What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2022-02-25 compared with 2021-03-01 · 457 added, 615 removed, 1781 unchanged (38% of the section changed)

12 unchanged sentences

• Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on our financial statements.

Controls and Procedures, and Other Information

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

12 unchanged sentences

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Our Board of Directors Governance Guidelines, our charters for our Audit, Compensation, Nominating and Corporate Governance and Environmental, Health and Safety Committees and our Code of Business Conduct & Ethics covering all employees, including our principal executive officer, principal financial officer, principal accounting officer and controllers, are available on our website, www.DelekUS.com, under the "About Us - Corporate Governance" caption.

Our Board of Directors Governance Guidelines, our charters for our Audit, Compensation, Technology Committee, Nominating and Corporate Governance and Environmental, Health and Safety Committees and our Code of Business Conduct & Ethics covering all employees, including our principal executive officer, principal financial officer, principal accounting officer and controllers, are available on our website, www.DelekUS.com, under the "About Us - Corporate Governance" caption.

A print copy of any of these documents will be mailed upon a written request made by a stockholder to the Corporate Secretary, Delek US Holdings, Inc.

16 unchanged sentences

EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a) Certain Documents Filed as Part of this Annual Report on Form 10-K:

Certain Documents Filed as Part of this Annual Report on Form 10-K:

Financial Statements.

19 unchanged sentences

Form of 6.750% Senior Notes due 2025 (included as Exhibit A in Exhibit 4.1).

Indenture, dated as of May 24, 2021, among Delek Logistics, Delek Logistics Finance Corp., the Guarantors named therein and U.S.

Bank, National Association, as trustee (incorporated by reference to Exhibit 4.1 of Delek Logistics’ Form 8-K filed on May 26, 2021).

Form of 7.125% Senior Note due 2028 (incorporated by reference to Exhibit 4.2 of the Partnership’s Form 8-K filed on May 26, 2021).

# Description of Common Stock

* Form of Indemnification Agreement for Directors and Officers (incorporated by reference to Exhibit 10.3 to the Company's Registration Statement on Form S-1/A, filed on April 20, 2006, SEC File No.

*# Form of Indemnification Agreement for Directors and Officers.

* Delek US Holdings, Inc.

2006 Long-Term Incentive Plan (as amended through May 4, 2010) (incorporated by reference to Exhibit 10.1 to the Company's Form 10-Q filed on May 7, 2010, SEC File No.

* Form of Delek US Holdings, Inc.

2006 Long-Term Incentive Plan Restricted Stock Unit Agreement (incorporated by reference to Exhibit 10.13(a) to the Company's Registration Statement on Form S-1/A, filed on April 20, 2006, SEC File No.

* Director Form of Delek US Holdings, Inc.

2006 Long-Term Incentive Plan Stock Option Agreement (incorporated by reference to Exhibit 10.13(b) to the Company's Registration Statement on Form S-1/A, filed on April 20, 2006, SEC File No.

* Officer Form of Delek US Holdings, Inc.

2006 Long-Term Incentive Plan Stock Option Agreement (incorporated by reference to Exhibit 10.13(c) to the Company's Registration Statement on Form S-1/A, filed on April 20, 2006, SEC File No.

* Director Form of Delek US Holdings, Inc.

2006 Long-Term Incentive Plan Stock Appreciation Rights Agreement (incorporated by reference to Exhibit 10.5 to the Company's Form 10-Q filed on August 6, 2010, SEC File No.

1 unchanged sentence

2006 Long-Term Incentive Plan Stock Appreciation Rights Agreement (incorporated by reference to Exhibit 10.4 to the Company's Form 10-Q filed on August 6, 2010, SEC File No.

* Form of Delek US Holdings, Inc.

2006 Long-Term Incentive Plan Performance Restricted Stock Unit Agreement (incorporated by reference to Exhibit 10.4 to the Company's Form 10-Q filed on August 7, 2014, SEC File No.

Tyler Throughput and Tankage Agreement, dated July 26, 2013, between Delek Refining, Ltd.

8 unchanged sentences

Aron & Company (incorporated by reference to Exhibit 10.4 to the Company's Form 10-Q filed on August 5, 2016).

Financial Statements and Schedules

Third Amended and Restated Omnibus Agreement, dated as of March 31, 2015, among Delek US Holdings, Inc., Lion Oil Company, Delek Logistics Operating, LLC, Delek Marketing & Supply, LP, Delek Refining, Ltd., Delek Logistics Partners, LP, Paline Pipeline Company, LLC, SALA Gathering Systems, LLC, Magnolia Pipeline Company, LLC, El Dorado Pipeline Company, LLC, Delek Crude Logistics, LLC, Delek Marketing-Big Sandy, LLC, DKL Transportation, LLC and Delek Logistics GP, LLC (incorporated by reference to Exhibit 10.1 to the Company's Form 10-Q filed on May 7, 2015).

Financial Statements and Schedules

First Amendment to Third Amended and Restated Omnibus Agreement, dated as of August 3, 2015, by and among Delek US Holdings, Inc., Lion Oil Company, Delek Logistics Operating, LLC, Delek Marketing & Supply, LP, Delek Refining, Ltd., Delek Logistics Partners, LP, Paline Pipeline Company, LLC, SALA Gathering Systems, LLC, Magnolia Pipeline Company, LLC, El Dorado Pipeline Company, LLC, Delek Crude Logistics, LLC, Delek Marketing-Big Sandy, LLC, DKL Transportation, LLC and Delek Logistics GP, LLC (incorporated by reference to Exhibit 10.5 to the Company's Form 10-Q filed on August 5, 2015).

Second Amendment and Restatement of Schedules to Third Amended and Restated Omnibus Agreement, dated and effective as of March 31, 2020 (incorporated by reference to Exhibit 10.2 of the Company’s Form 8-K filed on April 6, 2020).

Third Amendment and Restatement of Schedules to Third Amended and Restated Omnibus Agreement, dated and effective as of May 15, 2020 (incorporated by reference to Exhibit 10.2 of the Company’s Form 8-K filed on May 18, 2020).

5 unchanged sentences

2016 Long-Term Incentive Plan, effective May 5, 2020 (incorporated by reference to Exhibit 10.3 to the Company's Form 10-Q filed on May 8, 2020).

* Third Amendment to the Delek US Holdings, Inc.

2016 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.4 of the Company’s Form S-8 filed on June 10, 2021)

* General Terms and Conditions for Restricted Stock Unit Awards to Executive Officers and Directors under the 2016 Delek US Holdings, Inc.

24 unchanged sentences

and Ezra Uzi Yemin (incorporated by reference to Exhibit 10.4 to the Company’s Form 10-Q filed on May 8, 2020).

* Amended and Restated Executive Employment Agreement, dated April 6, 2020, between Delek US Holdings, Inc.

and Avigal Soreq (incorporated by reference to Exhibit 10.1 of the Company’s Form 8-K filed on April 9, 2020).

* Executive Employment Agreement, effective August 6, 2018, by and between Delek US Energy, Inc.

and Louis LaBella (incorporated by reference to Exhibit 10.38 to the Company's Form 10-K filed on March 1, 2019).

Financial Statements and Schedules

* Offer Letter, dated April 6, 2020, between Delek US Holdings, Inc.

and Reuven Spiegel (incorporated by reference to Exhibit 10.1 of the Company’s Form 8-K filed on April 9, 2020).

* Executive Employment Agreement, dated August 1, 2020, by and between Delek US Holdings, Inc.

2 unchanged sentences

Aron & Company LLC (incorporated by reference to Exhibit 10.1 to the Company's Form 8-K filed on March 26, 2018).

Big Spring Asphalt Services Agreement, dated March 20, 2018 and effective as of March 1, 2018, by and among Alon USA, LP, DKL Big Spring, LLC, for the limited purposes specified therein, Delek US, and for the limited purposes specified therein, J.

Aron & Company LLC (incorporated by reference to Exhibit 10.2 to the Company's Form 8-K filed on March 26, 2018).

Financial Statements and Schedules

Marketing Agreement, dated as of March 20, 2018 and effective as of March 1, 2018, by and among Alon USA, LP, DKL Big Spring, LLC, and for the limited purposes specified therein, Delek US (incorporated by reference to Exhibit 10.3 to the Company's Form 8-K filed on March 26, 2018).

12 unchanged sentences

Third Amended and Restated Limited Liability Company Agreement of Wink to Webster Pipeline LLC, a Delaware limited liability company, dated as of July 30, 2019, by and among Delek US Energy, Inc., ExxonMobil Permian Logistics LLC, Plains Pipeline, L.P., MPLX W2W Pipeline Holdings, LLC, Centurion Permian Logistics, LLC, and Rattler Midstream Operating LLC (incorporated by reference to Exhibit 10.1 to the Company's Form 8-K filed on August 5, 2019) .

Financial Statements and Schedules

Throughput and Deficiency Agreement, dated and effective as of March 31, 2020, by and between Lion Oil Trading & Transportation, LLC and DKL Permian Gathering, LLC (incorporated by reference to Exhibit 10.1 of the Company’s Form 8-K filed on April 6, 2020).

5 unchanged sentences

Aron & Company LLC, Lion Oil Company and Lion Oil Trading & Transportation, LLC (incorporated by reference to Exhibit 10.10 of the Company’s Form 10-Q filed on August 7, 2020).

Financial Statements and Schedules

Letter Agreement, dated as of December 21, 2020 by and between J.

Aron & Company LLC, Lion Oil Company, and Lion Oil Trading & Transportation, LLC.

Aron & Company LLC, Lion Oil Company, and Lion Oil Trading & Transportation, LLC (incorporated by reference to Exhibit 10.24 of the Company’s Form 10-K filed on March 1, 2021)

Third Amended and Restated Supply and Offtake Agreement, dated as of April 7, 2020, between J.

Aron & Company LLC and Alon USA, LP (incorporated by reference to Exhibit 10.11 of the Company’s Form 10-Q filed on August 7, 2020)

Exchange Agreement, dated as of August 13, 2020, among Delek Logistics Partners, LP, Delek Logistics GP, LLC, and Delek US Holdings, Inc.

(incorporated by reference to Exhibit 10.1 of the Company’s Form 8-K filed on August 14, 2020).

* Letter Agreement, dated as of August 13, 2020, between Delek Logistics GP, LLC and Ezra Uzi Yemin (incorporated by reference to Exhibit 10.2 of the Company’s Form 8-K filed on August 14, 2020).

* Letter Agreement, dated as of August 13, 2020, between Delek Logistics GP, LLC and Frederec Green (incorporated by reference to Exhibit 10.3 of the Company’s Form 8-K filed on August 14, 2020).

* Consulting Agreement, dated as of November 3, 2020, by and between Delek US Holdings, Inc.

and Frederec Green.

and Frederec Green (incorporated by reference to Exhibit 10.29 to the Company’s Form 10-K filed on March 1, 2021).

* # Executive Employment Agreement, effective February 3, 2021, by and between Delek US Holdings, Inc.

and Denise McWatters.

* # Executive Employment Agreement, effective March 1, 2021, by and between Delek US Holdings, Inc.

and Todd O’Malley.

# Subsidiaries of the Registrant.

24 unchanged sentences

INDEX TO FINANCIAL STATEMENTS

Reports of Independent Registered Public Accounting Firm

Reports of Independent Registered Public Accounting Firm (PCAOB ID:

Audited Financial Statements:

14 unchanged sentences

generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated March 1, 2021 expressed an unqualified opinion thereon.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated February 25, 2022 expressed an unqualified opinion thereon .

Basis for Opinion

14 unchanged sentences

Financial Statements and Schedules

Valuation of Goodwill

Evaluation of Goodwill for Impairment

Description of the Matter At December 31, 2021, the Company’s goodwill was $729.7 million and represented approximately 11% of total assets.

3 unchanged sentences

The estimated fair value of each reporting unit is determined using a combination of a discounted cash flow analysis based upon projected financial information and a multiple of expected future cash flows, such as those used by third-party analysts.

During 2020, the Company recorded a goodwill impairment charge of $126 million for certain reporting units within the Refining segment.

Auditing management’s annual goodwill impairment analysis for reporting units within the Refining segment requires significant judgment, as the valuation includes subjective estimates and assumptions in determining the estimated fair value of the reporting units.

In particular, the discounted cash flow analysis is sensitive to significant assumptions such as the weighted average cost of capital and the estimate of future cash flows including the related gross margin and long-term growth rate.

The market approach involves significant judgment involved in the selection of the appropriate peer group companies and valuation multiples.

The market approach involves significant judgment involved in the selection of the appropriate valuation multiples.

How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design, and tested the operating effectiveness of controls relating to the valuation of the reporting units within the Refining Segment in the goodwill impairment analysis process.

For example, we tested controls over management’s review of the discounted cash flow analysis, the projected financial information, and the valuation assumptions.

For example, we tested controls over management’s review of the significant inputs and assumptions used in determining the reporting unit fair values.

To test the estimated fair value of the Company’s reporting units within the Refining segment, our audit procedures included, among others, assessing valuation methodologies, performing recalculations, and testing the significant assumptions discussed above and the underlying data used by the Company.

5 unchanged sentences

Nashville, Tennessee

March 1, 2021

February 25, 2022

Financial Statements and Schedules

7 unchanged sentences

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of Delek US Holdings, Inc.

as of December 31, 2020 and 2019, the related consolidated statements of income, comprehensive income, changes in stockholders' equity and cash flows for each of the three years in the period ended December 31, 2020, and the related notes, and our report dated March 1, 2021 expressed an unqualified opinion thereon.

as of December 31, 2021 and 2020, the related consolidated statements of income, comprehensive income, changes in stockholders' equity and cash flows for each of the three years in the period ended December 31, 2021, and the related notes, and our report dated February 25, 2022 expressed an unqualified opinion thereon .

Basis for Opinion

16 unchanged sentences

Nashville, Tennessee

March 1, 2021

February 25, 2022

Financial Statements and Schedules

39 unchanged sentences

Additional paid-in capital 1,206.5 1,185.1

Accumulated other comprehensive (loss) income ( 7.2 ) 0.1

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

Accumulated other comprehensive loss ( 3.8 ) ( 7.2 )

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

( 694.1 ) ( 694.1 )

26 unchanged sentences

Income from equity method investments ( 18.3 ) ( 30.3 ) ( 34.3 )

Gain on sale of business — — ( 13.3 )

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

Impairment loss on assets held for sale — — 27.5

Loss on extinguishment of debt — — 9.1

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

Other (income) expense, net ( 15.8 ) ( 3.5 ) 4.1

4 unchanged sentences

Discontinued operations:

Income (loss) from discontinued operations, including loss on sale of discontinued operations — 6.6 ( 10.9 )

Income tax expense (benefit) — 1.4 ( 2.2 )

Income (loss) from discontinued operations, net of tax — 5.2 ( 8.7 )

Income from discontinued operations, including loss on sale of discontinued operations — — 6.6

Income tax expense — — 1.4

Income from discontinued operations, net of tax — — 5.2

Net (loss) income ( 170.5 ) ( 570.4 ) 336.2

3 unchanged sentences

(Loss) income from continuing operations $ ( 2.75 ) $ ( 8.26 ) $ 4.03

Income (loss) from discontinued operations — 0.07 ( 0.20 )

Income from discontinued operations — — 0.07

Total basic (loss) income per share $ ( 2.75 ) $ ( 8.26 ) $ 4.10

1 unchanged sentence

(Loss) income from continuing operations $ ( 2.75 ) $ ( 8.26 ) $ 3.99

Income (loss) from discontinued operations — 0.07 ( 0.19 )

Income from discontinued operations — — 0.07

Total diluted (loss) income per share $ ( 2.75 ) $ ( 8.26 ) $ 4.06

13 unchanged sentences

Commodity contracts designated as cash flow hedges:

Net (loss) gain related to commodity cash flow hedges ( 1.3 ) ( 43.4 ) 33.1

Income tax (benefit) expense ( 0.3 ) ( 9.5 ) 6.9

Net comprehensive (loss) income on commodity contracts designated as cash flow hedges ( 1.0 ) ( 33.9 ) 26.2

Loss on interest rate contracts designated as cash flow hedges, net of taxes — — ( 0.5 )

Foreign currency translation gain (loss), net of taxes 0.6 0.3 ( 0.9 )

Net loss related to commodity cash flow hedges ( 0.2 ) ( 1.3 ) ( 43.4 )

Income tax benefit — ( 0.3 ) ( 9.5 )

Net comprehensive loss on commodity contracts designated as cash flow hedges ( 0.2 ) ( 1.0 ) ( 33.9 )

Foreign currency translation gain, net of taxes — 0.6 0.3

Postretirement benefit plans:

Unrealized (loss) gain arising during the year related to:

Net actuarial (loss) gain ( 8.9 ) 5.8 ( 6.5 )

Unrealized gain (loss) arising during the year related to:

Net actuarial gain (loss) 4.7 ( 8.9 ) 5.8

Curtailment and settlement gains — — 2.7

2 unchanged sentences

Amortization of net actuarial loss — 0.1 0.7

(Loss) gain related to postretirement benefit plans, net ( 8.8 ) 6.5 ( 6.0 )

Income tax (benefit) expense ( 1.9 ) 1.4 ( 1.3 )

