers’ compensation claims up to a $ 4.0 million deductible on a per accident basis, general liability claims up to $ 4.0 million on a per occurrence basis and medical claims for eligible full-time employees up to $ 0.3 million per covered individual per calendar year.

We also record a self-insurance accrual for auto liability up to a $ 4.0 million deductible on a per accident basis.

With respect to workers’ compensation claims, we are subject to claims losses up to a $ 4.0 million deductible on a per accident basis, general liability claims up to $ 4.0 million on a per occurrence basis and medical claims for eligible full-time employees up to $ 0.3 million per covered individual per calendar year.

We are also subject to auto liability claims losses up to a $ 4.0 million deductible on a per accident basis.

We have umbrella liability insurance available to each of our segments in an amount determined reasonable by management.

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These laws and regulations govern the discharge of materials into the environment, waste management practices, pollution prevention measures and the composition of the fuels we produce, as well as the safe operation of our plants and pipelines and the safety of our workers and the public.

Numerous permits or other authorizations are required under these laws and regulations for the operation of our refineries, renewable fuels facilities, terminals, pipelines, underground

Notes to Condensed Consolidated Financial Statements (Unaudited)

storage tanks, trucks, rail cars and related operations, and may be subject to revocation, modification and renewal.

Numerous permits or other authorizations are required under these laws and regulations for the operation of our refineries, renewable fuels facilities, terminals, pipelines, underground storage tanks, trucks, rail cars and related operations, and may be subject to revocation, modification and renewal.

These laws and permits raise potential exposure to future claims and lawsuits involving environmental and safety matters which could include soil and water contamination, air pollution, personal injury and property damage allegedly caused by substances which we manufactured, handled, used, released or disposed of, transported, or that relate to pre-existing conditions for which we have assumed responsibility.

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While it is often difficult to quantify future environmental or safety related expenditures, we anticipate that continuing capital investments and changes in operating procedures will be required for the foreseeable future to comply with existing and new requirements, as well as evolving interpretations and more strict enforcement of existing laws and regulations.

As of September 30, 2020, we have recorded an environmental liability of approximately $ 112.7 million, primarily related to the estimated probable costs of remediating or otherwise addressing certain environmental issues of a non-capital nature at our refineries, as well as terminals, some of which we no longer own.

As of March 31, 2021, we have recorded an environmental liability of approximately $ 112.1 million, primarily related to the estimated probable costs of remediating or otherwise addressing certain environmental issues of a non-capital nature at our refineries, as well as terminals, some of which we no longer own.

This liability includes estimated costs for ongoing investigation and remediation efforts for known contamination of soil and groundwater.

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In the future, we could be required to extend the expected remediation period or undertake additional investigations of our refineries, pipelines and terminal facilities, which could result in the recognition of additional remediation liabilities.

We are also subject to various regulatory requirements related to carbon emissions and the compliance requirements to remit environmental credit obligations due to the EPA or other regulatory agencies, the most significant of which relates to the RINs Obligation subject to the EPA’s RFS-2 regulations.

The RFS-2 regulations are highly complex and evolving, requiring us to periodically update our compliance systems.

As part of our on-going monitoring and compliance efforts, on an annual basis we engage a third party to perform procedures to review our RINs inventory, processes and compliance.

The results of such procedures could include procedural findings but may also include findings regarding the usage of RINs to meet past obligations, the treatment of exported RINs, and the propriety of RINs on-hand.

Based on management’s current review, we have determined that there will likely be adjustments in future periods to current RINs inventory which (to the extent they are valued) offset our RINs Obligation.

Such adjustments may also require communication with the EPA if they involve reportable non-compliance which could lead to the assessment of penalties.

The total amount of exposure is not yet determinable, but based on management’s analysis of potential exposure, it is not expected to be material in relation to our total RINs Obligation.

El Dorado Refinery Fire

On February 27, 2021, our El Dorado refinery experienced a fire in its Penex unit.

Six employees were injured in the fire, which is currently being investigated by the Occupational Safety and Health Administration.

The facility was in the process of undergoing turnaround activity, so there were no operational disruptions as a result of the fire.

