What changed in this filing

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Item 9A. Controls and Procedures

2023-03-01 compared with 2022-02-25 · 837 added, 671 removed, 1567 unchanged (49% of the section changed)

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• 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.

Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies and procedures may deteriorate.

On June 1, 2022, we completed the acquisition of 3 Bear.

As part of our ongoing integration of the 3 Bear business, we are continuing to incorporate our controls and procedures into 3 Bear and to augment our company-wide controls to reflect the risks inherent in an acquisition of this type.

3 Bear accounted for approximately 8.3% of total assets as of December 31, 2022 and approximately 0.6% of net revenues of the Company for the year ended on December 31, 2022.

As permitted by the SEC staff guidance for newly acquired businesses, our report on our internal control over financial reporting for the year ending December 31, 2022, includes a scope exception that excludes the acquired 3 Bear business in order for management to have sufficient time to evaluate and implement our internal control structure over the operations of the 3 Bear business.

Management has conducted its evaluation of the effectiveness of internal control over financial reporting as of December 31, 2022, based on the framework in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

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Changes in Internal Control over Financial Reporting

There has been no change in our internal control over financial reporting (as described in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended December 31, 2021 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Except as described below, there has been no change in our internal control over financial reporting (as described in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended December 31, 2022 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

During the quarter ended December 31, 2022, we implemented a new enterprise resource planning (“ERP”) system.

The new ERP system replaced our previous ERP including our accounting system and general ledger.

As a result of this implementation, we modified certain existing controls and implemented new controls and procedures related to the new ERP system to maintain appropriate internal control over financial reporting during and after the system change.

OTHER INFORMATION

Amendments to Executive Chairman Employment Agreement

On February 27, 2023, the Human Capital and Compensation Committee of our Board approved amendments to the employment agreement with Ezra Uzi Yemin, our Executive Chairman of the Board (the “Employment Agreement Amendments”).

The Employment Agreement Amendments extend the term during which Mr.

Yemin will serve as Executive Chairman of the Company from December 31, 2023 to December 31, 2024.

The Employment Agreement Amendments also provide for the grant of time vesting equity awards on March 10, 2023 consisting of $750,000 of RSUs under the Company's 2016 Long-Term Incentive Plan and $750,000 of phantom units under the Delek Logistics GP, LLC Amended and Restated 2012 Long-Term Incentive Plan.

These grants will vest 50% on December 31, 2023 and 50% on December 31, 2024, subject to Mr.

Yemin’s continued service to the Company.

DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

Not applicable.

Directors, Executive Officers, Corporate Governance and Security Ownership

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

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.

7102 Commerce Way, Brentwood, Tennessee 37027.

Our Board of Directors Governance Guidelines, our charters for our Audit, Human Capital and Compensation, Technology, 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., 310 Seven Springs Way, Suite 400 and 500, Brentwood, Tennessee 37027.

We intend to disclose any amendments to or waivers of the Code of Business Conduct & Ethics on behalf of our Chief Executive Officer, Chief Financial Officer and persons performing similar functions on our website, at www.DelekUS.com, under the "Investor Relations" caption, promptly following the date of any such amendment or waiver.

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The information required by Items 406, 407(c)(3), (d)(4), and (d)(5) of Regulation S-K will be included under "Corporate Governance" in the Definitive Proxy Statement and is incorporated herein by reference.

Board of Directors

• Ezra Uzi Yemin

• Avigal Soreq

• Richard Marcogliese

• Leonardo Moreno

Sullivan, Jr.

• Vasili (Vicky) Sutil

• Shlomo Zohar

Senior Management

• Avigal Soreq – President and Chief Executive Officer

• Todd O’Malley – Executive Vice President, Chief Operating Officer

• Reuven Spiegel – Executive Vice President and Chief Financial Officer

• Denise McWatters – Executive Vice President, General Counsel and Secretary

• Jared Serff – Executive Vice President and Chief Human Resources Officer

Miller – Executive Vice President – Retail

• Sarit Soccary – Managing Partner – DK Innovation

• Mark Hobbs – Executive Vice President, Corporate Development

• Ido Biger – Executive Vice President, Chief Technology Officer and Chief Data Officer

• Nithia Thaver – Executive Vice President, President of Refining

EXECUTIVE COMPENSATION

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Exhibits - See below.

Financial Statements and Schedules

EXHIBIT INDEX

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Agreement and Plan of Merger dated as of November 8, 2017, among Delek US Holdings, Inc., Sugarland Mergeco, LLC, Alon USA Partners, LP, and Alon USA Partners GP, LLC (incorporated by reference to Exhibit 2.1 to the Company’s Form 8-K filed on November 9, 2017).

Amended and Restated Certificate of Incorporation, as amended by that certain Certificate of Designations of Series A Junior Participating Preferred Stock of Delek US Holdings, Inc., dated March 23, 2020 (incorporated by reference to Exhibit 3.1 of the Company’s Form 10-Q filed on May 8, 2020).

Amended and Restated Bylaws of Delek US Holdings, Inc.

Membership Interest Purchase Agreement, dated as of April 8, 2022, by and between 3 Bear Energy – New Mexico LLC and DKL Delaware Gathering, LLC (incorporated by reference to Exhibit 2.1 to the Partnership’s Form 8-K filed on April 11, 2022).

Second Amended and Restated Certificate of Incorporation of Delek US Holdings, Inc.

(incorporated by reference to Exhibit 3.1 of the Company’s Form 10-Q filed on May 9, 2022).

Fifth Amended and Restated Bylaws of Delek US Holdings, Inc.

(incorporated by reference to Exhibit 3.1 of the Company’s Form 10-Q filed on November 8, 2022).

Indenture, dated as of May 23, 2017, among Delek Logistics, LP, Delek Logistics Finance Corp., the Guarantors named therein and U.S.

Bank, National Association, as trustee (incorporated by reference to Exhibit 4.1 to the Partnership's Form 8-K filed on May 24, 2017, SEC File No.

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

Form of 6.750% Senior Notes due 2025 (included as Exhibit A in Exhibit 4.1 to the Partnership's Form 8-K filed on May 24, 2017, SEC File No.

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

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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.

Description of Common Stock (incorporated by reference to Exhibit 4.5 to the Company’s Form 10-K filed on February 25, 2022).

* Form of Indemnification Agreement for Directors and Officers ((incorporated by reference to Exhibit 10.1 to the Company’s Form 10-K filed on February 25, 2022).

* Delek US Holdings, Inc.

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and Delek Crude Logistics, LLC (incorporated by reference to Exhibit 10.4 to the Company's Form 8-K filed on November 14, 2012, SEC File No.

Financial Statements and Schedules

Pipelines and Storage Facilities Agreement, dated November 7, 2012, by and among Lion Oil Company, Delek Logistics Partners, LP, SALA Gathering Systems, LLC, El Dorado Pipeline Company, LLC, Magnolia Pipeline Company, LLC and J.

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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).

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

* Fourth Amendment to the Delek US Holdings, Inc.

2016 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed on August 5, 2022).

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

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2016 Long-Term Incentive Plan Restricted Stock Unit Agreement (incorporated by reference to Exhibit 10.29(d) to the Company’s Form 10-K filed February 28, 2017).

* Form of Delek US Holdings, Inc.

2016 Long-Term Incentive Plan Performance-Based Restricted Stock Unit Agreement (Cash Settled) (incorporated by reference to Exhibit 10.9 to the Company’s Form 10-Q filed on May 5, 2022) .

* Form of Delek US Holdings, Inc.

2016 Long-Term Incentive Plan Restricted Stock Unit Agreement (Cash Settled) (incorporated by reference to Exhibit 10.10 to the Company’s Form 10-Q filed on May 5, 2022).

* Alon USA Energy, Inc.

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Form of Restricted Stock Award Agreement (incorporated by reference to Exhibit 10.1 to Alon USA Energy, Inc.’s Form 8-K filed on January 12, 2017, SEC File No.

Financial Statements and Schedules

* Form of Appreciation Rights Award Agreement relating to Participant Grants pursuant Section 7 of the Alon USA Energy, Inc.

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

* First Amendment to Amended and Restated Executive Employment Agreement by and between the Company and Ezra Uzi Yemin, dated for reference as of March 27, 2022 (incorporated by reference to Exhibit 10.2 to the Company’s Form 10-Q filed on May 5, 2022).

* Executive Chairman Employment Agreement by and between the Company and Ezra Uzi Yemin, dated for reference as of March 27, 2022 (incorporated by reference to Exhibit 10.3 to the Company’s Form 10-Q filed on May 5, 2022).

* Offer Letter by and between the Company and Avigal Soreq, effective March 28, 2022 (incorporated by reference to Exhibit 10.4 to the Company’s Form 10-Q filed on May 5, 2022).

* Executive Employment Agreement by and between the Company and Avigal Soreq, dated for reference as of March 28, 2022 (incorporated by reference to Exhibit 10.5 to the Company’s Form 10-Q filed on May 5, 2022).

*# Change in Control Severance Agreement, dated for reference as of June 13, 2022, by and between the Company and Avigal Soreq.

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

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Aron & Company LLC (incorporated by reference to Exhibit 10.1 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).

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Third Incremental Amendment to Term Loan Credit Agreement, dated as of May 19, 2020, among Delek US Holdings, Inc., as borrower, the guarantors party thereto, the lenders party thereto, and Wells Fargo Bank, National Association, as administrative agent (incorporated by reference to Exhibit 10.1 of the Company’s Form 8-K filed on May 21, 2020).

Amended and Restated Term Loan Credit Agreement, dated as of November 18, 2022, by and among Delek US Holdings, Inc., as borrower, the lenders from time to time party thereto, Wells Fargo Bank, National Association, as administrative agent for each member of the Lender Group and the Bank Product Providers, the Subsidiaries of Delek US Holdings, Inc.

from time to time party thereto, as guarantors, Wells Fargo Securities, LLC, MUFG Bank, Ltd., and BofA Securities Inc., each as a joint lead arranger and joint book runner, Mizuho Bank, Ltd., PNC Capital Markets LLC, Citizens Bank, N.A., Barclays Bank PLC and Truist Securities, Inc., each as senior co-managers (incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K on November 18, 2022).

Financial Statements and Schedules

Second Amended and Restated Credit Agreement, dated as of March 30, 2018, by and among Delek US Holdings, Inc., as borrower, the lenders from time to time party thereto, Wells Fargo Bank, National Association, as administrative agent for each member of the Lender Group and the Bank Product Providers, the Subsidiaries of Delek US Holdings, Inc.

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Fourth Amendment to Second Amended and Restated Credit Agreement, dated December 18, 2019 (incorporated by reference to Exhibit 10.32 of the Company’s Form 10-K filed on February 28, 2020).

Third Amended and Restated Credit Agreement, dated as of October 26, 2022, by and among Delek US Holdings, Inc., as borrower, the lenders from time to time party thereto, Wells Fargo Bank, National Association, as administrative agent for each member of the Lender Group and the Bank Product Providers, the Subsidiaries of Delek US Holdings, Inc.

from time to time party thereto, as guarantors, Wells Fargo Bank, National Association, Truist Securities, Inc., PNC Bank, National Association, Bank of America, N.A., MUFG Bank Ltd., Regions Capital Markets, a division of Regions Bank, and Barclays Bank PLC, each as a joint lead arranger and joint book runner, Wells Fargo Bank, National Association, Truist Bank, PNC Bank, National Association, Bank of America, N.A., MUFG Bank Ltd., Regions Capital Markets, a division of Regions Bank, and Barclays Bank PLC, each as a co-syndication agent, and Citizens Bank, N.A.

as a documentation agent (incorporated by reference to exhibit 10.1 of the Company’s Form 8-K filed on October 27, 2022).

Amendment No.

1 to Third Amended and Restated Credit Agreement, dated as of December 22, 2022, by and among Delek US Holdings, Inc., as borrower, the subsidiaries of Delek US Holdings, Inc.

party thereto, as guarantors, the lenders party thereto and Wells Fargo Bank, National Association, as administrative agent (incorporated by reference to Exhibit 10.3 of the Company’s Form 8-K filed on December 29, 2022).

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) .

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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.

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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)

Inventory Intermediation Agreement, dated as of December 22, 2022, by and between Citigroup Energy, Inc.

and DK Trading & Supply, LLC (incorporated by reference to Exhibit 10.1 of the Company’s Form 8-K filed on December 29, 2022).

Pledge and Security Agreement, dated as of December 22, 2022, by and between Citigroup Energy, Inc.

and DK Trading & Supply, LLC (incorporated by reference to Exhibit 10.2 of the Company’s Form 8-K filed on December 29, 2022).

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

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

Financial Statements and Schedules

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

and Denise McWatters.

and Denise McWatters (incorporated by reference to Exhibit 10.25 to the Company’s Form 10-K filed on February 25, 2022).

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

and Todd O’Malley.

and Todd O’Malley (incorporated by reference to Exhibit 10.26 to the Company’s Form 10-K filed on February 25, 2022).

* Executive Employment Agreement by and between the Company and Todd O’Malley, dated as of March 28, 2022 (incorporated by reference to Exhibit 10.6 to the Company’s Form 10-Q filed on May 5, 2022).

*# Change in Control and Severance Agreement, dated as of March 28, 2022, by and between the Company and Todd O’Malley.

Stock Purchase and Cooperation Agreement, dated as of March 7, 2022, by and among Delek US Holdings, Inc., IEP Energy Holding LLC American Entertainment Properties Corp., Icahn Enterprises Holdings L.P.

Icahn Enterprises G.P.

Beckton Corp.

Icahn (incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K filed on March 7, 2022).

* Letter Agreement by and between the Company and Nithia Thaver, effective as of January 1, 2022 (incorporated by reference to Exhibit 10.7 to the Company’s Form 10-Q filed on May 5, 2022).

* Form of Change in Control Severance Agreement for Officers (incorporated by reference to Exhibit 10.8 to the Company’s Form 10-Q filed on May 5, 2022).

Assignment and Assumption Agreement and Guaranty, dated as of March 22, 2022, by and among Lion Oil Trading & Transportation, LLC, DK Trading & Supply, LLC, Delek Logistics Operating, LLC, Lion Oil Company, LLC, and Delek US Energy, Inc.

(incorporated by reference to Exhibit 10.1 of the Company’s Form 10-Q filed on November 8, 2022).

Partial Assignment and Assumption Agreement, dated as of March 23, 2022, by and among Lion Oil Company, LLC, DK Trading & Supply, LLC, and the Partnership (incorporated by reference to Exhibit 10.2 of the Company’s Form 10-Q filed on November 8, 2022).

Omnibus Assignment and Assumption Agreement, dated as of September 12, 2022, by and among Alon USA, LP, DK Trading & Supply, LLC, and the parties set forth on Schedule 1 thereto (incorporated by reference to Exhibit 10.3 of the Company’s Form 10-Q filed on November 8, 2022).

Omnibus Assignment and Assumption Agreement, dated as of September 12, 2022, by and among Lion Oil Company, LLC, DK Trading & Supply, LLC, and the parties set forth on Schedule 1 thereto (incorporated by reference to Exhibit 10.4 of the Company’s Form 10-Q filed on November 8, 2022) .

Omnibus Assignment and Assumption Agreement, dated as of September 13, 2022, by and among Delek Refining Ltd., DK Trading & Supply, LLC, and the parties set forth on Schedule 1 thereto (incorporated by reference to Exhibit 10.5 of the Company’s Form 10-Q filed on November 8, 2022).

Omnibus Assignment and Assumption Agreement, dated as of September 13, 2022, by and among Lion Oil Trading & Transportation, LLC, DK Trading & Supply, LLC, and the parties set forth on Schedule 1 thereto (incorporated by reference to Exhibit 10.6 of the Company’s Form 10 Q filed on November 8, 2022).

# Subsidiaries of the Registrant.

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## Certification of the Company's Chief Financial Officer pursuant to 18 U.S.C.

Section 1350, as

adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101 The following materials from Delek US Holdings, Inc.’s Annual Report on Form 10-K for the annual period ended December 31, 2022, formatted in iXBRL (Inline eXtensible Business Reporting Language):

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The Company agrees to supplementally furnish a copy of any of the omitted schedules to the United States Securities and Exchange Commission upon request.

++ Confidential treatment has been requested and granted with respect to certain portions of this exhibit pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

Omitted portions have been filed separately with the United States Securities and Exchange Commission.

~ Certain confidential information contained in these exhibits has been omitted because it (i) is not material and (ii) would be competitively harmful if publicly disclosed.

Financial Statements and Schedules

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Report of Independent Registered Public Accounting Firm

To the Stockholders and the Board of Directors of

To the Board of Directors and Stockholders of

Delek US Holdings, Inc.

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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, 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 .

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, 2022, 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, 2023 expressed an unqualified opinion thereon.