Net comprehensive (loss) gain on postretirement benefit plans ( 6.9 ) 5.1 ( 4.7 )

Total other comprehensive (loss) gain ( 7.3 ) ( 28.5 ) 20.1

Gain (loss) related to postretirement benefit plans, net 4.7 ( 8.8 ) 6.5

Income tax expense (benefit) 1.1 ( 1.9 ) 1.4

Net comprehensive gain (loss) on postretirement benefit plans 3.6 ( 6.9 ) 5.1

Total other comprehensive income (loss) 3.4 ( 7.3 ) ( 28.5 )

Comprehensive (loss) income $ ( 167.1 ) $ ( 577.7 ) $ 307.7

6 unchanged sentences

(In millions, except share and per share data)

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

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

Shares Amount Shares Amount

2 unchanged sentences

Net income — — — — 310.6 — — 25.6 336.2

Other comprehensive income related to commodity contracts, net — — — 26.2 — — — — 26.2

Other comprehensive loss related to postretirement benefit plans, net — — — ( 4.7 ) — — — — ( 4.7 )

Other comprehensive loss related to interest rate contracts — — — ( 0.5 ) — — — — ( 0.5 )

Foreign currency translation loss, net — — — ( 0.9 ) — — — — ( 0.9 )

Other comprehensive loss related to commodity contracts, net — — — ( 33.9 ) — — — — ( 33.9 )

Other comprehensive gain related to postretirement benefit plans, net — — — 5.1 — — — — 5.1

Foreign currency translation gain, net — — — 0.3 — — — — 0.3

Common stock dividends ($ 1.14 per share)

— — — — ( 86.8 ) — — — ( 86.8 )

De-recognition of non-controlling interest — — — — — — — ( 18.7 ) ( 18.7 )

Reclassification for stranded tax effects resulting from the Tax Reform Act — — — 1.6 ( 1.6 ) — — — —

Equity-based compensation expense — — 25.5 — — — — 0.3 25.8

1 unchanged sentence

Repurchase of common stock — — — — — ( 5,039,034 ) ( 178.1 ) — ( 178.1 )

Issuance of stock for non-controlling interest repurchase, net of tax 5,649,373 0.1 140.4 — — — — ( 127.0 ) 13.5

Shares received in connection with exercise of Call Options — — 124.2 — — ( 2,692,771 ) ( 123.9 ) — 0.3

Warrant reclassification to liability award — — ( 35.9 ) — — — — — ( 35.9 )

Cumulative effect of adopting accounting principle regarding income tax effect of intra-equity transfers — — — — ( 44.4 ) — — — ( 44.4 )

Shares issued in connection with settlement of Convertible Notes 2,692,218 — ( 0.3 ) — — — — — ( 0.3 )

Taxes paid due to the net settlement of equity-based compensation — — ( 9.2 ) — — — — — ( 9.2 )

7 unchanged sentences

(In millions, except share and per share data)

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

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

Shares Amount Shares Amount

1 unchanged sentence

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

Net income — — — — 310.6 — — 25.6 336.2

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

Net (loss) income — — — — ( 608.0 ) — — 37.6 ( 570.4 )

Other comprehensive loss related to commodity contracts, net — — — ( 1.0 ) — — — — ( 1.0 )

Other comprehensive gain related to postretirement benefit plans, net — — — 5.1 — — — — 5.1

Other comprehensive loss related to postretirement benefit plans, net — — — ( 6.9 ) — — — — ( 6.9 )

Foreign currency translation gain, net — — — 0.6 — — — — 0.6

4 unchanged sentences

Repurchase of common stock — — — — — ( 58,713 ) ( 1.9 ) — ( 1.9 )

Impact from incentive distribution rights ("IDRs") simplification transaction of Delek Logistics LP

— — 37.2 — — — — ( 50.8 ) ( 13.6 )

Repurchase of non-controlling interest — — ( 24.3 ) — — — — ( 4.6 ) ( 28.9 )

Taxes paid due to the net settlement of equity-based compensation — — ( 2.4 ) — — — — — ( 2.4 )

Exercise of equity-based awards 369,843 — — — — — — — —

Other — — 0.2 — — — — ( 0.1 ) 0.1

Balance at December 31, 2020:

8 unchanged sentences

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

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

Net (loss) income — — — — ( 203.5 ) — — 33.0 ( 170.5 )

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

Other comprehensive loss related to postretirement benefit plans, net — — — ( 6.9 ) — — — — ( 6.9 )

Foreign currency translation gain, net — — — 0.6 — — — — 0.6

Common stock dividends ( 0.93 per share)

— — — — ( 69.1 ) — — — ( 69.1 )

Other comprehensive gain related to postretirement benefit plans, net — — — 3.6 — — — — 3.6

Distributions to non-controlling interests — — — — — — — ( 32.4 ) ( 32.4 )

Equity-based compensation expense — — 24.4 — — — — 0.2 24.6

Sale of Delek Logistic common limited partner units, net — — 1.1 — — — — 0.6 1.7

Repurchase of common stock — — — — — — — — —

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

Repurchases of non-controlling interests — — ( 24.3 ) — — — — ( 4.6 ) ( 28.9 )

Taxes paid due to the net settlement of equity-based compensation — — ( 4.2 ) — — — — — ( 4.2 )

Exercise of equity-based awards 415,212 — — — — — — — —

Other — — 0.1 — ( 0.3 ) — — — ( 0.2 )

Balance at December 31, 2021:

9 unchanged sentences

Net (loss) income $ ( 170.5 ) $ ( 570.4 ) $ 336.2

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

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

Depreciation and amortization 264.6 267.6 194.3

Other amortization/accretion 10.8 9.5 8.2

Non-cash lease expense 60.6 59.7 34.9

4 unchanged sentences

Non-cash lower of cost or market/net realizable value adjustment ( 22.3 ) 29.2 ( 52.3 )

Loss on extinguishment of debt — — 9.1

Gain on sale of business — — ( 13.3 )

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

Impairment of assets held for sale — — 27.5

Equity-based compensation expense 24.6 22.8 25.8

7 unchanged sentences

Non-current assets and liabilities, net ( 12.2 ) ( 16.8 ) ( 47.6 )

Cash (used in) provided by operating activities - continuing operations ( 282.9 ) 575.2 590.4

Cash used in operating activities - discontinued operations — — ( 30.1 )

Net cash (used in) provided by operating activities ( 282.9 ) 575.2 560.3

Net cash provided by (used in) operating activities 371.4 ( 282.9 ) 575.2

Cash flows from investing activities:

7 unchanged sentences

Proceeds from sale of non-operating refinery — 39.9 —

Proceeds from sale of business — — 110.8

Proceeds from sales of discontinued operations — — 55.5

Cash used in investing activities - continuing operations ( 191.3 ) ( 691.3 ) ( 145.3 )

Cash provided by investing activities - discontinued operations — — 20.0

Insurance proceeds 7.0 — —

Contract termination recoveries of capital expenditures 17.3 — —

Net cash used in investing activities ( 178.4 ) ( 191.3 ) ( 691.3 )

Delek US Holdings, Inc.

Consolidated Statements of Cash Flows (Continued)

(In millions, except per share data )

Year Ended December 31,

2020 2019 2018

Cash flows from financing activities:

5 unchanged sentences

Repayments of product financing agreements ( 877.6 ) ( 128.1 ) ( 22.2 )

Settlement of warrants unwind agreement — — ( 35.9 )

Taxes paid due to the net settlement of equity-based compensation ( 4.2 ) ( 2.4 ) ( 9.2 )

2 unchanged sentences

Distribution to non-controlling interest ( 32.4 ) ( 32.9 ) ( 32.3 )

Proceeds from sale of Delek Logistics LP common limited partner units 2.1 — —

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

Dividends paid — ( 69.1 ) ( 86.8 )

Financing commitment cancellation proceeds 10.2 — —

Deferred financing costs paid ( 6.2 ) ( 0.7 ) ( 1.5 )

Net cash provided by (used in) financing activities 306.4 ( 7.9 ) ( 297.6 )

Net (decrease) increase in cash and cash equivalents ( 167.8 ) ( 124.0 ) 137.4

Net cash (used in) provided by financing activities ( 124.0 ) 306.4 ( 7.9 )

Net increase (decrease) in cash and cash equivalents 69.0 ( 167.8 ) ( 124.0 )

Cash and cash equivalents at the beginning of the period 787.5 955.3 1,079.3

Cash and cash equivalents at the end of the period $ 856.5 $ 787.5 $ 955.3

Delek US Holdings, Inc.

Consolidated Statements of Cash Flows (Continued)

(In millions, except per share data)

Year Ended December 31,

2021 2020 2019

Supplemental disclosures of cash flow information:

4 unchanged sentences

Non-cash investing activities:

Common stock issued in connection with the buyout of Alon Partnership non-controlling interest $ — $ — $ 127.0

(Decrease) increase in accrued capital expenditures $ ( 30.1 ) $ 15.1 $ ( 4.8 )

Increase (decrease) in accrued capital expenditures $ 4.9 $ ( 30.1 ) $ 15.1

Non-cash financing activities:

1 unchanged sentence

Non-cash lease liability arising from obtaining right of use assets during the period $ 102.8 $ 58.1 $ 15.9

Common stock issued in connection with settlement of Convertible Notes $ — $ — $ 123.9

Treasury shares received in connection with exercise of Call Options $ — $ — $ ( 123.9 )

See accompanying notes to the consolidated financial statements

7 unchanged sentences

Effective July 1, 2017 (the "Effective Time"), we acquired the outstanding common stock of Alon (previously listed under New York Stock Exchange ("NYSE"):

ALJ) (the "Delek/Alon Merger", as further discussed in Note 3), resulting in a new post-combination consolidated registrant renamed as Delek US Holdings, Inc.

ALJ) (the "Delek/Alon Merger"), resulting in a new post-combination consolidated registrant renamed as Delek US Holdings, Inc.

Unless otherwise noted or the context requires otherwise, the terms "we," "our," "us," "Delek" and the "Company" are used in this report to refer to Delek and its consolidated subsidiaries for all periods presented.

6 unchanged sentences

Any material subsequent events that occurred during this time have been properly recognized or disclosed in our financial statements.

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

Our 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.

2 unchanged sentences

However, in the event that Delek Logistics incurs a loss, our operating results will reflect such loss, net of intercompany eliminations, to the extent of our ownership interest in this entity.

The preparation of financial statements in conformity with U.S.

generally accepted accounting principles ("GAAP") and in accordance with the rules and regulations of the Securities and Exchange Commission ("SEC") requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.

The preparation of financial statements in conformity with United States ("U.S.") Generally Accepted Accounting Principles ("GAAP") and in accordance with the rules and regulations of the Securities and Exchange Commission ("SEC") requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.

Actual results could differ from those estimates.

3 unchanged sentences

Certain immaterial reclassifications have been made to prior period presentation in order to conform to the current year presentation.

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.

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.

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.

Risks and Uncertainties Arising from the COVID-19 Pandemic

economic activity has continued on a recovery trend during the year ended December 31, 2021, albeit remaining subject to heightened levels of uncertainty related to the on-going impact of the COVID-19 outbreak that developed into a pandemic in March 2020 (the “COVID-19 Pandemic” or the “Pandemic”), and the spread of new variants of the virus.

Most of the restrictions imposed in the prior year to prevent its spread have been eased and government vaccination campaigns continue.

Compared to the prior year, the economic recovery trends in the year ended December 31, 2021 included a resumption of flights by major airlines and increased motor vehicle use.

This has in turn resulted in increased demand and market prices for crude oil and certain of our products.

Nonetheless, there remains continued uncertainty about the duration and future impact of the COVID-19 Pandemic.

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 consolidated financial statements as of and for the year ended December 31, 2020.

To the extent these uncertainties have been identified and are believed to have had a material 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 consolidated financial statements as of and for the year ended December 31, 2021.

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

18 unchanged sentences

• results of certain immaterial operating segments, including our Canadian crude trading operations (as discussed in Note 11);

• Alon's asphalt terminal operations acquired as part of the Delek/Alon Merger and subsequently disposed in the second quarter of 2018 (see Note 8 for further discussion);

• wholesale crude operations

• Alon's asphalt terminal operations acquired as part of the Delek/Alon Merger;

• results and assets of discontinued operations;

4 unchanged sentences

All inter-segment transactions have been eliminated in consolidation.

The refining segment operates high conversion, independent refineries located in Tyler, Texas (the "Tyler refinery"), El Dorado, Arkansas (the "El Dorado refinery"), Big Spring, Texas (the "Big Spring refinery"), Krotz Springs, Louisiana (the "Krotz Springs refinery") and a non-operating refinery located in Bakersfield, California (the "Bakersfield refinery"), which was sold May 7, 2020.

In addition, the refining segment 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.

12 unchanged sentences

Such other receivables are with the same or similar customers as our trade receivables, and are subject to the same characteristics regarding the nature, timing, pricing and risk.

Delek recorded an allowance for doubtful accounts related to accounts receivable of $ 7.2 million and $ 3.7 million and as of December 31, 2020 and 2019, respectively.

Delek recorded an allowance for doubtful accounts related to accounts receivable of $ 6.5 million and $ 7.2 million as of December 31, 2021 and 2020, respectively.

Credit is extended based on evaluation of the customer’s financial condition.

6 unchanged sentences

No customer accounted for more than 10% of consolidated net sales for the years ended December 31, 2021, 2020 or 2019.

Refinery crude oil, work-in-process, refined products, blendstocks and asphalt inventory for all of our operations, excluding the Tyler refinery and merchandise inventory in our Retail segment, are stated at the lower of cost determined using the first-in, first-out (“FIFO”) basis or net realizable value.

Cost of inventory at the Tyler refinery is determined using the last-in, first-out (“LIFO”) inventory valuation method and inventory is stated at the lower of LIFO cost or market.

Cost of inventory at the Tyler refinery is determined using the LIFO inventory valuation method and inventory is stated at the lower of LIFO cost or market.

Retail merchandise inventory consists of cigarettes, beer, convenience merchandise and food service merchandise and is stated at estimated cost as determined by the retail inventory method.

22 unchanged sentences

Other intangible assets acquired in a business combination and determined to be finite-lived are amortized over their respective estimated useful lives.

The finite-lived intangible assets are amortized on straight-line bases over the estimated useful lives of five to 15 years.

The finite-lived intangible assets are amortized on straight-line basis over the estimated useful lives of five to 15 years.

The amortization expense is included in depreciation and amortization on the accompanying consolidated statements of income.

30 unchanged sentences

Goodwill is evaluated for impairment by comparing the carrying amount of the reporting unit to its estimated fair value.

The Company adopted ASU 2017-04, Goodwill and Other (Topic 350);

Simplifying the Test for Goodwill Impairment , during the fourth quarter of 2018.

In accordance with this guidance, a goodwill impairment charge is recognized for the amount that the carrying amount of a reporting unit, including goodwill, exceeds its fair value, limited to the total amount of goodwill allocated to that reporting unit.

In accordance with ASU 2017-04, Goodwill and Other (Topic 350);

Simplifying the Test for Goodwill Impairment , a goodwill impairment charge is recognized for the amount that the carrying amount of a reporting unit, including goodwill, exceeds its fair value, limited to the total amount of goodwill allocated to that reporting unit.

In assessing the recoverability of goodwill, assumptions are made with respect to future business conditions and estimated expected future cash flows to determine the fair value of a reporting unit.

3 unchanged sentences

A significant risk to our future results and the potential future impairment of goodwill is the volatility of the crude oil and the refined product markets which is often unpredictable and may negatively impact our results of operations in ways that cannot be anticipated and that are beyond management's control.

Our annual assessment of goodwill resulted in an impairment of $ 126.0 million during the year ended December 31, 2020, and no impairment during the years ended December 31, 2019 and 2018.

Our annual assessment of goodwill resulted in an impairment of $ 126.0 million during the year ended December 31, 2020.

There was no impairment during the years ended December 31, 2021 and 2019, respectively.

Details of remaining goodwill balances by segment are included in Note 17.

Delek records all derivative financial instruments, including any interest rate swap and cap agreements, fuel-related derivatives, over the counter ("OTC") future swaps, forward contracts and future RIN purchase and sales commitments that qualify as derivative instruments, at estimated fair value in accordance with the provisions of ASC 815.

Changes in the fair value of the derivative instruments are recognized in operations, unless we elect to apply and qualify for the hedging treatment permitted under the provisions of ASC 815 allowing such changes to be classified as other comprehensive income for cash flow hedges.

We determine the fair value of all derivative financial instruments utilizing exchange pricing and/or price index developers such as Platts, Argus or OPIS.

We determine the fair

value of all derivative financial instruments utilizing exchange pricing and/or price index developers such as Platts, Argus or OPIS.

On a regular basis, Delek enters into commodity contracts with counterparties for the purchase or sale of crude oil, blendstocks, and various finished products.

We evaluate these contracts under ASC 815 and do not measure at fair value if they qualify for, and we elect, the normal purchase / normal sale exception.

We evaluate these contracts under ASC 815 and do not measure at fair value if they qualify for, and we elect, the normal purchase / normal sale ("NPNS") exception.

