Delek US Holdings, Inc. 10-K

ITEM 9A. CONTROLS AND PROCEDURES Disclosure Controls and Procedures We maintain disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e)) under the Exchange Act that are designed to provide reasonable assurance that the information that we are required to disclose in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. It should be noted that, because of inherent limitations, our disclosure controls and procedures, however well designed and operated, can provide only reasonable, and not absolute, assurance that the objectives of the disclosure controls and procedures are met. As required by paragraph (b) of Rule 13a-15 under the Exchange Act, we carried out an evaluation under the supervision and with the participation of our management, including our Chief Executive Officer and our Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report. Based on such evaluation, our Chief Executive Officer and our Chief Financial Officer have concluded that our disclosure controls and procedures were effective as of the end of the period covered by this report. Management's Annual Report on Internal Control over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Our internal control over financial reporting is a process that is designed under the supervision of our Chief Executive Officer and Chief Financial Officer, and effected by our Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP. Our internal control over financial reporting includes those policies and procedures that: • Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; • Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP and that receipts and expenditures recorded by us are being made only in accordance with authorizations of our management and Board of Directors; and • 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. 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. Management's assessment included an evaluation of the design of our internal control over financial reporting and testing the operational effectiveness of our internal control over financial reporting. Management reviewed the results of the assessment with the Audit Committee of the Board of Directors. Based on its assessment and review with the Audit Committee, management concluded that, at December 31, 2022, we maintained effective internal control over financial reporting. Report of Independent Registered Public Accounting Firm Our independent registered public accounting firm, Ernst & Young LLP, has audited the effectiveness of our internal control over financial reporting as of December 31, 2022, as stated in their report, which is included in the section beginning on page F-1. The information required by Item 8 is incorporated by reference to the section beginning on page F-1. Changes in 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. 109 | ITEM 9B. 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. ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS Not applicable. 110 | Directors, Executive Officers, Corporate Governance and Security Ownership PART III ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE 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. The information required by Item 401 of Regulation S-K regarding directors will be included under "Election of Directors" in the definitive Proxy Statement for our Annual Meeting of Stockholders expected to be held May 2, 2023 (the "Definitive Proxy Statement"), and is incorporated herein by reference. The information required by Item 401 of Regulation S-K regarding executive officers will be included under "Corporate Governance" in the Definitive Proxy Statement and is incorporated herein by reference. The information required by Item 405 of Regulation S-K will be included under "Section 16(a) Beneficial Ownership Reporting Compliance" in the Definitive Proxy Statement and is incorporated herein by reference. 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 • William J. Finnerty • Richard Marcogliese • Leonardo Moreno • Gary M. Sullivan, Jr. • Vasili (Vicky) Sutil • Laurie Z. Tolson • 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 • Anthony L. 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 ITEM 11. EXECUTIVE COMPENSATION The information required by Item 402 and paragraphs (e)(4) and (e)(5) of Item 407 of Regulation S-K will be included under "Executive Compensation" and "Corporate Governance" in the Definitive Proxy Statement and is incorporated herein by reference. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS The information required by Item 201(d) and Item 403 of Regulation S-K will be included under "Equity Compensation Plan Information" and "Security Ownership of Certain Beneficial Owners and Management" in the Definitive Proxy Statement and is incorporated herein by reference. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE The information required by Item 404 of Regulation S-K will be included under "Certain Relationships and Related Transactions" in the Definitive Proxy Statement and is incorporated herein by reference. 111 | The information required by Item 407(a) of Regulation S-K will be included under "Election of Directors" and "Corporate Governance" in the Definitive Proxy Statement and is incorporated herein by reference. ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES The information required by this item will be included under “Independent Public Accountants” in the Definitive Proxy Statement and is incorporated herein by reference. 112 | Financial Statements and Schedules PART IV ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES Certain Documents Filed as Part of this Annual Report on Form 10-K: 1. Financial Statements. The accompanying Index to Financial Statements on page F-1 of this Annual Report on Form 10-K is provided in response to this item. 2. List of Financial Statement Schedules. All schedules are omitted because the required information is either not present, not present in material amounts, included within the Consolidated Financial Statements or is not applicable. 3. Exhibits - See below. EXHIBIT INDEX Exhibit No. Description 2.1 < Agreement and Plan of Merger dated as of January 2, 2017, among Delek US Holdings, Inc., Delek Holdco, Inc., Dione Mergeco, Inc., Astro Mergeco, Inc. and Alon USA Energy, Inc. (incorporated by reference to Exhibit 2.1 to the Company's Form 8-K filed on January 3, 2017). 2.2 First Amendment to Agreement and Plan of Merger dated as of February 27, 2017, among Delek US Holdings, Inc., Delek Holdco, Inc., Dion Mergeco, Inc., Astro Mergeco, Inc., and Alon USA Energy, Inc. (incorporated by reference to Exhibit 2.6 to the Company’s Form 10-K filed on February 28, 2017). 2.3 Second Amendment to Agreement and Plan of Merger dated as of April 21, 2017, among Delek US Holdings, Inc., Delek Holdco, Inc., Dion Mergeco, Inc., Astro Mergeco, Inc., and Alon USA Energy, Inc. (incorporated by reference to Annex B-2 to the Company’s Proxy Statement/Prospectus filed pursuant to Rule 424(b)(3) on May 30, 2017). 2.4 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). 2.5 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). 3.1 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). 3.2 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). 4.1 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. 001-35721). 4.2 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. 001-35721). 4.3 Indenture, dated as of May 24, 2021, among Delek Logistics, Delek Logistics Finance Corp., the Guarantors named therein and U.S. Bank, National Association, as trustee (incorporated by reference to Exhibit 4.1 of Delek Logistics’ Form 8-K filed on May 26, 2021). 4.4 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). 4.5 Description of Common Stock (incorporated by reference to Exhibit 4.5 to the Company’s Form 10-K filed on February 25, 2022). 10.1 * 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). 10.2(a) * Delek US Holdings, Inc. 2006 Long-Term Incentive Plan (as amended through May 4, 2010) (incorporated by reference to Exhibit 10.1 to the Company's Form 10-Q filed on May 7, 2010, SEC File No. 001-32868). 10.2(b) * Director Form of Delek US Holdings, Inc. 2006 Long-Term Incentive Plan Stock Appreciation Rights Agreement (incorporated by reference to Exhibit 10.5 to the Company's Form 10-Q filed on August 6, 2010, SEC File No. 001-32868). 10.2(c) * Employee Form of Delek US Holdings, Inc. 2006 Long-Term Incentive Plan Stock Appreciation Rights Agreement (incorporated by reference to Exhibit 10.4 to the Company's Form 10-Q filed on August 6, 2010, SEC File No. 001-32868). 10.3 Tyler Throughput and Tankage Agreement, dated July 26, 2013, between Delek Refining, Ltd. and Delek Marketing & Supply, LP (incorporated by reference to Exhibit 10.1 to the Company's Form 8-K filed on August 1, 2013). 10.4 Pipelines and Tankage Agreement, dated November 7, 2012, by and between Delek Refining, Ltd. 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. 001-32868). 113 | Financial Statements and Schedules 10.5 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. Aron & Company (incorporated by reference to Exhibit 10.5 to the Company's Form 8-K filed on November 14, 2012, SEC File No. 001-32868). 10.6(a) El Dorado Throughput and Tankage Agreement, executed as of February 10, 2014, between Lion Oil Company and Delek Logistics Operating LLC, and, for limited purposes, J. Aron & Company (incorporated by reference to Exhibit 10.1 to the Company's Form 8-K filed on February 14, 2014). 10.6(b) Amendment to El Dorado Throughput and Tankage Agreement, executed as of July 22, 2016 but effective as of February 11, 2014, between Lion Oil Company and Delek Logistics Operating LLC, and, for limited purposes, J. Aron & Company (incorporated by reference to Exhibit 10.4 to the Company's Form 10-Q filed on August 5, 2016). 10.7(a) 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). 10.7(b) 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). 10.7(c) Third Amendment and Restatement of Schedules to Third Amended and Restated Omnibus Agreement, dated and effective as of May 15, 2020 (incorporated by reference to Exhibit 10.2 of the Company’s Form 8-K filed on May 18, 2020). 10.8(a) * Delek US Holdings, Inc. 2016 Long-Term Incentive Plan (incorporated by reference to Exhibit 99.1 to the Company's Registration Statement on Form S-8 filed on June 1, 2016). 10.8(b) * First Amendment to the Delek US Holdings, Inc. 2016 Long-Term Incentive Plan, effective May 8, 2018 (incorporated by reference to Exhibit 10.2 to the Company's Registration Statement on Form S-8 filed on May 31, 2018). 10.8(c) * Second Amendment to the Delek US Holdings, Inc. 2016 Long-Term Incentive Plan, effective May 5, 2020 (incorporated by reference to Exhibit 10.3 to the Company's Form 10-Q filed on May 8, 2020). 10.8(d) * Third Amendment to the Delek US Holdings, Inc. 2016 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.4 of the Company’s Form S-8 filed on June 10, 2021) 10.8(e) * 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). 10.8(f) * General Terms and Conditions for Restricted Stock Unit Awards to Executive Officers and Directors under the 2016 Delek US Holdings, Inc. Long-Term Incentive Plan (incorporated by reference to Exhibit 10.5 to the Company's Form 10-Q filed on August 5, 2016). 10.8(g) * General Terms and Conditions for Stock Appreciation Right Awards to Executive Officers and Directors under the 2016 Delek US Holdings, Inc. Long-Term Incentive Plan (incorporated by reference to Exhibit 10.6 to the Company's Form 10-Q filed on August 5, 2016). 10.8(h) * Form of Delek US Holdings, Inc. 2016 Long-Term Incentive Plan Performance Restricted Stock Unit Agreement (incorporated by reference to Exhibit 10.29(c) to the Company’s Form 10-K filed February 28, 2017). 10.8(i) * Form of Delek US Holdings, Inc. 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). 10.8(j) * 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) . 10.8(k) * 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). 10.9(a) * Alon USA Energy, Inc. Second Amended and Restated 2005 Incentive Compensation Plan (incorporated by reference to Exhibit 10.2 to Alon USA Energy, Inc.’s Form 10-Q filed on May 9, 2012, SEC File No. 001-32567). 10.9(b) * Form of Restricted Stock Award Agreement relating to Director Grants pursuant to Section 12 of the Alon USA Energy, Inc. 2005 Incentive Compensation Plan (incorporated by reference to Exhibit 10.1 to Alon USA Energy, Inc.’s Form 8-K filed on August 5, 2005, SEC File No. 001-32567). 