During the three months ended March 31, 2021, we incurred workers'

Notes to Condensed Consolidated Financial Statements (Unaudited)

compensation losses of $ 3.8 million associated with the fire, which is included in operating expenses in the accompanying condensed consolidated statements of income.

Additionally, we recognized accelerated depreciation of $ 1.0 million in the three months ended March 31, 2021 due to property damaged in the fire.

Work to determine the full extent of losses and potential insurance claims continues and will continue until all the affected equipment and processes are brought back online and final testing can be completed.

The extent of any incremental losses is not yet determinable and may be subject to insurance recoveries.

Delek maintains property damage insurance policies which have an associated deductible of $ 5.0 million for the El Dorado refinery.

Covered losses in excess of the $ 5.0 million deductible will be recoverable under the property insurance policies.

Crude Oil and Other Releases

We have experienced several crude oil and other releases involving our assets.

There were no material releases that occurred during the nine months ended September 30, 2020.

There were no material releases that occurred during the three months ended March 31, 2021.

For releases that occurred in prior years, we have received regulatory closure or a majority of the cleanup and remediation efforts are substantially complete.

For the release sites that have not yet received regulatory closure, we expect to receive regulatory closure in late 2020 or 2021 and do not anticipate material costs associated with any fines or penalties or to complete activities that may be needed to achieve regulatory closure.

Expenses incurred for the remediation of these crude oil and other releases are included in operating expenses in our consolidated statements of income.

For the release sites that have not yet received regulatory closure, we expect to receive regulatory closure in 2021 and do not anticipate material costs associated with any fines or penalties or to complete activities that may be needed to achieve regulatory closure.

Expenses incurred for the remediation of these crude oil and other releases are included in operating expenses in our condensed consolidated statements of income.

Letters of Credit

As of September 30, 2020, we had in place letters of credit totaling approximately $ 227.3 million with various financial institutions securing obligations primarily with respect to our commodity transactions for the refining segment and certain of our insurance programs.

There were no amounts drawn by beneficiaries of these letters of credit at September 30, 2020.

As of March 31, 2021, we had in place letters of credit totaling approximately $ 314.6 million with various financial institutions securing obligations primarily with respect to our commodity transactions for the refining segment and certain of our insurance programs.

There were no amounts drawn by beneficiaries of these letters of credit at March 31, 2021.

Note 12 - Income Taxes

Under ASC 740, Income Taxes (“ASC 740”) we used an estimated annual tax rate to record income taxes for the three and nine months ended September 30, 2020 and September 30, 2019.

Our effective tax rate was 16.9 % and 32.0 % for the three and nine months ended September 30, 2020, respectively, compared to 18.3 % and 21.9 % for the three and nine ended September 30, 2019, respectively.

Under ASC 740 we used an estimated annual tax rate to record income taxes for the three months ended March 31, 2021 and March 31, 2020.

Our effective tax rate was 12.0 % and 21.3 % for the three months ended March 31, 2021 and 2020, respectively.

The difference between the effective tax rate and the statutory rate is generally attributable to permanent differences and discrete items.

The change in our effective tax rate for the three and nine months ended September 30, 2020 as compared to the three and nine months ended September 30, 2019 was primarily due to tax benefit for federal tax credits attributable to the Company’s biodiesel blending operations that were re-enacted in December 2019, reversal of a valuation allowance for deferred tax assets in partnership investments due to changes in the future realizability of deferred tax basis differences, and expected net operating loss carryback provided under the CARES Act which allows the Company to recover federal taxes paid in prior years at a 35% tax rate creating a 14% tax rate benefit.

On March 27, 2020, the Coronavirus Aid Relief, and Economic Security Act (the "CARES Act") was enacted into law.

The CARES Act includes several significant provisions for corporations, including the usage of net operating losses, interest deductions and payroll benefits.

The Company recognized $ 16.8 million of current federal income tax benefit for the nine months ended September 30, 2020, attributable to anticipated tax refunds from net operating loss carryback to prior 35% tax rate years under the CARES Act.

Additionally, we recorded an federal income tax receivable totaling $ 165.6 million as of September 30, 2020 related to the federal net operating loss carryback.