Delek's policy under the guidance of ASC 815-10-45, Derivatives and Hedging - Other Presentation Matters ("ASC 815-10-45"), is to net the fair value amounts recognized for multiple derivative instruments executed with the same counterparty and offset these values against the cash collateral arising from these derivative positions.

29 unchanged sentences

Our environmental credit obligations predominantly relate to EPA’s Renewable Fuel Standard - 2 ("RFS-2"), which requires that certain refiners generate environmental credits, called Renewable Identification Numbers ("RINs"), by blending renewable fuels into the fuel products they produce, or else purchasing RINs on the market, and that such RINs shall be used to satisfy the related environmental credit obligation.

of our refineries is an obligated party under RFS-2.

To the extent that any of our refineries is unable to blend renewable fuels to generate sufficient RINs, it must purchase RINs to satisfy its annual requirement ("RINs Obligation").

Each of our refineries is an obligated party under RFS-2.

To the extent that any of our refineries is unable to blend or produce renewable fuels to or generate or obtain sufficient RINs, it must purchase RINs to satisfy its annual requirement ("RINs Obligation").

To the extent that we have purchased RINs or transferred RINs to our refineries, each refinery’s RINs Obligation may be a surplus or deficit at the end of each reporting period (their respective “Net RINs Obligation”).

Because our Net RINs Obligations exceed the RINs we are able to generate annually on a consolidated basis, and because we have the legal ability to transfer RINs generated or purchased through any of our entities to our obligated parties as needed, we view and manage the Company’s individual Net RINs Obligations, as well as any non-obligated party RINs holdings, on a consolidated basis.

Therefore, the sum of our individual obligated parties’ Net RINs Obligations as well as RINs held by our non-obligated parties which meet our recognition criteria, comprises the Company’s “Consolidated Net RINs Obligation.” For all periods presented in these consolidated financial statements, the individual financial instruments relating to specific category and vintage requirements under RFS-2 comprising our Consolidated Net RINs Obligation are subject to market risk and meet the criteria set forth above.

consolidated financial statements, the individual financial instruments relating to specific category and vintage requirements under RFS-2 comprising our Consolidated Net RINs Obligation are subject to market risk and meet the criteria set forth above.

Therefore, we have elected to apply the fair value option to the individual financial instruments comprising our Consolidated Net RIN Obligation, using the fair value guidance provided by ASC 820.

Recognition of production-related RINs Obligation expense reflects the accrual of our RINs Obligation based on the current period production using current market price of RINs.

We record fair value adjustments to the RINs Obligation to reflect the ending market price of the underlying RINs relating to RINs Obligation incurred on previous production that is still outstanding.

We also may have changes in fair value attributable to changes in other observable market inputs, such as changes in volumetric expectations for obligation years where the volumetric rates have not yet been enacted.

Therefore, fair value adjustments represent adjustments for changes in observable inputs from what they were when we initially incurred and recorded the obligation.

Other Related Transactions

From time to time, Delek enters 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 RINs commitment contracts meet the definition of derivative instruments under ASC 815, Derivatives and Hedging ("ASC 815"), and are measured at fair value based on quoted prices from an independent pricing service.

These future RINs commitment contracts meet the definition of derivative instruments under ASC 815, and are measured at fair value based on quoted prices from an independent pricing service.

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

25 unchanged sentences

In the logistics segment, these obligations relate to the required cleanout of the pipeline and terminal tanks and removal of certain above-grade portions of the pipeline situated on right-of-way property.

In the retail segment, we have asset retirement obligations related to the removal of underground storage tanks and the removal of brand signage at owned and leased retail

sites which are legally required under the applicable leases.

In the retail segment, we have asset retirement obligations related to the removal of underground storage tanks and the removal of brand signage at owned and leased retail sites which are legally required under the applicable leases.

The asset retirement obligation for storage tank removal on leased retail sites is accreted over the expected life of the owned retail site or the average retail site lease term.

1 unchanged sentence

We believe the estimates selected, in each instance, represent our best estimate of future outcomes, but the actual outcomes could differ from the estimates selected.

We account for guarantees pursuant to the guidance in ASC 460, Guarantees .

The fair value of a noncontingent guarantee is determined and recorded as a liability at the time the guarantee is contractually executed, and the initial liability is subsequently reduced as we are released from exposure under the guarantee.

We may amortize the noncontingent guarantee liability over the relevant time period, if one exists, based on the facts and circumstances surrounding each type of guarantee, including whether the risk underlying the guarantee diminishes over time.

Otherwise, we will record changes in the fair value of the liability as they occur and can be reasonably estimated and will reverse the fair value liability when there is no further exposure under the guarantee.

Changes to the guarantee liability are recognized in the consolidated income statement on the line item that best represents the nature of the guarantee.

When the contingent performance on a guarantee becomes probable and the liability can be reasonably estimated, we accrue an additional liability for the amount that such liability exceeds the carrying value of the noncontingent guarantee, based on the facts and circumstances at that time.

Revenue Recognition

7 unchanged sentences

Service revenues are recognized as crude oil, intermediate and refined product are shipped through, delivered by or stored in our pipelines, trucks, terminals and storage facility assets, as applicable.

We do not recognize product revenues for these services as the product does not represent a promised good in the context of ASC 606.

We do not recognize product revenues for these services as the product does not represent a promised good in the context of ASC 606, Revenue from Contracts with Customers ("ASC 606").

All service revenues are based on regulated tariff rates or contractual rates.

11 unchanged sentences

Credit Losses

Under ASU 2016-13, Financial Instruments - Measurement of Credit Losses on Financial Instruments as codified in ASC 326, Financial Instruments - Credit Losses ("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.

Under ASU 2016-13, Financial Instruments - Measurement of Credit Losses on Financial Instruments ("ASU 2016-13"), as codified in ASC 326, Financial Instruments - Credit Losses ("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.

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.

23 unchanged sentences

Interest expense includes interest expense on debt, letters of credit, financing fees (including certain J.

Aron fees associated with our Supply and Offtake Agreements), the amortization, net of accretion, of debt discounts or premium and amortization of deferred debt issuance costs, and interest rate swap settlements, but excludes capitalized interest.

Aron fees associated with our Supply and Offtake Agreements), the amortization, net of accretion, of debt discounts or premium and amortization of deferred debt issuance costs, and interest rate hedge settlements, if any, but excludes capitalized interest.

Original issuance discount and debt issuance costs are amortized ratably over the term of the related debt when it is not materially different from the effective interest method.

26 unchanged sentences

Finally, ASC 740 requires an annual tabular roll-forward of unrecognized tax benefits.

The Tax Cuts and Jobs Act (the "Tax Reform Act") was enacted on December 22, 2017.

The Tax Reform Act reduces the U.S.

federal corporate tax rate from 35% to 21%, provides for immediate deduction of qualified capital assets placed in service, requires companies to pay a one-time transition tax on earnings of certain foreign subsidiaries that were previously tax deferred and creates new taxes on certain foreign sourced earnings.

Adjustments made upon finalization of our accounting analysis were not material to our consolidated financial statements.

See Note 15 for further discussion.

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 Biden administration has proposed several corporate tax increases, including raising the U.S.

corporate income tax rate and a global minimum tax, that, if enacted, may have an adverse impact on our tax liability.

These proposals include changes to the existing framework in respect of income taxes, as well as new types of non-income taxes which could apply to our business.

Equity-Based Compensation

16 unchanged sentences

The funded status represents the difference between the projected benefit obligation and the fair value of the plan assets.

The projected benefit obligation is the present value of benefits earned to date by plan participants, including the effect of assumed future salary increases.

The projected benefit obligation is the present value of benefits earned to date by plan participants, including the effect of assumed

future salary increases.

Plan assets are measured at fair value.

5 unchanged sentences

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.

We adopted this guidance prospectively on January 1, 2020 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.

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 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 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.

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.

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

8 unchanged sentences

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.

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 and results of operations.

ASU 2019-12, Simplifying the Accounting for Income Taxes

In December 2019, the FASB issued guidance which is 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.

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 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.

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.

Effective July 1, 2017, we acquired the outstanding common stock of Alon resulting in a new post-combination consolidated registrant renamed as Delek US Holdings, Inc.

In connection with the Delek/Alon Merger, Alon, Delek and U.S.

Bank National Association, as trustee (the “Trustee”) entered into a First Supplemental Indenture (the “Supplemental Indenture”), effective as of July 1, 2017, which provided that Alon's 3.0 % Convertible Senior Notes due 2018, which were previously convertible into Alon common stock, would thereafter be convertible into Delek common stock based on the exchange rate applied in the Delek/Alon Merger (the “Convertible Notes”).

Additionally, in connection with the Convertible Notes, Alon also entered into equity instruments, including call options (the "Call Options") and warrants (the "Warrants"), designed, in combination, to hedge a portion of the risk associated with the potential exercise of the conversion feature of the Convertible Notes and to mitigate the dilutive effect of such potential conversion.

These instruments were exchanged in connection with the Delek/Alon Merger into instruments that were indexed to Delek common stock.

See Note 11 for further discussion of these instruments and subsequent activity.

The Delek/Alon Merger was accounted for using the acquisition method of accounting, which requires, among other things, that assets acquired and liabilities assumed be recognized on the balance sheet at their fair value as of the acquisition date.

During the year ended December 31, 2018, we continued our procedures to determine the fair value of assets acquired and liabilities assumed in the Delek/Alon Merger, all of which were completed by June 30, 2018.

Transaction costs incurred by the Company in connection with the Delek/Alon Merger totaled approximately $ 6.6 million for the year ended December 31, 2018.

Such costs were included in general and administrative expenses in the accompanying consolidated statements of income.

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.

We aggregate our operating segments into three reportable segments:

9 unchanged sentences

Management measures the operating performance of each of the reportable segments based on the segment contribution margin.

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 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 bpd as of December 31, 2020, including the following:

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

• 80,000 bpd El Dorado, Arkansas refinery (the "El Dorado refinery");

• 73,000 bpd Big Spring, Texas refinery (the "Big Spring refinery");

• 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 has a combined nameplate capacity of 302,000 barrels per day ("bpd") as of December 31, 2021, including the following:

• 75,000 bpd Tyler, Texas refinery;

• 80,000 bpd El Dorado, Arkansas refinery;

• 73,000 bpd Big Spring, Texas refinery;

• 74,000 bpd Krotz Springs, Louisiana refinery.

As of December 31, 2021, 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.

2 unchanged sentences

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 and was retroactively reinstated for 2019.

On May 7, 2020, we sold our equity interests in Alon Bakersfield Property, Inc., an indirect wholly-owned subsidiary that owns the 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 consolidated statements of income.

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 $ 400 per unit (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.

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 December 31, 2021.

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

1 unchanged sentence

Motor fuels are sold under the Alon or Delek brand through various terminals to supply Alon or Delek branded retail sites.

In addition, we sell motor fuels through its wholesale distribution network on an unbranded basis.

In addition, Alon sells motor fuels through its wholesale distribution network on an unbranded basis.

Logistics Segment

2 unchanged sentences

Retail Segment

Our retail segment includes the operations of owned and leased convenience store sites located primarily in Central and West Texas and New Mexico.

These convenience stores typically offer various grades of gasoline and diesel 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.

Our retail segment includes the operations of owned and leased convenience store sites located primarily in West Texas and New Mexico.

Substantially all of the motor fuel sold through our retail segment is supplied by our Big Spring refinery, which is transferred to the retail segment at prices substantially determined by reference to published commodity pricing information.

3 unchanged sentences

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.

In connection with certain strategic initiatives, we closed one store in 2020 and for the year ended December 31, 2019, we closed or sold 30 under-performing or non-strategic store locations for total proceeds of $ 15.1 million.

In connection with certain strategic initiatives, we closed five stores in 2021, closed one store in 2020 and for the year ended December 31, 2019, we closed or sold 30 under-performing or non-strategic store locations for total proceeds of $ 15.1 million.

Significant Inter-segment Transactions

16 unchanged sentences

Segment contribution margin $ 82.4 $ 255.7 $ 72.0 $ ( 97.1 ) 313.0

Income (loss) from equity method investments 0.7 24.6 — ( 7.0 )

Segment contribution margin and income (loss) from equity method investments $ 83.1 $ 280.3 $ 72.0 $ ( 104.1 )

Depreciation and amortization $ 198.7 $ 42.8 $ 12.7 $ 10.4 264.6

Impairment of goodwill $ 126.0 $ — $ — $ — 126.0

General and administrative expenses 229.4

3 unchanged sentences

Year Ended December 31, 2020

(In millions) Refining (1) (2)

Logistics Retail Corporate,

Other and Eliminations (2)

(In millions) Refining Logistics Retail Corporate,

Other and Eliminations Consolidated

Net revenues (excluding intercompany fees and revenues) $ 5,363.1 $ 183.6 $ 681.7 $ 1,073.4 $ 7,301.8

4 unchanged sentences

Segment contribution margin $ ( 330.5 ) $ 238.1 $ 67.6 $ ( 74.4 ) ( 99.2 )

Income (loss) from equity method investments 52.0 22.6 — ( 44.3 )

Segment contribution margin and income (loss) from equity method investments $ ( 278.5 ) $ 260.7 $ 67.6 $ ( 118.7 )

Depreciation and amortization $ 198.3 $ 35.7 $ 13.2 $ 20.4 267.6

Impairment of goodwill $ 126.0 $ — $ — $ — 126.0

General and administrative expenses 248.3

Other operating income, net ( 13.1 )

Operating income $ 492.3

Operating loss $ ( 728.0 )

Capital spending (excluding business combinations) $ 201.0 $ 15.8 $ 9.1 $ 13.7 $ 239.6

2 unchanged sentences

Logistics Retail Corporate,

Other and Eliminations (2)

Other and Eliminations Consolidated

Net revenues (excluding intercompany fees and revenues) $ 8,095.9 $ 323.0 $ 838.0 $ 41.3 $ 9,298.2

4 unchanged sentences

Segment contribution margin $ 777.9 $ 173.4 $ 58.5 $ ( 51.0 ) 958.8

Income (loss) from equity method investments 45.5 19.8 — ( 31.0 )

Segment contribution margin and income (loss) from equity method investments $ 823.4 $ 193.2 $ 58.5 $ ( 82.0 )

Depreciation and amortization $ 134.3 $ 26.7 $ 11.2 $ 22.1 194.3

4 unchanged sentences

(1) Refining segment contribution margin for the year ended December 31, 2019 includes $ 77.6 million of BTC that was re-enacted in 2019, $ 36.0 million of which related to 2018 renewable blending activities.

Refining segment contribution margin for the year ended December 31, 2018 includes $ 24.9 million of BTC that was enacted in 2018 all of which related to 2017 renewable blending activities.

(2) The refining segment results of operations for the years ended December 31, 2019 and 2018, includes hedging gains (losses), a component of cost of materials and other, of $ 16.3 million and $( 25.6 ) million, respectively, which was previously included and reported in corporate, other and eliminations.

Other Segment Information

14 unchanged sentences

Total assets, excluding inter-segment notes receivable and right of use assets $ 4,192.5 $ 956.5 $ 258.9 $ 726.2 $ 6,134.1

Earnings (Loss) Per Share

Earnings Income (Loss) Per Share

Basic earnings per share (or "EPS") is computed by dividing net income (loss) by the weighted average common shares outstanding.

2 unchanged sentences

For those instruments that are indexed to our common stock, they are generally dilutive when the market price of the underlying indexed share of common stock is in excess of the exercise price.

Additionally, in connection with the Delek/Alon Merger, we assumed certain equity instruments, including conversion options (associated with Convertible Notes) and Warrants, that were dilutive in certain periods in which they were outstanding (see discussion of these instruments in Note 11).

The Convertible Notes conversion options were dilutive during the period they were outstanding when the incremental EPS calculated by dividing the increase in income associated with the elimination of interest expense on the convertible debt, net of tax, by the number of shares that would be issued upon conversion using the treasury stock method (which is applicable because of the cash settlement feature associated with the underlying principal) is dilutive to the overall diluted EPS calculation.

The Warrants were generally dilutive during the periods they were outstanding when the market price of the underlying indexed share of common stock was in excess of the exercise price.

All such instruments that may otherwise be dilutive may not be dilutive when there is net loss for the period.

We also assumed Call Options in connection with the Delek/Alon Merger which were not reflected in the diluted weighted average common shares outstanding because to do so would have been antidilutive.

On September 17, 2018, Delek settled the Convertible Notes for a combination of cash and shares of Delek common stock (See Note 11) and in November 2018, Delek entered into Warrant Unwind Agreements (the "Unwind Agreements" - See Note 11) with the holders of our outstanding common stock warrants;

therefore, these instruments were only potentially dilutive for EPS for the year ended December 31, 2018.