Change in Accounting Principle

As discussed in Note 2 to the consolidated financial statements, the Company has elected to change its method of accounting for inventory held at the Tyler, Texas refinery to the first-in, first-out costing method from the last-in, first-out costing method, and, retrospectively, adjusted the 2021 and 2020 consolidated financial statements for the change.

Basis for Opinion

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Financial Statements and Schedules

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.

As discussed in Notes 2 and 18 of the consolidated financial statements, goodwill is reviewed at the reporting unit level for impairment at least annually or more frequently if events or changes in circumstances indicate the goodwill might be impaired.

The Company performs its annual goodwill impairment assessment in the fourth quarter of each year.

The Company evaluates the recoverability of goodwill by comparing the carrying amount of each reporting unit to its estimated fair value.

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.

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.

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 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.

We compared the significant assumptions in the prospective financial data used by management to current industry and economic trends, analysts’ expectations, historical performance, and other relevant factors.

We performed sensitivity analyses of significant assumptions to evaluate the change in the fair value of the reporting units resulting from changes in the significant assumptions.

We also involved our valuation specialists to assist in evaluating the fair value methodologies, assessing the market multiples by comparison to the appropriate peer group companies, and testing the related components and assumptions that are most significant to the fair value estimates.

Accounting for Business Combinations

Description of the Matter During 2022, the Company completed its acquisition of 3 Bear Delaware Holding – NM, LLC (“3 Bear”) for net consideration of approximately $628.3 million as disclosed in Note 3 to the consolidated financial statements.

The transaction was accounted for as a business combination.

The Company allocated the purchase price, to the assets acquired and liabilities assumed based on their respective fair values, including a customer relationships intangible asset of $210.0 million.

Auditing the Company's accounting for its acquisition of 3 Bear was complex due to the significant estimation required by management to determine the fair value of the customer relationships intangible asset acquired.

The Company used the income approach in estimating the initial fair value of the acquired customer relationships intangible asset.

There was a high degree of subjective auditor judgment in evaluating the assumptions used in the income approach as changes to the assumptions used could have a significant effect on the determination of the initial fair value.

Assumptions used included projected revenue attributable to customer relationships, forecasted operating margins, and the discount rate, which are forward-looking and could be affected by future economic and market conditions.

How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design and tested the operating effectiveness of controls that address the risks of material misstatement related to the Company's accounting for business combinations, including controls over the assumptions identified above.

To test the estimated fair values, we performed audit procedures that included, among others, evaluating the Company's use of the income approach and testing the assumptions discussed above and the completeness and accuracy of the underlying data used by the Company in its analysis.

Our audit procedures also included evaluating the professional qualifications and objectivity of the Company's external consultant that assessed the projected revenue assumptions.

In addition, in evaluating whether we could use the work of the Company’s external consultant, we assessed the reasonableness of the projected revenue assumptions by identifying and evaluating corroborative and contrary evidence.

We involved our valuation specialists to assist in evaluating the appropriateness of the valuation methods and the reasonableness of certain significant assumptions, including the evaluation of the discount rate used in the income approach.

/s/ Ernst & Young LLP

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Nashville, Tennessee

February 25, 2022

March 1, 2023

Financial Statements and Schedules

Report of Independent Registered Public Accounting Firm

To the Stockholders and the Board of Directors of

To the Board of Directors and Stockholders of

Delek US Holdings, Inc.

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(the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2022, based on the COSO criteria.

As indicated in the accompanying Management’s Annual Report on Internal Control over Financial Reporting, management’s assessment of and conclusion on the effectiveness of internal control over financial reporting did not include the internal controls of 3 Bear Delaware Holding – NM, LLC (“3 Bear”), which is included in the 2022 consolidated financial statements of the Company and constituted 8.3% of total assets as of December 31, 2022, and 0.6% of net revenues for the year then ended.

Our audit of internal control over financial reporting of the Company also did not include an evaluation of the internal control over financial reporting of 3 Bear.

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, 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 .

as of December 31, 2022 and 2021, 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, 2022, and the related notes, and our report dated March 1, 2023 expressed an unqualified opinion thereon.

Basis for Opinion

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Nashville, Tennessee

February 25, 2022

March 1, 2023

Financial Statements and Schedules

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(In millions, except share and per share data)

December 31, 2021

December 31, 2022 As Adjusted (1)

Current assets:

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Current portion of long-term debt 74.5 92.2

Obligation under Supply and Offtake Agreements 487.5 129.2

Current portion of obligation under Inventory Intermediation Agreements 49.9 487.5

Current portion of operating lease liabilities 49.6 53.9

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Long-term debt, net of current portion 2,979.2 2,125.8

Obligation under Supply and Offtake Agreements — 224.9

Obligation under Inventory Intermediation Agreements 491.8 —

Environmental liabilities, net of current portion 111.5 109.5

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Accumulated other comprehensive loss ( 5.2 ) ( 3.8 )

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

Treasury stock, 17,575,527 shares, at cost, at December 31, 2022 and 2021, respectively

( 694.1 ) ( 694.1 )

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Total liabilities and stockholders’ equity $ 8,192.8 $ 6,812.6

(1) Adjusted to reflect the retrospective change in accounting policy from LIFO to FIFO for certain inventories.

See Note 8 for further discussion.

See accompanying notes to the consolidated financial statements

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Year Ended December 31,

2021 2020 2019

2022 As Adjusted (1)

As Adjusted (1)

Net revenues $ 20,245.8 $ 10,648.2 $ 7,301.8

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Total cost of sales 19,321.2 10,385.5 7,562.8

Insurance proceeds ( 31.2 ) ( 23.3 ) —

Operating expenses related to retail and wholesale business (excluding depreciation and amortization presented below) 106.8 110.4 97.8

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Total operating costs and expenses 19,756.3 10,682.9 8,034.1

Operating (loss) income ( 130.4 ) ( 728.0 ) 492.3

Interest expense 137.2 129.0 131.1

Interest income ( 0.5 ) ( 3.3 ) ( 11.3 )

Operating income (loss) 489.5 ( 34.7 ) ( 732.3 )

Interest expense, net 195.3 136.7 125.7

Income from equity method investments ( 57.7 ) ( 18.3 ) ( 30.3 )

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

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

Other income, net ( 2.5 ) ( 15.8 ) ( 3.5 )

Total non-operating expense, net 135.1 102.6 35.1

(Loss) income before income tax (benefit) expense ( 233.0 ) ( 763.1 ) 402.7

Income tax (benefit) expense ( 62.5 ) ( 192.7 ) 71.7

(Loss) income from continuing operations, net of tax ( 170.5 ) ( 570.4 ) 331.0

Discontinued operations:

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

Income (loss) before income tax expense (benefit) 354.4 ( 137.3 ) ( 767.4 )

Income tax expense (benefit) 63.9 ( 42.0 ) ( 193.6 )

Net income (loss) 290.5 ( 95.3 ) ( 573.8 )

Net income attributed to non-controlling interests 33.4 33.0 37.6

Net (loss) income attributable to Delek $ ( 203.5 ) $ ( 608.0 ) $ 310.6

Basic (loss) income per share:

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

Income from discontinued operations — — 0.07

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

Diluted (loss) income per share:

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

Income from discontinued operations — — 0.07

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

Net income (loss) attributable to Delek $ 257.1 $ ( 128.3 ) $ ( 611.4 )

Basic income (loss) per share $ 3.63 $ ( 1.73 ) $ ( 8.31 )

Diluted income (loss) per share $ 3.59 $ ( 1.73 ) $ ( 8.31 )

Weighted average common shares outstanding:

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Diluted 71,516,361 73,984,104 73,598,389

Dividends declared per common share outstanding $ — $ 0.93 $ 1.14

(1) Adjusted to reflect the retrospective change in accounting policy from LIFO to FIFO for certain inventories.

See Note 8 for further discussion.

See accompanying notes to the consolidated financial statements

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Year Ended December 31,

2021 2020 2019

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

2022 As Adjusted (1)

As Adjusted (1)

Net income (loss) $ 290.5 $ ( 95.3 ) $ ( 573.8 )

Other comprehensive income (loss):

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Income tax benefit — — ( 0.3 )

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

Comprehensive loss on commodity contracts designated as cash flow hedges, net of taxes — ( 0.2 ) ( 1.0 )

Foreign currency translation gain, net of taxes — — 0.6

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Net actuarial gain (loss) ( 1.9 ) 4.7 ( 8.9 )

Curtailment and settlement gains — — 2.7

Reclassified to other expense (income), net:

Gain recognized due to curtailment and settlement — — ( 2.7 )

Amortization of net actuarial loss — — 0.1

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Total other comprehensive income (loss) ( 1.4 ) 3.4 ( 7.3 )

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

Comprehensive income (loss) $ 289.1 $ ( 91.9 ) $ ( 581.1 )

Comprehensive income attributable to non-controlling interest 33.4 33.0 37.6

Comprehensive (loss) income attributable to Delek $ ( 200.1 ) $ ( 615.3 ) $ 282.1

Comprehensive income (loss) attributable to Delek $ 255.7 $ ( 124.9 ) $ ( 618.7 )

(1) Adjusted to reflect the retrospective change in accounting policy from LIFO to FIFO for certain inventories.

See Note 8 for further discussion.

See accompanying notes to the consolidated financial statements

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(In millions, except share and per share data)

Common Stock Additional Paid-in Capital Accumulated Other Comprehensive Income (Loss) 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 As Adjusted (1)

Treasury Shares Non-Controlling Interest in Subsidiaries Total Stockholders' Equity As Adjusted (1)

Shares Amount Shares Amount

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

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

Cumulative effect of change in accounting method for certain inventory valuation from LIFO to FIFO, net — — — — ( 5.3 ) — — — ( 5.3 )

Net income — — — — ( 611.4 ) — — 37.6 ( 573.8 )

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

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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 )

Repurchases of non-controlling interests — — ( 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:

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(In millions, except share and per share data)

Common Stock Additional Paid-in Capital Accumulated Other Comprehensive Income (Loss) 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 As Adjusted (1)

Treasury Stock Non-Controlling Interest in Subsidiaries Total Stockholders' Equity As Adjusted (1)

Shares Amount Shares Amount

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91,356,868 $ 0.9 $ 1,185.1 $ ( 7.2 ) $ 513.3 ( 17,575,527 ) $ ( 694.1 ) $ 118.4 $ 1,116.4

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

Net (loss) income — — — — ( 128.3 ) — — 33.0 ( 95.3 )

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

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

Distribution to non-controlling interest — — — — — — — ( 32.4 ) ( 32.4 )

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 )

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

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:

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Balance at December 31, 2021;

As Adjusted (1)

91,772,080 $ 0.9 $ 1,206.5 $ ( 3.8 ) $ 384.7 ( 17,575,527 ) $ ( 694.1 ) $ 119.8 $ 1,014.0

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

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

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

Net income — — — — 257.1 — — 33.4 290.5

Other comprehensive loss related to postretirement benefit plans, net — — — ( 1.4 ) — — — — ( 1.4 )

Common stock dividends ($ 0.61 per share)

— — — — ( 42.8 ) — — — ( 42.8 )

Distributions to non-controlling interests — — — — — — — ( 36.0 ) ( 36.0 )

Equity-based compensation expense — — 28.6 — — — — 0.5 29.1

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

Sale of Delek Logistics common limited partner units, net — — 8.5 — — — — 5.1 13.6

Repurchase of common stock ( 4,261,185 ) — ( 56.9 ) — ( 72.7 ) — — — ( 129.6 )

Purchase of Delek common stock from IEP Energy Holding LLC ( 3,497,268 ) — ( 46.0 ) — ( 18.0 ) — — — ( 64.0 )

Taxes paid due to the net settlement of equity-based compensation — — ( 6.5 ) — — — — — ( 6.5 )

Exercise of equity-based awards 457,405 — — — — — — — —

Issuance of Delek Logistic common limited partner units, net — — — — — — — 3.1 3.1

Other 38,485 — ( 0.1 ) — ( 0.4 ) — — — ( 0.5 )

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84,509,517 $ 0.9 $ 1,134.1 $ ( 5.2 ) $ 507.9 ( 17,575,527 ) $ ( 694.1 ) $ 125.9 $ 1,069.5

(1) Adjusted to reflect the retrospective change in accounting policy from LIFO to FIFO for certain inventories.

See Note 8 for further discussion.

See accompanying notes to the consolidated financial statements

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Year Ended December 31,

2021 2020 2019

2022 As Adjusted (1)

As Adjusted (1)

Cash flows from operating activities:

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

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

Net income (loss) $ 290.5 $ ( 95.3 ) $ ( 573.8 )

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

Depreciation and amortization 287.0 264.6 267.6

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Accounts payable and other current liabilities 298.7 702.5 ( 480.3 )

Obligation under Supply and Offtake Agreements 139.8 ( 129.6 ) 115.1

Obligation under Inventory Intermediation Agreements 102.3 139.8 ( 129.6 )

Non-current assets and liabilities, net ( 10.0 ) ( 12.2 ) ( 16.8 )

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Cash flows from investing activities:

Acquisition of 3 Bear ( 625.6 ) — —

Equity method investment contributions ( 0.1 ) ( 1.7 ) ( 31.2 )

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Purchases of property, plant and equipment ( 311.4 ) ( 222.2 ) ( 269.4 )

Asset acquisitions — — ( 8.0 )

Purchase of intangible assets ( 1.0 ) ( 2.8 ) ( 19.9 )

Purchases of intangible assets ( 5.6 ) ( 1.0 ) ( 2.8 )

Proceeds from sale of property, plant and equipment 1.2 11.9 0.2

Proceeds from sale of retail stores — — 15.1

Proceeds from sale of non-operating refinery — — 39.9

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Repayments of product financing agreements ( 1,006.9 ) ( 877.6 ) ( 128.1 )

Proceeds from Inventory Intermediation Agreement 538.8 — —

Payments for termination of Supply & Offtake Obligation ( 586.9 ) — —

Taxes paid due to the net settlement of equity-based compensation ( 6.5 ) ( 4.2 ) ( 2.4 )

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Distribution to non-controlling interest ( 36.0 ) ( 32.4 ) ( 32.9 )

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

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

Proceeds from sale of Delek Logistics common limited partner units 16.4 2.1 —

Proceeds from issuance of Delek Logistic common limited partner units, net 3.1 — —

Purchase of Delek common stock from IEP Energy Holding LLC ( 64.0 ) — ( 2.1 )

Dividends paid ( 42.8 ) — ( 69.1 )

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Deferred financing costs paid ( 62.5 ) ( 6.2 ) ( 0.7 )

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 )

Net cash provided by (used in) financing activities 491.1 ( 124.0 ) 306.4

Net (decrease) increase in cash and cash equivalents ( 15.2 ) 69.0 ( 167.8 )

Cash and cash equivalents at the beginning of the period 856.5 787.5 955.3

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Non-cash financing activities:

Non-cash lease liability arising from recognition of right of use assets upon adoption of Accounting Standards Update ("ASU") 2016-02 $ — $ — $ 206.0

Non-cash lease liability arising from obtaining right-of-use assets during the period $ 28.6 $ 102.8 $ 58.1

(1) Adjusted to reflect the retrospective change in accounting policy from LIFO to FIFO for certain inventories.

See Note 8 for further discussion.

See accompanying notes to the consolidated financial statements

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("Alon") (and its subsidiaries).

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"), 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.

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

On June 1, 2022, DKL Delaware Gathering, LLC, a subsidiary of the Delek Logistics, acquired 100 % of the limited liability company interests in 3 Bear Delaware Holding – NM, LLC ("3 Bear") from 3 Bear Energy – New Mexico LLC, related to their crude oil and natural gas gathering, processing and transportation businesses, as well as water disposal and recycling operations, located in the Delaware Basin of New Mexico (the "3 Bear Acquisition").

See Note 3 - Acquisitions for additional information.

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

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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.

In the opinion of management, all adjustments necessary for a fair presentation of the financial condition and the results of operations have been included.

All adjustments are of a normal, recurring nature.

Reclassifications

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

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 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:

• The evaluation of indefinite-lived intangibles and goodwill for potential impairment during our annual assessment or where indicators exist, as defined by GAAP;

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

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

• The evaluation of derivatives and hedge accounting for counterparty risk and changes in forecasted transactions, as provided for under GAAP;

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

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

• The evaluation of commitments and contingencies, including changes in concentrations, as applicable;

• The evaluation of the impact of changing forecasts on our assessment of deferred tax asset valuation allowances and annual effective tax rates;

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

Segment Reporting

Delek is an integrated downstream energy business based in Brentwood, Tennessee, and has three primary lines of business:

petroleum refining;

the transportation, storage and wholesale distribution of crude oil, intermediate and refined products;

petroleum refining and crude oil operations;

the transportation, storage and wholesale distribution of crude oil, natural gas, intermediate and refined products and water disposal and recycling;

and convenience store retailing.

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Refining, Logistics and Retail.