10.9(c) * Form of Restricted Stock Award Agreement relating to Participant Grants pursuant to Section 8 of the Alon USA Energy, Inc. 2005 Incentive Compensation Plan (incorporated by reference to Exhibit 10.1 to Alon USA Energy, Inc.’s Form 8-K filed on August 23, 2005, SEC File No. 001-32567). 10.9(d) * Form II of Restricted Stock Award Agreement relating to Participant Grants pursuant to Section 8 of the Alon USA Energy, Inc. 2005 Incentive Compensation Plan (incorporated by reference to Exhibit 10.3 to Alon USA Energy, Inc.’s Form 8-K filed on November 8, 2005, SEC File No. 001-32567). 10.9(e) * Alon USA Energy, Inc. 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. 001-32567). 114 | Financial Statements and Schedules 10.9(f) * Form of Appreciation Rights Award Agreement relating to Participant Grants pursuant Section 7 of the Alon USA Energy, Inc. 2005 Incentive Compensation Plan (incorporated by reference to Exhibit 10.1 to Alon USA Energy, Inc.’s Form 8-K filed on March 12, 2007, SEC File No. 001-32567). 10.9(g) * Form of Amendment to Appreciation Rights Award Agreement relating to Participant Grants pursuant to Section 7 of the Alon USA Energy, Inc. 2005 Incentive Compensation Plan (incorporated by reference to Exhibit 10.2 to Alon USA Energy, Inc.’s Form 8-K filed on January 27, 2010, SEC File No. 001-32567). 10.9(h) * Form of Award Agreement relating to Executive Officer Restricted Stock Grants pursuant to the Alon USA Energy, Inc. 2005 Amended and Restated Incentive Compensation Plan (incorporated by reference to Exhibit 10.2 to Alon USA Energy, Inc.’s Form 8-K filed on May 9, 2011, SEC File No. 001-32567). 10.10 * Amended and Restated Executive Employment Agreement, dated as of May 8, 2020, by and between Delek US Holdings, Inc. and Ezra Uzi Yemin (incorporated by reference to Exhibit 10.4 to the Company’s Form 10-Q filed on May 8, 2020). 10.11 * 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). 10.12 * 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). 10.13 * 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). 10.14 * 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). 10.15 *# Change in Control Severance Agreement, dated for reference as of June 13, 2022, by and between the Company and Avigal Soreq. 10.16 * Executive Employment Agreement, dated August 1, 2020, by and between Delek US Holdings, Inc. and Reuven Spiegel (incorporated by reference to Exhibit 10.5 of the Company’s Form 10-Q filed on August 7, 2020). 10.17 Pipelines, Storage and Throughput Facilities Agreement (Big Spring Refinery Logistics Assets and Duncan Terminal), dated March 20, 2018 and effective as of March 1, 2018, by and among Alon USA, LP, DKL Big Spring, LLC, for the limited purposes specified therein, Delek US, and for the limited purposes specified therein, J. Aron & Company LLC (incorporated by reference to Exhibit 10.1 to the Company's Form 8-K filed on March 26, 2018). 10.18 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). 10.19(a) Term Loan 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, Wells Fargo Securities, LLC, Barclays Bank PLC, SunTrust Robinson Humphrey, Inc., and Regions Capital Markets, a division of Regions Bank, each as a joint lead arranger and joint bookrunner, and The Bank of Tokyo-Mitsubishi, Ltd., Credit Suisse Securities (USA) LLC, PNC Capital Markets LLC and Fifth Third Bank, each as a co-manager (incorporated by reference to Exhibit 10.1 to the Company's Form 8-K filed on April 5, 2018). 10.19(b) Amendment No. 1 to Term Loan Credit Agreement, dated as of October 26, 2018 by and among Delek US Holdings, Inc., as borrower, the guarantors thereto, the lenders from time to time party thereto and Wells Fargo Bank, National Association, as administrative agent LLC (incorporated by reference to Exhibit 10.6 to the Company’s Quarterly Report on Form 10-Q filed on November 8, 2019). 10.19(c) First Incremental Amendment to Term Loan Credit Agreement, dated as of May 22, 2019, by and 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 to the Company's Form 8-K filed on May 29, 2019). 10.19(d) Second Incremental Amendment to Term Loan Credit Agreement, dated as of November 12, 2019, by and 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 to the Company’s Form 8-K filed on November 15, 2019). 10.19(e) 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). 10.19(f) 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). 115 | Financial Statements and Schedules 10.20(a) 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. from time to time party thereto, as guarantors, Wells Fargo, Barclays Bank PLC, Regions Capital Markets, a division of Regions Bank, and SunTrust Robinson Humphrey, Inc., each as a joint lead arranger and joint book runner, Barclays Bank PLC, Regions Bank, and SunTrust Bank, each as a co-syndication agent, and Fifth Third Bank, The Bank of Tokyo-Mitsubishi UFJ, Ltd., PNC Bank, National Association, and Credit Suisse AG, Cayman Islands Branch, each as a co-documentation agent (incorporated by reference to Exhibit 10.2 to the Company's Form 8-K filed on April 5, 2018). 10.20(b) First Amendment to Second Amended and Restated Credit Agreement, dated as of May 14, 2018, by and among Delek US Holdings, Inc., as borrower, Wells Fargo Bank, National Association, as administrative agent for each member of the Lender Group and the Bank Product Providers and the lenders from time to time party thereto (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed on November 8, 2019). 10.20(c) Second Amendment to Second Amended and Restated Credit Agreement, dated as of July 13, 2018, by and among Delek US Holdings, Inc., as borrower, Wells Fargo Bank, National Association, as administrative agent for each member of the Lender Group and the Bank Product Providers and the lenders from time to time party thereto (incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q filed on November 8, 2019). 10.20(d) Third Amendment to Second Amended and Restated Credit Agreement, dated October 18, 2019 (incorporated by reference to Exhibit 10.31 of the Company’s Form 10-K filed on February 28, 2020). 10.20(e) 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). 10.21(a) 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). 10.21(b) 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). 10.22 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) . 10.23 Throughput and Deficiency Agreement, dated and effective as of March 31, 2020, by and between Lion Oil Trading & Transportation, LLC and DKL Permian Gathering, LLC (incorporated by reference to Exhibit 10.1 of the Company’s Form 8-K filed on April 6, 2020). 10.24 Transportation Services Agreement, dated May 15, 2020 and effective as of May 1, 2020, between Delek Refining, Ltd., Lion Oil Company and DKL Transportation, LLC (incorporated by reference to Exhibit 10.1 of the Company’s Form 8-K filed on May 18, 2020). 10.25 Third Amended and Restated Supply and Offtake Agreement, dated as of April 7, 2020, between J. Aron & Company LLC and Alon Refining Krotz Springs, Inc. (incorporated by reference to Exhibit 10.9 of the Company’s Form 10-Q filed on August 7, 2020). 10.26 Third Amended and Restated Master Supply and Offtake Agreement, dated as of April 7, 2020, among J. 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). 10.27 Letter Agreement, dated as of December 21, 2020 by and between J. Aron & Company LLC, Lion Oil Company, and Lion Oil Trading & Transportation, LLC (incorporated by reference to Exhibit 10.24 of the Company’s Form 10-K filed on March 1, 2021) 10.28 Third Amended and Restated Supply and Offtake Agreement, dated as of April 7, 2020, between J. Aron & Company LLC and Alon USA, LP (incorporated by reference to Exhibit 10.11 of the Company’s Form 10-Q filed on August 7, 2020) 10.29 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). 10.30 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). 10.31 * 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). 116 | Financial Statements and Schedules 10.32 * Executive Employment Agreement, effective February 3, 2021, by and between Delek US Holdings, Inc. and Denise McWatters (incorporated by reference to Exhibit 10.25 to the Company’s Form 10-K filed on February 25, 2022). 10.33 * Executive Employment Agreement, effective March 1, 2021, by and between Delek US Holdings, Inc. and Todd O’Malley (incorporated by reference to Exhibit 10.26 to the Company’s Form 10-K filed on February 25, 2022). 10.34 * 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). 10.35 *# Change in Control and Severance Agreement, dated as of March 28, 2022, by and between the Company and Todd O’Malley. 10.36 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. Inc. Beckton Corp. and Carl C. Icahn (incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K filed on March 7, 2022). 10.37 * 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). 10.38 * 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). 10.39 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). 10.40 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). 10.41 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). 10.42 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) . 10.43 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). 10.44 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). 21.1 # Subsidiaries of the Registrant. 23.1 # Consent of Ernst & Young LLP. 31.1 # Certification of the Company's Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a) under the Securities Exchange Act. 31.2 # Certification of the Company's Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a) under the Securities Exchange Act. 32.1 ## Certification of the Company's Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 32.2 ## 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. 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): (i) Consolidated Balance Sheets as of December 31, 2022 and 2021, (ii) Consolidated Statements of Income for the years ended December 31, 2022, 2021 and 2020, (iii) Consolidated Statements of Comprehensive Income for the years ended December 31, 2022, 2021 and 2020, (iv) Consolidated Statements of Changes in Stockholders’ Equity for the years ended December 31, 2022, 2021 and 2020, (v) Consolidated Statements of Cash Flows for the years ended December 31, 2022, 2021 and 2020 and (vi) Notes to Consolidated Financial Statements. 104 # Cover Page Interactive Data File formatted in iXBRL (Inline eXtensible Business Reporting Language) and contained in Exhibit 101. * Management contract or compensatory plan or arrangement. # Filed herewith. ## Furnished herewith. < Certain schedules have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The Company agrees to supplementally furnish a copy of any of the omitted schedules to the United States Securities and Exchange Commission upon request. 117 | Financial Statements and Schedules Delek US Holdings, Inc. Consolidated Financial Statements As of December 31, 2022 and 2021 and For Each of the Three Years Ended December 31, 2022, 2021 and 2020 INDEX TO FINANCIAL STATEMENTS Reports of Independent Registered Public Accounting Firm (PCAOB ID: 000 42 ) F- 2 Audited Financial Statements: Consolidated Balance Sheets F- 5 Consolidated Statements of Income F- 6 Consolidated Statements of Comprehensive Income F- 7 Consolidated Statements of Changes in Stockholders' Equity F- 8 Consolidated Statements of Cash Flows F- 11 Notes to Consolidated Financial Statements F- 12 F-1 | Financial Statements and Schedules Report of Independent Registered Public Accounting Firm To the Board of Directors and Stockholders of Delek US Holdings, Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Delek US Holdings, Inc. (the “Company”) as of December 31, 2022 and 2021, and 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 (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2022, in conformity with U.S. 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, 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 These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. F-2 | Financial Statements and Schedules 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 We have served as the Company’s auditor since 2002. Nashville, Tennessee March 1, 2023 F-3 | Financial Statements and Schedules Report of Independent Registered Public Accounting Firm To the Board of Directors and Stockholders of Delek US Holdings, Inc. Opinion on Internal Control over Financial Reporting We have audited Delek US Holdings, Inc.’