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

4 unchanged sentences

Income from continuing operations attributed to non-controlling interest 33.0 37.6 25.6

(Loss) income from continuing operations attributable to Delek (numerator for basic EPS - continuing operations attributable to Delek) ( 608.0 ) 305.4 356.9

Interest on convertible debt, net of tax — — 2.6

Numerator for diluted EPS - continuing operations attributable to Delek $ ( 203.5 ) $ ( 608.0 ) $ 305.4

Numerator for EPS - discontinued operations

Income (loss) from discontinued operations, including gain (loss) on sale of discontinued operations $ — $ 6.6 $ ( 10.9 )

Income tax expense (benefit) — 1.4 ( 2.2 )

Income (loss) from discontinued operations, net of tax — 5.2 ( 8.7 )

Income from discontinued operations attributed to non-controlling interest — — 8.1

Income (loss) from discontinued operations attributable to Delek $ — $ 5.2 $ ( 16.8 )

Income from discontinued operations, including gain (loss) on sale of discontinued operations $ — $ — $ 6.6

Income tax expense — — 1.4

Income from discontinued operations attributable to Delek $ — $ — $ 5.2

Weighted average common shares outstanding (denominator for basic EPS) 73,984,104 73,598,389 75,853,187

Dilutive effect of convertible debt — 1,525,846

Dilutive effect of warrants — — 967,352

Dilutive effect of stock-based awards — — 720,904

Weighted average common shares outstanding, assuming dilution 73,598,389 76,574,091 86,768,401

Weighted average common shares outstanding, assuming dilution (denominator for diluted EPS) 73,984,104 73,598,389 76,574,091

Basic (loss) income per share:

(Loss) income from continuing operations $ ( 2.75 ) $ ( 8.26 ) $ 4.03

Income (loss) from discontinued operations — 0.07 ( 0.20 )

Income from discontinued operations — — 0.07

Total basic (loss) income per share $ ( 2.75 ) $ ( 8.26 ) $ 4.10

1 unchanged sentence

(Loss) income from continuing operations $ ( 2.75 ) $ ( 8.26 ) $ 3.99

Income (loss) from discontinued operations — 0.07 ( 0.19 )

Income from discontinued operations — — 0.07

Total diluted (loss) income per share $ ( 2.75 ) $ ( 8.26 ) $ 4.06

3 unchanged sentences

Total antidilutive stock-based compensation 3,587,493 4,082,944 1,932,179

Delek Logistics and the Alon Partnership

Delek Logistics

Delek Logistics is a publicly traded limited partnership that was formed by Delek in 2012 to own, operate, acquire and construct crude oil and refined products logistics and marketing assets.

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

As of December 31, 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 December 31, 2021, we owned a 79.8 % interest in Delek Logistics, consisting of 34,696,800 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 consolidated statements of income and in non-controlling interest in subsidiaries in the accompanying 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 ("Logistics GP"), 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 %.

On December 20, 2021, Delek commenced a program to sell up to 434,590 common limited partner units representing limited partner interests

in Delek Logistics over the next three months in open market transactions conducted pursuant to Rule 144 under the Securities Act of 1933, as amended, and a Rule 10b5-1 trading plan.

As of December 31, 2021, we have sold 49,068 units for gross proceeds of $ 2.1 million;

$ 1.7 million net of taxes.

On August 13, 2020, Delek Logistics completed a transaction to eliminate the IDRs held by Delek Logistics GP, LLC ("Logistics GP"), 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 the 5.2 % ownership interest in the general partner from affiliates, who were 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.

4 unchanged sentences

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 consolidated financial statements, representing our logistics segment.

Delek Logistics is a VIE, as defined under GAAP, and is consolidated into our 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.

21 unchanged sentences

Operating lease liabilities, net of current portion 14.1 15.4

Deferred tax liabilities 0.6 0.2

Other non-current liabilities 22.7 22.7

5 unchanged sentences

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 under Delek Logistics’ revolving credit facility.

Total consideration for the Trucking 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 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 3 - 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.

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

In connection with the closing of the transaction, Delek, Delek Logistics and various of their respective subsidiaries entered into a Throughput and Deficiency Agreement (the “T&D Agreement”).

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.

Under the T&D Agreement, Delek Logistics will operate and maintain the Permian 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.

3 unchanged sentences

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

In March 2018, Delek Logistics, through its wholly-owned subsidiary DKL Big Spring, LLC, completed the acquisition from a subsidiary of Delek (the Alon Partnership) of storage tanks and terminals that support our Big Spring, Texas refinery (the "Big Spring Logistic Assets Acquisition"), which included the execution of related commercial agreements.

In addition, a new marketing agreement was entered into between the subsidiary of Delek Logistics and the Alon Partnership pursuant to which the subsidiary of Delek Logistics provides marketing services for product sales from the Big Spring refinery.

The cash paid for the transferred assets was $ 170.8 million, and the cash paid for the marketing agreement was $ 144.2 million.

The transactions were financed with borrowings under the 2014 Facility (as defined in Note 11).

Additionally, the transaction resulted in the creation of a deferred tax asset related to the tax-book basis difference in the sold assets totaling $ 98.8 million, against which we have recorded a valuation allowance totaling $ 5.5 million for the portion of the deferred tax asset that relates to basis difference attributable to the non-controlling interest and therefore may not be realizable.

Prior periods have not been recast in our Note 4 - Segment Data, as these assets did not constitute a business in accordance with the ASU 2017-01, and were accounted for as acquisitions of assets between entities under common control.

Alon Partnership

As part of the Delek/Alon Merger, we acquired the Alon Partnership which owns the assets and conducts the operations of the Big Spring refinery and the associated integrated wholesale marketing operations.

On February 7, 2018 (the "Merger Date"), Delek acquired from the Alon Partnership all of the outstanding limited partner units that Delek did not already own in an all-equity transaction (the "Alon Partnership Merger").

Delek owned approximately 51.0 million limited partner units of the Alon Partnership, or approximately 81.6 % of the outstanding units, immediately prior to the Merger Date.

Under terms of the merger agreement, the owners of the remaining outstanding units in the Alon Partnership that Delek did not own immediately prior to the Merger Date received a fixed exchange ratio of 0.49 shares of Delek common stock for each limited partner unit of the Alon Partnership, resulting in the issuance of approximately 5.6 million shares of Delek common stock to the public unitholders of the Alon Partnership.

Because the transaction represented a combination of ownership interests under common control, the transfer of equity from non-controlling interest to owned interest (additional paid-in capital) was recorded at carrying value and no gain or loss was recognized in connection with the transaction.

Additionally, book-tax basis difference was created as a result of the transaction that resulted in a deferred tax asset of approximately $ 13.5 million, net of a valuation allowance on certain state income tax components, that also increased additional paid-in capital.

Transaction costs incurred by the Company in connection with the Alon Partnership Merger totaled approximately $ 3.0 million for the year ended December 31, 2018.

Such costs were included in general and administrative expenses in the accompanying consolidated statements of income.

Equity Method Investments

Wink to Webster Pipeline

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

(“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”).

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 years ended December 31, 2020 and 2019, we made capital contributions totaling $ 18.9 million and $ 126.7 million, respectively.

As of December 31, 2019, Delek's investment balance in WWP totaled $ 125.3 million, and our portion of net losses was $ 1.4 million for the year ended December 31, 2019.

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).

Construction of the majority of the pipeline system is complete, with initial operation commencing in October 2020 and full commercial operation under the Transportation Service Agreements commencing in February 2022.

During the year ended December 31, 2020, we made capital contributions totaling $ 18.9 million.

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").

3 unchanged sentences

The obligations of the members under the joint venture are guaranteed by the parents of the members of the WWP Project Financing JV.

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

The Company evaluated Delek'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 December 31, 2020, except for the guarantee of member obligations under the joint venture, the Company does not have other existing guarantees with or to HoldCo, or any third-party work contracted with it.

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

As of December 31, 2021, except for the guarantee of member obligations under the joint venture, the Company does not have other existing guarantees with or to HoldCo, or any third-party for work contracted with it.

On September 30, 2021 WWP made the decision to buy Delek out of the Midland Connector Financing Commitment Agreement which provided an interest-free commitment to fund us up to $ 65.0 million upon completion of a connector to connect the WWP long-haul pipeline to our Permian Gathering System, with repayment over 14 years.

The buy-out totaled $ 27.5 million and represented the estimated incremental cost of capital to fund the $ 65.0 million in expenditures over a 14 -year term, and enabled us to recover approximately $ 18.0 million of capital expenditures that we may not have incurred had it not been for the financing commitment, including approximately $ 6.6 million that was written off.

As a result of the transaction, for the year ended December 31, 2021 we recognized $ 20.9 million of other non-operating income, representing the excess over recognized write-offs.

As of December 31, 2021 and 2020, Delek's investment balance in WWP Project Financing Joint Venture totaled $ 49.3 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 year ended December 31, 2020, we received distributions of $ 69.3 million from WWP Project Financing Joint Venture to return excess capital contributions made.

In addition, we recognized a loss on the investment of $ 8.5 million for the year ended December 31, 2020.

In addition to the investment, we recognized a loss of $ 17.7 million and $ 8.5 million for the years ended December 31, 2021 and 2020, respectively.

Delek Logistics Investments

4 unchanged sentences

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 year ended December 31, 2020, we made additional capital contributions totaling $ 12.2 million based on capital calls received.

Delek Logistics contributed an additional $ 3.5 million related to such expansion project in May 2019 and during 2020 made additional capital contributions totaling $ 12.2 million based on capital calls received.

As of December 31, 2021 and 2020, Delek's investment balance in Red River totaled $ 144.0 million and $ 141.8 million, respectively.

7 unchanged sentences

Other Investments

Effective with the Delek/Alon Merger, we acquired a 50 % interest in two joint ventures that own asphalt terminals located in Fernley, Nevada, and Brownwood, Texas.

On May 21, 2018, Delek sold its 50 % interest in the asphalt terminal located in Fernley, Nevada.

See Note 8 for further discussion.

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

As of December 31, 2021 and 2020, Delek's investment balance in the Brownwood, Texas joint venture was $ 41.6 million and $ 39.3 million, respectively.

5 unchanged sentences

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

Discontinued Operations and Assets Held for Sale

Asphalt Terminals Held for Sale

On February 12, 2018, Delek announced it had reached a definitive agreement to sell certain assets and operations of four asphalt terminals (included in corporate, other and eliminations in our segment disclosure), as well as an equity method investment in an additional asphalt terminal, to an affiliate of Andeavor.

This transaction included asphalt terminal assets in Bakersfield, Mojave and Elk Grove, California and Phoenix, Arizona, as well as Delek’s 50 % equity interest in the Paramount-Nevada Asphalt Company, LLC joint venture that operated an asphalt terminal located in Fernley, Nevada.

On May 21, 2018, Delek completed the transaction and received net proceeds of approximately $ 110.8 million, inclusive of the $ 75.0 million base proceeds as well as certain preliminary working capital adjustments.

The assets associated with the owned terminals met the definition of held for sale pursuant to ASC 360 as of February 1, 2018, but did not meet the definition of discontinued operations pursuant to ASC 205-20, Presentation of Financial Statements - Discontinued Operations ("ASC 205-20"), as the sale of these asphalt assets did not represent a strategic shift that would have a major effect on the entity's operations and financial results.

Accordingly, depreciation ceased as of February 1, 2018, and the assets to be sold were reclassified to assets held for sale as of that date and were written down to the estimated fair value less costs to sell, resulting in an impairment loss on assets held for sale of $ 27.5 million for the year ended December 31, 2018.

All goodwill associated with the asphalt operations sold was written off in connection with the impairment charge discussed above.

In connection with the completion of the sale transaction, we recognized a gain of approximately $ 13.3 million, resulting primarily from the recognition of certain additional proceeds at closing associated with the asphalt terminals which were not previously determinable or probable and the recognition of the gain on the sale of the joint venture which was not previously recognized as held for sale (as it did not meet the criteria).

Such gain on sale of the asphalt assets is reflected in results of continuing operations on the accompanying consolidated statement of income for the year ended December 31, 2018.

Discontinued Operations

California Discontinued Entities

During the third quarter 2017, we committed to a plan to sell certain assets associated with our Paramount and Long Beach, California refineries (both non-operating refineries) and our California renewable fuels facility ("AltAir"), which were acquired as part of the Delek/Alon Merger.

Such operations were designated and reported as discontinued operations.

2 unchanged sentences

The sale involved initial proceeds due at closing, a subsequent working capital settlement as well as contingent proceeds for Delek's pro rata portion of any BTC relating to AltAir activities in 2018 earned through the sale date in connection with the re-enactment of the 2018 BTC that occurred in December 2019, and other final adjustments on retained contingent liabilities.

Total proceeds for the sale were $ 93.3 million, and we recognized a loss in discontinued operations on the sale before taxes of $ 33.3 million, $ 41.4 million of which was recognized in 2018 with the remainder recognized in 2019.

The loss from discontinued operations was subsequently reduced in 2019 by $ 8.1 million.

Also, an additional loss of $ 3.4 million was recognized in discontinued operations related to the sale of the Paramount assets in 2019.

Sale of Long Beach Refinery Net Assets

The transaction to dispose of certain assets and liabilities associated with our Long Beach, California refinery to Bridge Point Long Beach, LLC closed July 17, 2018 resulting in initial cash proceeds of approximately $ 14.5 million, net of expenses, and resulting in a gain on sale of discontinued operations of approximately $ 1.4 million during the third quarter of 2018.

The transaction to dispose of certain assets and liabilities associated with our Long Beach, California refinery to Bridge Point Long Beach, LLC closed July 17, 2018.

We retained certain asset retirement obligations in connection with the disposition of the Long Beach refinery related to work that was required subsequent to the sale.

As of December 31, 2019, the work was completed and the remaining unused asset retirement obligations were written off resulting in additional gain on sale of discontinued operations of $ 1.9 million.

As of December 31, 2019, the work was completed and the remaining unused asset retirement obligations were written off resulting in an additional gain on sale of discontinued operations of $ 1.9 million.

Operating Results of Discontinued Operations

1 unchanged sentence

Classification as discontinued operations requires retrospective reclassification of the associated assets, liabilities and results of operations for all periods presented.

The loss from discontinued operations, net of tax of $ 8.7 million for the year ended December 31, 2018, included operating income of $ 26.1 million and a preliminary loss on sale of California Discontinued Entities of $ 40.0 million, which was subsequently adjusted in 2019 by $ 6.6 million for a final loss on the sale of $ 33.4 million.

The loss from discontinued operations was subsequently reduced in 2019 by $ 6.6 million.

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

7 unchanged sentences

Total inventories $ 1,176.1 $ 727.7

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, due to a market price decline below our cost of certain inventory products.

At December 31, 2021, we recorded a pre-tax inventory valuation reserve of $ 8.8 million, none 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.

2 unchanged sentences

Permanent Liquidations

We incurred a permanent reduction in a LIFO layer resulting in liquidation (loss) gain in our refinery inventory of $( 1.6 ) million, $ 9.2 million and $( 7.5 ) million during the years ended December 31, 2020, 2019 and 2018, respectively.

These liquidation (losses) gains were recognized as a component of cost of materials and other in the accompanying consolidated statements of income.

We incurred a permanent reduction in a LIFO layer resulting in liquidation gain (loss) in our refinery inventory of $ 3.0 million, $( 1.6 ) million and $ 9.2 million during the years ended December 31, 2021, 2020 and 2019, respectively.

These liquidation gains (losses) were recognized as a component of cost of materials and other in the accompanying consolidated statements of income.

Inventory Supply and Offtake Obligations

11 unchanged sentences

The Supply and Offtake Agreements are accounted for as inventory financing arrangements under the fair value election provided by ASC 815 and ASC 825.

Barrels subject to the Supply and Offtake Agreements are as follows:

(in millions) El Dorado Big Spring Krotz Springs

Barrels subject to the Supply and Offtake Agreements are as follows (in millions):

El Dorado Big Spring Krotz Springs

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

17 unchanged sentences

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.

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

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.

5 unchanged sentences

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

On May 1, 2021 the provision was triggered and on May 28, 2021, $ 15.2 million of incremental proceeds were received from J.

Effective June 4, 2021, J.

Aron terminated our $ 10.0 million letter of credit that was issued to them under the terms of the Supply and Offtake Agreements.

As of December 31, 2021, the fixed component of the Baseline Step-Out Liabilities subject to the Periodic Price Adjustments amounted to approximately $ 38.6 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 May 2021 and October 2021.

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.

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

All or some portion of that amount may become due or payable if Periodic Price Adjustments are triggered in May 2021 and October 2021.

Gains (losses) related to changes in fair value due to commodity-index price are recorded as a component of cost of materials and other, and changes in fair value due to interest rate risk are recorded as a component of interest expense in the consolidated statements of income.

With respect to the Baseline Step-Out liabilities, we recognized gains (losses) in cost of materials and other attributable to changes in fair value due to commodity-index price totalin g $ 105.5 million, and $( 51.5 ) million for the y ears ended December 31, 2021 and 2020.

Before the January 2020 amendments, the fair value of the fixed price Baseline Step-Out liabilities were based on changes to interest rates reflecting changes to the interest rate risk, and such effect is included in total interest expense for that period, as disclosed below.