Operations that are not specifically included in the reportable segments are included in Corporate, Other and Eliminations, which consists of the following:

Operations that are not specifically included in the reportable segments are included in Corporate, Other and Eliminations, which primarily consists of the following:

• our corporate activities;

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

• wholesale crude operations

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

• results and assets of discontinued operations;

• intercompany eliminations.

Decisions concerning the allocation of resources and assessment of operating performance are made based on this segmentation.

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.

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").

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.

The logistics segment owns and operates crude oil and refined products logistics and marketing assets.

The retail segment markets gasoline, diesel and other refined petroleum products, and convenience merchandise through a network of company-operated retail fuel and convenience stores.

During the fourth quarter 2022, we realigned our reportable segments for financial reporting purposes to reflect changes in the manner in which our chief operating decision maker ("CODM"), assesses financial information for decision-making purposes.

The change primarily represents reporting the operating results of wholesale crude operations within the refining segment.

Prior to this change, wholesale crude operations were reported as part of corporate, other and eliminations.

While this reporting change did not change our consolidated results, segment data for previous years has been restated and is consistent with the current year presentation throughout the financial statements and the accompanying notes.

The CODM evaluates performance based upon EBITDA.

We define EBITDA for any period as net income (loss) to add back interest expense, income tax expense (benefit), depreciation and amortization.

Segment reporting is more fully discussed in Note 4.

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Our allowance for doubtful accounts is reflected as a reduction of accounts receivable in the consolidated balance sheets.

One customer accounted for more than 10% of our consolidated accounts receivable balance as of December 31, 2021 and 2020.

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 FIFO basis or net realizable value.

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.

Two customers accounted for more than 10% of our consolidated accounts receivable balance as of December 31, 2022 and one customer as of December 31, 2021.

One customer accounted for $ 3.9 billion of net sales which was more than 10% of consolidated net sales for the year ended December 31, 2022 and was recognized in the Refining segment while no customers exceeded 10% for the years ended December 31, 2021 or 2020, respectively.

Change in Accounting Principle

As of January 1, 2022, we changed our method for accounting for inventory held at the Tyler, Texas refinery ("the Tyler refinery") to the first-in, first-out ("FIFO") costing method from the last-in, first-out ("LIFO") costing method, which conforms the Company’s refining inventory to a single method of accounting.

Total inventories accounted for using LIFO, prior to the accounting method change, comprised 27.1 % of the Company’s total inventories as of December 31, 2020.

This change in accounting method is preferable because it provides better consistency across our refineries and improves transparency, and results in recognition that better reflects the physical flow of inventory and more accurately reflects the current value of inventory.

The effects of this change have been retrospectively applied to all periods presented with a cumulative effect adjustment reflected in the January 1, 2020 beginning retained earnings.

See Note 8 - Inventory for additional information.

Crude oil, work-in-process, refined products, blendstocks and asphalt inventory for all of our operations, excluding merchandise inventory in our Retail segment, are stated at the lower of cost determined using the FIFO basis or net realizable value.

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.

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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 basis 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 5 to 35 years.

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

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

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

In accordance with Accounting Standards Updates ("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.

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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.

We may also elect to perform a qualitative impairment assessment of goodwill balances.

The qualitative assessment permits companies to assess whether it is more likely than not (i.e., a likelihood of greater than 50%) that the fair value of a reporting unit is less than its carrying amount.

If a company concludes that, based on the qualitative assessment, it is more likely than not that the fair value of a reporting unit is less than its carrying amount, the company is required to perform the quantitative impairment test.

Alternatively, if a company concludes based on the qualitative assessment that it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, it has completed its goodwill impairment test and does not need to perform the quantitative impairment test.

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

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Details of remaining goodwill balances by segment are included in Note 16.

Business Combinations

We recognize and measure the assets acquired and liabilities assumed in a business combination based on their estimated fair values at the acquisition date in accordance with the provisions of ASC 805.

Any excess or surplus of the purchase consideration when compared to the fair value of the net tangible assets acquired, if any, is recorded as goodwill or gain from a bargain purchase.

The fair value of assets and liabilities as of the acquisition date are often estimated using a combination of approaches, including the income approach, which requires us to project future cash flows and apply an appropriate discount rate;

the cost approach, which requires estimates of replacement costs and depreciation and obsolescence estimates;

and the market approach which uses market data and adjusts for entity-specific differences.

We use all available information to make these fair value determinations and engage third-party consultants for valuation assistance.

The estimates used in determining fair values are based on assumptions believed to be reasonable, but which are inherently uncertain.

Accordingly, actual results may differ materially from the projected results used to determine fair value.

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, Derivatives and Hedging ("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.

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

ASC 820 applies to our commodity and other derivatives that are measured at fair value on a recurring basis, and to our supply and offtake agreements and environmental credit obligations that are accounted for under the fair value election.

ASC 820 applies to our commodity and other derivatives that are measured at fair value on a recurring basis, and to our inventory intermediation agreement and environmental credit obligations that are accounted for under the fair value election.

ASC 820 also applies to the measurement of our equity method investment, goodwill and long-lived tangible and intangible assets when determining whether or not an impairment exists, when circumstances require evaluation.

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Nonperformance risk is not considered material to our financial statements as of December 31, 2022 and 2021.

Inventory Supply and Offtake Obligations

Delek has Supply and Offtake Agreements (the "Supply and Offtake Agreements" or the "J.

Inventory Intermediation Obligations

As of December 30, 2022, Delek has an inventory intermediation agreement ("Inventory Intermediation Agreement") with Citigroup Energy Inc.

("Citi") in connection with DK Trading & Supply, LLC (“DKTS”), an indirect subsidiary of Delek, which provide a financing mechanism on contractual baseline inventory volumes and also revolving over and short volumes.

We account for the market-indexed obligations under our Intermediation Agreements as product (in this case, crude oil and refined product inventory) financing arrangements under the fair value option pursuant to ASC 825 and the fair value guidance provided by ASC 820, and recognize all changes in the fair value in cost of materials and other in the accompanying statements of income.

Prior to December 30, 2022, Delek had Supply and Offtake Agreements (the "Supply and Offtake Agreements" or the "J.

Aron Agreements") with J.

Aron & Company ("J.

Aron") in connection with its El Dorado, Big Spring and Krotz Springs refineries, which provide a financing mechanism on contractual baseline inventory volumes and also revolving over and short volumes.

We account for the market-indexed obligations under our Supply and Offtake Agreements as product (in this case, crude oil and refined product inventory) financing arrangements under the fair value option pursuant to ASC 825 and the fair value guidance provided by ASC 820, and recognize all changes in the fair value in cost of materials and other in the accompanying statements of income.

During periods where we had fixed price components that were subject to interest rate risk and not market price risk, the changes in fair value of those components was recognized in interest expense.

By electing the fair value option, the changes in fair value provide a natural economic hedge to our FIFO cost of sales recognition without having to bifurcate any embedded derivatives and consider the complex hedge accounting rules.

Aron") with similar terms.

See Notes 9 and 12 for further discussion.

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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 any of our refineries is unable to blend or produce renewable fuels 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.

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, 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.

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.

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We maintain an accrual for these costs based on claims filed and an estimate of claims incurred but not reported.

Differences between actual settlements and recorded accruals are recorded in the period identified.

Differences between actual settlements and recorded accruals are recorded in the period such differences are identified.

Environmental Expenditures

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Payment terms require customers to pay shortly after delivery and do not contain significant financing components.

In the first quarter of 2020, we began selling crude barrels through supply agreements predominantly in the gulf coast region.

The transaction price for these products is based on contractual rates.

Revenue is recognized based on consideration specified in such agreements when performance obligations are satisfied by transferring control of crude oil to the customer.

The transaction prices of our contracts with customers are either fixed or variable, with variable pricing generally based on various market indices.

For our contracts that include variable consideration, we utilize the variable consideration allocation exception, whereby the variable consideration is only allocated to the performance obligations that are satisfied during the period.

Refer to Note 4 for disclosure of our revenue disaggregated by segment, as well as a description of our reportable segment income.

Revenues for products sold are generally recognized upon delivery of the product, which is when title and control of the product is transferred.

Transaction prices for these products are typically at market rates for the product at the time of delivery.

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.

Service revenues are recognized as crude oil, intermediates, refined products, natural gas and water are shipped through, delivered by or stored in our pipelines, trucks, terminals and storage facility assets, as applicable, and as wastewater is recycled and disposed of.

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").

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Service revenue and related costs are recorded at gross amounts or net amounts, as appropriate, in accordance with the principal versus agent provisions in ASC 606.

In the first quarter of 2020, we began selling crude barrels through supply agreements predominantly in the gulf coast region.

The transaction price for these products is based on contractual rates.

Revenue is recognized based on consideration specified in such agreements when performance obligations are satisfied by transferring control of crude oil to the customer.

The transaction prices of our contracts with customers are either fixed or variable, with variable pricing generally based on various market indices.

Refer to Note 3 for disclosure of our revenue disaggregated by segment, as well as a description of our reportable segment income.

Credit Losses

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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.

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Interest Expense

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 hedge settlements, if any, but excludes capitalized interest.

Interest expense includes interest expense on debt, letters of credit, financing fees (including certain Citi fees associated with our Intermediation 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.

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

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.

In August 2022, the Inflation Reduction Act of 2022 (the “Act”) was signed into law.

One of the aspects of the Act was the introduction of a 1% excise tax on certain corporate stock buybacks.

More specifically, the Act would impose a nondeductible 1% excise tax on the fair market value of certain stock that is “repurchased” during the taxable year by a publicly traded U.S.

corporation or acquired by certain of its subsidiaries.

The taxable amount is reduced by the fair market value of certain issuances of stock throughout the year.

The Act also imposes a 15% corporate minimum tax and extends and expands tax incentives for clean energy.

The Company does not expect any material impacts as a result of The Act.

Equity-Based Compensation

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ASC 718 requires the use of a valuation model to calculate the fair value of stock-based awards on the date of grant.

Delek uses the Black-Scholes-Merton option-pricing model to determine the fair value of stock option and stock appreciation right (SAR) awards.

Delek uses the Black-Scholes-Merton option-pricing model to determine the fair value of stock option and stock appreciation right ("SARs") awards.

Restricted stock units ("RSUs") are valued based on the fair market value of the underlying stock on the date of grant.

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Postretirement Benefits

In connection with the Delek/Alon Merger, we assumed defined benefit pension and postretirement medical plans for certain former Alon employees.

In connection with the acquisition of the outstanding common stock of Alon on July 1, 2017 (the "Delek/Alon Merger"), we assumed defined benefit pension and postretirement medical plans for certain former Alon employees.

We recognize the underfunded status of our defined benefit pension and postretirement medical plans as a liability.

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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.

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New Accounting Pronouncements Adopted During 2022

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 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

ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity's Own Equity (Subtopic 815-40):

Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity

In August 2020, the FASB issued ASU 2020-06, which is intended to simplify the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts in an entity's own equity.

The guidance allows for either full retrospective adoption or modified retrospective adoption.

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

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

In August 2020, the Financial Accounting Standards Board ("FASB") ASU 2020-06, which is intended to simplify the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts in an entity's own equity.

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

We adopted this guidance on January 1, 2022 and the adoption did not have a material impact on our business, financial condition or results of operations.

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

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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.

We adopted this guidance during 2022 and the adoption did not have a material impact on our business, financial condition or results of operations.

3 Bear Delaware Holding - NM, LLC Acquisition

Delek Logistics completed the 3 Bear Acquisition on June 1, 2022 (the "Acquisition Date"), in which it acquired crude oil and natural gas gathering, processing and transportation and storage operations, as well as water disposal and recycling operations, located in the Delaware Basin of New Mexico.

The purchase price for 3 Bear was $ 628.3 million.

The 3 Bear Acquisition was financed through a combination of cash on hand and borrowings under the Delek Logistics' Credit Facility (as defined in Note 10 of these consolidated financial statements).

For the year ended December 31, 2022, we incurred $ 10.6 million in incremental direct acquisition and integration costs that principally consist of legal, advisory and other professional fees.

Such costs are included in general and administrative expenses in the accompanying consolidated statements of income for these periods.

Our consolidated financial and operating results reflect the 3 Bear Acquisition operations beginning June 1, 2022.

Our results of operations included revenue and net income of $ 123.7 million and $ 14.2 million, respectively, for the year ended December 31, 2022.

The 3 Bear Acquisition was accounted for using the acquisition method of accounting, whereby the purchase price was allocated to the tangible and intangible assets acquired and the liabilities assumed based on their fair values.

The excess of the consideration paid over the fair value of the net assets acquired was recorded as goodwill.

Determination of Purchase Price

The table below represents the purchase price (in millions):

Base purchase price:

closing net working capital (as defined in the 3 Bear Purchase Agreement)

closing indebtedness (as defined in the 3 Bear Purchase Agreement)

Cash paid for the adjusted purchase price 547.7

Cash paid to payoff 3 Bear credit agreement (as defined in the 3 Bear Purchase Agreement) 80.6

Purchase price $ 628.3

Purchase Price Allocation

The following table summarizes the preliminary fair values of assets acquired and liabilities assumed in the 3 Bear Acquisition as of June 1, 2022 (in millions):

Assets acquired:

Cash and cash equivalents $ 2.7

Accounts receivables, net 28.9

Inventories 1.8

Other current assets 1.0

Property, plant and equipment 382.8

Operating lease right-of-use assets 7.4

Goodwill 14.8

Other intangibles, net (1)

Other non-current assets 0.5

Total assets acquired 663.4

Liabilities assumed:

Accounts payable 8.0

Accrued expenses and other current liabilities 22.4

Current portion of operating lease liabilities 1.0

Asset retirement obligations 2.3

Operating lease liabilities, net of current portion 1.4

Total liabilities assumed 35.1

Fair value of net assets acquired $ 628.3

(1) The acquired intangible assets amount includes the following identified intangibles:

• Customer relationships intangible that is subject to amortization with a preliminary fair value of $ 210.0 million, which will be amortized over an 11.6 -year useful life.

• Rights-of-way intangible that is subject to amortization with a preliminary fair value of $ 13.5 million, which will be amortized over the weighted-average useful life of 25.4 years.

These fair value estimates are preliminary and therefore, the final fair value of assets acquired and liabilities assumed and the resulting effect on our financial position may change once all necessary information has become available and we finalize our valuations.

To the extent possible, estimates have been considered and recorded, as appropriate, for the items above based on the information available as of December 31, 2022.

We will continue to evaluate these items until they are satisfactorily resolved and adjust our purchase price allocation accordingly, within the allowable measurement period (not to exceed one year from the date of acquisition), as defined by Accounting Standards Codification ("ASC") 805, Business Combinations ("ASC 805").

The fair value of property, plant and equipment was based on the combination of the cost and market approaches.

Key assumptions in the cost approach include determining the replacement cost by evaluating recently published data and adjusting replacement cost for physical deterioration, functional and economic obsolescence.

We used the market approach to measure the value of certain assets through an analysis of recent sales or offerings of comparable properties.

The fair value of customer relationships was based on the income approach.

Key assumptions in the income approach include projected revenue attributable to customer relationships, operating margins and discount rates.

The fair values discussed above were based on significant inputs that are not observable in the market and, therefore, represent Level 3 measurements.

The fair values of all other current assets and liabilities were equivalent to their carrying values due to their short-term nature.

The goodwill recognized in the 3 Bear Acquisition is primarily attributable to enhancing our third-party revenues, further diversification of our customer and product mix, expanding our footprint into the Delaware basin and bolstering our Environmental, Social and Governance ("ESG") optionality through furthering carbon capture opportunities and greenhouse gas reduction projects currently underway.

This goodwill is deductible for income tax purposes.

Goodwill related to the 3 Bear Acquisition is included in the logistics segment.

Unaudited Pro Forma Financial Information

The following table summarizes the unaudited pro forma financial information of the Company assuming the 3 Bear Acquisition had occurred on January 1, 2021.

The unaudited pro forma financial information has been adjusted to give effect to certain pro forma adjustments that are directly related to the 3 Bear Acquisition based on available information and certain assumptions that management believes are factually supportable.

The most significant pro forma adjustments relate to (i) incremental interest expense and amortization of deferred financing costs associated with revolving credit facility borrowings incurred in connection with the 3 Bear Acquisition, (ii) incremental depreciation resulting from the estimated fair values of acquired property, plant and equipment, (iii) incremental amortization resulting from the estimated fair values of acquired customer relationships intangible (iv) accounting policy alignment, and (v) transaction costs.

The unaudited pro forma financial information excludes any expected cost savings or other synergies as a result of the 3 Bear Acquisition.

The unaudited pro forma financial information is not necessarily indicative of the results of operations that would have been achieved had the 3 Bear Acquisition been effective as of the dates presented, nor is it indicative of future operating results of the combined company.

Actual results may differ significantly from the unaudited pro forma financial information.