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) (the COSO criteria). In our opinion, Delek US Holdings, Inc. (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, 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 The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Definition and Limitations of Internal Control Over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. 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 or procedures may deteriorate. /s/ Ernst & Young LLP Nashville, Tennessee March 1, 2023 F-4 | Financial Statements and Schedules Delek US Holdings, Inc. Consolidated Balance Sheets (In millions, except share and per share data) December 31, 2021 December 31, 2022 As Adjusted (1) ASSETS Current assets: Cash and cash equivalents $ 841.3 $ 856.5 Accounts receivable, net 1,234.4 776.6 Inventories, net of inventory valuation reserves 1,518.5 1,260.7 Other current assets 122.7 126.0 Total current assets 3,716.9 3,019.8 Property, plant and equipment: Property, plant and equipment 4,349.0 3,645.4 Less: accumulated depreciation ( 1,572.6 ) ( 1,338.1 ) Property, plant and equipment, net 2,776.4 2,307.3 Operating lease right-of-use assets 179.5 208.5 Goodwill 744.3 729.7 Other intangibles, net 315.6 102.7 Equity method investments 359.7 344.1 Other non-current assets 100.4 100.5 Total assets $ 8,192.8 $ 6,812.6 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable $ 1,745.6 $ 1,695.3 Current portion of long-term debt 74.5 92.2 Current portion of obligation under Inventory Intermediation Agreements 49.9 487.5 Current portion of operating lease liabilities 49.6 53.9 Accrued expenses and other current liabilities 1,166.8 797.8 Total current liabilities 3,086.4 3,126.7 Non-current liabilities: Long-term debt, net of current portion 2,979.2 2,125.8 Obligation under Inventory Intermediation Agreements 491.8 — Environmental liabilities, net of current portion 111.5 109.5 Asset retirement obligations 41.8 38.3 Deferred tax liabilities 266.5 214.5 Operating lease liabilities, net of current portion 122.4 152.0 Other non-current liabilities 23.7 31.8 Total non-current liabilities 4,036.9 2,671.9 Stockholders’ equity: Preferred stock, $ 0.01 par value, 10,000,000 shares authorized, no shares issued and outstanding — — Common stock, $ 0.01 par value, 110,000,000 shares authorized, 84,509,517 shares and 91,772,080 shares issued at December 31, 2022 and 2021, respectively 0.9 0.9 Additional paid-in capital 1,134.1 1,206.5 Accumulated other comprehensive loss ( 5.2 ) ( 3.8 ) Treasury stock, 17,575,527 shares, at cost, at December 31, 2022 and 2021, respectively ( 694.1 ) ( 694.1 ) Retained earnings 507.9 384.7 Non-controlling interests in subsidiaries 125.9 119.8 Total stockholders’ equity 1,069.5 1,014.0 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 F-5 | Financial Statements and Schedules Delek US Holdings, Inc. Consolidated Statements of Income (In millions, except share and per share data) Year Ended December 31, 2021 2020 2022 As Adjusted (1) As Adjusted (1) Net revenues $ 20,245.8 $ 10,648.2 $ 7,301.8 Cost of sales: Cost of materials and other 18,355.6 9,643.9 6,845.5 Operating expenses (excluding depreciation and amortization presented below) 701.8 502.0 475.7 Depreciation and amortization 263.8 239.6 241.6 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 General and administrative expenses 348.8 212.6 234.6 Depreciation and amortization 23.2 25.0 26.0 Impairment of goodwill — — 126.0 Other operating income, net ( 12.5 ) ( 27.3 ) ( 13.1 ) Total operating costs and expenses 19,756.3 10,682.9 8,034.1 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, net ( 2.5 ) ( 15.8 ) ( 3.5 ) Total non-operating expense, net 135.1 102.6 35.1 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 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: Basic 70,789,458 73,984,104 73,598,389 Diluted 71,516,361 73,984,104 73,598,389 (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 F-6 | Financial Statements and Schedules Delek US Holdings, Inc. Consolidated Statements of Comprehensive Income (In millions) Year Ended December 31, 2021 2020 2022 As Adjusted (1) As Adjusted (1) Net income (loss) $ 290.5 $ ( 95.3 ) $ ( 573.8 ) Other comprehensive income (loss): Commodity contracts designated as cash flow hedges: Net loss related to commodity cash flow hedges — ( 0.2 ) ( 1.3 ) Income tax benefit — — ( 0.3 ) 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 Postretirement benefit plans: Unrealized gain (loss) arising during the year related to: Net actuarial gain (loss) ( 1.9 ) 4.7 ( 8.9 ) Reclassified to other expense (income), net: Amortization of net actuarial loss — — 0.1 Gain (loss) related to postretirement benefit plans, net ( 1.9 ) 4.7 ( 8.8 ) Income tax expense (benefit) ( 0.5 ) 1.1 ( 1.9 ) Net comprehensive gain (loss) on postretirement benefit plans ( 1.4 ) 3.6 ( 6.9 ) Total other comprehensive income (loss) ( 1.4 ) 3.4 ( 7.3 ) Comprehensive income (loss) $ 289.1 $ ( 91.9 ) $ ( 581.1 ) Comprehensive income attributable to non-controlling interest 33.4 33.0 37.6 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 F-7 | Financial Statements and Schedules Delek US Holdings, Inc. Consolidated Statements of Changes in Stockholders' Equity (In millions, except share and per share data) 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 Balance at December 31, 2019: 90,987,025 $ 0.9 $ 1,151.9 $ 0.1 $ 1,205.6 ( 17,516,814 ) $ ( 692.2 ) $ 169.0 $ 1,835.3 Cumulative effect of adopting accounting principle regarding measurement of credit losses on financial instruments, net — — — — ( 6.5 ) — — — ( 6.5 ) 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 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 ) Equity-based compensation expense — — 22.7 — — — — 0.1 22.8 Distribution to non-controlling interest — — — — — — — ( 32.9 ) ( 32.9 ) 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 — — — — — — — — Balance at December 31, 2020: 91,356,868 $ 0.9 $ 1,185.1 $ ( 7.2 ) $ 513.3 ( 17,575,527 ) $ ( 694.1 ) $ 118.4 $ 1,116.4 F-8 | Financial Statements and Schedules Delek US Holdings, Inc. Consolidated Statements of Changes in Stockholders' Equity (Continued) (In millions, except share and per share data) 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 Balance at December 31, 2020: 91,356,868 $ 0.9 $ 1,185.1 $ ( 7.2 ) $ 513.3 ( 17,575,527 ) $ ( 694.1 ) $ 118.4 $ 1,116.4 Net (loss) income — — — — ( 128.3 ) — — 33.0 ( 95.3 ) 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 Equity-based compensation expense — — 24.4 — — — — 0.2 24.6 Distribution to non-controlling interest — — — — — — — ( 32.4 ) ( 32.4 ) 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: 91,772,080 $ 0.9 $ 1,206.5 $ ( 3.8 ) $ 384.7 ( 17,575,527 ) $ ( 694.1 ) $ 119.8 $ 1,014.0 F-9 | Financial Statements and Schedules Delek US Holdings, Inc. Consolidated Statements of Changes in Stockholders' Equity (Continued) (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 Shares Amount Shares Amount 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 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 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 ) Balance at December 31, 2022: 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 F-10 | Financial Statements and Schedules Delek US Holdings, Inc. Consolidated Statements of Cash Flows (In millions, except per share data) Year Ended December 31, 2021 2020 2022 As Adjusted (1) As Adjusted (1) Cash flows from 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 Non-cash lease expense 62.6 60.6 59.7 Deferred income taxes 61.6 ( 38.9 ) ( 33.0 ) Impairment of goodwill — — 126.0 Income from equity method investments ( 57.7 ) ( 18.3 ) ( 30.3 ) Dividends from equity method investments 32.3 29.2 33.2 Non-cash lower of cost or market/net realizable value adjustment 1.9 8.3 0.2 Gain on sale of non-operating refinery — — ( 56.8 ) Equity-based compensation expense 29.1 24.6 22.8 Other 14.9 ( 11.2 ) 13.9 Changes in assets and liabilities: Accounts receivable ( 428.9 ) ( 253.3 ) 259.7 Inventories and other current assets ( 254.4 ) ( 468.6 ) 277.7 Fair value of derivatives ( 4.6 ) 39.6 ( 23.1 ) Accounts payable and other current liabilities 298.7 702.5 ( 480.3 ) Obligation under Inventory Intermediation Agreements 102.3 139.8 ( 129.6 ) Non-current assets and liabilities, net ( 10.0 ) ( 12.2 ) ( 16.8 ) Net cash provided by (used in) operating activities 425.3 371.4 ( 282.9 ) Cash flows from investing activities: Acquisition of 3 Bear ( 625.6 ) — — Equity method investment contributions ( 0.1 ) ( 1.7 ) ( 31.2 ) Distributions from equity method investments 9.9 10.3 72.0 Purchases of property, plant and equipment ( 311.4 ) ( 222.2 ) ( 269.4 ) 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 non-operating refinery — — 39.9 Insurance proceeds — 7.0 — Contract termination recoveries of capital expenditures — 17.3 — Net cash used in investing activities ( 931.6 ) ( 178.4 ) ( 191.3 ) Cash flows from financing activities: Proceeds from long-term revolvers 3,385.3 1,339.3 1,883.1 Payments on long-term revolvers ( 2,472.8 ) ( 1,827.9 ) ( 1,754.9 ) Proceeds from term debt 1,250.0 400.0 185.0 Payments on term debt ( 1,289.1 ) ( 43.4 ) ( 37.9 ) Proceeds from product financing agreements 994.6 916.1 297.2 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 ) Repurchase of common stock ( 129.6 ) — ( 1.9 ) Repurchase of non-controlling interest — — ( 28.9 ) Distribution to non-controlling interest ( 36.0 ) ( 32.4 ) ( 32.9 ) 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 ) Financing commitment cancellation proceeds — 10.2 — Deferred financing costs paid ( 62.5 ) ( 6.2 ) ( 0.7 ) 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 Cash and cash equivalents at the end of the period $ 841.3 $ 856.5 $ 787.5 Delek US Holdings, Inc. Consolidated Statements of Cash Flows (Continued) (In millions, except per share data) Year Ended December 31, 2022 2021 2020 Supplemental disclosures of cash flow information: Cash paid during the period for: Interest, net of capitalized interest of $ 2.1 million, $ 0.9 million and $ 0.4 million in the 2022, 2021 and 2020 periods, respectively $ 186.7 125.3 123.7 Income taxes $ 27.6 $ 4.2 $ 3.6 Non-cash investing activities: Increase (Decrease) in accrued capital expenditures $ 31.8 $ 4.9 $ ( 30.1 ) Non-cash financing activities: 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 F-11 | Financial Statements and Schedules Delek US Holdings, Inc. Notes to Consolidated Financial Statements 1. General Delek US Holdings, Inc. operates through its consolidated subsidiaries, which include Delek US Energy, Inc. ("Delek Energy") (and its subsidiaries) and Alon USA Energy, Inc. ("Alon") (and its subsidiaries). 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. Delek's Common Stock is listed on the NYSE under the symbol "DK." 2. Accounting Policies Basis of Presentation Our consolidated financial statements include the accounts of Delek and its subsidiaries. All significant intercompany transactions and account balances have been eliminated in consolidation. We have evaluated subsequent events through the filing of this Form 10-K. Any material subsequent events that occurred during this time have been properly recognized or disclosed in our financial statements. Our consolidated financial statements include Delek Logistics Partners, LP ("Delek Logistics", 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. We are also considered to be the primary beneficiary for accounting purposes for this entity and are Delek Logistics' primary customer. As Delek Logistics does not derive an amount of gross margin material to us from third parties, there is limited risk to Delek associated with Delek Logistics' operations. However, in the event that Delek Logistics incurs a loss, our operating results will reflect such loss, net of intercompany eliminations, to the extent of our ownership interest in this entity. The preparation of financial statements in conformity with 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. Reclassifications Certain immaterial reclassifications have been made to prior period presentation in order to conform to the current year presentation. Segment Reporting Delek is an integrated downstream energy business based in Brentwood, Tennessee, and has three primary lines of business: 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. For the periods presented, we have aggregated 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 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); and • intercompany eliminations. 