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 December 31, 2021:

Baseline Step-Out Liability $ 159.6 $ 68.4 $ 102.4 $ 330.4

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

Revolving over/short product financing liability 120.9 41.1 ( 4.9 ) 157.1

Total Obligations Under Supply and Offtake Agreements 280.5 109.5 97.5 487.5

Current portion 280.5 109.5 97.5 487.5

102.0 25.3 ( 4.5 ) 122.8

Obligations Under Supply and Offtake Agreements - Noncurrent portion $ — $ — $ — $ —

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

(in millions) El Dorado Big Spring Krotz Springs Total

Other (receivable) payable for monthly activity true-up $ ( 2.7 ) $ 1.0 $ 7.0 $ 5.3

El Dorado Big Spring Krotz Springs Total

Balances as of December 31, 2020:

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

Revolving over/short product financing liability 93.0 73.5 40.5 207.0

Revolving over/short product 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 receivable for monthly activity true-up $ ( 16.4 ) $ ( 3.1 ) $ ( 3.5 ) $ ( 23.0 )

Other 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 consolidated balance sheet.

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

Recurring cash fees paid during the periods presented were as follows:

(in millions) El Dorado Big Spring Krotz Springs Total

Recurring cash fees paid during the periods presented were as follows (in millions):

El Dorado Big Spring Krotz Springs Total

Recurring cash fees paid during the year ended December 31, 2021 $ 10.5 $ 3.3 $ 4.3 $ 18.1

2 unchanged sentences

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.

Total interest expense incurred during the periods presented was as follows:

(in millions) El Dorado Big Spring Krotz Springs Total

Total interest expense incurred during the periods presented was as follows (in millions):

El Dorado Big Spring Krotz Springs Total

Interest expense for the year ended December 31, 2021 $ 10.5 $ 3.3 $ 4.3 $ 18.1

2 unchanged sentences

Reflected in interest expense are losses totaling $ 3.9 million for the year ended December 31, 2020 and gains totaling $ 9.3 million for the year ended December 31, 2019 related to the changes in fair value in the Baseline Step-Out Liabilities component of Obligations Under Supply and Offtake Agreements.

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

(in millions) El Dorado Big Spring and Krotz Springs

There were no such gains or losses for the year ended December 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 December 31, 2021 $ 195.0 $ —

9 unchanged sentences

Delek Logistics 2025 Notes (3)

Delek Logistics 2028 Notes (4)

Reliant Bank Revolver 50.0 50.0

6 unchanged sentences

(3) Net of deferred financing costs of $ 2.5 million and $ 3.3 million, respectively, and debt discount of $ 0.8 million and $ 1.0 million, respectively, at December 31, 2021 and December 31, 2020.

(4) Net of deferred financing costs of $ 5.7 million at December 31, 2021.

Delek Revolver and Term Loan

6 unchanged sentences

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

In connection with the Refinancing, we recorded a loss on extinguishment of debt totaling approximately $ 9.1 million during 2018.

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.

3 unchanged sentences

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").

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.

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").

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.

3 unchanged sentences

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 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.

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 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 revolver 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 fee will be at a rate of 0.25 % or 0.375 % per annum, depending on average commitment usage for such quarter.

15 unchanged sentences

Additional Information

At December 31, 2020, the weighted average borrowing rate under the Revolving Credit Facility was 3.5 % with no principal amount outstanding.

Additionally, there were letters of credit issued of approximately $ 253.2 million as of December 31, 2020 under the Revolving Credit Facility.

At December 31, 2021, the weighted average borrowing rate under the Revolving Credit Facility was 3.50 % and there were no principal amounts outstanding thereunder.

Additionally, there were letters of credit issued of approximately $ 270.4 million as of December 31, 2021

under the Revolving Credit Facility.

Unused credit commitments under the Revolving Credit Facility, as of December 31, 2021, were approximately $ 729.6 million.

2 unchanged sentences

Delek Hapoalim Term Loan

On December 31, 2019, Delek entered into a term loan credit and guaranty agreement (the "Agreement") with Bank Hapoalim B.M.

On December 31, 2019, Delek entered into an unsecured term loan credit and guaranty agreement (the "Agreement") with Bank Hapoalim B.M.

("BHI") as the administrative agent.

3 unchanged sentences

Proceeds may be used for general corporate purposes.

The Agreement has an accordion feature that allows increasing the term loan to maximum size of $ 100.0 million, subject to receiving increased or new commitments from lenders and the satisfaction of certain other conditions precedent.

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

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

On December 30, 2020 and June 28, 2021, 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 December 31, 2021, the weighted average borrowing rate under the term loan was approximately 3.10 % comprised entirely of a LIBOR borrowing and the principal amount outstanding thereunder was $ 29.2 million.

On July 30, 2021, we elected to voluntarily prepay $ 10.0 million in principal of the term loan.

As of December 31, 2021, the effective interest rate related to the BHI Term Loan was 3.67 %.

2 unchanged sentences

The Delek Logistics Credit Facility also contains an accordion feature whereby Delek Logistics can increase the size of the credit facility to an aggregate of $ 1.0 billion, subject to receiving increased or new commitments from lenders and the satisfaction of certain other conditions precedent.

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

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

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

11 unchanged sentences

On May 23, 2017, Delek Logistics and Delek Logistics Finance Corp.

(collectively, the “Issuers”) issued $ 250.0 million in aggregate principal amount of 6.75 % senior notes due in 2025 (the “Delek Logistics Notes”) at a discount.

(“Finance Corp.” and together with Delek Logistics, the “Issuers”) issued $ 250.0 million in aggregate principal amount of 6.75 % senior notes due in 2025 (the “Delek Logistics 2025 Notes”) at a discount.

The Delek Logistics 2025 Notes are general unsecured senior obligations of the Issuers.

The Delek Logistics Notes are unconditionally guaranteed jointly and severally on a senior unsecured basis by Delek Logistics' existing subsidiaries (other than Delek Logistics Finance Corp., the "Guarantors") and will be unconditionally guaranteed on the same basis by certain of Delek Logistics' future subsidiaries.

The Delek Logistics 2025 Notes are unconditionally guaranteed jointly and severally on a senior unsecured basis by Delek Logistics' existing subsidiaries (other than Finance Corp.) and will be unconditionally guaranteed on the same basis by certain of Delek Logistics' future subsidiaries.

The Delek Logistics 2025 Notes rank equal in right of payment with all existing and future senior indebtedness of the Issuers, and senior in right of payment to any future subordinated indebtedness of the Issuers.

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

Interest on the Delek Logistics 2025 Notes is payable semi-annually in arrears on each May 15 and November 15.

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

Beginning on May 15, 2020, the Issuers may, subject to certain conditions and limitations, redeem all or part of 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.

All or part of the Delek Logistics 2025 Notes are currently redeemable, subject to certain conditions and limitations, at a redemption price of 103.375 % of the redeemed principal, plus accrued and unpaid interest, if any.

Beginning on May 15, 2022, the Issuers may, subject to certain conditions and limitations, redeem all or part of the Delek Logistics 2025 Notes, at a redemption price of 101.688 % of the redeemed principal 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 2025 Notes from holders at a price equal to 101.00 % of the principal amount thereof, plus accrued and unpaid interest.

As of December 31, 2021, we had $ 250.0 million in outstanding principal amount under the Delek Logistics 2025 Notes, and the effective interest rate was 7.20 %.

Alon Convertible Senior Notes (share values in dollars)

In connection with the Delek/Alon Merger, Alon, Delek and U.S.

Bank National Association, the Trustee, entered into the Supplemental Indenture, effective as of July 1, 2017, supplementing the Indenture, dated as of September 16, 2013 (the “Original Indenture”;

the Original Indenture, as amended by the Supplemental Indenture, is referred to as the "Indenture"), pursuant to which Alon issued its 3.0 % Convertible Senior Notes due 2018 (as previously defined, the “Convertible Notes”) in the aggregate principal amount of $ 150.0 million, which were convertible into shares of Alon’s common stock, par value $ 0.01 per share or cash or a combination of cash and Alon common stock, at Alon's election, all as provided in the Indenture.

The Supplemental Indenture provides that, as of the Effective Time, the right to convert each $ 1,000 principal amount of the Convertible Notes based on a number of shares of Alon common stock equal to the Conversion Rate (as defined in the Indenture) in effect immediately prior to the Delek/Alon Merger was changed into a right to convert each $ 1,000 principal amount of Convertible Notes into or based on a number of shares of Delek common stock (at the exchange rate of 0.504 ), par value $ 0.01 per share, equal to the Conversion Rate in effect immediately prior to the Merger.

In addition, the Supplemental Indenture provided that, as of the Effective Time, Delek fully and unconditionally guaranteed, on a senior basis, Alon’s obligations under the Convertible Notes.

Interest on the Convertible Notes was payable in arrears in March and September of each year.

The Convertible Notes were not redeemable at our option prior to maturity.

Under the terms of the Convertible Notes, the holders of the Convertible Notes could not require us to repurchase all or part of the notes except for instances of a fundamental change, as defined in the Indenture.

The holders of the Convertible Notes could convert their notes at any time after June 15, 2018 into a settlement amount determined in accordance with the terms of the Indenture.

The Convertible Notes could be converted into shares of Delek common stock, into cash, or into a combination of cash and shares of Delek common stock, at our election.

In May 2018, we made the election and notified holders of our intention to satisfy the principal amount outstanding with cash and the incremental value of the conversion options with shares at maturity.

The conversion rate of the Convertible Notes was subject to adjustment upon the occurrence of certain events, including cash dividend adjustments.

On September 17, 2018, Delek settled the Convertible Notes for a combination of cash and shares of Delek common stock.

The maturity settlement in respect of the Convertible Notes consisted of (i) cash payments totaling approximately $ 152.5 million which included a cash payment for outstanding principal of $ 150.0 million, a cash payment for accrued interest of approximately $ 2.2 million, a cash payment for dividends of approximately $ 0.3 million and a nominal cash payment in lieu of fractional shares, and (ii) the issuance of approximately 2.7 million shares of Delek common stock to holders of the Convertible Notes (the “Conversion Shares”).

The issuance of the Conversion Shares was made in exchange for the Convertible Notes pursuant to an exemption from the registration requirements provided by Section 3(a)(9) of the Securities Act of 1933, as amended.

Prior to the conversion, the conversion feature met the definition for recognition as a bifurcated equity instrument.

Convertible Note Hedge Transactions

In connection with the Convertible Notes offering, Alon entered into convertible note hedge transactions with respect to Alon common stock (as previously defined, the “Call Options”) with the initial purchasers of the Convertible Notes (the “Hedge Counterparties”).

In connection with the Delek/Alon Merger, Alon, Delek and the Hedge Counterparties entered into amended and restated Call Options permitting us to purchase up to approximately 5.7 million shares of Delek common stock, subject to customary anti-dilution adjustments, that underlie the Convertible Notes sold in the offering.

On September 17, 2018, we exercised the Call Options in connection with the settlement of the Convertible Notes and received approximately 2.7 million shares of our common stock from the Call Option counterparties, a cash payment for dividends of approximately $ 0.3 million and a nominal cash payment in lieu of fractional shares.

On a net basis, the settlement of the Convertible Notes and the exercise of the Call Options resulted in no net dilution to our common stock.

Prior to their exercise, the Call Options totaling $ 23.3 million were included as a reduction of additional paid-in capital on the consolidated balance sheets.

Warrant Transactions

In connection with the Convertible Notes offering, Alon also entered into warrant transactions whereby warrants to acquire Alon common stock were sold to the Hedge Counterparties.

In connection with the Delek/Alon Merger, Alon, Delek and the Hedge Counterparties entered into amended and restated Warrants which allowed the Hedge Counterparties to purchase up to approximately 5.7 million shares of Delek common stock, subject to customary anti-dilution adjustments.

In November 2018, Delek entered into Warrant Unwind Agreements with the holders of our outstanding common stock Warrants.

Pursuant to the terms of the Unwind Agreements, we settled for cash all outstanding Warrants with

the holders at various prices per Warrant as provided in the Unwind Agreements.

The settlement amount was based on the volume-weighted average market price of our common stock taking into account an adjustment for the exercise price of the Warrants over a period of sixteen trading days beginning November 9, 2018 (the “Unwind Period”).

Following the Unwind Period and upon the satisfaction of the payment obligation, the Warrants were canceled and the associated rights and obligations terminated.

Based on the provisions of the Unwind Agreements, the amount paid to warrant holders in satisfaction of the payment obligation totaled approximately $ 36 million.

Delek Logistics 2028 Notes

On May 24, 2021, Delek Logistics and Finance Corp.

(collectively, the “Co-issuers”), issued $ 400.0 million in aggregate principal amount of the Co-issuers 7.125 % Senior Notes due 2028 (the “Delek Logistics 2028 Notes”), at par, pursuant to an indenture with U.S.

Bank, National Association as trustee.

The Delek Logistics 2028 Notes are general unsecured senior obligations of the Co-issuers and are unconditionally guaranteed jointly and severally on a senior unsecured basis by Delek Logistics’ subsidiaries other than Finance Corp.

and will be unconditionally guaranteed on the same basis by certain of Delek Logistics’ future subsidiaries.

The Delek Logistics 2028 Notes rank equal in right of payment with all existing and future senior indebtedness of the Co-issuers, and senior in right of payment to any future subordinated indebtedness of the Co-issuers.

The Delek Logistics 2028 Notes will mature on June 1, 2028, and interest is payable semi-annually in arrears on each June 1 and December 1, commencing December 1, 2021.

At any time prior to June 1, 2024, the Co-issuers may redeem up to 35 % of the aggregate principal amount of the Delek Logistics 2028 Notes with the net cash proceeds of one or more equity offerings by Delek Logistics at a redemption price of 107.125 % of the redeemed principal amount, plus accrued and unpaid interest, if any, subject to certain conditions and limitations.

Prior to June 1, 2024, the Co-issuers may also redeem all or part of the Delek Logistics 2028 Notes at a redemption price of the principal amount plus accrued and unpaid interest, if any, plus a "make whole" premium, subject to certain conditions and limitations.

In addition, beginning on June 1, 2024, the Co-issuers may, subject to certain conditions and limitations, redeem all or part of the Delek Logistics 2028 Notes, at a redemption price of 103.563 % of the redeemed principal for the twelve-month period beginning on June 1, 2024, 101.781 % for the twelve-month period beginning on June 1, 2025, and 100.00 % beginning on June 1, 2026 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 Co-issuers will be obligated to make an offer for the purchase of the Delek Logistics 2028 Notes from holders at a price equal to 101.00 % of the principal amount thereof, plus accrued and unpaid interest.

As of December 31, 2021, we had $ 400.0 million in outstanding principal amount under the Delek Logistics 2028 Notes, and the effective interest rate was 7.41 %.

Reliant Bank Revolver

2 unchanged sentences

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;

On December 9, 2020 and June 17, 2021, 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.

2 unchanged sentences

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, requires annual principal amortization payments of $ 25.0 million through 2020 followed by a final principal amortization payment of $ 20.0 million at maturity on January 4, 2021.

As of December 31, 2020, a total principal amount of $ 20.0 million was outstanding under the Promissory Notes.

Delek had four unsecured notes payable (the "Promissory Notes") for a total of $ 120.0 million in principal 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, with a final principal amortization payment of $ 20.0 million which was paid at maturity of the Promissory Notes 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.

Under the terms of our Revolving Credit Facility, Term Loan Credit Facility, Delek Logistics Credit Facility, Delek Logistics 2025 Notes, Delek Logistics 2028 Notes, Reliant Bank Revolver and BHI Agreement, we are required to comply with certain usual and customary financial and non-financial covenants.

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.

15 unchanged sentences

Delek Logistics 2025 Notes — — — 250.0 — — 250.0

Delek Logistics 2028 Notes — — — — — 400.0 400.0

Reliant Bank Revolver 50.0 — — — — — 50.0

3 unchanged sentences

We use the majority of our derivatives to reduce normal operating and market risks with the primary objective of reducing the impact of market price volatility on our results of operations.

As such, our use of derivative contracts is primarily 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;

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

• 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 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 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.

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.

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

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

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

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.

Commodity 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.

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.

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 NPNS pursuant to ASC 815.

If we elect the NPNS 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.

For the years ended December 31, 2020 and 2019, 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 consolidated statements of income.

Our Canadian crude trading operations are accounted for as derivative instruments, and the related unrealized and realized gains and losses are recognized in other operating income, net on the accompanying consolidated statements of income.

Additionally, as of and for the year ended December 31, 2021, other forward contracts accounted for as derivatives that are specific to managing crude costs rather than for trading purposes are recognized in cost of materials and other on the consolidated statements of income in our refining segment, and are included in our disclosures of commodity derivatives in the tables below.

Futures, swaps or other commodity related derivative instruments that are utilized to specifically provide economic hedges on our Canadian forward contract or investment positions are recognized in other operating income, net because that is where the related underlying transactions are reflected.

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

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 consolidated statements of income.

At this time, 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 were designated as cash flow hedges and the change in fair value between the execution date and the end of period was recorded in other comprehensive income.

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 the hedged transactions are recognized in income.

3 unchanged sentences

As a result, the asset and liability amounts below differ from the amounts presented in our consolidated balance sheets.

See Note 13 for further information regarding the fair value of derivative instruments as presented below (in millions):

See Note 12 for further information regarding the fair value of derivative instruments (in millions).