Year Ended December 31,

(in millions, except per share data) 2022 2021

Net sales $ 20,344.4 $ 10,806.4

Net income (loss) attributable to Delek $ 255.6 $ ( 162.8 )

Net income (loss) per share:

Basic income (loss) per share $ 3.61 $ ( 2.20 )

Diluted income (loss) per share $ 3.57 $ ( 2.20 )

We aggregate our operating segments into three reportable segments:

Refining, Logistics and Retail.

Operations that are not specifically included in the reportable segments are included in Corporate, Other and Eliminations, which consists of the following:

Operations that are not specifically included in the reportable segments are included in Corporate, Other and Eliminations, which primarily consists of the following:

• our corporate activities;

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

• wholesale crude operations;

• Alon's asphalt terminal operations;

• our discontinued Paramount and Long Beach, California refinery and California renewable fuels facility operations (acquired as part of the Delek/Alon Merger) (see Note 7 for further discussion);

• intercompany eliminations.

Decisions concerning the allocation of resources and assessment of operating performance are made based on this segmentation.

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

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.

During the fourth quarter 2022, we realigned our reportable segments for financial reporting purposes to reflect changes in the manner in which our chief operating decision maker, or CODM, assesses financial information for decision-making purposes.

The change primarily represents reporting the operating results of wholesale crude operations within the refining segment.

Prior to this change, wholesale crude operations were reported as part of corporate, other and eliminations.

The accounting policies of the reporting segments are the same as those described in Note 2, except that the disaggregated financial results for the reporting segments have been prepared using a management approach, which is consistent with the basis and manner in which management internally disaggregates financial information for the purposes of assisting internal operating decisions.

The CODM evaluates performance based upon EBITDA.

We define EBITDA for any period as net income (loss) to add back interest expense, income tax expense (benefit), depreciation and amortization.

Through September 30, 2022, the CODM believed that contribution margin was a meaningful measure of performance, and it was used by the CODM to analyze the Company and stand-alone operating segment performance.

During the fourth quarter 2022, the CODM determined that EBITDA is the key performance measure for planning and forecasting purposes and discontinued the use of contribution margin as a measure of performance.

Segment EBITDA should not be considered a substitute for results prepared in accordance with U.S.

GAAP and should not be considered alternatives to net income (loss), which is the most directly comparable financial measure to EBITDA that is in accordance with U.S.

Segment EBITDA, as determined and measured by us, should also not be compared to similarly titled measures reported by other companies.

Assets by segment are not a measure used to assess the performance of the Company by the CODM and thus are not disclosed.

Refining Segment

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The refining segment has a combined nameplate capacity of 302,000 barrels per day ("bpd") as of December 31, 2022, 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.

• Tyler, Texas refinery;

• El Dorado, Arkansas refinery (the "El Dorado refinery");

• Big Spring, Texas refinery (the "Big Spring refinery");

• Krotz Springs, Louisiana refinery (the "Krotz Springs refinery").

As of December 31, 2022, 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.

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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 2019.

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

In addition, the refining segment also includes our wholesale crude operations.

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.

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Logistics Segment

Our logistics segment owns and operates crude oil and refined products logistics and marketing assets.

The logistics segment generates revenue by charging fees for gathering, transporting and storing crude oil and for marketing, distributing, transporting and storing intermediate and refined products in select regions of the southeastern United States and West Texas for our refining segment and third parties, and sales of wholesale products in the West Texas market.

Our logistics segment owns and operates crude oil, refined products and natural gas logistics and marketing assets as well as water disposal and recycling assets.

The logistics segment generates revenue by charging fees for gathering, transporting and storing crude oil and natural gas, marketing, distributing, transporting and storing intermediate and refined products and disposing and recycling water in select regions of the southeastern United States, the Delaware Basin in New Mexico and West Texas for our refining segment and third parties, and sales of wholesale products in the West Texas market.

The operating results and assets acquired in the 3 Bear Acquisition have been included in the logistics segment beginning on June 1, 2022.

Retail Segment

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

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 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

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Business Segment Operating Performance

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

The following is a summary of business segment operating performance as measured by EBITDA for the year ended indicated (in millions):

Year Ended December 31, 2022

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Inter-segment fees and revenues 1,032.1 479.4 — ( 1,511.5 ) —

Operating costs and expenses:

Cost of materials and other 9,439.5 384.4 635.6 ( 719.9 ) 9,739.6

Operating expenses (excluding depreciation and amortization presented below) 434.1 60.8 89.8 10.9 595.6

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 )

Total revenues $ 19,763.0 $ 1,036.4 $ 956.9 $ ( 1,510.5 ) $ 20,245.8

Segment EBITDA attributable to Delek $ 719.1 $ 304.8 $ 44.1 $ ( 264.7 ) $ 803.3

Depreciation and amortization ( 205.4 ) ( 63.0 ) ( 12.0 ) ( 6.6 ) ( 287.0 )

General and administrative expenses 229.4

Other operating income, net ( 50.6 )

Operating loss $ ( 130.4 )

Interest income (expense), net ( 4.1 ) ( 82.3 ) 0.5 ( 109.4 ) ( 195.3 )

Income tax expense ( 63.9 )

Net income attributable to Delek $ 257.1

Capital spending (excluding business combinations) $ 138.0 $ 130.7 $ 34.2 $ 40.2 $ 343.1

Year Ended December 31, 2021

(In millions) Refining Logistics Retail Corporate,

(In millions) Refining (1)

Logistics Retail Corporate,

Other and Eliminations Consolidated (1)

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Inter-segment fees and revenues 702.9 418.8 — ( 1,121.7 ) —

Operating costs and expenses:

Cost of materials and other 5,745.5 269.1 523.6 303.0 6,841.2

Operating expenses (excluding depreciation and amortization presented below) 402.7 56.2 90.5 10.4 559.8

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 )

Total revenues $ 10,267.8 $ 700.9 $ 797.4 $ ( 1,117.9 ) $ 10,648.2

Segment EBITDA attributable to Delek $ 69.2 $ 258.0 $ 51.1 $ ( 147.3 ) $ 231.0

Depreciation and amortization ( 198.7 ) ( 42.8 ) ( 12.7 ) ( 10.4 ) ( 264.6 )

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

General and administrative expenses 248.3

Other operating income, net ( 13.1 )

Operating loss $ ( 728.0 )

Interest income (expense), net 17.4 ( 50.2 ) — ( 103.9 ) ( 136.7 )

Income tax benefit 42.0

Net loss attributable to Delek $ ( 128.3 )

Capital spending (excluding business combinations) $ 172.4 $ 27.5 $ 5.1 $ 22.1 $ 227.1

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Inter-segment fees and revenues 437.3 379.8 — ( 817.1 ) —

Operating costs and expenses:

Cost of materials and other 7,528.2 336.5 684.7 ( 892.2 ) 7,657.2

Operating expenses (excluding depreciation and amortization presented below) 492.4 74.1 94.8 20.9 682.2

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 )

Total revenues $ 6,855.3 $ 563.4 $ 681.7 $ ( 798.6 ) $ 7,301.8

Segment EBITDA attributable to Delek $ ( 549.3 ) $ 238.1 $ 47.0 $ ( 147.5 ) $ ( 411.7 )

Depreciation and amortization ( 198.3 ) ( 35.7 ) ( 13.2 ) ( 20.4 ) ( 267.6 )

General and administrative expenses 274.7

Other operating income, net ( 2.5 )

Operating income $ 492.3

Interest income (expense), net 34.9 ( 42.9 ) — ( 117.7 ) ( 125.7 )

Income tax benefit 193.6

Net loss attributable to Delek $ ( 611.4 )

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

(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.

Other Segment Information

Total assets by segment were as follows as of:

December 31, 2021

Refining Logistics Retail Corporate,

Other and Eliminations Consolidated

Total assets $ 6,434.3 $ 935.1 $ 247.9 $ ( 889.3 ) $ 6,728.0

Inter-segment notes receivable ( 1,026.8 ) — — 1,026.8 —

Inter-segment right of use lease assets ( 269.7 ) — — 269.7 —

Total assets, excluding inter-segment notes receivable and right of use assets $ 5,137.8 $ 935.1 $ 247.9 $ 407.2 $ 6,728.0

December 31, 2020

Refining Logistics Retail Corporate,

Other and Eliminations Consolidated

Total assets $ 5,848.9 $ 956.5 $ 258.9 $ ( 930.2 ) $ 6,134.1

Inter-segment notes receivable ( 1,285.8 ) — — 1,285.8 —

Inter-segment right of use lease assets ( 370.6 ) — — 370.6 —

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 Income (Loss) Per Share

(1) Adjusted to reflect the retrospective change in accounting policy from LIFO to FIFO for certain inventories.

See Note 8 for further discussion.

Earnings (Loss) Per Share

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

Diluted earnings per share is computed by dividing net income (loss), as adjusted for changes to income that would result from the assumed settlement of the dilutive equity instruments included in diluted weighted average common shares outstanding, by the diluted weighted average common shares outstanding.

For all years presented, we have outstanding various equity-based compensation awards that are considered in our diluted EPS calculation (when to do so would not be anti-dilutive), and is inclusive of awards disclosed in Note 20 to these consolidated financial statements.

For all periods presented, we have outstanding various equity-based compensation awards that are considered in our diluted EPS calculation (when to do so would be dilutive), and is inclusive of awards disclosed in Note 21 to these consolidated financial statements.

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.

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Numerator for EPS - continuing operations

(Loss) income from continuing operations $ ( 170.5 ) $ ( 570.4 ) $ 331.0

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

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

Numerator for EPS - discontinued operations

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

Net income (loss) $ 290.5 $ ( 95.3 ) $ ( 573.8 )

Income attributed to non-controlling interest 33.4 33.0 37.6

Numerator for basic and diluted EPS attributable to Delek $ 257.1 $ ( 128.3 ) $ ( 611.4 )

Weighted average common shares outstanding (denominator for basic EPS) 70,789,458 73,984,104 73,598,389

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Weighted average common shares outstanding, assuming dilution (denominator for diluted EPS) 71,516,361 73,984,104 73,598,389

Basic (loss) income per share:

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

Income from discontinued operations — — 0.07

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

Diluted (loss) income per share:

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

Income from discontinued operations — — 0.07

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

Basic income (loss) per share $ 3.63 $ ( 1.73 ) $ ( 8.31 )

Diluted income (loss) income per share $ 3.59 $ ( 1.73 ) $ ( 8.31 )

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

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Total antidilutive stock-based compensation 2,299,660 3,587,493 4,082,944

(1) Adjusted to reflect the retrospective change in accounting policy from LIFO to FIFO for certain inventories.

See Note 8 for further discussion.

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.

Delek Logistics is a publicly traded limited partnership formed by Delek in 2012 that owns and operates crude oil, refined products and natural gas logistics and marketing assets as well as water disposal and recycling assets.

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

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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 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 November 14, 2022, Delek Logistics entered into an Equity Distribution Agreement with RBC Capital Markets, LLC (the “Manager”) under which we may issue and sell, from time to time, to or through the Manager, as sales agent and/or principal, as applicable, common units representing limited partner interests, having an aggregate offering price of up to $ 100.0 million.

The Equity Distribution Agreement provides us the right, but not the obligation, to sell common units in the future, at prices we deem appropriate.

The net proceeds from any sales under this agreement will be used for general partnership purposes.

For the year ended December 31, 2022, we sold 59,192 common units under the Equity Distribution Agreement for net proceeds of $ 3.1 million.

Underwriting discounts were immaterial.

On June 1, 2022, DKL Delaware Gathering, LLC, a subsidiary of Delek Logistics, completed the 3 Bear Acquisition related to crude oil and natural gas gathering, processing and transportation businesses, as well as water disposal and recycling operations, in the Delaware Basin in New Mexico.

The purchase price was $ 628.3 million.

See Note 3 - Acquisitions for additional information.

On April 14, 2022, Delek Logistics filed a shelf registration statement with the SEC registering, which was declared effective on April 29th, for the potential sale, from time to time by Delek Logistics, of up to $ 200.0 million of common limited partner units of Delek Logistics.

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.

For the years ended December 31, 2022 and 2021, we sold 385,522 and 49,068 units, respectively, for gross proceeds of $ 16.4 million ($ 13.6 million, net of taxes) and $ 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.

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

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

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

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

No units were sold for the year ended December 31, 2022.

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The Delek Logistics consolidated balance sheets are presented below (in millions):

As of December 31, 2022

As of December 31, 2021

Cash and cash equivalents $ 8.0 $ 4.3

Accounts receivable 53.3 15.4

Accounts receivable from related parties — 5.9

Inventory 1.5 2.4

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Accounts payable to related parties 6.1 64.4

Current portion of long-term debt 15.0 —

Current portion of operating lease liabilities 8.0 6.8

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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 4 - 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 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.

Effective March 31, 2020, Delek Logistics, through its wholly-owned subsidiary DKL Permian Gathering, LLC, acquired the Midland Gathering System (previously referred to as the Permian 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 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.

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

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

The cash component of this dropdown was financed with borrowings on the DKL Credit Facility (as defined in Note 10).

The cash component of this dropdown was financed with borrowings on the Delek Logistics Credit Facility (as defined in Note 10).

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

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Wink to Webster Pipeline

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

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

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

Pursuant to the LLCA, Delek Energy will be required to contribute its percentage interest of the applicable construction costs (including certain costs previously incurred by WWP).

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").

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

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

Accordingly, distributions received from WWP through the WWP Project Financing JV will first be applied in service of the related project financing debt, with excess distributions being made to the members of the WWP Project Financing JV as provided for in the W2W Holdings LLC Agreement and as allowed under the project financing debt.

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

On June 2, 2022, the WWP Project Financing JV refinanced its project finance debt using the proceeds from a $ 535.0 million senior secured notes issuance due January 31, 2032.

In connection with this notes issuance, on June 2, 2022 the WWP Project Financing JV also entered into a senior secured credit agreement that provides for revolving loan commitments in an amount of up to $ 75.0 million and the issuance of letters of credit in an amount of up to $ 44.0 million.

The maturity date of the revolver and letter credit commitments is June 2, 2027.

Distributions received from WWP through the WWP Project Financing JV will first be applied in service of its debt, with excess distributions being made to the members of the WWP Project Financing JV as provided for in the W2W Holdings LLC Agreement and as allowed for under its debt agreements.

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

On October 13, 2022, we received a $ 7.9 million excess distribution in accordance with financing arrangements and the W2W Holdings LLC Agreement.

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

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As of December 31, 2022, 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.

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 Midland 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.

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As of December 31, 2022 and 2021, Delek's investment balance in WWP Project Financing Joint Venture totaled $ 49.0 million and $ 49.3 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 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.

In addition to the investment, we recognized income of $ 7.6 million and a loss of $ 17.7 million for the years ended December 31, 2022 and 2021, respectively.

Delek Logistics Investments

In May 2019, Delek Logistics, through its wholly owned indirect subsidiary DKL Pipeline, LLC (“DKL Pipeline”), entered into a Contribution and Subscription Agreement (the “Contribution Agreement”) with Plains Pipeline, L.P.

(“Plains”) and Red River Pipeline Company LLC (“Red River”).

Pursuant to the Contribution Agreement, DKL Pipeline contributed $ 124.7 million, substantially all of which was financed under the Delek Logistics Credit Facility (as defined in Note 10), to Red River in exchange for a 33 % membership interest in Red River and DKL Pipeline’s admission as a member of Red River ("Red River Pipeline Joint Venture").

Red River owns a 16-inch crude oil pipeline running from Cushing, Oklahoma to Longview, Texas.

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 and during 2020 made additional capital contributions totaling $ 12.2 million based on capital calls received.

Delek Logistics has a 33 % membership interest in Red River Pipeline Company LLC (“Red River”), which owns a 16 -inch crude oil pipeline running from Cushing, Oklahoma to Longview, Texas.

As of December 31, 2022 and 2021, Delek's investment balance in Red River totaled $ 149.6 million and $ 144.0 million, respectively.

We recognized income on the investment totaling $ 14.5 million and $ 8.9 million for the years ended December 31, 2021 and 2020, respectively.

We made no capital contributions during the year ended December 31, 2022 and made $ 1.4 million in capital contributions during the year ended December 31, 2021 based on capital calls.

We recognized income on the investment totaling $ 20.5 million and $ 14.5 million for the year ended December 31, 2022 and 2021, respectively.

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

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Other Investments

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.

We recognized income on this investment totaling $ 10.7 million and $ 15.4 million for the years ended December 31, 2021 and 2020, respectively.

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

Delek Renewables, LLC, a wholly-owned subsidiary of Delek, has a 50 % interest in a joint venture that owns, operates and maintains a terminal consisting of an ethanol unit train facility with an ethanol tank in North Little Rock, Arkansas.

As of December 31, 2021 and 2020, Delek Renewables, LLC's investment balance in this joint venture was $ 3.2 million and $ 4.0 million, respectively, and was accounted for using the equity method.