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. F-12 | Cash and Cash Equivalents Delek maintains cash and cash equivalents in accounts with large, U.S. or multi-national financial institutions. All highly liquid investments purchased with a term of three months or less are considered to be cash equivalents. As of December 31, 2022 and 2021, these cash equivalents consisted primarily of bank money market accounts and bank certificates of deposit, as well as overnight investments in U.S. Government or its agencies' obligations and bank repurchase obligations collateralized by U.S. Government or its agencies' obligations. Accounts Receivable Accounts receivable primarily consists of trade receivables generated in the ordinary course of business, but may also include receivables on commodity sales contracts that are part of crude optimization and are, therefore, related to transactions that are reflected as reductions of cost of materials and other, rather than revenue. Such other receivables are with the same or similar customers as our trade receivables, and are subject to the same characteristics regarding the nature, timing, pricing and risk. Delek recorded an allowance for doubtful accounts related to accounts receivable of $ 6.8 million and $ 6.5 million as of December 31, 2022 and 2021, respectively. Credit is extended based on evaluation of the customer’s financial condition. We perform ongoing credit evaluations of our customers and require letters of credit, prepayments or other collateral or guarantees as management deems appropriate. Allowance for doubtful accounts is based on a combination of historical experience and specific identification methods. Credit risk is minimized as a result of the ongoing credit assessment of our customers and a lack of concentration in our customer base. Credit losses are charged to allowance for doubtful accounts when deemed uncollectible. Our allowance for doubtful accounts is reflected as a reduction of accounts receivable in the consolidated balance sheets. 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. Inventory 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. We are not subject to concentration risk with specific suppliers, since our crude oil and refined products inventory purchases are commodities that are readily available from a large selection of suppliers. Investment Commodities Investment commodities represent those commodities (generally crude oil) physically on hand as a result of trading activities with physical forward contracts where such crude will not be used (either directly in production or indirectly through inventory optimization) in the normal course of our refining business. Such investment commodities are maintained on a weighted average cost basis for determining realized gains and losses on physical purchases and sales under forward contracts, and ending balances are adjusted to fair value at each reporting date using published market prices of the commodity on the applicable exchange. The investment commodities are included in other current assets on the accompanying consolidated balance sheets and changes in fair value are recorded in other operating income in the accompanying consolidated statements of income. Property, Plant and Equipment Assets acquired by Delek in conjunction with business acquisitions are recorded at estimated fair value at the acquisition date in accordance with the purchase method of accounting as prescribed in Accounting Standards Codification ("ASC") 805, Business Combinations ("ASC 805"). Other acquisitions of property and equipment are carried at cost. Betterments, renewals and extraordinary repairs that extend the life of an asset are capitalized. Maintenance and repairs are charged to expense as incurred. Delek owns certain fixed assets on leased locations and depreciates these assets and asset improvements over the lesser of management's estimated useful lives of the assets or the remaining lease term. F-13 | Depreciation is computed using the straight-line method over management's estimated useful lives of the related assets, which are as follows: Years Building and building improvements 15 - 40 Refinery machinery and equipment 5 - 40 Pipelines and terminals 15 - 40 Retail store equipment and site improvements 7 - 40 Refinery turnaround costs 4 - 6 Automobiles 3 - 5 Computer equipment and software 3 - 10 Furniture and fixtures 5 - 15 Asset retirement obligation assets 15 - 50 Other Intangible Assets 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 5 to 35 years. The amortization expense is included in depreciation and amortization on the accompanying consolidated statements of income. Acquired intangible assets determined to have an indefinite useful life are not amortized, but are instead tested for impairment in connection with our evaluation of long-lived assets as events and circumstances indicate that the asset might be impaired. Property, Plant and Equipment and Other Intangibles Impairment Property, plant and equipment held and used and other intangibles are evaluated for impairment whenever indicators of impairment exist. In accordance with ASC 360, Property, Plant and Equipmen t ("ASC 360") and ASC 350, Intangibles - Goodwill and Other ("ASC 350"), Delek evaluates the realizability of these long-lived assets as events occur that might indicate potential impairment. In doing so, Delek assesses whether the carrying amount of the asset is recoverable by estimating the sum of the future cash flows expected to result from the asset, undiscounted and without interest charges. If the carrying amount is more than the recoverable amount, an impairment charge must be recognized based on the fair value of the asset. These impairment charges are included in other operating income in our consolidated statements of income. There were no impairment charges for the years ended December 31, 2022, 2021 or 2020. Equity Method Investments For equity investments that are not required to be consolidated under the variable or voting interest model, we evaluate the level of influence we are able to exercise over an entity’s operations to determine whether to use the equity method of accounting. Our judgment regarding the level of influence over an equity method investment includes considering key factors such as our ownership interest, participation in policy-making and other significant decisions and material intercompany transactions. Equity investments for which we determine we have significant influence are accounted for as equity method investments. Amounts recognized for equity method investments are included in equity method investments in our consolidated balance sheets and adjusted for our share of the net earnings and losses of the investee and cash distributions, which are separately stated in our consolidated statements of income and our consolidated statements of cash flows. We evaluate our equity method investments presented for impairment whenever events or changes in circumstances indicate that the carrying amounts of such investments may be impaired. There were no impairment losses recorded on equity method investments for the years ended December 31, 2022, 2021 or 2020. See Note 7 for further information on our equity method investments. Variable Interest Entities Our consolidated financial statements include the financial statements of our subsidiaries and variable interest entities, of which we are the primary beneficiary. We evaluate all legal entities in which we hold an ownership or other pecuniary interest to determine if the entity is a VIE. Variable interests can be contractual, ownership or other pecuniary interests in an entity that change with changes in the fair value of the VIE’s assets. If we are not the primary beneficiary, the general partner or another limited partner may consolidate the VIE, and we record the investment as an equity method investment. Capitalized Interest Delek capitalizes interest on capital projects associated with the refining and logistics segments. Refinery Turnaround Costs Refinery turnaround costs are incurred in connection with planned shutdowns and inspections of our refineries' major units to perform necessary repairs and replacements. Refinery turnaround costs are deferred when incurred, classified as property, plant and equipment and amortized on a straight-line basis over that period of time estimated to lapse until the next planned turnaround occurs. Refinery turnaround costs include, among other things, the cost to repair, restore, refurbish or replace refinery equipment such as vessels, tanks, reactors, piping, rotating equipment, instrumentation, electrical equipment, heat exchangers and fired heaters. F-14 | Goodwill and Impairment Goodwill in an acquisition represents the excess of the aggregate purchase price over the fair value of the identifiable net assets. Goodwill is reviewed at least annually during the fourth quarter for impairment, or more frequently if indicators of impairment exist, such as disruptions in our business, unexpected significant declines in operating results or a sustained market capitalization decline. Goodwill is evaluated for impairment by comparing the carrying amount of the reporting unit to its estimated fair value. 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. In assessing the recoverability of goodwill, assumptions are made with respect to future business conditions and estimated expected future cash flows to determine the fair value of a reporting unit. We may consider inputs such as a market participant weighted average cost of capital, gross margin, capital expenditures and long-term growth rates based on historical information and our best estimate of future forecasts, all of which are subject to significant judgment and estimates. We may also consider a market approach in determining or corroborating the fair values of the reporting units using a multiple of expected future cash flows, such as those used by third-party analysts, which is also subject to significant judgment and estimates. If these estimates and assumptions change in the future, due to factors such as a decline in general economic conditions, competitive pressures on sales and margins and other economic and industry factors beyond management's control, an impairment charge may be required. 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. There was no impairment during the years ended December 31, 2022 and 2021, respectively. 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. Derivatives 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. On a regular basis, Delek enters into commodity contracts with counterparties for the purchase or sale of crude oil, blendstocks, and various finished products. We evaluate these contracts under ASC 815 and do not measure at fair value if they qualify for, and we elect, the normal purchase / normal sale ("NPNS") exception. Delek's policy under the guidance of ASC 815-10-45, Derivatives and Hedging - Other Presentation Matters ("ASC 815-10-45"), is to net the fair value amounts recognized for multiple derivative instruments executed with the same counterparty and offset these values against the cash collateral arising from these derivative positions. F-15 | Fair Value of Financial Instruments The fair values of financial instruments are estimated based upon current market conditions and quoted market prices for the same or similar instruments. Management estimates that the carrying value approximates fair value for all of Delek's assets and liabilities that fall under the scope of ASC 825, Financial Instruments ("ASC 825"). Delek also applies the provisions of ASC 825 as it pertains to the fair value option with respect to certain financial instruments. This option 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. 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 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. This standard also requires that we assess the impact of nonperformance risk on our derivatives. Nonperformance risk is not considered material to our financial statements as of December 31, 2022 and 2021. 