December 31, 2021 December 31, 2020

16 unchanged sentences

Other current assets — — 0.5 ( 0.3 )

Commodity derivatives (1)

Other current liabilities — — — —

Commodity derivatives (1)

Other long-term assets — — 0.2 ( 0.1 )

Total gross fair value of derivatives 130.7 ( 109.1 ) 1,431.3 ( 1,409.5 )

3 unchanged sentences

(1) As of December 31, 2021 and 2020, we had open derivative positions representing 182,525,893 and 159,682,606 barrels, respectively, of crude oil and refined petroleum products.

Of these open positions, contracts representing 600,000 barrels were designated as cash flow hedging instruments as of December 31, 2019.

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

Additionally, as of December 31, 2020 and 2019, we had open derivative positions representing 22,130,000 and 49,350,000 One Million British Thermal Units ("MMBTU"), respectively, of natural gas products.

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

Additionally, as of December 31, 2021 and 2020, we had open derivative positions representing 1,320,000 and 22,130,000 million British Thermal Units ("MMBTU"), respectively, of natural gas products.

(2) As of December 31, 2021 and 2020, we had open RINs commitment contracts representing 16,325,000 and 282,150,000 RINs, respectively.

(3) As of December 31, 2020 and 2019, $ 14.8 million and $ 38.8 million, respectively, of cash collateral held by counterparties has been netted with the derivatives with each counterparty.

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

(3) As of December 31, 2021 and 2020, $( 24.7 ) 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 non-trading commodity derivatives and RINs commitment contracts recorded in the consolidated statements of income are as follows (in millions) (2) :

Year Ended December 31,

2021 2020 2019

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

$ ( 88.0 ) $ 18.0 $ 0.9

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

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

$ 37.7 $ ( 88.0 ) $ 17.9

Gains recognized in cost of materials and other due to cash flow hedging ineffectiveness on commodity derivatives designated as hedging instruments

Gains (losses) on non-trading physical forward contract commodity derivatives in cost of materials and other ( 6.6 ) — —

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 4.6 4.8

Total (losses) gains $ 31.3 $ ( 83.4 ) $ 22.7

10 unchanged sentences

Losses of $ 0.2 million, $ 3.6 million and $ 3.8 million, net of tax, on settled commodity contracts were reclassified into cost of materials and other in the consolidated statements of income during the years ended December 31, 2021, 2020 and 2019, respectively.

As of December 31, 2020, we estimate that $ 0.2 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) expense, net on the consolidated statements of income are as follows (in millions):

As of December 31, 2021, we estimate that no 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 derivatives (none of which were designated as hedging instruments) recorded in other operating (income) expense, net on the consolidated statements of income are as follows (in millions):

Year Ended December 31,

2021 2020 2019

Trading Physical Forward Contract Commodity Derivatives

Realized gains (losses) $ 6.5 $ ( 3.1 ) $ 5.1

Unrealized gains (losses) — ( 0.3 ) 3.6

Total $ 6.5 $ ( 3.4 ) $ 8.7

Trading Hedging Commodity Derivatives

Realized (losses) gains $ 3.3 $ 7.5 $ 9.2

7 unchanged sentences

Level 3 inputs are unobservable inputs for the asset or liability reflecting our assumptions about pricing by market participants.

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.

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 for the NPNS 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.

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 which was stored on our behalf until October 2020 for a fee of approximately 100,000 barrels.

6 unchanged sentences

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 2).

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, and gains (losses) related to changes in fair value are recorded as a component of cost of materials and other in the consolidated statements of income.

With respect to our Consolidated Net RINs Obligation surplus or deficit, we recognized gains (losses) on changes in fair value totaling $ 17.8 million and $( 15.2 ) million for the years ended December 31, 2020 and 2019, respectively, primarily attributable to changes in the market prices of the underlying credits that occurred at the end of each quarter.

For the year ended December 31, 2021, we recognized gains (losses) on changes in fair value totaling $( 44.5 ) million, which was attributable to changes in estimated volume requirements related to the 2021 RINs Obligation to reflect the December 2021 Proposed EPA Rule (where a rule regarding 2021 requirements had not been previously enacted) as well as to quarterly changes in the market prices of the underlying credits.

The environmental credits obligation is impacted by government regulation requiring such credits, and the obligation, and likewise the value of the underlying credits, may be impacted by exemptions granted by the regulatory agencies.

During the third quarter of 2019, the Tyler, El Dorado and Krotz Springs refineries received approval from the EPA for a small refinery exemption from the requirements of the renewable fuel

standard ("RIN Waivers") for the 2018 calendar year, which resulted in a reduction of our Consolidated Net RINs Obligation and related cost of materials and other of approximately $ 20.7 million for the year ended December 31, 2019.

During the first quarter 2019, the Tyler and Big Spring refineries received RIN Waivers for the 2017 calendar year, which had an immaterial impact on our results of operations, while the 2017 RIN Waivers for the El Dorado and Krotz Springs refineries received in March 2018 resulted in a reduction of our Consolidated Net RINs Obligation and related cost of materials and other of approximately $ 90.9 million for the year ended December 31, 2018.

We have not received any additional RIN Waivers impacting the year ended December 31, 2020.

During the third quarter of 2019, the Tyler, El Dorado and Krotz Springs refineries received approval from the EPA for a small refinery exemption from the requirements of the renewable fuel standard ("RIN Waivers") for the 2018 calendar year, which resulted in a reduction of our Consolidated Net RINs Obligation and related cost of materials and other of approximately $ 20.7 million for the year ended December 31, 2019.

During the first quarter 2019, the Tyler and Big Spring refineries received RIN Waivers for the 2017 calendar year, which had an immaterial impact on our results of operations.

We have not received any additional RIN Waivers impacting the years ended December 31, 2021 and 2020.

As of and for the years ended December 31, 2021 and 2020, we elected to account for our J.

5 unchanged sentences

and (2) we determine fair value of the commodity-indexed revolving over/short inventory financing liability based on the market prices for the consigned crude oil and refined products collateralizing the financing/funding where such obligation is categorized as Level 2 and is presented in the current portion of the Obligation under Supply and Offtake Agreements on our consolidated balance sheets.

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

See Note 9 for discussion of gains and losses recognized from changes in fair value.

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.

14 unchanged sentences

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

Investment commodities 12.1 — — 12.1

RINs commitment contracts — 33.6 — 33.6

Environmental credits obligation surplus — 16.8 — 16.8

Total assets — 1,431.3 — 1,431.3

7 unchanged sentences

In the table above, derivative assets and liabilities with the same counterparty are not netted where the legal right of offset exists.

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 December 31, 2020 and 2019, $ 14.8 million and $ 38.8 million, respectively, of cash collateral was held by counterparty brokerage firms and has been netted with the net derivative positions with each counterparty.

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 December 31, 2021 and 2020, $( 24.7 ) 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 11 for further information regarding derivative instruments.

4 unchanged sentences

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, prior to the Delek/Alon Merger.

In June 2019, the court found in favor of the plaintiffs and assessed damages against such subsidiary totaling $ 6.7 million, which was reduced to $ 6.4 million in the fourth quarter of 2019 and is included as of December 31, 2020 in accrued expenses and other current liabilities on the accompanying consolidated balance sheet.

In June 2019, the court found in favor of the plaintiffs and assessed damages against such subsidiary totaling $ 6.7 million, which was reduced to $ 6.4 million in the fourth quarter of 2019.

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

As a result of this liability, a $ 5.7 million increase in the accrual was recorded during the year ended December 31, 2019.

Additionally, we incurred $ 1.2 million of related legal expenses during the year ended December 31, 2019 that was recorded in general and administrative expenses in the accompanying consolidated statements of income.

The judgment of $ 6.4 million is currently stayed while the case is under appeal with the Ninth Circuit Court of Appeals.

The estimated resolution date is indeterminable at this time.

As of December 31, 2019 and 2018, AltAir (one of the California Discontinued Entities) was the party to a lawsuit whereby the plaintiff alleged breach of contract relating to a supply agreement during the period prior to the Delek/Alon Merger.

We recorded a contingent liability associated with this matter (the "Ten-Tex Litigation") totaling $ 5.0 million as part of the purchase price allocation, which was finalized in June 2018.

In July 2019, we reached a settlement with the plaintiff, whereby we were obligated for $ 2.3 million of the judgment against AltAir plus expected legal fees of approximately $ 0.2 million.

Related to this obligation, we reduced our litigation accrual by $ 2.4 million during the year ended December 31, 2019, which was recorded in discontinued operations.

In August 2019, we reached an agreement with World Energy to offset amounts payable by Delek under our seller obligations for the Ten-Tex Litigation matter against the working capital settlement receivable, and to convert the net receivable into a note receivable from World Energy.

As a result, this obligation is not reflected in our liabilities on the consolidated balance sheet as of December 31, 2019.

See Note 8 for further discussion of these matters.

The matter was appealed, and has been remanded to the district court regarding jurisdictional issues.

On June 19, 2017, the Arkansas Teacher Retirement System filed a lawsuit in the Delaware Court of Chancery (Arkansas Teacher Retirement System v.

Alon USA Energy, Inc., et al., Case No.

2017-0453), asserting claims for breach of fiduciary duty in connection with the business combination of Delek US Holdings, Inc.

and Alon USA Energy, Inc.

Following a mediation, the parties to the litigation agreed to a settlement and release of all claims of the plaintiff class in exchange for the defendants' agreement to pay $ 44.8 million into a settlement fund, of which our insurance carriers agreed to fund approximately $ 42.5 million under the applicable insurance policies and pursuant to varying limits and limitations.

The settlement, in which the Company and other defendants expressly deny all assertions of wrongdoing or fault, was approved by the Court on October 29, 2021.

In addition to the $ 2.3 million of the settlement that was not covered by insurance, we accrued $ 4.2 million of estimated unpaid and remaining legal fees.

As of December 31, 2021, the remaining unpaid balance is $ 0.7 million, and is included in accrued expenses and other current liabilities on the accompanying consolidated balance sheet.

Self-insurance

3 unchanged sentences

Environmental, Health and Safety

We are subject to extensive federal, state and local environmental and safety laws and regulations enforced by various agencies, including the EPA, the United States Department of Transportation and the Occupational Safety and Health Administration, as well as numerous state, regional and local environmental, safety and pipeline agencies.

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.

We are subject to extensive federal, state and local environmental and safety laws and regulations enforced by various agencies, including the EPA, the United States Department of Transportation and the Occupational Safety and Health Administration ("OSHA"), as well as numerous state, regional and local environmental, safety and pipeline agencies.

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

3 unchanged sentences

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.

On November 5, 2018, Alon and certain of its subsidiaries including Alon Bakersfield Property, Inc.

(which was subsequently sold on May 7, 2020 - See Note 4) (collectively, "ABPI") entered into a Settlement and Release Agreement (the "Settlement Agreement") with Equilon

Enterprises, LLC, doing business as Shell Oil Products, US ("Shell"), a former owner of our non-operating Bakersfield refinery which was acquired by Delek in connection with the Delek/Alon Merger.

The Settlement Agreement resolved certain disputed indemnification matters related to environmental obligations and asset retirement obligations at the Bakersfield refinery.

As a result of this Settlement Agreement, Shell paid ABPI a lump sum payment of $ 34.0 million and conveyed to ABPI ownership of a non-operating terminal located on the site of the Bakersfield refinery (deemed to have little or no value) and the parties will terminate a nominal lease agreement related to such terminal.

Of this total lump sum settlement payment, $ 14.0 million was previously recognized as an indemnification receivable in the purchase price allocation associated with the Delek/Alon Merger as of July 1, 2017, because such amounts represented indemnification that was deemed by the Company to be probable of realization based on existing indemnification agreements in place on the date of the acquisition and that related to identified asset retirement obligations that were also recognized in the purchase price allocation.

Of the remaining settlement amount received, $ 16.0 million is attributable to additional recoveries of remediation costs and is included as a reduction of operating expenses, and $ 4.0 million is considered additional consideration for concessions made under the Settlement Agreement and is included as other income in the accompanying consolidated statements of income for the year ended December 31, 2018.

The Big Spring refinery negotiated an agreement with the EPA for over 10 years under the EPA’s National Petroleum Refinery Initiative regarding alleged historical violations of the federal Clean Air Act related to emissions and emissions control equipment.

A consent decree resolving these alleged historical violations for the Big Spring refinery was lodged with the United States District Court for the Northern District of Texas on June 6, 2017.

An amendment to such consent decree was agreed upon by the Delek and the EPA/Department of Justice ("DOJ") in late 2018 and was executed by Delek.

That amended consent decree was lodged during the first quarter of 2019, and was entered by the Court on June 5, 2019.

The civil penalty of $ 0.5 million was paid on June 18, 2019.

Per the amended consent decree, the Company will be required to expend capital for pollution control equipment that may be significant over the next 10 years .

As of December 31, 2021, we have recorded an environmental liability of approximately $ 112.2 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.

2 unchanged sentences

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.

Included in our environmental liabilities as of both December 31, 2021 and 2020 is a liability totaling $ 78.5 million related to a property that we have historically operated as an asphalt and marine fuel terminal both as an owner and, subsequently, as a lessee under an in-substance lease agreement (the “License Agreement”).

The License Agreement, which provided us the license to continue operating our asphalt and marine fuel terminal operations on the property for a term of ten years (expiring in June 2020), also ascribed a contractual noncontingent indemnification guarantee to certain of our wholly-owned subsidiaries related to certain incremental environmental remediation activities, predicated on the completion of certain property development activities ascribed to the lessor.

Our combined liability, comprised of our environmental liability plus the estimated fair value of the noncontingent guarantee liability, was recorded in connection with the Delek/Alon Merger, effective July 1, 2017.

While the License Agreement expired in June 2020, it is currently being disputed in litigation where we have determined that no loss accrual is necessary and that the amount of incremental loss that is reasonably possible is immaterial as of December 31, 2021.

Such ongoing dispute causes sufficient uncertainty around the release of risk and the appropriate joint and several liability allocations thereunder that we cannot currently determine a more reasonable estimate of the potential total contingent liability that is probable, nor do we have sufficient information to better estimate the fair value of any remaining noncontingent guarantee liability.

As such, as of December 31, 2021 and 2020, except for accretion and expenditures, our combined environmental liability related to the terminal and property remained unchanged.

Environmental liabilities with payments that are fixed or reliably determinable have been discounted to present value at various rates depending on their expected payment stream.

9 unchanged sentences

Discounted environmental liabilities $ 34.4

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 (See Note 2 for further discussion).

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 may 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 and related adjustments to our 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.

Based on management’s review which was completed during the second quarter 2021, we recorded a RINs inventory true-up adjustment totaling $( 12.3 ) million which increased our recorded RINs Obligation.

We have also self-reported our related instances of non-compliance to the EPA, and while we cannot yet estimate the extent of penalties that may be assessed, it is not expected to be material in relation to our total RINs Obligation.

Other Losses and Contingencies

Delek maintains property damage insurance policies which have varying deductibles.

Delek also maintains business interruption insurance policies, with varying coverage limits and waiting periods.

Covered losses in excess of the deductible and outside of the waiting period will be recoverable under th e property and business interruption insurance policies.

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 was investigated by OSHA.

Contrary to initial assessments, and despite occurring during the early stages of turnaround activity, the facility did suffer operational disruptions as a result of the fire.

During the year ended December 31, 2021, we incurred workers' compensation losses of $ 3.8 million and accrued an additional $ 4.0 million for uncovered litigation, claims and assessments associated with the fire, which are included in operating expenses in the consolidated statements of income.

Additionally, we recognized accelerated depreciation of $ 1.0 million due to property damaged in the fire, which was recovered during the year ended December 31, 2021.

An additional $ 7.4 million was recognized as a gain, in excess of these losses, during the year ended December 31, 2021.

We continue to incur repair costs that may be recoverable under property and casualty insurance policies.

In addition, during the year ended December 31, 2021, we recognized a gain of $ 8.8 million related to business interruption claims.

Such gain is included in other operating income in the consolidated statements of income.

If applicable, we accrue receivables for probable insurance or other third-party recoveries.

Work to determine the full extent of covered business interruption and property and casualty losses and potential insurance claims is ongoing and may result in the future recognition of insurance recoveries.

Winter Storm Uri

During February 2021, the Company experienced a severe weather event ("Winter Storm Uri") which temporarily impacted operations at all of our refineries.

Due to the extreme freezing conditions, we experienced reduced throughputs at our refineries as there was a disruption in the crude supply, as well as damages to various units at our refineries requiring additional operating and capital expenditures.

We recognized additional operating expenses in the amount of $ 17.5 million during the year ended December 31, 2021 due to property damaged in the freeze which was recovered during the year ended December 31, 2021.

An additional $ 5.0 million was recognized as a gain, in excess of these losses during the year ended December 31, 2021.

We continue to incur additional repair costs that may be recoverable under property and casualty insurance policies.

We also recognized a gain of $ 1.1 million related to business interruption claims.

Such gain is included in other operating income in the consolidated statements of income.

If applicable, we accrue receivables for probable insurance or other third-party recoveries.

Work to determine the full extent of covered business interruption and property and casualty losses and potential insurance claims is ongoing and may result in additional future recognition of insurance recoveries.

Crude Oil and Other Releases

We have experienced several crude oil and other releases involving our assets, including five releases that occurred in 2019 and six releases that occurred in 2018.

There were no material releases that occurred during the year ended December 31, 2020.