We recognized nominal income on this investment for the both years ended December 31, 2021 and 2020.

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

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 ("California Discontinued Entities").

Such operations were designated and reported as discontinued operations.

Sale of Paramount Refinery Assets and Altair

On March 16, 2018, Delek sold to World Energy, LLC ("World Energy") (i) all of Delek’s membership interests in AltAir (ii) certain refining assets and other related assets located in Paramount, California and (iii) certain associated tank farm and pipeline assets and other related assets located in California.

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.

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.

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 an additional gain on sale of discontinued operations of $ 1.9 million.

Operating Results of Discontinued Operations

The operating results, net of tax, from discontinued operations associated with the California Discontinued Entities are presented separately in Delek’s consolidated statements of income and the notes to the consolidated financial statements have been adjusted to exclude the discontinued operations.

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 was subsequently reduced in 2019 by $ 6.6 million.

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

December 31, 2021 December 31, 2020

Refinery raw materials and supplies $ 446.4 $ 270.7

Refinery work in process 147.5 92.1

Refinery finished goods 544.3 327.1

Retail fuel 9.3 6.2

Retail merchandise 26.2 28.5

Logistics refined products 2.4 3.1

Total inventories $ 1,176.1 $ 727.7

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.

For the years ended December 31, 2021, 2020 and 2019, we recognized a net reduction (increase) in cost of materials and other in the accompanying consolidated statements of income related to the change in pre-tax inventory valuation of $ 22.3 million, $( 29.2 ) million and $ 52.3 million, respectively.

At December 31, 2021 and 2020, the excess of replacement cost compared to the carrying value (LIFO) of the Tyler refinery inventories was $ 68.4 million and $ 3.4 million, respectively.

Permanent Liquidations

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

Delek has Supply and Offtake Agreements with J.

In addition to our pipeline joint ventures, we also have a 50 % interest in a joint venture that owns asphalt terminals located in the southwestern region of the U.S., as well as a 50 % interest in a joint venture that owns, operates and maintains a terminal consisting of an ethanol unit train facility with an ethanol tank in Arkansas.

As of December 31, 2022 and December 31, 2021, Delek's investment balance in these joint ventures was $ 53.7 million and $ 44.8 million, respectively.

We recognized income on these investments totaling $ 18.5 million and $ 11.4 million for the years ended December 31, 2022 and 2021, respectively.

Both investments are accounted for using the equity method.

The investment in asphalt terminal operations is included as part of total assets in corporate, other and eliminations in our segment disclosure while the ethanol terminal operations is reflected in the refining segment.

Combined summarized financial information for our equity method investees on a 100% basis is shown below (in millions):

As of December 31, 2022 As of December 31, 2021

Current assets $ 116.5 $ 94.1

Non-current assets $ 1,333.2 $ 1,335.9

Current liabilities $ 16.0 $ 18.7

Non-current liabilities $ 553.9 $ 534.9

Years Ended December 31,

2022 2021 2020

Revenues $ 441.8 $ 258.5 $ 267.8

Gross profit $ 165.6 $ 76.7 $ 98.4

Operating income $ 147.4 $ 55.1 $ 80.1

Net income $ 130.3 $ 55.6 $ 81.2

Crude oil feedstocks, refined products, blendstocks and asphalt inventory for all of our operations, excluding merchandise inventory in our retail segment, are stated at the lower of cost determined using FIFO basis or net realizable value.

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.

Effective January 1, 2022, we changed our method for valuing the inventory held at the Tyler refinery to the FIFO inventory valuation method from the LIFO inventory valuation method.

Total inventories accounted for using LIFO, prior to the accounting method change, comprised 27.1 % of the Company’s total inventories as of December 31, 2020.

This change in accounting method is preferable because it provides better consistency across our refineries and improved transparency, and results in recognition that better reflects the physical flow of inventory and more accurately reflects the current value of inventory.

After this change, we no longer utilize the LIFO valuation method and the majority of our inventories are now valued using the FIFO cost method, with the remainder valued using the Retail method for the retail segment inventory.

The effects of this change have been retrospectively applied to all periods presented.

This change resulted in a decrease to retained earnings of $ 5.3 million as of January 1, 2020 in accordance with ASC 250, Accounting Changes and Error Corrections.

The following table presents the components of inventory for each period presented reflecting the accounting method change discussed above:

Titled Inventory Inventory Intermediation Agreement (2)

December 31, 2022

Feedstocks, raw materials and supplies $ 479.7 $ 163.8 $ 643.5

Refined products and blendstock 490.8 354.8 845.6

Merchandise inventory and other 29.4 — 29.4

Total $ 999.9 $ 518.6 $ 1,518.5

December 31, 2021 - As Adjusted (1)

Feedstocks, raw materials and supplies $ 358.1 $ 157.9 $ 516.0

Refined products and blendstock 389.6 328.9 718.5

Merchandise inventory and other 26.2 — 26.2

Total $ 773.9 $ 486.8 $ 1,260.7

(1) Adjusted to reflect the retrospective change in accounting policy from LIFO to FIFO for certain inventories, as described above.

(2) Refer to Note 9 - Inventory Intermediation Obligations for further information.

In addition, certain financial statement line items in our Consolidated Statement of Income for the years ended December 31, 2021 and 2020, our Consolidated Statement of Cash Flows for the years ended December 31, 2021 and 2020, and our Consolidated Balance Sheet as of December 31, 2021, were retrospectively adjusted as follows:

Year Ended December 31, 2021

(In millions) As Reported (using LIFO) Adjustment As Adjusted (using FIFO)

Consolidated Statements of Income

Cost of materials and other $ 9,739.6 $ ( 95.7 ) $ 9,643.9

Total cost of sales $ 10,481.2 $ ( 95.7 ) $ 10,385.5

Loss before income tax benefit $ ( 233.0 ) $ 95.7 $ ( 137.3 )

Income tax benefit $ ( 62.5 ) $ 20.5 $ ( 42.0 )

Net loss $ ( 170.5 ) $ 75.2 $ ( 95.3 )

Net loss attributable to Delek $ ( 203.5 ) $ 75.2 $ ( 128.3 )

Net loss per share attributable to Delek

Basic $ ( 2.75 ) $ 1.02 $ ( 1.73 )

Diluted $ ( 2.75 ) $ 1.02 $ ( 1.73 )

December 31, 2021

(In millions) As Reported (using LIFO) Adjustment As Adjusted (using FIFO)

Consolidated Balance Sheet

Inventories, net of inventory valuation reserves $ 1,176.1 $ 84.6 $ 1,260.7

Total Assets $ 6,728.0 $ 84.6 $ 6,812.6

Deferred tax liabilities

$ 196.4 $ 18.1 $ 214.5

Retained Earnings $ 318.2 $ 66.5 $ 384.7

Total liabilities and stockholders' equity $ 6,728.0 $ 84.6 $ 6,812.6

Year Ended December 31, 2021

(In millions) As Reported (using LIFO) Adjustment As Adjusted (using FIFO)

Consolidated Statements of Cash Flows

$ ( 170.5 ) $ 75.2 $ ( 95.3 )

Non-cash lower of cost or market/net realizable value adjustment

$ ( 22.3 ) $ 30.6 $ 8.3

Deferred income taxes $ ( 59.4 ) $ 20.5 $ ( 38.9 )

Inventories and other current assets

$ ( 342.3 ) $ ( 126.3 ) $ ( 468.6 )

Year Ended December 31, 2020

(In millions) As Reported (using LIFO) Adjustment As Adjusted (using FIFO)

Consolidated Statements of Income

Cost of materials and other $ 6,841.2 $ 4.3 $ 6,845.5

Total cost of sales $ 7,558.5 $ 4.3 $ 7,562.8

Loss before income tax benefit $ ( 763.1 ) $ ( 4.3 ) $ ( 767.4 )

Income tax benefit $ ( 192.7 ) $ ( 0.9 ) $ ( 193.6 )

Net loss $ ( 570.4 ) $ ( 3.4 ) $ ( 573.8 )

Net loss attributable to Delek $ ( 608.0 ) $ ( 3.4 ) $ ( 611.4 )

Net loss per share attributable to Delek

Basic $ ( 8.26 ) $ ( 0.05 ) $ ( 8.31 )

Diluted $ ( 8.26 ) $ ( 0.05 ) $ ( 8.31 )

Year Ended December 31, 2020

(In millions) As Reported (using LIFO) Adjustment As Adjusted (using FIFO)

Consolidated Statements of Cash Flows

$ ( 570.4 ) $ ( 3.4 ) $ ( 573.8 )

Non-cash lower of cost or market/net realizable value adjustment

$ 29.2 $ ( 29.0 ) $ 0.2

Deferred income taxes $ ( 32.1 ) $ ( 0.9 ) $ ( 33.0 )

Inventories and other current assets

$ 244.4 $ 33.3 $ 277.7

The following tables reflect the effect of the change in the accounting principle on the current period Consolidated Financial Statements:

Year Ended December 31, 2022

(In millions) As Computed (using LIFO) As Reported (using FIFO) Effect of Change

Consolidated Statements of Income

Cost of materials and other $ 18,366.4 $ 18,355.6 $ 10.8

Total cost of sales $ 19,332.0 $ 19,321.2 $ 10.8

Income before income tax expense $ 343.6 $ 354.4 $ ( 10.8 )

Income tax expense $ 61.6 $ 63.9 $ ( 2.3 )

Net income attributable to Delek $ 248.6 $ 257.1 $ ( 8.5 )

Net income per share attributable to Delek

Basic $ 3.51 $ 3.63 $ ( 0.12 )

Diluted $ 3.48 $ 3.59 $ ( 0.11 )

December 31, 2022

(In millions) As Computed (using LIFO) As Reported (using FIFO) Effect of Change

Consolidated Balance Sheet

Inventories, net inventory valuation reserves $ 1,423.0 $ 1,518.5 $ ( 95.5 )

Total Assets $ 8,097.3 $ 8,192.8 $ ( 95.5 )

Accrued expenses and other current

$ 1,166.8 $ 1,166.8 $ —

Deferred tax liabilities

$ 246.0 $ 266.5 $ ( 20.5 )

Retained Earnings $ 432.9 $ 507.9 $ ( 75.0 )

Total liabilities and stockholders' equity $ 8,097.3 $ 8,192.8 $ ( 95.5 )

Year Ended December 31, 2022

(In millions) As Computed (using LIFO) As Reported (using FIFO) Effect of Change

Consolidated Statements of Cash Flows

$ 282.0 $ 290.5 $ ( 8.5 )

Non-cash lower of cost or market/net realizable value adjustment

$ ( 0.9 ) $ 1.9 $ ( 2.8 )

Deferred income taxes $ 59.2 $ 61.6 $ ( 2.4 )

Inventories and other current assets

$ ( 240.7 ) $ ( 254.4 ) $ 13.7

Accounts payable and other current liabilities $ 298.7 $ 298.7 $ —

At December 31, 2022, we recorded a pre-tax inventory valuation reserve of $ 11.2 million 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 $ 9.3 million For the years ended December 31, 2022, 2021 and 2020, we recognized a net reduction (increase) in cost of materials and other in the accompanying consolidated statements of income related to the change in pre-tax inventory valuation of $( 1.9 ) million, $( 8.5 ) million and $( 0.2 ) million, respectively.

Inventory Intermediation Obligations

The following table summarizes our outstanding obligations under our Inventory Intermediation Agreement and Supply and Offtake Agreements:

As of December 31, 2022 As of December 31, 2021

Obligations under Inventory Intermediation Agreements

Obligations related to Base Layer Volumes $ 491.8 $ —

Current portion 49.9 —

Total Obligations under Inventory Intermediation Agreements $ 541.7 $ —

Other payable for monthly activity true-up $ 5.6 $ —

Obligations under Supply and Offtake Agreements

Baseline Step-Out Liability $ — $ 330.4

Revolving over/short product financing liability — 157.1

Total Obligation Under Supply and Offtake Agreements — 487.5

Current portion — 487.5

Obligations Under Supply and Offtake Agreements - Non-current portion $ — $ —

Other (receivable) payable for monthly activity true-up $ ( 34.9 ) $ 5.3

Inventory Intermediation Agreements

On December 22, 2022, DKTS, an indirect subsidiary of Delek entered into an Inventory Intermediation Agreement with Citi.

Pursuant to the Inventory Intermediation Agreement, Citi will (i) purchase from and sell to DKTS crude oil and other petroleum feedstocks in connection with refining processing operations at El Dorado, Big Spring, and Krotz Springs, (ii) purchase from and sell to DKTS all refined products produced by such refineries other than certain excluded products and (iii) in connection with such purchases and sales, DKTS will enter into certain market risk hedges in each case, on the terms and subject to certain conditions.

The Inventory Intermediation Agreement results in up to $ 800 million of working capital capacity for DKTS.

As of December 31, 2022, we had letters of credit outstanding of $ 115.0 million supporting the Inventory Intermediation Agreement.

The Inventory Intermediation Agreement expires December 30, 2024, subject to an extension that can be executed by Citi for an additional twelve months .

The Inventory Intermediation Agreement replaces the Supply and Offtake Agreements with J.

Aron that expired on December 30, 2022.

The Inventory Intermediation Agreement provide for the lease to Citi of crude oil and refined product storage facilities.

At the inception of the Inventory Intermediation Agreement, we transferred title to a certain number of barrels of crude and other inventories to Citi, and the Inventory Intermediation Agreement requires the repurchase of the remaining inventory (including certain "Base Layer Volumes") at the termination.

As of December 31, 2022, the barrels subject to the Inventory Intermediation Agreement totaled 6.3 million, including Base Layer Volumes associated with our non-current inventory intermediation obligation of 5.5 million barrels.

The Inventory Intermediation Agreement is accounted for as an inventory financing arrangement under the fair value election provided by ASC 815 and ASC 825.

Therefore, the crude oil and refined products barrels subject to the Inventory Intermediation Agreement will continue to be reported in our consolidated balance sheets until processed and sold to a third party.

At each reporting period, we record a liability equal to the repurchase obligation to Citi at current market prices.

The associated repurchase obligations associated with the Base Layer Volumes are reflected as non-current liabilities on our consolidated balance sheet to the extent that they are not contractually due within twelve months.

The remaining obligation resulting from our monthly activity, including long and short inventory positions valued at market-indexed pricing, are included in current liabilities (or receivables) on our consolidated balance sheet.

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

With respect to the repurchase obligation, we recognized gains (losses) in cost of materials and other attributable to changes in fair value due to commodity-index price.

F or the year ended December 31, 2022 there were no gains (losses) recognized due to the change in fair value.

Included in the Inventory Intermediation Agreement are cost of financing associated with the value of the inventory and other periodic charges, which we include in interest expense, net in the consolidated statements of income.

For the year ended December 31, 2022 we recognized $ 0.2 million in interest expense associated with the Inventory Intermediation Agreement.

In addition to the cost of financing charges, we may pay or receive certain market structure settlements based on changes in market prices over time.

These settlements are recorded in cost of materials and other in the consolidated statements of income.

Supply & Offtake Agreements

Delek entered into Supply and Offtake Agreements with J.

Aron in connection with its El Dorado, Big Spring and Krotz Springs refineries.

Pursuant to the Supply and Offtake Agreements, (i) J.

Aron agrees to sell to us, and we agree to buy from J.

Aron, at market prices, crude oil for processing at these refineries and (ii) we agree to sell, and J.

Aron agrees to buy, at market prices, certain refined products produced at these refineries.

The Supply and Offtake Agreements also provide for the lease to J.

Aron agreed to sell to us, and we agreed to buy from J.

Aron, at market prices, crude oil for processing at these refineries and (ii) we agreed to sell, and J.

Aron agreed to buy, at market prices, certain refined products produced at these refineries.

and (ii) we agreed to sell, and J.

Aron agreed to buy, at market prices, certain refined products produced at these refineries.

The Supply and Offtake Agreements also provided for the lease to J.

Aron of crude oil and refined product storage facilities, and the identification of prospective purchasers of refined products on J.

1 unchanged sentence

At the inception of the Supply and Offtake Agreements, we transferred title to a certain number of barrels of crude and other inventories to J.

Aron (the "Step-In"), and the Supply and Offtake Agreements require the repurchase of remaining inventory (including certain "Baseline Volumes") at the termination of those Agreements (the "Step-Out").

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):

Aron (the "Step-In"), and the Supply and Offtake Agreements required the repurchase of remaining inventory (including certain "Baseline Volumes") at the termination of those Agreements (the "Step-Out").

The Supply and Offtake Agreements were 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 were as follows (in millions):

El Dorado Big Spring Krotz Springs

3 unchanged sentences

(1) Includes Baseline Volumes plus/minus over/short quantities.

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

The Supply and Offtake Agreements were amended in December 2018 for Big Spring and in January 2019 for El Dorado and Krotz Springs so that the repurchase of Baseline Volumes at the end of the Supply and Offtake Agreement term (representing the "Baseline Step-Out Liability" or, collectively, the "Baseline Step-Out Liabilities") were based upon a fixed price where, prior to those amendments, the Baseline Step-Out Liabilities were based on market-indexed pricing.