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") with similar terms. See Notes 9 and 12 for further discussion. Environmental Credits and Related Regulatory Obligations As part of our refining operations, we generate certain regulatory environmental credit obligations due to the U.S. Environmental Protection Agency (“EPA”) or other regulatory agencies. Additionally, we may generate, during the operation of our refining or other activities, or purchase on a market, environmental credits for purposes of ultimately meeting expected environmental credit obligations. These resultant net environmental credit obligations are financial instruments under ASC 825. For those financial instruments where (1) there are consistently available observable market inputs or market-corroborated inputs; and (2) there continues to be (or is reasonably expected to be) sustained liquidity in the applicable credits market, we generally apply the fair value option, as available pursuant to ASC 825. We recognize a current liability at the end of each reporting period in which we do not have sufficient environmental credits to cover the current environmental credits obligation (a “deficit”), and we recognize a current asset at the end of each reporting period in which we have generated or acquired environmental credits meeting our recognition criteria in excess of our current environmental credits obligation (a “surplus”). Any obligation surplus or deficit would be measured at fair value either directly through the observable inputs or indirectly through the market-corroborated inputs. The net cost of environmental credits used each period as well as changes to fair value attributable to our environmental credit obligations (surplus or deficit) are charged to cost of materials and other in the consolidated statements of income. Our environmental credit obligations predominantly relate to EPA’s Renewable Fuel Standard - 2 ("RFS-2"), which requires that certain refiners generate environmental credits, called Renewable Identification Numbers ("RINs"), by blending renewable fuels into the fuel products they produce, or else purchasing RINs on the market, and that such RINs shall be used to satisfy the related environmental credit obligation. 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 or generate or obtain sufficient RINs, it must purchase RINs to satisfy its annual requirement ("RINs Obligation"). To the extent that we have purchased RINs or transferred RINs to our refineries, each refinery’s RINs Obligation may be a surplus or deficit at the end of each reporting period (their respective “Net RINs Obligation”). Because our Net RINs Obligations exceed the RINs we are able to generate annually on a consolidated basis, and because we have the legal ability to transfer RINs generated or purchased through any of our entities to our obligated parties as needed, we view and manage the Company’s individual Net RINs Obligations, as well as any non-obligated party RINs holdings, on a consolidated basis. Therefore, the sum of our individual obligated parties’ Net RINs Obligations as well as RINs held by our non-obligated parties which meet our recognition criteria, comprises the Company’s “Consolidated Net RINs Obligation.” For all periods presented in these consolidated financial statements, the individual financial instruments relating to specific category and vintage requirements under RFS-2 comprising our Consolidated Net RINs Obligation are subject to market risk and meet the criteria set forth above. Therefore, we have elected to apply the fair value option to the individual financial instruments comprising our Consolidated Net RIN Obligation, using the fair value guidance provided by ASC 820. Recognition of production-related RINs Obligation expense reflects the accrual of our RINs Obligation based on the current period production using current market price of RINs. We record fair value adjustments to the RINs Obligation to reflect the ending market price of the underlying RINs relating to RINs Obligation incurred on previous production that is still outstanding. We also may have changes in fair value attributable to changes in other observable market inputs, such as changes in volumetric expectations for obligation years where the volumetric rates have not yet been enacted. Therefore, fair value adjustments represent adjustments for changes in observable inputs from what they were when we initially incurred and recorded the obligation. F-16 | Other Related Transactions From time to time, Delek enters into future commitments to purchase or sell RINs at fixed prices and quantities, which are used to manage the costs associated with our RINs Obligation. These future RINs commitment contracts meet the definition of derivative instruments under ASC 815, and are measured at fair value based on quoted prices from an independent pricing service. Changes in the fair value of these future RINs commitment contracts are recorded in cost of materials and other on the consolidated statements of income. See Note 11 for further information. Additionally, from time to time, we may elect to sell surplus environmental credits and contemporaneously enter into a corresponding obligation to repurchase substantially identical environmental credits at a future date to provide an additional source of short-term financing and to take advantage of market liquidity for holdings that are not currently required for operations. We account for such transactions as product financing arrangements. In such cases, the sale is not recognized, but rather the proceeds are treated as product financing proceeds where a corresponding product financing obligation is recorded, while the subsequent repurchase is treated as repayment of the product financing obligation, with the difference recorded as interest expense over the intervening period. Such transactions are included in our cash flows from financing transactions. Self-Insurance Reserves Delek has varying deductibles or self-insured retentions on our workers’ compensation, general liability, automobile liability insurance and medical claims for certain employees with coverage above the deductibles or self-insured retentions in amounts management considers adequate. 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 such differences are identified. Environmental Expenditures It is Delek's policy to accrue environmental and clean-up related costs of a non-capital nature when it is both probable that a liability has been incurred and the amount can be reasonably estimated. Environmental liabilities represent the current estimated costs to investigate and remediate contamination at sites where we have environmental exposure. This estimate is based on assessments of the extent of the contamination, the selected remediation technology and review of applicable environmental regulations, typically considering estimated activities and costs for 15 years, and up to 30 years if a longer period is believed reasonably necessary. Such estimates may require judgment with respect to costs, time frame and extent of required remedial and clean-up activities. Accruals for estimated costs from environmental remediation obligations generally are recognized no later than completion of the remedial feasibility study and include, but are not limited to, costs to perform remedial actions and costs of machinery and equipment that are dedicated to the remedial actions and that do not have an alternative use. Such accruals are adjusted as further information develops or circumstances change. We discount environmental liabilities to their present value if payments are fixed or reliably determinable. Expenditures for equipment necessary for environmental issues relating to ongoing operations are capitalized. Provisions for environmental liabilities generally are recognized in operating expenses. Changes in laws and regulations and actual remediation expenses compared to historical experience could significantly impact our results of operations and financial position. We believe the estimates selected, in each instance, represent our best estimate of future outcomes, but the actual outcomes could differ from the estimates selected. Asset Retirement Obligations Delek initially recognizes liabilities which represent the fair value of a legal obligation to perform asset retirement activities, including those that are conditional on a future event, when the amount can be reasonably estimated. If a reasonable estimate cannot be made at the time the liability is incurred, we record the liability when sufficient information is available to estimate the liability’s fair value. In the refining segment, we have asset retirement obligations with respect to our refineries due to various legal obligations to clean and/or dispose of these assets at the time they are retired. In the logistics segment, these obligations relate to the required cleanout of the pipeline and terminal tanks and removal of certain above-grade portions of the pipeline situated on right-of-way property. In the retail segment, we have asset retirement obligations related to the removal of underground storage tanks and the removal of brand signage at owned and leased retail sites which are legally required under the applicable leases. The asset retirement obligation for storage tank removal on leased retail sites is accreted over the expected life of the owned retail site or the average retail site lease term. In order to determine fair value, management must make certain estimates and assumptions including, among other things, projected cash flows, a credit-adjusted risk-free rate and an assessment of market conditions that could significantly impact the estimated fair value of the asset retirement obligations. We believe the estimates selected, in each instance, represent our best estimate of future outcomes, but the actual outcomes could differ from the estimates selected. Guarantees We account for guarantees pursuant to the guidance in ASC 460, Guarantees . The fair value of a noncontingent guarantee is determined and recorded as a liability at the time the guarantee is contractually executed, and the initial liability is subsequently reduced as we are released from exposure under the guarantee. We may amortize the noncontingent guarantee liability over the relevant time period, if one exists, based on the facts and circumstances surrounding each type of guarantee, including whether the risk underlying the guarantee diminishes over time. F-17 | Otherwise, we will record changes in the fair value of the liability as they occur and can be reasonably estimated and will reverse the fair value liability when there is no further exposure under the guarantee. Changes to the guarantee liability are recognized in the consolidated income statement on the line item that best represents the nature of the guarantee. When the contingent performance on a guarantee becomes probable and the liability can be reasonably estimated, we accrue an additional liability for the amount that such liability exceeds the carrying value of the noncontingent guarantee, based on the facts and circumstances at that time. Revenue Recognition The Company recognizes revenue when it satisfies a performance obligation by transferring control over a product or by providing services to a customer. Refining Revenues for products sold are recorded at the point of sale upon delivery of product, which is the point at which title to the product is transferred, the customer has accepted the product and the customer has significant risks and rewards of owning the product. We typically have a right to payment once control of the product is transferred to the customer. Transaction prices for these products are typically at market rates for the product at the time of delivery. 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. Logistics 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, 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"). All service revenues are based on regulated tariff rates or contractual rates. Payment terms require customers to pay shortly after delivery and do not contain significant financing components. Retail Fuel and merchandise revenue is recognized at the point of sale, which is when control of the product is transferred to the customer. Payments from customers are received at the time sales occur in cash or by credit or debit card. We derive service revenues from the sale of lottery tickets, money orders, car washes and other ancillary product and service offerings. 