We have experienced several crude oil and other releases involving our assets, including five releases that occurred in 2019.

There were no material releases that occurred during the years ended December 31, 2021 and 2020.

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 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.

For the release sites that have not yet received regulatory closure, we 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.

9 unchanged sentences

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.

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

On March 27, 2020, 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 year ended December 31, 2020, attributable to anticipated tax refunds from net operating loss carryback to prior 35% tax rate years under the CARES Act.

Also, we recorded a federal income tax receivable specifically related to the net operating loss carryback totaling $ 156.2 million of which $ 135.6 million is current and $ 20.6 million is non-current as of December 31, 2020.

On December 22, 2017, the U.S.

government enacted the Tax Reform Act, which made broad and complex changes to the U.S.

tax code, including a permanent reduction in the U.S.

federal corporate tax rate from 35% to 21% (“Rate Reduction”).

The Tax Reform Act also put into place new tax laws that will apply prospectively, which include, but are not limited to, modifying the rules governing the deductibility of certain executive compensation;

extending and modifying the additional first-year depreciation deduction to accelerate expensing of certain qualified property;

creating a limitation on deductible interest expense;

and changing rules related to uses and limitations of net operating loss carryforwards.

At December 31, 2018, we finalized our accounting analysis based on the guidance, interpretations, and data available.

We continue to monitor IRS guidance including final regulations, revenue rulings, revenue procedures, and applicable notices.

We applied the guidance in Staff Accounting Bulletin 118 (“SAB 118”), when accounting for the effects of the Tax Reform Act.

In 2017, we made a reasonable estimate of the effects on our existing deferred tax balances, and recognized a provisional benefit amount of $ 166.9 million, which was included as a component of income tax expense from continuing operations.

We remeasured certain deferred tax assets and liabilities based on the rates at which they are expected to reverse in the future, which is generally 21% for federal purposes.

For the year ended December 31, 2018, we completed the analysis of the accounting for the tax effects of the Tax Reform Act, resulting in our recording of an additional tax benefit of $ 0.6 million during 2018.

These adjustments to the previously recorded provisional amounts include the tax effects on the existing deferred tax balances and executive compensation.

We also had a reclassification of $ 1.6 million from accumulated other comprehensive income to retained earnings for stranded tax effects as of December 31, 2018 resulting from the Tax Reform Act.

On January 1, 2018, we adopted ASU 2016-16.

As a result of the adoption, we decreased prepaid income taxes by $ 59.4 million, increased income taxes payable by $ 3.0 million, increased deferred tax assets by $ 18.0 million (net of a valuation allowance of $ 17.2 million), and decreased retained earnings by $ 44.4 million for the cumulative effect related to new guidance that requires recognizing the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs.

Also, we recorded a federal income tax receivable specifically related to the net operating loss carryback totaling $ 156.2 million;

a current receivable of $ 135.6 million and a non-current receivable of $ 20.6 million.

The full amount of this tax receivable was received during the third quarter of 2021.

Significant components of Delek's deferred tax assets (liabilities) reported in the accompanying consolidated financial statements as of December 31, 2021 and 2020 were as follows (in millions):

2 unchanged sentences

Right-of-use asset ( 44.6 ) ( 35.1 )

Derivatives and hedging ( 9.3 ) 0.3

Partnership and equity investments ( 142.5 ) ( 133.3 )

1 unchanged sentence

Total deferred tax liabilities ( 473.3 ) ( 433.9 )

Interest expense limitation under 163j 18.9 0.3

Compensation and employee benefits 12.6 13.6

3 unchanged sentences

Reserves and accruals 37.9 33.4

Inventories 28.1 2.7

Other 0.4 0.8

3 unchanged sentences

$ ( 191.3 ) $ ( 249.5 )

(1) Total net deferred tax liabilities includes $ 6.0 million of state deferred tax assets recorded in other non-current assets in our consolidated balance sheet.

(1) Total net deferred tax liabilities includes $ 5.1 million and $ 6.0 million of state deferred tax assets recorded in other non-current assets in our consolidated balance sheet.at December 31, 2021 and December 31, 2020, respectively.,

The difference between the actual income tax expense and the tax expense computed by applying the statutory federal income tax rate to income from continuing operations was attributable to the following (in millions):

7 unchanged sentences

Changes in valuation allowance 4.0 ( 10.8 ) 7.3

Impact of Tax Reform Act — — ( 0.6 )

Impact of CARES Act NOL carryback ( 16.8 ) — —

Impact of CARES Act net operating loss carryback — ( 16.8 ) —

Goodwill impairment — 21.4 —

10 unchanged sentences

We also carry valuation allowances related to basis differences that may not be recoverable.

During the years ended December 31, 2020 and 2019, we recorded decreases to the valuation allowance of $ 10.8 million and increases of $ 7.3 million, respectively.

The 2020 decrease in the valuation allowance was primarily driven by the reversal of allowance for deferred tax assets in partnership investments due to changes in the future realizability of deferred tax basis differences.

During the years ended December 31, 2021 and 2020, we recorded an increase to the valuation allowance of $ 4.0 million and a decrease of $ 10.8 million, respectively.

The 2021 increase in the valuation allowance was primarily driven by changes in the state tax attributes, whereas in 2020 the decrease was driven by the reversal of allowance for deferred tax asset in partnership investments due to changes in the future realizability of deferred tax basis differences.

In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will be realized.

1 unchanged sentence

Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment.

Based upon the level of historical taxable income and projections for future taxable income over the periods for which the deferred tax assets are deductible, management believes it is

more likely than not Delek will realize the benefits of these deductible differences, net of the existing valuation allowance.

Based upon the level of historical taxable income and projections for future taxable income over the periods for which the deferred tax assets are deductible, management believes it is more likely than not Delek will realize the benefits of these deductible differences, net of the existing valuation allowance.

The amount of the deferred tax assets considered realizable, however, could be reduced in the near term if estimates of future taxable income during the carryforward period are reduced.

9 unchanged sentences

Delek is under Joint Committee of Taxation review for tax years 2012 through 2020.

Pre-acquisition tax returns for Alon USA Energy & Subsidiaries ("Alon") are closed for U.S.

Pre-acquisition tax returns for Alon are closed for U.S.

federal income tax examinations through the tax year ended December 31, 2016 as of December 31, 2021.

Alon is currently under Joint Committee of Taxation review for tax year 2017.

Alon USA Partners, LP is currently under audit by the IRS for tax year 2019.

Delek is currently under audit in various states for tax years 2016 through 2019.

2 unchanged sentences

ASC 740 requires the elimination of the income tax benefits associated with any income tax position where it is not "more likely than not" that the position would be sustained upon examination by the taxing authorities.

Increases and decreases to the beginning balance of unrecognized tax benefits, which includes interest and penalties were as follows (in millions):

Increases and decreases to unrecognized tax benefits, which includes immaterial interest and penalties, were as follows (in millions):

Year Ended December 31,

14 unchanged sentences

Our related party transactions consist primarily of transactions with our equity method investees (See Note 6).

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

Transactions with our related parties were as follows for the periods presented (in millions):

Year Ended December 31,

(in millions) 2020 2019 2018

2021 2020 2019

$ 71.4 $ 69.0 $ 86.0

Cost of materials and other (2)

23 unchanged sentences

Depreciation expense $ 192.1 $ 42.8 $ 11.9 $ 10.4 $ 257.2

$ 191.5 $ 35.7 $ 12.4 $ 20.4 $ 260.0

As of and For the Year Ended December 31, 2020

5 unchanged sentences

Depreciation expense (1)

$ 191.5 $ 35.7 $ 12.4 $ 20.4 $ 260.0

(1) Depreciation expense includes accelerated depreciation of $ 19.0 million taken in the fourth quarter of 2020 primarily due to the decision to abandon certain property and equipment.

9 unchanged sentences

With respect to the goodwill associated with the reporting units within the logistics segment, we performed a qualitative assessment in 2021, 2020 and 2019.

For the year ended December 31, 2020, the annual impairment review resulted in an impairment charge

of $ 126.0 million.

For the years ended December 31, 2019 and 2018, no impairment of goodwill had occurred.

For the year ended December 31, 2020, the annual impairment review resulted in an impairment charge of $ 126.0 million.

For the years ended December 31, 2021 and 2019, no impairment of goodwill occurred.

Accumulated goodwill impairment was $ 126.0 million as of December 31, 2021.

2 unchanged sentences

Balance, December 31, 2018 $ 801.3 $ 12.2 $ 44.3 $ — $ 857.8

Finalization of purchase price allocation for 2017 Delek/Alon Merger 50.4 — 13.5 2.4 66.3

Write-down resulting from asset held for sale impairment (1)

— — — ( 25.1 ) ( 25.1 )

Balance, December 31, 2018 801.3 12.2 44.3 — 857.8

Write-off of goodwill associated with retail stores sold — — ( 2.1 ) — ( 2.1 )

2 unchanged sentences

Balance, December 31, 2020 675.3 12.2 42.2 — 729.7

(1) This write-down of goodwill resulted from the impairment of assets held for sale associated with the asphalt business to net realizable value, as discussed in Note 8.

Goodwill Impairment — — — — —

Balance, December 31, 2021 $ 675.3 $ 12.2 $ 42.2 $ — $ 729.7

Other Intangible Assets

20 unchanged sentences

Total $ 127.8 $ ( 20.0 ) $ 107.8

Amortization of intangible assets was $ 5.7 million, $ 5.7 million, and $ 6.1 million during the years ended December 31, 2020, 2019 and 2018, respectively, and is included in depreciation and amortization on the accompanying consolidated statements of income.

Amortization of intangible assets was $ 5.7 million during each of the years ended December 31, 2021, 2020 and 2019, and is included in depreciation and amortization on the accompanying consolidated statements of income.

Amortization expense for the next five years is estimated to be as follows (in millions):

2 unchanged sentences

Other Current Assets December 31, 2021 December 31, 2020

Income and other tax receivables $ 142.0 $ 61.9

Short-term derivative assets (see Note 12)

Prepaid expenses 21.8 21.9

Biodiesel tax credit (see Note 4)

Investment commodities $ 45.0 $ 1.1

Consolidated Net RINs Obligation surplus (see Note 13)

Prepaid expenses 44.9 21.8

Short-term derivative assets (see Note 11) 23.6 72.9

Income and other tax receivables 3.6 142.0

Other 8.9 18.6

3 unchanged sentences

Product financing agreements $ 249.6 $ 198.0

Consolidated Net RINs Obligation deficit (see Note 12)

Income and other taxes payable 124.8 109.5

Crude purchase liabilities 107.4 62.1

Consolidated Net RINs Obligation deficit (see Note 13)

Short-term derivative liabilities (see Note 12)

Deferred revenue 44.6 16.5

Employee costs 44.4 30.2

Short-term derivative liabilities (see Note 11)

Other 28.0 34.7

4 unchanged sentences

The Delek US Holdings, Inc.

2006 Long-Term Incentive Plan, as amended (the "2006 Plan"), allowed Delek to grant stock options, stock appreciation rights ("SARs"), restricted stock, restricted common stock units ("RSUs"), performance awards ("PRSUs"), and other stock-based awards of up to 5,053,392 shares of Delek's common stock to certain directors, officers, employees, consultants and other individuals who performed services for Delek or its affiliates.

2006 Long-Term Incentive Plan, as amended (the "2006 Plan"), allowed Delek to grant stock options, stock appreciation rights ("SARs"), RSUs, PRSUs, and other stock-based awards of up to 5,053,392 shares of Delek's common stock to certain directors, officers, employees, consultants and other individuals who performed services for Delek or its affiliates.

Stock options and SARs granted under the 2006 Plan were generally granted at market price or higher.

6 unchanged sentences

The 2016 Plan allows Delek to grant stock options, SARs, restricted stock, RSUs, performance awards and other stock-based awards of up to 4,400,000 shares of Delek's common stock to certain directors, officers, employees, consultants and other individuals who perform services for Delek or its affiliates.

On May 18, 2018 and May 5 2020, the Company's stockholders approved an amendment to the 2016 plan that increased the number of Common Stock available under this plan by 4,500,000 shares and 2,120,000 shares, respectively, to 11,020,000 shares.

On May 18, 2018, May 5, 2020 and May 6 2021, the Company's stockholders approved an amendment to the 2016 plan that increased the number of shares of common stock available under this plan by 4,500,000 shares, 2,120,000 shares and 3,215,000 shares, respectively, to 14,235,000 shares.

Stock options and SARs issued under the 2016 Plan are granted at prices equal to (or greater than) the fair market value of Delek's common stock on the grant date and are generally subject to a vesting period of one year or more.

5 unchanged sentences

The Alon 2005 Plan permits the granting of awards to Alon's officers and key employees in the form of options to purchase common stock, SARs, restricted shares of common stock, RSUs, performance shares, performance units and senior executive plan bonuses.

Effective with the Delek/Alon Merger, all contractually unvested share-based awards were converted into share-

based awards denominated in Delek common stock.

Effective with the Delek/Alon Merger, all contractually unvested share-based awards were converted into share-based awards denominated in Delek common stock.

Committed but unissued share-based awards were exchanged and converted into rights to receive share-based awards indexed to Delek common stock.

The Alon 2005 Plan was terminated June 4, 2021.

Option and SAR Assumptions

The table below provides the assumptions used in estimating the fair values of our outstanding stock options and SARs under the Incentive Plans.

For all awards granted, we calculated volatility using historical volatility and implied volatility of a peer group of public companies using weekly stock prices.

2019 Grants 2018 Grants

(Graded Vesting) (Graded Vesting)

4 years 4 years

The table below provides the fair value assumptions for our outstanding stock options and SARs under the Incentive Plans.

For all awards granted, we calculated volatility using historical and implied volatility of a peer group of public companies using weekly stock prices.

(Grade Vesting - 4 years)

Expected volatility 48.16 %- 48.94 %

47.52 %- 49.42 %

Dividend yield 2.03 %- 2.60 %

2.00 %- 2.33 %

Expected term 4.57 - 4.62 years

4.38 - 4.62 years

Risk free rate 1.57 %- 2.41 %

1.56 %- 2.92 %

Fair value per share $ 11.46

Stock Option and SAR Activity

The following table summarizes the stock option and SAR activity under the Incentive Plans for the years ended December 31, 2020, 2019 and 2018:

The following table summarizes our Incentive Plans stock option and SAR activity for the years ended December 31, 2021, 2020 and 2019:

Number of Shares Under Option Weighted-Average Strike Price Weighted-Average Contractual Term (in years) Average Intrinsic Value

12 unchanged sentences

Forfeited ( 389,225 ) $ 38.10

Options and SARs outstanding, December 31, 2020 2,490,480 $ 34.16 6.8 $ 0.1

Vested options and SARs exercisable, December 31, 2020 1,501,155 $ 32.60 6.4 $ 0.1

Options and SARs outstanding, December 31, 2021 2,073,230 $ 33.79 5.8 nominal

Vested options and SARs exercisable, December 31, 2021 1,758,730 $ 32.62 5.6 nominal

Restricted Stock Units

8 unchanged sentences

Performance-Based Restricted Stock Unit Assumptions

The table below provides the assumptions used in estimating the fair values of our outstanding PRSUs under the Plan.

The table below provides the assumptions used in estimating the fair values of our outstanding PRSUs under the Incentive Plans.

For all awards granted, we calculated volatility using historical volatility and implied volatility of a peer group of public companies using weekly stock prices.

16 unchanged sentences

Forfeited ( 133,243 ) $ 39.19

Performance Achieved 145,169 $ 16.55

Balance December 31, 2019 1,112,842 $ 39.31

7 unchanged sentences

Forfeited ( 238,046 ) $ 22.58

Performance Achieved 18,651 $ 29.19

Performance Not Achieved ( 23,896 ) $ 47.68

Balance December 31, 2021 2,146,631 $ 23.54

1 unchanged sentence

Compensation expense for Delek equity-based awards amounted to $ 23.5 million, $ 22.3 million and $ 25.2 million for the years ended December 31, 2021, 2020 and 2019, respectively.

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

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

We recognized income tax expense (benefits) for equity-based awards of $ 1.7 million, $ 2.3 million and $( 2.5 ) million for the years ended December 31, 2021, 2020 and 2019, respectively.

3 unchanged sentences

These amounts are net of 196,451 , 167,094 and 564,090 shares, respectively, withheld to satisfy employee tax obligations related to the exercises and vesting for the years ended December 31, 2021, 2020 and 2019.

Delek paid approximately $ 2.4 million, $ 9.2 million and $ 11.5 million of taxes in connection with the settlement of these awards both for the years ended December 31, 2020, 2019 and 2018.

Delek paid approximately $ 4.2 million, $ 2.4 million and $ 9.2 million of taxes in connection with the settlement of these awards for the years ended December 31, 2021, 2020 and 2019.

We issue new shares of common stock upon exercise or vesting of share-based awards.

2 unchanged sentences

The Delek Logistics GP, LLC 2012 Long-Term Incentive Plan ("Logistics LTIP") permits the grant of unit options, restricted units, phantom units, unit appreciation rights, distribution equivalent rights, other unit-based awards, and unit awards.