Notes to Condensed Consolidated Financial Statements (Unaudited)

The change in our effective tax rate for the three months ended March 31, 2021 as compared to the three months ended March 31, 2020 was primarily due to the first quarter 2020 reversal of a valuation allowance for deferred tax assets in partnership investments due to changes in the future realizability of deferred tax basis differences, change in state income tax footprint for separate state jurisdictions and changes in certain state income tax apportionment rates.

Note 13 - Related Party Transactions

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Transactions with our related parties were as follows for the periods presented:

Three Months Ended September 30, Nine Months Ended September 30,

Three Months Ended March 31,

(in millions) 2021 2020

$ 27.6 $ 45.1 $ 57.5 $ 73.3

Cost of materials and other (2)

$ 10.9 $ 20.3 $ 31.4 $ 33.7

(1) Consists primarily of asphalt sales which are recorded in corporate, other and eliminations segment.

(2) Consists primarily of pipeline throughput fees paid by the refining segment and asphalt purchases.

Note 14 - Other Assets and Liabilities

Notes to Condensed Consolidated Financial Statements (Unaudited)

Note 14 - Other Current Assets and Liabilities

The detail of other current assets is as follows (in millions):

Other Current Assets September 30, 2020 December 31, 2019

RINs assets $ 231.1 $ 14.5

Other Current Assets March 31, 2021 December 31, 2020

Income and other tax receivables $ 158.7 $ 142.0

Right to receive crude oil barrels (see Note 10) 36.6 —

Short-term derivative assets (see Note 9) 150.6 72.9

Prepaid expenses 29.4 21.8

Environmental Credits Obligation surplus (see Note 10) 7.3 16.8

Biodiesel tax credit (see Note 2) 3.2 97.5

Investment commodities 1.0 12.1

Other 19.5 19.7

Total $ 358.2 $ 256.4

The detail of other non-current assets is as follows (in millions):

Other Non-Current Assets September 30, 2020 December 31, 2019

Supply and Offtake receivable $ 32.7 $ 32.7

Other equity Investments 10.4 8.9

Deferred financing costs 7.3 8.5

Other 18.1 17.7

Total $ 68.5 $ 67.8

Notes to Condensed Consolidated Financial Statements (Unaudited)

The detail of accrued expenses and other current liabilities is as follows (in millions):

Accrued Expenses and Other Current Liabilities September 30, 2020 December 31, 2019

Environmental Credits Obligation deficit (see Note 10) $ 237.6 $ 18.5

Accrued Expenses and Other Current Liabilities March 31, 2021 December 31, 2020

Product financing agreements $ 277.8 $ 198.0

Income and other taxes payable 88.3 119.6

Consolidated Net RINs Obligation deficit (see Note 10) 220.8 59.6

Crude purchase liabilities 205.6 62.1

Income and other taxes payable 101.7 109.5

Deferred revenue 48.1 16.5

Employee costs 34.6 30.2

Short-term derivative liabilities (see Note 9) 22.2 35.8

Interest payable 9.6 8.8

Environmental liabilities (see Note 11) 6.6 8.2

Accrued utilities 3.7 4.4

Tank inspection liabilities 3.1 5.6

Other 51.0 34.7

Total $ 961.8 $ 546.4

The detail of other non-current liabilities is as follows (in millions):

Other Non-Current Liabilities September 30, 2020 December 31, 2019

Liability for unrecognized tax benefits $ 15.2 $ 12.1

Tank inspection liabilities 9.4 9.9

Pension and other postemployment benefit liabilities, net 3.1 5.3

Long-term derivative liabilities (see Note 9) 1.8 1.4

Deferred payroll taxes 7.8 —

Other 0.1 2.2

Total $ 37.4 $ 30.9

Note 15 - Equity-Based Compensation

4 unchanged sentences

2016 Long-Term Incentive Plan that increased the number of shares of common stock available for issuance under this plan by 2,120,000 shares to 11,020,000 shares.

Compensation expense related to equity-based awards granted under the Incentive Plans amounted to $ 6.6 million and $ 17.4 million for the three and nine months ended September 30, 2020, respectively, and $ 7.3 million and $ 18.7 million for the three and nine months ended September 30, 2019, respectively.

Compensation expense related to equity-based awards granted under the Incentive Plans amounted to $ 4.5 million and $ 5.8 million for the three months ended March 31, 2021 and 2020, respectively.

These amounts are included in general and administrative expenses in the accompanying condensed consolidated statements of income.