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. Credit Losses Under ASU 2016-13, Financial Instruments - Measurement of Credit Losses on Financial Instruments ("ASU 2016-13"), as codified in ASC 326, Financial Instruments - Credit Losses ("ASC 326"), we have applied the expected credit loss model for recognition and measurement of impairments in financial assets measured at amortized cost or at fair value through other comprehensive income including accounts receivables. The expected credit loss model is also applied for notes receivables and contractual holdbacks to which ASU 2016-13 applies and which are not accounted for at fair value through profit or loss. The loss allowance for the financial asset is measured at an amount equal to the lifetime expected credit losses. If the credit risk on the financial asset has decreased significantly since initial recognition, the loss allowance for the financial asset is re-measured. Changes in loss allowances are recognized in profit and loss. For trade receivables, a simplified impairment approach is applied recognizing expected lifetime losses from initial recognition. F-18 | Cost of Materials and Other and Operating Expenses For the refining segment, cost of materials and other includes the following: • the direct cost of materials (such as crude oil and other refinery feedstocks, refined petroleum products and blendstocks, and ethanol feedstocks and products) that are a component of our products sold; • costs related to the delivery (such as shipping and handling costs) of products sold; • costs related to our environmental credit obligations to comply with various governmental and regulatory programs (such as the cost of RINs as required by the EPA's Renewable Fuel Standard and emission credits under various cap-and-trade systems); and • gains and losses on our commodity derivative instruments. Operating expenses for the refining segment include the costs to operate our refineries and biodiesel facilities, excluding depreciation and amortization. These costs primarily include employee-related expenses, energy and utility costs, catalysts and chemical costs, and repairs and maintenance expenses. For the logistics segment, cost of materials and other includes the following: • all costs of purchased refined products, additives and related transportation of such products, • costs associated with the operation of our trucking assets, which primarily include allocated employee costs and other costs related to fuel, truck leases and repairs and maintenance, • the cost of pipeline capacity leased from a third-party, and • gains and losses related to our commodity hedging activities. Operating expenses for the logistics segment include the costs associated with the operation of owned terminals and pipelines and terminalling expenses at third-party locations, excluding depreciation and amortization. These costs primarily include outside services, allocated employee costs, repairs and maintenance costs and energy and utility costs. Operating expenses related to the wholesale business are excluded from cost of sales because they primarily relate to costs associated with selling the products through our wholesale business. For the retail segment, cost of materials and other comprises the costs related to specific products sold at retail sites, primarily consisting of motor fuels and merchandise. Retail fuel cost of sales represents the cost of purchased fuel, including transportation costs. Merchandise cost of sales includes the delivered cost of merchandise purchases, net of merchandise rebates and commissions. Operating expenses related to the retail business include costs such as wages of employees, lease expense, utility expense and other costs of operating the stores, excluding depreciation and amortization, and are excluded from cost of sales because they primarily relate to costs associated with selling the products through our retail sites. Depreciation and amortization is separately presented in our statement of income and disclosed by reportable segment in Note 4. Interest Expense 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. Sales, Use and Excise Taxes Delek's policy is to exclude from revenue all taxes assessed by a governmental authority, including sales, use and excise taxes, that are both imposed on and concurrent with a specific revenue-producing transaction and collected from a customer. Deferred Financing Costs Deferred financing costs associated with our revolving credit facilities are included in other non-current assets in the accompanying consolidated balance sheets. Deferred financing costs associated with our term loan facilities are included as a reduction to the associated debt balance in the accompanying consolidated balance sheets. These costs represent expenses related to issuing our long-term debt and obtaining our lines of credit and are amortized ratably over the remaining term of the respective financing when it is not materially different from the effective interest method and included in interest expense in the accompanying consolidated statements of income. See Note 10 for further information. Advertising Costs Delek expenses advertising costs as the advertising space is utilized. Advertising expense for the years ended December 31, 2022, 2021 and 2020 was $ 3.8 million, $ 2.0 million and $ 1.9 million, respectively. F-19 | Leases In accordance with ASC 842-20, Leases - Lessee ("ASC 842-20"), we classify leases with contractual terms longer than twelve months as either operating or finance. Finance leases are generally those leases that are highly specialized or allow us to substantially utilize or pay for the entire asset over its useful life. All other leases are classified as operating leases. Delek leases land, buildings and various equipment under primarily operating lease arrangements, most of which provide the option, after the initial lease term, to renew the leases. Some of these lease arrangements include fixed lease rate increases, while others include lease rate increases based upon such factors as changes, if any, in defined inflationary indices. For all leases that include fixed rental rate increases, these are included in our fixed lease payments. Our leases may include variable payments, based on changes on price or other indices, that are expensed as incurred. Delek calculates the total lease expense for the entire noncancelable lease period, considering renewals for all periods for which it is reasonably certain to be exercised, and records lease expense on a straight-line basis in the accompanying consolidated statements of income. Accordingly, a lease liability is recognized for these leases and is calculated to be the present value of the fixed lease payments, as defined by ASC 842-20, using a discount rate based on our incremental borrowing rate. A corresponding right-of-use asset is recognized based on the lease liability and adjusted for certain costs and prepayments. The right-of-use asset is amortized over the noncancelable lease period, considering renewals for all periods for which it is reasonably certain to be exercised. See Note 25 for further information. Income Taxes Income taxes are accounted for under the provisions of ASC 740, Income Taxes ("ASC 740"). This standard generally requires Delek to record deferred income taxes for the differences between the book and tax bases of its assets and liabilities, which are measured using enacted tax rates and laws that will be in effect when the differences are expected to reverse. Deferred income tax expense or benefit represents the net change during the year in our deferred income tax assets and liabilities, exclusive of the amounts held in other comprehensive income. ASC 740 also prescribes a comprehensive model for how companies should recognize, measure, present and disclose in their financial statements uncertain tax positions taken or expected to be taken on a tax return and prescribes the minimum recognition threshold a tax position is required to meet before being recognized in the financial statements. Finally, ASC 740 requires an annual tabular roll-forward of unrecognized tax benefits. 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 ASC 718, Compensation - Stock Compensation ("ASC 718"), requires the cost of all share-based payments to employees, including grants of employee stock options, to be recognized in the income statement and establishes fair value as the measurement objective in accounting for share-based payment arrangements. 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 ("SARs") awards. Restricted stock units ("RSUs") are valued based on the fair market value of the underlying stock on the date of grant. Performance-based RSUs ("PRSUs") include a market condition based on the Company's total shareholder return over the performance period and are valued using a Monte-Carlo simulation model. We record compensation expense for these awards based on the grant date fair value of the award, recognized ratably over the measurement period. Vested RSUs and PRSUs are not issued until the minimum statutory withholding requirements have been remitted to us for payment to the taxing authority. As a result, the actual number of shares accounted for as issued may be less than the number of RSUs vested, due to any withholding amounts which have not been remitted. We generally recognize compensation expense related to stock-based awards with graded or cliff vesting on a straight-line basis over the vesting period. It is our practice to issue new shares when share-based awards are exercised. Our equity-based compensation expense includes estimates for forfeitures and volatility based on our historical experience. If actual forfeitures differ from our estimates, we adjust equity-based compensation expense accordingly. F-20 | Postretirement Benefits 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. Changes in the funded status of our defined benefit pension and postretirement medical plans are recognized in other comprehensive income in the period when the changes occur. 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. Plan assets are measured at fair value. We use December 31 of each year, or more frequently as necessary, as the measurement date for plan assets and obligations for all of our defined benefit pension and postretirement medical plans. We straight-line amortize prior service costs and actuarial gains and losses over the average future service of members expected to receive benefits and use a 10% corridor in regards to the actuarial gains and losses. See Note 23 for more information regarding our postretirement benefits. The service cost component of net periodic benefit is included as part of general and administrative expenses in the accompanying consolidated statements of income. The other components of net periodic benefit are included as part of other expense (income), net in the accompanying consolidated statements of income. New Accounting Pronouncements Adopted During 2022 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 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) In March 2020, the FASB issued an amendment which is intended to provide temporary optional expedients and exceptions to GAAP guidance on contracts, hedge accounting and other transactions affected by the expected market transition from the London Interbank Offered Rate ("LIBOR") and other interbank rates. 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. Acquisitions 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. F-21 | Determination of Purchase Price The table below represents the purchase price (in millions): Base purchase price: $ 624.7 Add: closing net working capital (as defined in the 3 Bear Purchase Agreement) 3.6 Less: closing indebtedness (as defined in the 3 Bear Purchase Agreement) ( 80.6 ) 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) 223.5 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. F-22 | 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 ) 4. Segment Data 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 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); and • intercompany eliminations. 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. 