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

In September 2019, we amended the Supply and Offtake Agreements to increase the fixed Step-Out price on Baseline Volumes.

As a result of the change in the contractual terms, we received cash, net of estimated fees paid, totaling approximately $ 38.9 million.

No gain or loss was recognized as a result of these September 2019 amendments.

In January 2020, we amended our three Supply and Offtake Agreements so that the Baseline Step-Out Liabilities were once again based on market-indexed prices subject to commodity price risk.

As a result of the amendment, such Baseline Step-Out Liabilities continued to be recorded at fair value under the fair value election provided by ASC 815 and ASC 825, where the fair value now reflected changes in commodity price risk rather than interest rate risk with subsequent changes in fair value being recorded in cost of materials and other.

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

In April 2020, we amended and restated our three Supply and Offtake Agreements to renew and extend the terms to December 30, 2022, with J.

Aron having the sole discretion to further extend to May 30, 2025 by giving at least 6 months prior notice to the current maturity date.

As part of this amendment, there were changes to the underlying market index, annual fee, the crude purchase fee, crude roll fees and timing of cash settlements related to periodic price adjustments (the "Periodic Price Adjustments").

The Baseline Step-Out Liabilities continue to be recorded at fair value under the fair value election included under ASC 815 and ASC 825.

The Baseline Step-Out Liabilities have a floating component whose fair value reflects changes to commodity price risk with changes in fair value recorded in cost of materials and other and a fixed component whose fair value reflects changes to interest rate risk with changes in fair value recorded in interest expense.

As part of this amendment, there were changes to the underlying market index, annual fee, the crude purchase fee, crude roll fees and timing of cash settlements related to periodic price adjustments.

The repurchase of Baseline Volumes at the end of the Supply and Offtake Agreement term (representing the "Baseline Step-Out Liability" or, collectively, the "Baseline Step-Out Liabilities") continued to be recorded at fair value under the fair value election included under ASC 815 and ASC 825.

The Baseline Step-Out Liabilities had a floating component whose fair value reflected changes to commodity price risk with changes in fair value recorded in cost of materials and other and a fixed component whose fair value reflected changes to interest rate risk with changes in fair value recorded in interest expense.

There was no amendment date change in fair value resulting from the modification.

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.

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

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

Aron on October 30, 2020.

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

Contemporaneous with the payment, J.

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

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 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.

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

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

Gains (losses) related to changes in fair value due to commodity-index price were recorded as a component of cost of materials and other, and changes in fair value due to interest rate risk were 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 totaling $ 63.0 million, an d $ 105.5 million for the y ears ended December 31, 2022 and 2021.

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.

14 unchanged sentences

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

(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.

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

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

2 unchanged sentences

Recurring cash fees paid during the year ended December 31, 2022

$ 13.6 $ 5.1 $ 4.7 $ 23.4

Recurring cash fees paid during the year ended December 31, 2021

$ 10.5 $ 3.3 $ 4.3 $ 18.1

Recurring cash fees paid during the year ended December 31, 2020

$ 9.7 $ 3.4 $ 4.1 $ 17.2

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

2 unchanged sentences

Interest expense for the year ended December 31, 2022

$ 13.6 $ 5.1 $ 4.7 $ 23.4

Interest expense for the year ended December 31, 2021

$ 10.5 $ 3.3 $ 4.3 $ 18.1

Interest expense for the year ended December 31, 2020

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.

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 $ —

Letters of credit outstanding as of December 31, 2020 $ 195.0 $ 10.0

$ 10.1 $ 6.5 $ 4.5 $ 21.1

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

There were no such gains or losses for the years ended December 31, 2022 and 2021.

We maintained letters of credit under the Supply and Offtake Agreements for the El Dorado refinery at December 31, 2022 and December 31, 2021 of $ 70.0 million and $ 195.0 million, respectively.

Long-Term Obligations and Notes Payable

5 unchanged sentences

Hapoalim Term Loan (2)

Delek Logistics Credit Facility 258.0 746.6

Delek Logistics Revolving Facility 720.2 258.0

Delek Logistics Term Loan Facility (3)

Delek Logistics 2025 Notes (4)

Delek Logistics 2028 Notes (5)

Reliant Bank Revolver 50.0 50.0

Promissory Notes — 20.0

United Community Bank Revolver 50.0 50.0

3,053.7 2,218.0

2 unchanged sentences

(1) Net of deferred financing costs of $ 1.6 million and $ 2.2 million, respectively, and debt discount of $ 56.3 million and $ 17.8 million, respectively, at December 31, 2022 and December 31, 2021.

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

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

(3) Net of deb discount of $ 1.4 million at December 31, 2022.

(4) Net of deferred financing costs of $ 1.8 million and $ 2.5 million, respectively, and debt discount of $ 0.6 million and $ 0.8 million, respectively, at December 31, 2022 and December 31, 2021.

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

Delek Revolver and Term Loan

On March 30, 2018 (the "Closing Date"), Delek entered into (i) a new term loan credit agreement with Wells Fargo Bank, National Association, as administrative agent (the "Term Administrative Agent"), Delek, as borrower, certain subsidiaries of Delek, as guarantors, and the lenders from time to time party thereto, providing for a senior secured term loan facility in an amount of $ 700.0 million (the "Term Loan Credit Facility") and (ii) a second amended and restated credit agreement with Wells Fargo Bank, National Association, as administrative agent (the "Revolver Administrative Agent"), Delek, as borrower, certain subsidiaries of Delek, as guarantors, and the other lenders party thereto, providing for a senior secured asset-based revolving credit facility with commitments of $ 1.0 billion (the "Revolving Credit Facility" and, together with the Term Loan Credit Facility, the "New Credit Facilities").

The Revolving Credit Facility permits borrowings in Canadian dollars of up to $ 50.0 million.

The Revolving Credit Facility also permits the issuance of letters of credit of up to $ 400.0 million, including letters of credit denominated in Canadian dollars of up to $ 10.0 million.

Delek may designate restricted subsidiaries as additional borrowers under the Revolving Credit Facility.

The Term Loan Credit Facility was drawn in full for $ 700.0 million on the Closing Date at an original issue discount of 0.50 %.

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

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

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 %.

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

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

There are no restrictions on the Company's use of the proceeds of the Incremental Term Loans and Incremental Loans.

The proceeds may be used for (i) reducing utilizations under the Revolving Credit Facility, (ii) general corporate purposes and (iii) paying transaction fees and expenses associated with the incremental amendments.

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

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

The proceeds of the Third Incremental Term Loan may be used (i) for general corporate purposes and (ii) to pay transaction fees and expenses associated with the Third Incremental Term Loan.

(5) Net of deferred financing costs of $ 4.8 million and $ 5.7 million at December 31, 2022 and December 31, 2021, respectively.

Delek's Revolving Credit Facility and Term Loan Credit Facility

On October 26, 2022, Delek entered into a third amended and restated credit agreement providing for a senior secured asset-based revolving credit facility with an initial commitment of $ 1.1 billion (the “Revolving Credit Facility”).

The Revolving Credit Facility permits borrowings in Canadian dollars of up to $ 50.0 million and issuance of letters of credit up to $ 500.0 million, including letters of credit denominated in Canadian dollars of up to $ 10.0 million.

The Revolving Credit Facility will mature and the commitments thereunder will terminate October 26, 2027.

In connection with the refinancing of the Revolving Credit Facility, Delek incurred $ 7.1 million debt issuance costs which are being deferred and amortized over the term of the Revolving Credit Facility and are recorded as an asset within other current and other non-current assets on the company's consolidated balance sheets.

On November 18, 2022, (the "Term Closing Date"), Delek entered into an amended and restated term loan credit agreement providing for a senior secured term loan facility in an initial principal amount of $ 950.0 million (the "Term Loan Credit Facility") with the ability to request up to $ 400.0 million in incremental loans subject to certain restrictions.

The Term Loan Credit Facility initial principal of $ 950.0 million was drawn in full on the Term Closing Date at an original issue discount of 4.00 %.

Proceeds of the Term Loan Credit Facility, along with borrowings under Delek’s Revolving Credit Facility and cash on hand were used to refinance Delek’s Term Loan Credit Agreement dated March 30, 2018 as amended and supplemented.

As a result of the refinancing, outstanding term loans were reduced by an aggregate of approximately $ 300.0 million.

The Term Loan Credit Facility requires scheduled quarterly principal payments of $ 2.4 million commencing with March 31, 2023, with the balance of principal due on November 19, 2029.

The Term Loan Credit Facility requires prepayments with the net cash proceeds from certain debt incurrences, asset dispositions and insurance or condemnation events, subject to specified exceptions, thresholds and reinvestment rights.

The Term Loan Credit Facility also requires annual prepayments with a variable percentage of Delek’s excess cash flow, ranging from 50.00 % to 0.00 % depending on Delek’s consolidated fiscal year end secured net leverage ratio.

In connection with the modification of the Term Loan Credit Facility, Delek recorded a $ 44.4 million debt discount which is being deferred and amortized over the life of the Term Loan Credit Facility and is netted against the outstanding borrowings within the long-term debt, less the current portion line item, on Delek's consolidated balance sheets.

Interest and Unused Line Fees

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")).

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 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.

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) an Adjusted Term Secured Overnight Financing Rate (“SOFR”), 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 applicable margin for the Term Loan Credit Facility borrowings is 2.50 % per annum with respect to base rate borrowings and 3.50 % per annum with respect to SOFR borrowings.

The initial applicable margin for Revolving Credit Facility borrowings is 0.25 % per annum with respect to base rate borrowings and 1.25 % per annum with respect SOFR and CDOR borrowings.

The applicable margin for such borrowings after December 31, 2022 is based on Delek’s quarterly average 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 SOFR 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 0.30 % per annum, depending on average commitment usage for such quarter.

As of December 31, 2022, the unused line fee was set at 0.30 % per annum.

Maturity and Repayments

The Revolving Credit Facility will mature and the commitments thereunder will terminate on March 30, 2023.

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

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

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

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

The Term Loan Credit Facility also requires annual prepayments with a variable percentage of Delek’s excess cash flow, ranging from 50 % to 0 % depending on Delek’s consolidated fiscal year end secured net leverage ratio.

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

Guarantee and Security

The obligations of the borrowers under the New Credit Facilities are guaranteed by Delek and each of its direct and indirect, existing and future, wholly-owned domestic subsidiaries, subject to customary exceptions and limitations, and excluding Delek Logistics, Delek Logistics GP, LLC, and each subsidiary of the foregoing (collectively, the "MLP Subsidiaries").

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

The obligations of the borrowers under the Term Loan Credit Facility and the Revolving Credit Facility are guaranteed by Delek and each of its direct and indirect, existing and future, wholly-owned domestic subsidiaries, subject to customary exceptions and limitations, and excluding Delek Logistics Partners, LP, Delek Logistics GP, LLC, and each subsidiary of the foregoing (collectively, the "MLP Subsidiaries").

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

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

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

The Term Loan Credit Facility is secured by a first priority lien on the Term Priority Collateral and a second priority lien on the Revolving Priority Collateral.

Certain excluded assets are not included in the Term Priority Collateral and the Revolving Priority Collateral.

Additional Information

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.

At December 31, 2022 and 2021, the weighted average borrowing rate under the Revolving Credit Facility was 5.67 % and 3.50 %, respectively, there were $ 450.0 million principal amounts outstanding thereunder.

Additionally, there were letters of credit issued of approximately $ 287.4 million as of December 31, 2022 under the Revolving Credit Facility.

Unused credit commitments under the Revolving Credit Facility, as of December 31, 2022, were approximately $ 362.6 million.

At December 31, 2021, the weighted average borrowing rate under the Term Loan Credit Facility was approximately 3.00 % comprised entirely of LIBOR borrowings and the principal amount outstanding thereunder was $ 1,260.0 million.

As of December 31, 2021, the effective interest rate related to the Term Loan Credit Facility was 3.53 %.

At December 31, 2022, the weighted average borrowing rate under the Term Loan Credit Facility was approximately 7.92 % and comprised entirely of SOFR borrowings.

At December 31, 2021 the weighted average borrowing rate was 3.00 % comprised entirely of LIBOR borrowings.

The principal amount outstanding thereunder was $ 950.0 million and $ 1,260.0 million at December 31, 2022 and 2021, respectively.

As of December 31, 2022 and 2021, the effective interest rate related to the Term Loan Credit Facility was 9.14 % and 3.53 %, respectively.

Delek Hapoalim Term Loan

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.

Pursuant to the Agreement, on December 31, 2019, Delek borrowed $ 40.0 million (the "BHI Term Loan").

The interest rate under the Agreement is equal to LIBOR plus a margin of 3.00 %.

The Agreement has a maturity date of December 31, 2022 and requires quarterly loan amortization payments of $ 0.1 million, commencing March 31, 2020.

Proceeds may be used for general corporate purposes.

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 %.

Delek Logistics Credit Facility

On September 28, 2018, Delek Logistics and all of its subsidiaries entered into a third amended and restated senior secured revolving credit agreement with Fifth Third Bank ("Fifth Third") as administrative agent and a syndicate of lenders (hereafter, the "Delek Logistics Credit Facility") with lender commitments of $ 850.0 million.

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.

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

("BHI") as the administrative agent, pursuant to which Delek borrowed $ 40.0 million (the "BHI Term Loan").

The interest rate under the Agreement was equal to LIBOR plus a margin of 3.00 %.

The BHI Agreement had a current maturity date of December 31, 2022 and required quarterly loan amortization payments of $ 0.1 million.

On July 30, 2021, January 31, 2022, and June 30, 2022, we elected to voluntarily prepay $ 10.0 million in principal of the term loan.

A final voluntary principal prepayment of $ 9.0 million was made on September 30, 2022, thereby repaying the BHI Term Loan in full.

Delek Logistics Revolving Credit Facility and Term Loan Credit Facility

On September 28, 2018, Delek Logistics and all of its subsidiaries entered into a third amended and restated senior secured revolving credit agreement (hereafter, the "2018 Credit Facility") with lender commitments of $ 850.0 million.

On May 13, 2022 and May 26, 2022, Delek Logistics entered into amendments to the 2018 Credit Facility which provided for the transition from a LIBOR benchmark to Term SOFR, and secured consent and flexibility with respect to certain covenants.

On May 26, 2022, Delek Logistics entered into a Third Amendment to the 2018 Credit Facility which, among other things, provided for certain changes to the Delek Logistics Credit Facility in connection with the pro forma calculations in conjunction with the 3 Bear Acquisition, increased the lender commitments to $ 1.0 billion, increased the line of credit sublimit to an aggregate amount of $ 90.0 million and increased the swing line sublimit to $ 18.0 million.

On October 13, 2022, Delek Logistics amended and restated the 2018 Credit Facility by entering into and all of its subsidiaries entered into a fourth amended and restated senior secured revolving credit agreement (hereafter, the "Delek Logistics Credit Facility”) which (i) increased total aggregate commitments to $ 1.2 billion, comprised of $ 900.0 million in senior secured revolving commitments with a sublimit of up to $ 115.0 million for letters of credit and $ 25.0 million for swing line loans together referred to hereafter (the “Delek Logistics Revolving Facility”) and a new senior secured term loan with an original principal amount of $ 300.0 million (the “Delek Logistics Term Loan Facility”), (ii) reset the accordion feature under the Delek Logistics Revolving Facility, to allow increases up to $ 1.15 billion with the agreement of the Delek Logistics Partnership and one or more existing or new lenders, (iii) extended the maturity date of the Revolving Facility to October 13, 2027, and (iv) provided for the Delek Logistics Term Facility to be drawn in full on October 13, 2022, with a maturity date of October 13, 2024.

The Delek Logistics Credit Facility contains a prepayment requirement for the proceeds obtained from certain senior unsecured notes issuances.

The Delek Logistics Term Facility requires four quarterly amortization payments of $ 3.8 million in 2023 and three quarterly amortization payments of $ 7.5 million in 2024.

Borrowings under the Delek Logistics Revolving Facility bear interest at the election of Delek Logistics at either a U.S.

dollar prime rate, plus an applicable margin ranging from 1.00 % to 2.00 % depending on Delek Logistics' leverage ratio, or a SOFR rate plus a credit spread adjustment of 0.10 % for one-month interest periods and 0.25 % for three-month interest periods plus an applicable margin ranging from 2.00 % to 3.00 % depending on the leverage ratio.

Unused revolving commitments under the Delek Logistics Revolving Facility incur a commitment fee that ranges from 0.30 % to 0.50 % depending on the leverage ratio.