The Logistics LTIP limits the number of units that may be delivered pursuant to vested awards to 612,207 common units, subject to proportionate adjustment in the event of unit splits and similar events.

Awards granted under the Logistics LTIP will be settled with Delek Logistics units.

On June 9, 2021, the Logistics GP board of directors amended the Logistics LTIP and increased the number of common units representing limited partner interests in Delek Logistics (the "Common Units") authorized for issuance under this plan by 300,000 Common Units to 912,207 Common Units.

The term of the Logistics LTIP was also extended to June 9, 2031.

Equity-based compensation expense is included in general and administrative expenses in the accompanying consolidated statements of income and is immaterial for the years ended December 31, 2021, 2020 and 2019.

Delek US Holdings, Inc.

Employee Stock Purchase Plan

On June 2, 2021, the Company's board of directors adopted the Delek US Holdings, Inc.

Employee Stock Purchase Plan (the "ESPP").

The ESPP is structured as a qualified employee stock purchase plan under Section 423 of the U.S.

Internal Revenue Code of 1986.

The Company authorized the issuance of 2,000,000 shares of common stock under the ESPP.

On each purchase date, eligible employees (as defined in the ESPP) can purchase the Company's stock at a price per share equal to 85.0 % of the closing price of the Company's common stock on the exercise date, but no less than par value.

There are four offering periods of three months during each fiscal year, beginning each January 1st, April 1st, July 1st, and October 1st.

No shares of common stock were issued under the ESPP during the year ended December 31, 2021.

Implementation of the plan will be effective in 2022.

Shareholders' Equity

Dividends Suspension

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

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.

The Rights initially traded with Delek’s common stock and expired in accordance with the terms of the Rights Agreement on March 19, 2021.

Preferred Stock

1 unchanged sentence

Stock Repurchase Program

In December 2016, our Board of Directors authorized a share repurchase program for up to $ 150.0 million of Delek common stock.

On November 6, 2018, our Board of Directors authorized a share repurchase program for up to $ 500.0 million of Delek common stock.

Any share repurchases under the repurchase program may be implemented through open market transactions or in privately negotiated transactions, in accordance with applicable securities laws.

1 unchanged sentence

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

On February 26, 2018, the Board of Directors approved a new $ 150.0 million authorization to repurchase Delek common stock.

This amount has no expiration date and is in addition to any remaining amounts previously authorized.

On November 6, 2018, the Board of Directors authorized the repurchase of an additional $ 500.0 million of Delek common stock.

During the year ended December 31, 2018, we repurchased 9,022,386 shares of our common stock for a total of $ 365.3 million.

The purchases included the 2.0 million shares of our common stock purchased from Alon Israel in connection with Delek’s rights pursuant to a Stock Purchase Agreement dated April 14, 2015, by and between Delek and Alon Israel.

Alon Israel delivered a right of first offer notice to Delek on January 16, 2018, informing Delek of Alon Israel’s intention to sell the 2.0 million shares, and Delek accepted such offer on January 17, 2018.

The total purchase price for the 2.0 million shares was approximately $ 75.3 million, or $ 37.64 per share.

During the years ended December 31, 2020 and 2019, we repurchased 58,713 and 5,039,034 shares of our common stock for a total of $ 1.9 million and $ 178.1 million, respectively.

During the year ended December 31, 2020 and 2019, we repurchased 58,713 and 5,039,034 shares of our common stock for a total of $ 1.9 million and $ 178.1 million, respectively.

No repurchases of our common stock were made in the year ended December 31, 2021.

As of December 31, 2021, there was approximately $ 229.7 million of authorization remaining under Delek's aggregate stock repurchase program (based on repurchases that had settled as of December 31, 2021).

During the year ended December 31, 2020, we suspended the share repurchase program until our internal parameters are met for resuming such repurchases.

As of December 31, 2020, operations, maintenance and warehouse hourly employees along with truck drivers at the Tyler refinery were represented by the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union

and its Local 202.

Of the Tyler employees, 51.0 % of operations, maintenance and warehouse hourly employees are currently covered by a collective bargaining agreement that expires January 31, 2022 while 13.2 % of Tyler truck drivers are currently covered by a collective bargaining agreement that expires May 1, 2021.

As of December 31, 2020, operations and maintenance hourly employees at the El Dorado refinery were represented by the International Union of Operating Engineers and its Local 381.

Of the El Dorado employees, 40.7 % are covered by a collective bargaining agreement which expires on August 1, 2021.

As of December 31, 2020, our El Dorado and Texas based truck drivers for Lion Oil Company were represented by the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union, AFL - CIO while our El Dorado refinery warehouse hourly employees were represented by the International Union of Operating Engineers and its Local 381;

none are currently covered by a collective bargaining agreement.

As of December 31, 2020, approximately 68.9 % of employees who work at our Big Spring refinery are covered by a collective bargaining agreement that expires March 31, 2022.

As of December 31, 2021, operations, maintenance and warehouse hourly employees along with truck drivers at the Tyler refinery were represented by the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union and its Local 202.

Of the Tyler refinery employees, 55.9 % of operations, maintenance and warehouse hourly employees are currently covered by a collective bargaining agreement that expires January 31, 2028 while 8.5 % of Tyler refinery truck drivers are currently covered by a collective bargaining agreement that expires October 31, 2024.

As of December 31, 2021, operations, maintenance and warehouse hourly employees at the El Dorado refinery were represented by the International Union of Operating Engineers and its Local 351.

Of the El Dorado refinery employees, 40.4 % are covered by a collective bargaining agreement which expires on August 1, 2027.

As of December 31, 2021, approximately 68.3 % of employees who work at our Big Spring refinery were covered by a collective bargaining agreement that expires March 31, 2027.

None of our employees in our logistics segment, retail segment or in our corporate office are represented by a union.

2 unchanged sentences

Pension Plans

Effective with the Delek/Alon Merger on July 1, 2017 (see Note 3), we had four defined benefit pension plans covering substantially all of Alon's employees, excluding employees of the retail segment.

Effective with the Delek/Alon Merger, we had four defined benefit pension plans covering substantially all of Alon's employees, excluding employees of the retail segment.

The benefits are based on years of service and the employee’s final average monthly compensation.

6 unchanged sentences

The related expense (estimated without considering forfeitures) has been or will be recognized over the remaining union contract period.

As of December 31, 2020, estimated remaining expense is approximately $ 2.0 million during 2021, and approximately $ 0.1 million in 2022.

As of December 31, 2021, estimated remaining expense is approximately $ 0.1 million during 2022.

On October 1, 2018, we spun off a portion of the Alon's qualified pension plan into a new plan - The Alon USA Pension Plan for Collectively Bargained Employees.

4 unchanged sentences

The plan's obligation was settled and paid out from the plan's asset on December 20, 2019.

Financial information related to our pension plans is presented below:

The pre-tax amounts related to the defined benefit plans recognized as pension benefit liability in the consolidated balance sheets as of December 31, 2021 was $ 2.9 million.

Financial information related to our pension plans is presented below (in millions):

Year Ended December 31,

17 unchanged sentences

Under-funded status at end of year $ ( 2.9 ) $ ( 10.2 )

The pre-tax amounts related to the defined benefit plans recognized as pension benefit liability in the consolidated balance sheets as of December 31, 2020 was $ 10.2 million.

The pre-tax amounts in accumulated other comprehensive income (loss) that have not yet been recognized as components of net periodic benefit cost were as follows:

The pre-tax amounts in accumulated other comprehensive income (loss) that have not yet been recognized as components of net periodic benefit cost were as follows (in millions):

Year Ended December 31,

Net actuarial loss (gain) $ 9.3 $ ( 0.1 )

Net actuarial loss $ 4.9 $ 9.3

Prior service credit — —

1 unchanged sentence

The accumulated benefit obligation for each of our pension plans was in excess of the fair value of plan assets.

The projected benefit obligation, accumulated benefit obligation and fair value of plan assets for the pension plans were as follows:

The projected benefit obligation, accumulated benefit obligation and fair value of plan assets for the pension plans were as follows (in millions):

Year Ended December 31,

5 unchanged sentences

Discount rate 2.75 % 2.45 %

Rate of compensation increase N/A N/A

The discount rate used reflects the expected future cash flow based on our funding valuation assumptions and participant data as of the beginning of the plan period.

The expected future cash flow is discounted by the Principal Pension Discount Yield Curve for the fiscal year end because it has been specifically designed to help pension funds comply with statutory funding guidelines.

The expected future cash flow is discounted by the Principal Pension Discount Yield Curve for the fiscal year end

because it has been specifically designed to help pension funds comply with statutory funding guidelines.

The expected long-term rate of return is based on the portfolio as a whole and not on the sum of the returns on individual asset categories.

The weighted-average assumptions used to determine net periodic benefit costs were as follows:

3 unchanged sentences

Expected long-term rate of return on plan assets 4.65 % 5.75 % 7.00 %

Rate of compensation increase — % — % 3.00 %

The expected long-term rate of return is based on the portfolio as a whole and not on the sum of the returns on individual asset categories.

The components of net periodic benefit cost related to our benefit plans consisted of the following:

The components of net periodic benefit cost related to our benefit plans consisted of the following (in millions):

Year Ended December 31,

1 unchanged sentence

2021 2020 2019

Service cost $ — $ — $ 0.4

Interest cost 3.5 4.2 5.4

Expected return on plan assets ( 6.0 ) ( 6.8 ) ( 7.5 )

Recognition of gain due to settlement — — ( 0.1 )

Recognition of gain due to curtailment — — ( 2.7 )

8 unchanged sentences

Total 100.0 % 100.0 %

The fair value of our pension assets by category were as follows:

The fair value of our pension assets by category were as follows (in millions):

Quoted Prices in Active Markets For Identical Assets or Liabilities (Level 1) Significant Other Observable Inputs (Level 2) Significant

18 unchanged sentences

The asset allocation of the plan is reviewed on at least an annual basis.

We made no contributions to the pension plans for the year ended December 31, 2020, and expect to contribute $ 6.1 million to the pension plans in 2021.

We made $ 0.3 million in contributions to the pension plans for the year ended December 31, 2021, and expect no contributions to be made to the pension plans in 2022.

There were no employee contributions to the plans.

The benefits expected to be paid in each year 2022–2026 are $ 6.4 million, $ 6.5 million, $ 7.1 million, $ 6.9 million and $ 7.0 million, respectively.

The aggregate benefits expected to be paid in the five years from 2026–2030 are $ 35.4 million.

The aggregate benefits expected to be paid in the five years

from 2027–2031 are $ 35.5 million.

The expected benefits are based on the same assumptions used to measure our benefit obligation at December 31, 2021 and include estimated future employee service.

For the years ended December 31, 2021, 2020 and 2019, we sponsored a voluntary 401(k) Employee Retirement Savings Plans for eligible employees.

Employees must be at least 21 years of age and have 45 days of service to be eligible to participate in the plan.

Employees must be at least 21 years of age and eligibility to participate in the plan is immediate upon employment.

Employee contributions are matched on a fully-vested basis by us up to a maximum of 6 % of eligible compensation.

6 unchanged sentences

The accrued benefit liability related to this plan reflected in the consolidated balance sheet was $ 1.2 million and $ 1.8 million at December 31, 2021 and 2020, respectively.

Selected Quarterly Financial Data (Unaudited)

Quarterly financial information for the years ended December 31, 2020 and 2019 is summarized below.

The sum of the quarterly results may differ from the annual results presented on our consolidated statements of operations due to rounding.

The quarterly financial information summarized below has been prepared by Delek's management and is unaudited (in millions, except per share data).

For the Three Month Periods Ended

March 31, 2020 June 30, 2020 September 30, 2020 December 31, 2020

Net revenues $ 1,821.2 $ 1,535.5 $ 2,062.9 $ 1,882.2

Operating (loss) income $ ( 361.5 ) $ 22.8 $ ( 75.2 ) $ ( 314.1 )

Net (loss) income from continuing operations $ ( 307.0 ) $ 98.5 $ ( 76.9 ) $ ( 285.0 )

Net (loss) income $ ( 307.0 ) $ 98.5 $ ( 76.9 ) $ ( 285.0 )

Net (loss) income attributable to Delek $ ( 314.4 ) $ 87.7 $ ( 88.1 ) $ ( 293.2 )

Basic (loss) income per share from continuing operations $ ( 4.28 ) $ 1.19 $ ( 1.20 ) $ ( 3.98 )

Diluted (loss) income per share from continuing operations $ ( 4.28 ) $ 1.18 $ ( 1.20 ) $ ( 3.98 )

For the Three Month Periods Ended

March 31, 2019 June 30, 2019 September 30, 2019 December 31, 2019 (1)

Net revenues $ 2,199.9 $ 2,480.3 $ 2,334.3 $ 2,283.7

Operating income $ 222.4 $ 134.3 $ 87.4 $ 48.2

Net income from continuing operations $ 154.4 $ 84.6 $ 60.0 $ 32.0

Net income $ 154.4 $ 83.8 $ 60.0 $ 38.0

Net income attributable to Delek $ 149.3 $ 77.3 $ 51.3 $ 32.7

Basic income per share from continuing operations $ 1.92 $ 1.02 $ 0.68 $ 0.36

Diluted income per share from continuing operations $ 1.90 $ 1.01 $ 0.68 $ 0.36

The tables above include the following infrequently occurring items:

(1) Net income from continuing operations for the quarter ended December 31, 2019 includes the benefit of retroactive biodiesel tax credits related to 2019 and 2018 blending activities totaling $ 77.6 million.

Of this amount, $ 31.1 million related to the first three quarters of 2019 blending activities and $ 36.0 million related to 2018 blending activities.

The quarterly earnings per share calculations for the three months ended December 31, 2020 and 2019 are presented below:

Three Months Ended December 31,

Numerator for EPS - continuing operations

(Loss) income from continuing operations $ ( 285.0 ) $ 32.0

Income from continuing operations attributed to non-controlling interest 8.2 5.3

Numerator for diluted EPS - continuing operations attributable to Delek $ ( 293.2 ) $ 26.7

Numerator for EPS - discontinued operations

Income from discontinued operations $ — $ 6.0

Weighted average common shares outstanding (denominator for basic EPS) 73,736,637 74,042,343

Dilutive effect of stock-based awards — 658,583

Weighted average common shares outstanding, assuming dilution 73,736,637 74,700,926

Basic income per share:

(Loss) income from continuing operations $ ( 3.98 ) $ 0.36

Income from discontinued operations — 0.08

Total basic (loss) income per share $ ( 3.98 ) $ 0.44

Diluted income per share:

(Loss) income from continuing operations $ ( 3.98 ) $ 0.36

Income from discontinued operations — 0.08

Total diluted (loss) income per share $ ( 3.98 ) $ 0.44

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

Antidilutive stock-based compensation 301,086 1,925,207

Antidilutive due to loss 3,685,519 —

Total antidilutive stock-based compensation 3,986,605 1,925,207

We lease certain retail stores, land, building and various equipment from others.

24 unchanged sentences

Leased assets obtained in exchange for new operating lease liabilities $ 87.1 $ 58.1

December 31, 2020

Leased assets obtained in exchange for new financing lease liabilities $ 15.7 $ 5.6

December 31, 2021 December 31, 2020

Weighted-average remaining lease term (years) operating leases 4.7 5.2

Weighted-average remaining lease term (years) financing leases 6.6 2.9

Weighted-average discount rate operating leases (3)

Weighted-average discount rate financing leases (3)

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

1 unchanged sentence

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

The following is an estimate of the maturity of our lease liabilities for operating leases having remaining noncancelable terms in excess of one year as of December 31, 2020 (in millions) under the new lease guidance ASC 842:

The following is an estimate of the maturity of our lease liabilities for operating and financing leases having remaining noncancelable terms in excess of one year as of December 31, 2021 (in millions) under the new lease guidance ASC 842:

Maturity of Lease Liabilities Total

8 unchanged sentences

Present Value of Lease Liabilities $ 205.9

Subsequent Events

During February 2021, the Company experienced a severe weather event at the Tyler, El Dorado and Krotz Springs refineries, resulting in units being temporarily shut down and damages to parts of the facilities due to extreme freezing conditions.

The Company is currently determining the financial impact of the event and expects to incur certain recovery costs and repair costs.

Additionally, the severe weather conditions and the resultant industry downtime have caused energy prices to rise in certain regions where we operate, which are expected to result in additional operating expenses for the refineries impacted until such time that supply is restored and energy prices stabilize.

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

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

We are in the preliminary stages of assessing the extent of the damages.

Financial Statements and Schedules

6 unchanged sentences

(Principal Financial Officer)

March 1, 2021

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by or on behalf of the following persons on behalf of the registrant and in the capacities indicated on March 1, 2021:

February 25, 2022

/s/ Ezra Uzi Yemin

Ezra Uzi Yemin

Director (Chairman), President and Chief Executive Officer

Director (Chair), President and Chief Executive Officer

(Principal Executive Officer)

/s/ Nilah Staskus

Nilah Staskus

/s/ Robert Wright

Robert Wright

Senior Vice President, Chief Accounting Officer

6 unchanged sentences

/s/ Laurie Z.

/s/ David Wiessman

David Wiessman

/s/ Shlomo Zohar

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-K

Item 9A. Controls and Procedures