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 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. GAAP. 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. F-23 | Refining Segment The refining segment processes crude oil and other feedstocks for the manufacture of transportation motor fuels, including various grades of gasoline, diesel fuel and aviation fuel, asphalt and other petroleum-based products that are distributed through owned and third-party product terminals. The refining segment has a combined nameplate capacity of 302,000 barrels per day ("bpd") as of December 31, 2022, including the following: • Tyler, Texas refinery; • El Dorado, Arkansas refinery (the "El Dorado refinery"); • Big Spring, Texas refinery (the "Big Spring refinery"); and • 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. The biodiesel industry has historically been substantially aided by federal and state tax incentives. One tax incentive program that has been significant to our renewable fuels facilities is the federal blender's tax credit (also known as the biodiesel tax credit or "BTC"). 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. 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. (“GCE”) for total cash consideration of $ 40.0 million. As a result of this sale, we recognized a gain of $ 56.8 million, largely due to the buyer assuming substantially all of the asset retirement obligations and environmental liabilities associated with this refinery, which is included in gain on sale of non-operating refinery on the accompanying consolidated statements of income. As part of the transaction, GCE granted a call option to Delek to acquire up to a 33 1/3% limited member interest in the acquiring subsidiary of GCE for up to $ 13.3 million, subject to certain adjustments. Such option is exercisable by Delek through the 90th day after GCE demonstrates commercial operations, as contractually defined which has not yet occurred as of December 31, 2022. The refining segment's petroleum-based products are marketed primarily in the south central, southwestern and western regions of the United States. This segment also ships and sells gasoline into wholesale markets in the southern and eastern United States. Motor fuels are sold under the Alon or Delek brand through various terminals to supply Alon or Delek branded retail sites. In addition, Alon sells motor fuels through its wholesale distribution network on an unbranded basis. Logistics Segment 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 Our retail segment includes the operations of owned and leased convenience store sites located primarily in West Texas and New Mexico. These convenience stores typically offer various grades of gasoline and diesel under the Alon or Delek brand name and food products, food service, tobacco products, non-alcoholic and alcoholic beverages, general merchandise as well as money orders to the public, primarily under the 7-Eleven and DK or Alon brand names. Substantially all of the motor fuel sold through our retail segment is supplied by our Big Spring refinery, which is transferred to the retail segment at prices substantially determined by reference to published commodity pricing information. We operated 249 and 248 stores as of December 31, 2022 and 2021, respectively. In November 2018, we terminated the license agreement with 7-Eleven, Inc. 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. F-24 | Significant Inter-segment Transactions All inter-segment transactions have been eliminated in consolidation and consists primarily of the following: • refining segment refined product sales to the retail segment to be sold through the store locations; • refining segment sales of asphalt and refined product to entities included in corporate, other and eliminations; • logistics segment service fee revenue under service agreements with the refining segment based on the number of gallons sold and to share a portion of the margin achieved in return for providing marketing, sales and customer services; • logistics segment sales of wholesale finished product to our refining segment; and • logistics segment crude transportation, terminalling and storage fee revenue from our refining segment for the utilization of pipeline, terminal and storage assets. Business Segment Operating Performance 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 (In millions) Refining Logistics Retail Corporate, Other and Eliminations Consolidated Net revenues (excluding intercompany fees and revenues) $ 18,730.9 $ 557.0 $ 956.9 $ 1.0 $ 20,245.8 Inter-segment fees and revenues 1,032.1 479.4 — ( 1,511.5 ) — 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 ) 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 (1) Logistics Retail Corporate, Other and Eliminations Consolidated (1) Net revenues (excluding intercompany fees and revenues) $ 9,564.9 $ 282.1 $ 797.4 $ 3.8 $ 10,648.2 Inter-segment fees and revenues 702.9 418.8 — ( 1,121.7 ) — 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 ) 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 Year Ended December 31, 2020 (In millions) Refining (1) Logistics Retail Corporate, Other and Eliminations Consolidated (1) Net revenues (excluding intercompany fees and revenues) $ 6,418.0 $ 183.6 $ 681.7 $ 18.5 $ 7,301.8 Inter-segment fees and revenues 437.3 379.8 — ( 817.1 ) — 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 ) 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 F-25 | (1) Adjusted to reflect the retrospective change in accounting policy from LIFO to FIFO for certain inventories. See Note 8 for further discussion. 5. 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 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. The following table sets forth the computation of basic and diluted earnings per share. Year Ended December 31, 2022 2021 (1) 2020 (1) Numerator: Numerator for EPS - continuing operations Net income (loss) $ 290.5 $ ( 95.3 ) $ ( 573.8 ) Less: 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 ) Denominator: Weighted average common shares outstanding (denominator for basic EPS) 70,789,458 73,984,104 73,598,389 Dilutive effect of stock-based awards 726,903 — — Weighted average common shares outstanding, assuming dilution (denominator for diluted EPS) 71,516,361 73,984,104 73,598,389 EPS: 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: Antidilutive stock-based compensation (because average share price is less than exercise price) 2,299,660 2,988,718 3,616,690 Antidilutive due to loss — 598,775 466,254 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. 6. Delek Logistics Delek Logistics 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. As of December 31, 2022, we owned a 78.8 % interest in Delek Logistics, consisting of 34,311,278 common limited partner units and the non-economic general partner interest. The limited partner interests in Delek Logistics not owned by us are reflected in net income attributable to non-controlling interest in the accompanying consolidated statements of income and in non-controlling interest in subsidiaries in the accompanying consolidated balance sheets. On 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. F-26 | 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. Contemporaneously, we repurchased the 5.2 % ownership interest in the general partner from affiliates, who were also members of the general partner's management and board of directors, for $ 23.1 million, increasing our ownership interest in the general partner to 100.0 %. As a result of these transactions, the non-controlling interest in our consolidated balance sheets decreased by $ 50.8 million, with a $ 37.2 million increase to additional paid-in capital which is net of $ 11.5 million related to deferred income taxes and $ 2.1 million of transaction costs. 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. We have agreements with Delek Logistics that, among other things, establish fees for certain administrative and operational services provided by us and our subsidiaries to Delek Logistics, provide certain indemnification obligations and establish terms for fee-based commercial logistics and marketing services provided by Delek Logistics and its subsidiaries to us. The revenues and expenses associated with these agreements are eliminated in consolidation. Delek Logistics is a VIE, as defined under GAAP, and is consolidated into our consolidated financial statements, representing our logistics segment. The assets of Delek Logistics can only be used to settle its own obligations and its creditors have no recourse to our assets. Exclusive of intercompany balances and the marketing agreement intangible asset between Delek Logistics and Delek which are eliminated in consolidation, the Delek Logistics consolidated balance sheets are included in the consolidated balance sheets of Delek. The Delek Logistics consolidated balance sheets are presented below (in millions): As of December 31, 2022 As of December 31, 2021 ASSETS Cash and cash equivalents $ 8.0 $ 4.3 Accounts receivable 53.3 15.4 Inventory 1.5 2.4 Other current assets 2.4 1.0 Property, plant and equipment, net 924.0 449.4 Equity method investments 257.0 250.0 Operating lease right-of-use assets 24.8 20.9 Goodwill 27.1 12.2 Intangible assets, net 364.8 153.9 Other non-current assets 16.4 25.6 Total assets $ 1,679.3 $ 935.1 LIABILITIES AND DEFICIT Accounts payable $ 57.4 $ 8.2 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 Accrued expenses and other current liabilities 19.7 17.4 Long-term debt 1,646.6 899.0 Asset retirement obligations 9.3 6.5 Operating lease liabilities, net of current portion 12.1 14.1 Other non-current liabilities 15.8 22.7 Deficit ( 110.7 ) ( 104.0 ) Total liabilities and deficit $ 1,679.3 $ 935.1 F-27 | Effective May 1, 2020, Delek through its wholly owned subsidiaries Lion Oil Company (“Lion Oil”) and Delek Refining, Ltd. (“Delek Refining”) contributed certain leased and owned tractors and trailers and related assets used in the provision of trucking and transportation services for crude oil, petroleum and certain other products throughout Arkansas, Oklahoma and Texas to Delek Trucking, LLC (“Delek Trucking”), a direct wholly owned subsidiary of Lion Oil. Following this contribution, Lion Oil sold all of the issued and outstanding membership interests in Delek Trucking (the “Trucking Acquisition”) to DKL Transportation, LLC (“DKL Transportation”), a wholly owned subsidiary of Delek Logistics. Promptly following the consummation of the Trucking Acquisition, Delek Trucking merged with and into DKL Transportation, with DKL Transportation continuing as the surviving entity. Total consideration for the Trucking Acquisition was approximately $ 48.0 million in cash, subject to certain post-closing adjustments, financed primarily with borrowings 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 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 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 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. Additionally, in March 2020, we purchased 451,822 of Delek Logistics limited partner units from an investor pursuant to a Common Unit Purchase Agreement between Delek Marketing & Supply, LLC and such investor. The purchase price of the units amounted to approximately $ 5.0 million. 7. Equity Method Investments Wink to Webster Pipeline 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 Wink to Webster Pipeline LLC ("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. 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. The Company determined it is not the primary beneficiary since it does not have the power to direct activities that most significantly impact HoldCo. The Company does not hold a controlling financial interest in HoldCo because no single party has the power to direct the activities that most significantly impact HoldCo’s economic performance since power to make the decisions about the significant activities is shared equally with MPLX and all significant decisions require unanimous consent of the board of directors of HoldCo. The Company accounts for its investment in HoldCo using the equity method of accounting due to its significant influence with its 50 % membership interest. The Company's maximum exposure to any losses incurred by HoldCo is limited to its investment. As of December 31, 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. F-28 | 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. As a result of the transaction, for the year ended December 31, 2021 we recognized $ 20.9 million of other non-operating income, representing the excess over recognized write-offs. As of December 31, 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. 