As of September 30, 2020, there was $ 42.2 million of total unrecognized compensation cost related to non-vested share-based compensation arrangements, which is expected to be recognized over a weighted-average period of 1.8 years.

We issued net shares of common stock of 68,265 and 314,204 as a result of exercised or vested equity-based awards during the three and nine months ended September 30, 2020, respectively, and 78,695 and 462,318 for the three and nine months ended September 30, 2019, respectively.

These amounts are net of 31,020 and 161,469 shares withheld to satisfy employee tax obligations related to the exercises and vesting during the three and nine months ended September 30, 2020, respectively, and 146,148 and 470,232 for the three and nine months ended September 30, 2019, respectively.

As of March 31, 2021, there was $ 37.3 million of total unrecognized compensation cost related to non-vested share-based compensation arrangements, which is expected to be recognized over a weighted-average period of 1.6 years.

We issued net shares of common stock of 93,856 and 102,895 as a result of exercised or vested equity-based awards during the three months ended March 31, 2021 and 2020, respectively.

These amounts are net of 58,851 and 61,505 shares withheld to satisfy employee tax obligations related to the exercises and vesting during the three months ended March 31, 2021 and 2020, respectively.

Delek Logistics GP, LLC 2012 Long-Term Incentive Plan

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The LTIP is administered by the Conflicts Committee of the board of directors of Delek Logistics' general partner.

Notes to Condensed Consolidated Financial Statements (Unaudited)

Note 16 - Shareholders' Equity

During the nine months ended September 30, 2020, our Board of Directors declared the following dividends:

Approval Date Dividend Amount Per Share Record Date Payment Date

February 24, 2020 $ 0.31 March 10, 2020 March 24, 2020

May 4, 2020 $ 0.31 May 20, 2020 June 3, 2020

August 3, 2020 $ 0.31 August 19, 2020 September 3, 2020

Dividends Suspension

We have elected to suspend dividends beginning in the fourth quarter of 2020 in order to conserve capital.

Notes to Condensed Consolidated Financial Statements (Unaudited)

Stock Repurchase Program

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The repurchase program does not obligate us to acquire any particular amount of stock and does not expire.

During the nine months ended September 30, 2020, 58,713 shares of our common stock were repurchased for a total of $ 1.9 million.

No repurchases of our common stock were made in the three months ended September 30, 2020.

During the three and nine months ended September 30, 2019, we repurchased 1,236,854 and 4,175,576 shares of our common stock for a total of $ 43.0 million and $ 147.8 million, respectively.

As of September 30, 2020, there was $ 229.7 million of authorization remaining under Delek's aggregate stock repurchase program.

During the three months ended March 31, 2020, 58,713 shares of our common stock were repurchased for a total of $ 1.9 million.

No repurchases of our common stock were made in the three months ended March 31, 2021.

As of March 31, 2021, there was $ 229.7 million of authorization remaining under Delek's aggregate stock repurchase program.

In the second quarter of 2020, we elected to suspend the share repurchase program.

Stockholder Rights Plan

1 unchanged sentence

The dividend was distributed in a non-cash transaction on March 30, 2020 to the stockholders of record on that date.

The Rights initially trade with, and are inseparable from, Delek’s common stock.

Once the Rights become exercisable, each Right will allow its holder to purchase one one-thousandth of a share of Series A Junior Participating Preferred Stock, par value $ 0.01 per share (a “Preferred Share”) for $ 92.24 , subject to adjustment (the “Exercise Price”).

This portion of a Preferred Share will give the stockholder approximately the same dividend, voting and liquidation rights as would one share of Delek’s common stock.

Prior to exercise, the Right does not give its holder any dividend, voting or liquidation rights.

The Rights will not be exercisable until 10 days after the public announcement that a person or group that has become an “Acquiring Person” (as defined in the Rights Agreement).

The point at which these terms are met is otherwise referred to as the "Distribution Date." If a person or group becomes an Acquiring Person, all holders of Rights except the Acquiring Person may, for the Exercise Price, purchase shares of the Company’s common stock with a market value of two times the Exercise Price, based on the market price of the common stock prior to such acquisition.

In addition, subject to certain conditions set forth in the Rights Agreement, the Board may extinguish the Rights.