Borrowings under the Delek Logistics Term Facility bear interest at the election of Delek Logistics at either a U.S.

dollar prime rate, plus an applicable margin of 2.50 % for the first year of the Delek Logistics Term Facility and 3.00 % for the second year of the Delek Logistics Term Facility, or a SOFR rate plus a credit spread adjustment of 0.10 % for one-month interest periods and 0.25 % for three-month interest periods plus an applicable margin of 3.50 % for the first year of the Delek Logistics Term Facility and 4.00 % for the second year of the Delek Logistics Term Facility.

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.

Borrowings under the Delek Logistics Credit Facility bear interest at either a U.S.

dollar prime rate, Canadian dollar prime rate, LIBOR, or a CDOR rate, in each case plus applicable margins, at the election of the borrowers and as a function of draw down currency.

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

At December 31, 2021, the weighted average borrowing rate was approximately 2.46 %.

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

As of December 31, 2021, this fee was 0.30 % on an annualized basis.

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

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

As of December 31, 2021, Delek Logistics had $ 258.0 million of outstanding borrowings under the Delek Logistics Credit Facility, with no letters of credit in place.

Unused credit commitments under the Delek Logistics Credit Facility as of December 31, 2021, were $ 592.0 million.

The Delek Logistics Credit Facility contains affirmative and negative covenants and events of default with Delek Logistics considers customary and similar to those in the 2018 Credit Facility.

In connection with the refinancing of the Delek Logistics Credit Facility, we recorded a $ 1.9 million debt discount which is being deferred and amortized over the life of the Delek Logistics Term Facility and is netted against the outstanding borrowings within the long-term debt, less the current portion line item on the company's consolidated balance sheets, and $ 6.2 million of debt issuance costs which are being deferred and amortized over the life of the Delek Logistics Revolving Facility and are included in other current and other non-current assets on the company's consolidated balance sheets.

As of December 31, 2022 and 2021, Delek Logistics had outstanding principal borrowings under the Delek Logistics Revolving Facility of $ 720.5 million and $ 258.0 million with weighted average borrowing rates of 7.55 % and 2.46 %, respectively.

As of December 31, 2022, there were no letters of credit in place.

Unused credit commitments under the Delek Logistics Revolving Facility as of December 31, 2022, were $ 179.5 million.

At December 31, 2022, the weighted average borrowing rate under the Delek Logistics Term Loan Facility was approximately 7.92 %, comprised entirely of SOFR borrowings.

The principal amount outstanding thereunder was $ 300.0 million, and the effective interest rate was 8.22 %.

Delek Logistics 2025 Notes

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(“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.

In May 2018, the Delek Logistics 2025 Notes were exchanged for new notes with terms substantially identical in all material respects with the exception that the new notes exclude transfer restriction terms.

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

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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 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.

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.

The Delek Logistics 2025 Notes will mature on May 15, 2025, and interest is payable semi-annually in arrears on May 15 and November 15.

All or part of the Delek Logistics 2025 Notes are currently redeemable, subject to certain conditions and limitations, 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 % of the principal amount thereof, plus accrued and unpaid interest.

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As of December 31, 2022, we had $ 400.0 million in outstanding principal amount under the Delek Logistics 2028 Notes, and the effective interest rate was 7.40 %.

Reliant Bank Revolver

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

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

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

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.

United Community Bank Revolver

Delek has an unsecured revolving credit agreement with United Community Bank (formally Reliant Bank) (the "United Community Bank Revolver") with a commitment amount of $ 50.0 million.

On June 30, 2022, we amended the United Community Bank Revolver to extend the maturity date to June 30, 2023 and change the interest rate per annum to a variable rate equal to the Wall Street Journal Prime Rate plus 0.75 % effective July 1, 2022.

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

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

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.

As of December 31, 2022, we had $ 50.0 million outstanding and no unused credit commitments under this facility.

Restrictive 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.

Under the terms of our debt facilities, we are required to comply with certain usual and customary financial and non-financial covenants.

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

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Future Maturities

Principal maturities of Delek's existing third-party debt instruments for the next five years and thereafter are as follows as of December 31, 2021 (in millions):

2022 2023 2024 2025 2026 Thereafter Total

Revolving Credit Facility $ — $ — $ — $ — $ — $ — $ —

Term Loan Credit Facility 13.0 13.0 13.0 1,221.0 — — 1,260.0

Hapoalim Term Loan 29.2 — — — — — 29.2

Delek Logistics Credit Facility — 258.0 — — — — 258.0

Delek Logistics 2025 Notes — — — 250.0 — — 250.0

Delek Logistics 2028 Notes — — — — — 400.0 400.0

Reliant Bank Revolver 50.0 — — — — — 50.0

Promissory Notes — — — — — — —

Principal maturities of Delek's third-party debt instruments for the next five years and thereafter are as follows (in millions):

Year Ended December 31, Total

Thereafter 1,302.5

Total $ 3,120.5

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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.

As of December 31, 2022, we do not believe there is any material credit risk with respect to the counterparties to any of our derivative contracts.

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

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

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

The following table presents the fair value of our derivative instruments as of December 31, 2022 and December 31, 2021.

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

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Other current liabilities — ( 6.6 ) — ( 0.7 )

Derivatives designated as hedging instruments:

Commodity derivatives (1)

Other current assets — — 0.5 ( 0.3 )

Total gross fair value of derivatives 328.9 ( 341.3 ) 130.7 ( 109.1 )

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(2) As of December 31, 2022 and 2021, we had open RINs commitment contracts representing 259,022,967 and 16,325,000 RINs, respectively.

(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.

(3) As of December 31, 2022 and 2021, $ 13.8 million and $( 24.7 ) million, respectively, of cash collateral (obligation) 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) :

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2022 2021 2020

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

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

$ ( 38.0 ) $ 37.7 $ ( 88.0 )

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

(Losses) gains on non-trading physical forward contract commodity derivatives in cost of materials and other 9.0 ( 6.6 ) —

Losses on hedging derivatives not designated as hedging instruments recognized in operating expenses ( 1.7 ) — —

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

Total (losses) gains $ ( 30.7 ) $ 31.3 $ ( 83.4 )

(1) Gains (losses) on commodity derivatives that are economic hedges but not designated as hedging instruments include unrealized gains (losses) of $ 7.8 million , $ 22.6 million and $( 31.8 ) million for the years ended December 31, 2021, 2020 and 2019, respectively.

(1) Gains (losses) on commodity derivatives that are economic hedges but not designated as hedging instruments include unrealized (losses) gains of $( 15.4 ) million , $ 7.8 million and $ 22.6 million for the years ended December 31, 2022, 2021 and 2020, respectively.

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

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Year Ended December 31,

2022 2021 2020

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

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For cash flow hedges, no component of the derivative instruments’ gains or losses was excluded from the assessment of hedge effectiveness for the years ended December 31, 2022, 2021 and 2020.

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.

During the years ended December 31, 2021 and 2020, there were losses of $ 0.2 million and $ 3.6 million, net of tax, respectively, on settled commodity contracts.

There were no such losses during the year ended December 31, 2022.

These losses were reclassified into cost of materials and other in the consolidated statements of income.

As of December 31, 2022, 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):

Total gains (losses) 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,

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Realized gains (losses) $ 16.1 $ 6.5 $ ( 3.1 )

Unrealized gains (losses) — ( 0.3 ) 3.6

Unrealized losses ( 0.4 ) — ( 0.3 )

Total $ 15.7 $ 6.5 $ ( 3.4 )

Trading Hedging Commodity Derivatives

Realized (losses) gains $ 3.3 $ 7.5 $ 9.2

Realized gains $ 13.5 $ 3.3 $ 7.5

Unrealized (losses) gains ( 18.5 ) 16.2 0.5

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Fair Value Measurements

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

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

ASC 820 requires disclosures that categorizes assets and liabilities measured at fair value into one of three different levels depending on the observability of the inputs employed in the measurement.

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Such barrels were received in the fourth quarter of 2020.

The realized gain on the underlying commodity related to the SPR financial asset for the year ended December 31, 2020 of $ 10.8 million was recorded in other (income) expense, net.

The realized gain on the underlying commodity related to the SPR financial asset for the year ended December 31, 2020 of $ 10.8 million was recorded in other income, net.

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

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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.

With respect to our Consolidated Net RINs Obligation surplus or deficit, we recognized gains (losses) on changes in fair value totaling $( 61.2 ) million and $ 17.8 million for the years ended December 31, 2022 and 2020, respectively, primarily attributable to changes in the market prices of the underlying credits that occurred at the end of each quarter including changes in volume requirements related to the 2020, 2021 and 2022 RINs Obligation to reflect the June 2022 EPA finalized volume requirements.

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.

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.

As of and for the years ended December 31, 2022 and 2021, we elected to account for our Inventory Intermediation step-out liability and our J.

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

This standard permits the election to carry financial instruments and certain other items similar to financial instruments at fair value on the balance sheet, with all changes in fair value reported in earnings.

With respect to the amended and restated Supply and Offtake Agreements, such amendments being effective April 2020 for all the agreements, we apply fair value measurement as follows:

With respect to the Inventory Intermediation Agreement and the amended and restated Supply and Offtake Agreements, such amendments being effective April 2020 for all the agreements, we apply fair value measurement as follows:

(1) we determine fair value for our amended variable step-out liability based on changes in fair value related to market volatility based on a floating commodity-index price, and for our amended fixed step-out liability based on changes to interest rates and the timing and amount of expected future cash settlements where such obligation is categorized as Level 2.

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.

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.

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 Inventory Intermediation Agreement 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.

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.

The estimated fair value of the Delek Logistics 2028 Notes was $ 359.7 million as of December 31, 2022, measured based upon quoted market prices in an active market, defined as Level 1 in the fair value hierarchy.

At December 31, 2021, the estimated fair value approximated the carrying value.

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

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

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Environmental credits obligation deficit — ( 295.5 ) — ( 295.5 )

Aron supply and offtake obligations — ( 487.5 ) — ( 487.5 )

Inventory Intermediation Agreement obligation — ( 541.7 ) — ( 541.7 )

Total liabilities — ( 1,178.5 ) — ( 1,178.5 )

Net assets (liabilities) $ — $ ( 638.1 ) $ — $ ( 638.1 )

Net liabilities $ — $ ( 849.6 ) $ — $ ( 849.6 )

As of December 31, 2021

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Total liabilities — ( 768.8 ) — ( 768.8 )

Net assets (liabilities) $ — $ ( 391.9 ) $ — $ ( 391.9 )

Net liabilities $ — $ ( 638.1 ) $ — $ ( 638.1 )

The derivative values above are based on analysis of each contract as the fundamental unit of account as required by ASC 820.

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

As of 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.

As of December 31, 2022 and 2021, $ 13.8 million and $( 24.7 ) million, respectively, of cash collateral (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.

Non-Recurring Fair Value Measurements

The 3 Bear Acquisition was accounted for as a business combination using the acquisition method of accounting, with the assets acquired and liabilities assumed at their respective acquisition date fair values at the closing date.

The fair value measurements were based on a combination of valuation methods including discounted cash flows, the market approach and obsolescence adjusted replacement costs, all of which are Level 3 inputs.

Commitments and Contingencies

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

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.

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.

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

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

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

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

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 ("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.

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.

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.

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Included in our environmental liabilities as of both December 31, 2022 and 2021 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.

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 and expired 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.

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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.

Based on management’s review 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.

In June 2022, the EPA finalized volumes for compliance years 2020, 2021 and 2022 under the RFS program, announced supplemental volume obligations for compliance years 2022 and 2023 and established new provisions of the RFS which addressed bio-intermediates.

Additionally, the EPA denied the petitions for small refinery exemptions for prior period compliance years.

In December 2022, the EPA released proposed volume obligations for compliance years 2023, 2024 and 2025.

Other Losses and Contingencies

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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.

During the year ended December 31, 2021, we incurred workers' compensation losses of $ 3.8 million associated with the fire 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 2021.

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

No expense was recorded related to the El Dorado refinery fire during the year ended December 31, 2022.

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.

In addition, during the years ended December 31, 2022 and 2021, we recognized a gain of $ 9.1 million and $ 8.8 million, respectively, related to business interruption claims.

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

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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.

During February 2021, we 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.

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 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.

In addition, during the years ended December 31, 2022 and 2021, we also recognized a gain of $ 22.0 million and $ 1.1 million, respectively, related to business interruption claims.

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

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Crude Oil and Other Releases

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

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

There were no material releases that occurred during the years ended December 31, 2022 and 2021.

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

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

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Beginning balance $ 38.3 $ 37.5

Liabilities identified 2.3 —

Liabilities settled ( 0.1 ) ( 0.4 )

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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 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;

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, 2022 and 2021 were as follows (in millions):

2022 2021 (1)

Non-Current Deferred Taxes:

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Right-of-use asset ( 38.7 ) ( 44.6 )

Derivatives and hedging ( 9.3 ) 0.3

Partnership and equity investments ( 189.1 ) ( 142.5 )

Deferred revenues ( 6.3 ) ( 4.8 )

Total deferred tax liabilities ( 484.2 ) ( 457.7 )

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Tax credit carryforwards 6.3 17.5

Deferred revenues 20.0 ( 6.3 )

Lease obligation 38.1 44.4

Reserves and accruals 32.1 37.9

Derivatives and hedging 3.2 ( 9.3 )

Inventories 2.6 10.0

Other 0.4 0.8

Total deferred tax assets 294.8 307.3

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$ ( 262.4 ) $ ( 209.4 )

(1) Adjusted to reflect the retrospective change in accounting policy from LIFO to FIFO for certain inventories.

See Note 8 for further discussion.

(2) Total net deferred tax liabilities includes $ 4.1 million and $ 5.1 million of state deferred tax assets recorded in other non-current assets in our consolidated balance sheet at December 31, 2022 and December 31, 2021, respectively.

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2022 2021 (1)

Provision for federal income taxes at statutory rate $ ( 48.9 ) $ ( 160.3 ) $ 84.6

State income tax (benefit) expense, net of federal tax provision ( 1.9 ) ( 11.3 ) 6.3

Provision (benefit) for federal income taxes at statutory rate $ 74.4 $ ( 28.4 ) $ ( 161.3 )

State income tax benefit, net of federal tax provision ( 15.0 ) ( 1.9 ) ( 11.3 )

Income tax benefit attributable to non-controlling interest ( 7.2 ) ( 7.1 ) ( 7.9 )

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Other items 4.8 — 2.7

Income tax (benefit) expense $ ( 62.5 ) $ ( 192.7 ) $ 71.7

Income tax expense (benefit) $ 63.9 $ ( 42.0 ) $ ( 193.6 )

(1) Adjusted to reflect the retrospective change in accounting policy from LIFO to FIFO for certain inventories.

See Note 8 for further discussion.

(2) Tax credits and incentives include work opportunity and research and development credits, as well as incentives for the Company’s biodiesel blending operations.

Income tax (benefit) expense from continuing operations was as follows (in millions):

Income tax expense (benefit) was as follows (in millions):

Year Ended December 31,

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$ 63.9 $ ( 42.0 ) $ ( 193.6 )

(1) Adjusted to reflect the retrospective change in accounting policy from LIFO to FIFO for certain inventories.

See Note 8 for further discussion.

We carry valuation allowances against certain state deferred tax assets and net operating losses that may not be recoverable with future taxable income.

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

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.

During the years ended December 31, 2022 and 2021, we recorded an increase to the valuation allowance of $ 14.0 million and $ 4.0 million, respectively.

The 2022 increase in the valuation allowance was primarily driven by changes in state attributes due to a legal entity restructuring that occurred during the fourth quarter of 2022, whereas in 2021 the increase was driven by changes in the state tax attributes.

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.

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federal income tax examinations by tax authorities for years through 2012.

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

Delek is under Joint Committee of Taxation review for tax years 2012 through 2020, and Alon is under Joint Committee of Taxation review for the short tax year 2017.

On January 18, 2023, the Company received notice that the Congressional Joint Committee has completed its consideration of both Delek and Alon's income tax returns for 2016-2020 with no material adjustments identified.

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, 2022.

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.

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

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

Year Ended December 31,

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Reductions for tax positions related to lapse of applicable statute of limitations ( 0.4 ) ( 1.1 ) ( 0.2 )

Settlements with taxing authorities — ( 5.8 ) ( 0.9 )

Reductions for tax positions related to settlements with taxing authorities ( 1.2 ) — ( 5.8 )

Balance at the end of the year $ 7.0 $ 14.1 $ 9.6

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Delek recognizes accrued interest and penalties related to unrecognized tax benefits as an adjustment to the current provision for income taxes.

We recognized interest expense (income) of $ 0.3 million, $ 0.5 million, and $( 1.1 ) million related to unrecognized tax benefits during the years ended December 31, 2021, 2020 and 2019.

We recognized interest expense (income) of $ 0.1 million, $ 0.3 million, and $ 0.5 million related to unrecognized tax benefits during the years ended December 31, 2022, 2021 and 2020, respectively.

The total recognized liability for interest was $ 1.3 million and $ 1.5 million as of December 31, 2022 and 2021, respectively.