If the Company is later acquired in a merger or similar transaction after the Distribution Date, all holders of Rights except the Acquiring Person may, for the Exercise Price, purchase shares of the acquiring corporation with a market value of two times the Exercise Price, based on the market price of the acquiring corporation’s stock prior to such merger.

In the event the Company receives a fully financed, all-cash tender offer satisfying the conditions set forth in the Rights Agreement (a “Qualifying Offer”), and certain other events occur, the Rights Agreement provides a mechanism for stockholders holding more than 20 % of the shares of Delek common stock then outstanding (excluding shares beneficially owned by the person making the Qualifying Offer) to demand a special meeting of the stockholders of the Company to vote on a resolution exempting such Qualifying Offer from the provisions of the Rights Agreement.

The Rights will expire on March 19, 2021, subject to a possible earlier expiration to the extent provided in the Rights Agreement.

Preferred Stock

On March 20, 2020, our Board of Directors authorized 1,000,000 shares of preferred stock with a par value of $ 0.01 per share as Series A Junior Participating Preferred Stock.

Notes to Condensed Consolidated Financial Statements (Unaudited)

Note 17 - Employees

Postretirement Benefits

The net periodic (benefit) cost for our postretirement benefit plans was not material for the three and nine months ended September 30, 2020 or 2019.

Additionally, our estimated contributions to our pension plans during 2020 have not changed significantly from amounts previously disclosed in the notes to the consolidated financial statements for the year ended December 31, 2019.

The Rights traded with Delek’s common stock.

The Rights expired in accordance with the terms of the Rights Agreement on March 19, 2021.

Note 17 - Leases

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Our sublease portfolio consists primarily of operating leases within our retail stores and crude storage equipment.

As of September 30, 2020, $ 26.8 million of our net property, plant, and equipment balance is subject to an operating lease.

As of March 31, 2021, $ 26.0 million of our net property, plant, and equipment balance is subject to an operating lease.

This agreement does not include options for the lessee to purchase our leasing equipment, nor does it include any material residual value guarantees or material restrictive covenants.

1 unchanged sentence

The following table presents additional information related to our operating leases in accordance ASC 842, Leases ("ASC 842"):

Three Months Ended September 30, Nine Months Ended September 30,

Three Months Ended March 31,

(in millions) 2021 2020

Operating lease costs (1)

Short-term lease costs (1)

$ 17.7 $ 15.7

Short-term lease costs (2)

Sublease income ( 1.9 ) ( 1.9 )

3 unchanged sentences

Operating cash flows from operating leases (1)

$ ( 18.3 ) $ ( 15.7 )

Leased assets obtained in exchange for new operating lease liabilities $ 7.4 $ 6.8

September 30, 2020

Leased assets obtained in exchange for new financing lease liabilities $ 12.2 $ —

March 31, 2021

Weighted-average remaining lease term (years) operating leases 5.1

Weighted-average remaining lease term (years) financing leases 7.7

Weighted-average discount rate operating leases (3)

Weighted-average discount rate financing leases (3)

(1) Includes an immaterial amount of financing lease cost.

(2) Includes an immaterial amount of variable lease cost.

(3) Our discount rate is primarily based on our incremental borrowing rate in accordance with ASC 842 .

Note 19 - Subsequent Events

Dividend Suspension

We have elected to suspend dividends beginning in the fourth quarter of 2020 in order to conserve capital.

Notes to Condensed Consolidated Financial Statements (Unaudited)

Supply and Offtake Agreements

Pursuant to the Supply and Offtake Agreements' Periodic Price Adjustment provision, we determined that the provision was triggered on October 1, 2020 and a paydown amounting to $ 20.8 million was made to J.

Aron on October 30, 2020.

The prospective pricing underlying the fixed component of the Baseline Step-Out liabilities will be adjusted accordingly to reflect this payment, resulting in a reduction to the fixed differential component of our long-term Supply and Offtake Obligation totaling $ 20.8 million and a prospective contractual reset of the fixed differentials subject to future Periodic Price Adjustments.

Contemporaneous with the payment, J.

Aron separately refunded to us the $ 10.0 million of deferred additional monthly fees.

Management's Discussion and Analysis

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 1. Financial Statements