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

Property, Plant and Equipment

Property, plant and equipment, at cost, consist of the following (in millions):

Land $ 57.5 $ 58.0

Building and building improvements 113.6 114.3

Refinery machinery and equipment 2,006.1 1,989.5

Pipelines and terminals 637.2 562.3

Retail store equipment and site improvements 61.3 53.1

Refinery turnaround costs 351.2 151.7

Other equipment 152.3 162.1

Construction in progress 266.2 428.5

$ 3,645.4 $ 3,519.5

accumulated depreciation ( 1,338.1 ) ( 1,152.3 )

$ 2,307.3 $ 2,367.2

Property, plant and equipment, accumulated depreciation and depreciation expense by reporting segment are as follows (in millions):

As of and For the Year Ended December 31, 2021

Refining Logistics Retail Corporate,

Other and Eliminations Consolidated

Property, plant and equipment $ 2,665.2 $ 715.9 $ 168.1 $ 96.2 $ 3,645.4

Accumulated depreciation ( 946.3 ) ( 266.5 ) ( 59.4 ) ( 65.9 ) ( 1,338.1 )

Property, plant and equipment, net $ 1,718.9 $ 449.4 $ 108.7 $ 30.3 $ 2,307.3

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

As of and For the Year Ended December 31, 2020

Refining Logistics Retail Corporate,

Other and Eliminations Consolidated

Property, plant and equipment $ 2,566.0 $ 692.3 $ 165.3 $ 95.9 $ 3,519.5

Accumulated depreciation ( 811.2 ) ( 227.5 ) ( 48.9 ) ( 64.7 ) ( 1,152.3 )

Property, plant and equipment, net $ 1,754.8 $ 464.8 $ 116.4 $ 31.2 $ 2,367.2

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.

Of this amount, $ 11.1 million, $ 1.6 million and $ 6.3 million relate to refining, logistics and other segments, respectively.

Goodwill represents the excess of the aggregate purchase price over the fair value of the identifiable net assets acquired and is not amortized.

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This review was performed at the reporting unit level, which is at or one level below our operating segment.

We estimated the value of each of our reporting units using a discounted cash flows ("DCF") analysis and a multiple of expected future cash flows, such as those used by third-party analysts.

For a quantitative assessment, we estimated the value of each of our reporting units using a discounted cash flows ("DCF") analysis and a multiple of expected future cash flows, such as those used by third-party analysts.

The DCF analysis included a market participant weighted average cost of capital, forecasted crack spreads, gross margin, capital expenditures, and long-term growth rate based on historical information and our best estimate of future forecasts.

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With respect to the goodwill associated with the reporting units within the logistics segment, we performed a qualitative assessment in 2022, 2021 and 2020.

With respect to the goodwill associated with the reporting units within the refining and retail segments, we performed a qualitative assessment in 2022 and a quantitative assessment in 2021 and 2020.

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

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Balance, December 31, 2019 $ 801.3 $ 12.2 $ 42.2 $ — $ 855.7

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

Balance, December 31, 2019 801.3 12.2 42.2 — 855.7

Goodwill impairment ( 126.0 ) — — — ( 126.0 )

Balance, December 31, 2020 675.3 12.2 42.2 — 729.7

Goodwill Impairment — — — — —

Balance, December 31, 2021 675.3 12.2 42.2 — 729.7

Acquisition — 14.8 — — 14.8

Write-off goodwill associated with stores sold — — ( 0.2 ) — ( 0.2 )

Balance, December 31, 2022 $ 675.3 $ 27.0 $ 42.0 $ — $ 744.3

Property, Plant and Equipment

Property, plant and equipment, at cost, consist of the following (in millions):

Land $ 60.0 $ 57.5

Building and building improvements 110.4 113.6

Refinery machinery and equipment 2,095.4 2,006.1

Pipelines and terminals 1,103.9 637.2

Retail store equipment and site improvements 77.8 61.3

Refinery turnaround costs 485.3 351.2

Other equipment 169.4 152.3

Construction in progress 246.8 266.2

$ 4,349.0 $ 3,645.4

accumulated depreciation ( 1,572.6 ) ( 1,338.1 )

$ 2,776.4 $ 2,307.3

Depreciation of property, plant and equipment assets was $ 272.0 million, $ 257.2 million and $ 260.0 million during the years ended December 31, 2022, 2021 and 2020, respectively, and is included in depreciation and amortization on the accompanying consolidated statements of income.

Other Intangible Assets

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Fuel trade name 5 years 4.0 ( 4.0 ) —

Rights-of-way 8 - 35 years

13.5 ( 0.4 ) 13.1

Customer relationships 11.6 years 210.0 ( 10.6 ) 199.4

Intangible assets not subject to amortization:

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Total $ 128.4 $ ( 25.7 ) $ 102.7

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 of intangible assets was $ 16.2 million, $ 5.7 million and $ 5.7 million during the years ended December 31, 2022, 2021 and 2020, respectively, 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):

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Other Current Assets December 31, 2022 December 31, 2021

Investment commodities $ 45.0 $ 1.1

Prepaid expenses $ 45.4 $ 44.9

Investment commodities 29.8 45.0

Short-term derivative assets (see Note 11)

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Accrued Expenses and Other Current Liabilities December 31, 2022 December 31, 2021

Product financing agreements $ 249.6 $ 198.0

Consolidated Net RINs Obligation deficit (see Note 12)

Income and other taxes payable 124.8 109.5

$ 295.5 $ 172.2

Crude purchase liabilities 268.7 107.4

Deferred revenue 44.6 16.5

Product financing agreements 258.0 249.6

Income and other taxes payable 120.4 124.8

Employee costs 91.2 44.4

Deferred revenue 44.6 44.6

Short-term derivative liabilities (see Note 11)

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Total $ 1,166.8 $ 797.8

Restructuring and Other Charges

During the year ending December 31, 2022, we initiated a cost optimization plan to improve efficiencies and align our workforce with strategic activities and operations.

During the 2022 fiscal year, we recorded $ 12.5 million of costs associated with these restructuring related activities, primarily for consulting fees and severance costs.

These amounts were recognized in general and administrative expenses within our consolidated statement of income and are included in Corporate, Other and Eliminations in our segment disclosures in Note 4 - Segment Data.

The recorded costs include an accrual of $ 9.9 million as of December 31, 2022.

We anticipate concluding our restructuring activities by the end of fiscal year 2024.

Future cost estimates for these initiatives are continuing to be developed.

Equity-Based Compensation

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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"), 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.

2006 Long-Term Incentive Plan, as amended (the "2006 Plan"), allowed Delek to grant stock options, 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.

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On May 5, 2016, our stockholders approved our 2016 Long-Term Incentive Plan (the “2016 Plan”) to succeed our 2006 Plan.

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, 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.

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

On May 3,2022, 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 760,000 shares to 14,995,000 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.

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Forfeited ( 219,450 ) $ 35.72

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

Options and SARs outstanding, December 31, 2022 1,527,045 $ 35.17 5.1 $ 1.0

Vested options and SARs exercisable, December 31, 2022 1,447,795 $ 35.20 5.0 $ 1.0

Restricted Stock Units

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45.06 %- 62.70 %

39.67 %- 39.98 %

Expected term 2.56 - 2.81 years

2.56 - 2.81 years

2.06 - 2.81 years

Risk free rate 1.84 % - 3.12 %

0.20 %- 0.56 %

1.64 %- 2.42 %

Fair value per share $ 35.03 $ 36.23 $ 10.65

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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.

We recognized income tax expense for equity-based awards of $ 0.9 million, $ 1.7 million and $ 2.3 million for the years ended December 31, 2022, 2021 and 2020, respectively.

As of December 31, 2022, there was $ 44.2 million of total unrecognized compensation cost related to non-vested share-based compensation arrangements, which is expected to be recognized over a weighted-average period of 1.3 years.

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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, 2022, 2021 and 2020.

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.

For 2022, our Board of Directors declared the following dividends:

Approval Date Dividend Amount Per Share Record Date Payment Date

June 21, 2022 $ 0.20 July 12, 2022 July 20, 2022

August 1, 2022 $ 0.20 August 22, 2022 September 6, 2022

October 31, 2022 $ 0.21 November 18, 2022 December 2, 2022

February 27, 2023 $ 0.22 March 10, 2023 March 17, 2023

Stockholder Rights Plan

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

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.

In the second quarter of 2020, we elected to suspend the share repurchase program with a $ 229.7 million remaining authorization balance.

On August 1, 2022, the Board of Directors approved an approximately $ 170.3 million increase in its share repurchase authorization, bringing the total amount available for repurchases under current authorizations to $ 400.0 million.

During the year ended December 31, 2022, 4,261,185 shares of our common stock were repurchased and cancelled at the time of the transaction for a total of $ 129.6 million.

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, 2022, there was $ 270.4 million of authorization remaining under Delek's aggregate stock repurchase program.

Stock Purchase and Cooperation Agreement

On March 7, 2022, Delek entered into a stock purchase and cooperation agreement (the “Icahn Group Agreement”) with IEP Energy Holding LLC, a Delaware limited liability company, American Entertainment Properties Corp., a Delaware corporation, Icahn Enterprises Holdings L.P., a Delaware limited partnership, Icahn Enterprises G.P.

Inc., a Delaware corporation, Beckton Corp., a Delaware corporation, and Carl C.

Icahn (collectively, the “Icahn Group”), pursuant to which the Company purchased an aggregate of 3,497,268 shares of common stock of the Company, at a price per share of $ 18.30 , the closing price of a share of Company common stock on the NYSE on March 4, 2022, the last trading day prior to the execution of the Icahn Group Agreement, which equals an aggregate purchase price of $ 64.0 million.

The Company funded the transaction from cash on hand.

The 3,497,268 shares were cancelled at the time of the transaction.

In addition to the foregoing, under the terms of the Icahn Group Agreement, the Icahn Group withdrew its nomination notice for the nomination of nominees for election to the Company’s board of directors for the Company’s 2022 annual meeting of stockholders.

Under the terms of the

Icahn Group Agreement, the Icahn Group agreed to standstill restrictions, which requires, among other things, that until the completion of the Company’s 2023 annual meeting of stockholders, the Icahn Group will refrain from acquiring additional shares of the Company Common Stock.

As of December 31, 2022, 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.

Of the Tyler refinery employees, 149 of operations, maintenance and warehouse hourly employees are currently covered by a collective bargaining agreement that expires January 31, 2028 while 66 of Tyler refinery truck drivers are currently covered by a collective bargaining agreement that expires November 3, 2024.

As of December 31, 2022, 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, 177 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.

As of December 31, 2022, 159 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.

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Pension Plans

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.

We have two defined benefit pension plans for certain Alon employees.

The benefits are based on years of service and the employee’s final average monthly compensation.

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Contributions are intended to provide not only for benefits attributed to service to date but also for those benefits expected to be earned in the future.

The plans were frozen for non-union employees effective September 30, 2017.

During 2018, we completely settled the supplemental retirement income plan of the retail segment, had a partial settlement of Alon's executive non-qualified restoration plan, froze Alon's qualified pension plan for union employees effective July 31, 2018, and entered into an agreement with the International Union of Operating Engineers (the "Union") to extend the Union agreement to March 31, 2022.

As part of the extended Union agreement, the Company agreed to compensate each pension-eligible employee in the Union for the loss of the pension benefit over the remaining union contract period in four annual installments beginning July 2018.

Payments are contingent upon continued employment at each annual payment date and are expected to total approximately $ 6.9 million in the aggregate without considering forfeitures (which cannot yet be estimated).

The related expense (estimated without considering forfeitures) has been or will be recognized over the remaining union contract period.

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.

This new plan consists of Union employees.

The assets were allocated as required under IRC Section 414.

The remaining accumulated other comprehensive income at that date was split between the two plans based on their respective portions of projected benefit obligation.

The Alon USA Pension Plan for Collectively Bargained Employees was terminated.

The plan's obligation was settled and paid out from the plan's asset on December 20, 2019.

Both plans are closed to new participants.

The pre-tax amounts related to the defined benefit plans recognized as pension benefit liability in the consolidated balance sheets as of December 31, 2022 was $ 3.1 million.

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Interest cost 3.7 3.5

Actuarial loss (gain) ( 5.5 ) 18.3

Actuarial gain ( 33.5 ) ( 5.5 )

Benefits paid ( 5.7 ) ( 5.6 )

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Fair value of plan assets at beginning of year $ 137.9 $ 138.5

Actual gain on plan assets 5.0 15.7

Actual gain (loss) on plan assets ( 30.0 ) 5.0

Employer contribution — 0.3

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Net actuarial loss $ 6.5 $ 4.9

Prior service credit — —

Projected benefit obligations at end of year $ 6.5 $ 4.9

9 unchanged sentences

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.

10 unchanged sentences

Expected return on plan assets ( 5.2 ) ( 6.0 ) ( 6.8 )

Recognition of gain due to curtailment — — ( 2.7 )

Net periodic benefit $ ( 1.5 ) $ ( 2.5 ) $ ( 2.6 )

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The asset allocation of the plan is reviewed on at least an annual basis.

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.

We made no contributions to the pension plans for the year ended December 31, 2022, and expect no contributions to be made to the pension plans in 2023.

There were no employee contributions to the plans.

The benefits expected to be paid in each year 2023–2027 are $ 6.4 million, $ 7.1 million, $ 6.9 million, $ 7.0 million and $ 7.1 million, respectively.

The aggregate benefits expected to be paid in the five years

from 2027–2031 are $ 35.5 million.

The aggregate benefits expected to be paid in the five years from 2028–2032 are $ 35.8 million.

The expected benefits are based on the same assumptions used to measure our benefit obligation at December 31, 2022 and include estimated future employee service.

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Employee contributions are matched on a fully-vested basis by us up to a maximum of 6 % of eligible compensation.

Eligibility for the Company matching contribution begins on the first of the month following one year of employment.

Eligibility for the Company matching contribution begins immediate upon employment with vesting after one year of service.

For the years ended December 31, 2022, 2021 and 2020, the 401(k) plans expense recognized was $ 10.9 million, $ 4.8 million and $ 10.4 million, respectively.

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The accrued benefit liability related to this plan reflected in the consolidated balance sheet was $ 0.8 million and $ 1.2 million at December 31, 2022 and 2021, respectively.

Selected Quarterly Financial Data (Unaudited)

Quarterly financial information for the years ended December 31, 2022 and 2021 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, 2022 June 30, 2022 September 30, 2022 December 31, 2022

Net revenues $ 4,459.1 $ 5,982.6 $ 5,324.9 $ 4,479.2

Operating income (loss) $ 46.7 $ 493.3 $ 53.0 $ ( 103.5 )

Net income (loss) from continuing operations $ 14.8 $ 368.6 $ 16.8 $ ( 109.7 )

Net income (loss) $ 14.8 $ 368.6 $ 16.8 $ ( 109.7 )

Net income (loss) attributable to Delek $ 6.6 $ 361.8 $ 7.4 $ ( 118.7 )

Basic income (loss) per share from continuing operations $ 0.09 $ 5.11 $ 0.11 $ ( 1.73 )

Diluted income (loss) per share from continuing operations $ 0.09 $ 5.05 $ 0.10 $ ( 1.73 )

For the Three Month Periods Ended

March 31, 2021 (1)

June 30, 2021 (1)

September 30, 2021 (1)

December 31, 2021 (1)

Net revenues $ 2,392.2 $ 2,191.5 $ 2,956.5 $ 3,108.0

Operating income (loss) $ ( 47.4 ) $ ( 50.2 ) $ 37.9 $ 25.0

Net income (loss) from continuing operations $ ( 62.7 ) $ ( 48.1 ) $ 20.6 $ ( 5.1 )

Net income (loss) $ ( 62.7 ) $ ( 48.1 ) $ 20.6 $ ( 5.1 )

Net income (loss) attributable to Delek $ ( 70.0 ) $ ( 56.7 ) $ 11.8 $ ( 13.4 )

Basic income (loss) per share from continuing operations $ ( 0.95 ) $ ( 0.77 ) $ 0.16 $ ( 0.18 )

Diluted income (loss) per share from continuing operations $ ( 0.95 ) $ ( 0.77 ) $ 0.16 $ ( 0.18 )

(1) Adjusted to reflect the retrospective change in accounting policy from LIFO to FIFO for certain inventories.

See Note 8 for further discussion.

We lease certain retail stores, land, building and various equipment from others.

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(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 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

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(Principal Financial Officer)

February 25, 2022

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 February 25, 2022:

March 1, 2023

/s/ Ezra Uzi Yemin

Ezra Uzi Yemin

Director (Chair), President and Chief Executive Officer

Executive Chairman

/s/ Avigal Soreq

Director, President and Chief Executive Officer

(Principal Executive Officer)

10 unchanged sentences

/s/ Shlomo Zohar

/s/ Leonard Moreno

Leonard Moreno

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