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 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 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. In addition to Red River, Delek Logistics has two other joint ventures that own and operate logistics assets, and which serve third parties and subsidiaries of Delek. We own a 50 % membership interest in the entity formed with an affiliate of Plains All American Pipeline, L.P. to operate one of these pipeline systems (the "Caddo Pipeline") and a 33 % membership interest in Andeavor Logistics Rio Pipeline LLC which operates the other pipeline system (the "Rio Pipeline"). As of December 31, 2022 and 2021, Delek Logistics' investment balance in these joint ventures was $ 107.4 million and $ 106.0 million, respectively, and are accounted for using the equity method. We recognized income on these investments totaling $ 11.1 million and $ 10.1 million for the years ended December 31, 2022 and 2021, respectively. Other Investments 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 8. Inventory 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. F-29 | 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) Total 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 ) F-30 | 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 Net loss $ ( 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 Net loss $ ( 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 F-31 | 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 Net income $ 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. F-32 | 9. 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 Less: 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. F-33 | 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 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. Aron’s behalf. 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 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 Baseline Volumes pursuant to the respective Supply and Offtake Agreements 2.0 0.8 1.3 Barrels of inventory consigned under the respective Supply and Offtake Agreements as of December 31, 2022 — — — Barrels of inventory consigned under the respective Supply and Offtake Agreements as of December 31, 2021 (1) 3.5 1.3 1.2 (1) Includes Baseline Volumes plus/minus over/short quantities. 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 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 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. F-34 | Net balances payable (receivable) under the Supply and Offtake Agreements were as follows as of the balance sheet dates (in millions): El Dorado Big Spring Krotz Springs Total Balances as of December 31, 2022: Baseline Step-Out Liability $ — $ — $ — $ — Revolving over/short product financing liability — — — — Total Obligations Under Supply and Offtake Agreements — — — — Less: Current portion — — — — Obligations Under Supply and Offtake Agreements - Noncurrent portion $ — $ — $ — $ — Other (receivable) payable for monthly activity true-up $ ( 27.3 ) $ ( 16.6 ) $ 9.0 $ ( 34.9 ) El Dorado Big Spring Krotz Springs Total Balances as of December 31, 2021: Baseline Step-Out Liability $ 159.6 $ 68.4 $ 102.4 $ 330.4 Revolving over/short product financing liability (receivable) 120.9 41.1 ( 4.9 ) 157.1 Total Obligations Under Supply and Offtake Agreements 280.5 109.5 97.5 487.5 Less: Current portion 280.5 109.5 97.5 487.5 Obligations Under Supply and Offtake Agreements - Noncurrent portion $ — $ — $ — $ — 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. Recurring cash fees paid during the periods presented were as follows (in millions): El Dorado Big Spring Krotz Springs Total Recurring cash fees paid during the year ended December 31, 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. Total interest expense incurred during the periods presented was as follows (in millions): El Dorado Big Spring Krotz Springs Total Interest expense for the year ended December 31, 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 $ 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. F-35 | 10. Long-Term Obligations and Notes Payable Outstanding borrowings, net of unamortized debt discounts and certain deferred financing costs, under Delek’s existing debt instruments are as follows (in millions): December 31, 2022 December 31, 2021 Revolving Credit Facility $ 450.0 $ — Term Loan Credit Facility (1) 892.1 1,240.0 Hapoalim Term Loan (2) — 29.0 Delek Logistics Revolving Facility 720.2 258.0 Delek Logistics Term Loan Facility (3) 298.6 — Delek Logistics 2025 Notes (4) 247.6 246.7 Delek Logistics 2028 Notes (5) 395.2 394.3 United Community Bank Revolver 50.0 50.0 3,053.7 2,218.0 Less: Current portion of long-term debt and notes payable 74.5 92.2 $ 2,979.2 $ 2,125.8 (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 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. (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. F-36 | 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) 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. Guarantee and Security 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. Certain excluded assets are not included in the Term Priority Collateral and the Revolving Priority Collateral. Additional Information 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, 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 "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. F-37 | 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 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 On May 23, 2017, Delek Logistics and Delek Logistics Finance Corp. (“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. The Delek Logistics 2025 Notes are unconditionally guaranteed jointly and severally on a senior unsecured basis by Delek Logistics' existing subsidiaries (other than Finance Corp.) and will be unconditionally guaranteed on the same basis by certain of Delek Logistics' future subsidiaries. The Delek Logistics 2025 Notes rank equal in right of payment with all existing and future senior indebtedness of the Issuers, and senior in right of payment to any future subordinated indebtedness of the Issuers. 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. F-38 | As of December 31, 2022, we had $ 250.0 million in outstanding principal amount under the Delek Logistics 2025 Notes, and the effective interest rate was 7.21 %. Delek Logistics 2028 Notes On May 24, 2021, Delek Logistics and Finance Corp. (collectively, the “Co-issuers”), issued $ 400.0 million in aggregate principal amount of the Co-issuers 7.125 % Senior Notes due 2028 (the “Delek Logistics 2028 Notes”), at par, pursuant to an indenture with U.S. Bank, National Association as trustee. The Delek Logistics 2028 Notes are general unsecured senior obligations of the Co-issuers and are unconditionally guaranteed jointly and severally on a senior unsecured basis by Delek Logistics’ subsidiaries other than Finance Corp. and will be unconditionally guaranteed on the same basis by certain of Delek Logistics’ future subsidiaries. The Delek Logistics 2028 Notes rank equal in right of payment with all existing and future senior indebtedness of the Co-issuers, and senior in right of payment to any future subordinated indebtedness of the Co-issuers. The Delek Logistics 2028 Notes will mature on June 1, 2028, and interest is payable semi-annually in arrears on each June 1 and December 1, commencing December 1, 2021. At any time prior to June 1, 2024, the Co-issuers may redeem up to 35 % of the aggregate principal amount of the Delek Logistics 2028 Notes with the net cash proceeds of one or more equity offerings by Delek Logistics at a redemption price of 107.125 % of the redeemed principal amount, plus accrued and unpaid interest, if any, subject to certain conditions and limitations. Prior to June 1, 2024, the Co-issuers may also redeem all or part of the Delek Logistics 2028 Notes at a redemption price of the principal amount plus accrued and unpaid interest, if any, plus a "make whole" premium, subject to certain conditions and limitations. In addition, beginning on June 1, 2024, the Co-issuers may, subject to certain conditions and limitations, redeem all or part of the Delek Logistics 2028 Notes, at a redemption price of 103.563 % of the redeemed principal for the twelve-month period beginning on June 1, 2024, 101.781 % for the twelve-month period beginning on June 1, 2025, and 100.00 % beginning on June 1, 2026 and thereafter, plus accrued and unpaid interest, if any. In the event of a change of control, accompanied or followed by a ratings downgrade within a certain period of time, subject to certain conditions and limitations, the Co-issuers will be obligated to make an offer for the purchase of the Delek Logistics 2028 Notes from holders at a price equal to 101.00 % of the principal amount thereof, plus accrued and unpaid interest. As of December 31, 2022, we had $ 400.0 million in outstanding principal amount under the Delek Logistics 2028 Notes, and the effective interest rate was 7.40 %. 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, 2022, we had $ 50.0 million outstanding and no unused credit commitments under this facility. Restrictive Covenants Under the terms of our debt facilities, 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. The Term Loan Credit Facility does not have any financial maintenance covenants. We believe we were in compliance with all covenant requirements under each of our credit facilities as of December 31, 2022. Certain of our debt facilities contain limitations on the incurrence of additional indebtedness, making of investments, creation of liens, dispositions and acquisitions of assets, and making of restricted payments and transactions with affiliates. These covenants may also limit the payment, in the form of cash or other assets, of dividends or other distributions, or the repurchase of shares with respect to our equity. Additionally, certain of our debt facilities limit our ability to make investments, including extensions of loans or advances to, or acquisitions of equity interests in, or guarantees of obligations of, any other entities. Restricted Net Assets Some of Delek's subsidiaries have restrictions in their respective credit facilities limiting their use of assets, as has been discussed above. As of December 31, 2022, we had no subsidiaries with restricted net assets which would prohibit earnings from being transferred to the parent company for its use. F-39 | Future Maturities 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 2023 $ 74.5 2024 294.5 2025 259.5 2026 9.5 2027 1,180.0 Thereafter 1,302.5 Total $ 3,120.5 11. Derivative Instruments We use the majority of our derivatives to reduce normal operating and market risks with the primary objective of reducing the impact of market price volatility on our results of operations. As such, our use of derivative contracts is aimed at: • limiting our exposure to commodity price fluctuations on inventory above or below target levels (where appropriate) within each of our segments; • managing our exposure to commodity price risk associated with the purchase or sale of crude oil, feedstocks/intermediates and finished grade fuel within each of our segments; • managing our exposure to market crack spread fluctuations; • managing the cost of our RINs Obligation using future commitments to purchase or sell RINs at fixed prices and quantities; and • limiting the exposure to interest rate fluctuations on our floating rate bo rrowings. We primarily utilize commodity swaps, futures, forward contracts and options contracts, generally with maturity dates of three years or less, and from time to time interest rate swaps or caps to achieve these objectives. Futures contracts are standardized agreements, traded on a futures exchange, to buy or sell the commodity at a predetermined price and location at a specified future date. Options provide the right, but not the obligation to buy or sell a commodity at a specified price in the future. Commodity swaps and futures contracts require cash settlement for the commodity based on the difference between a fixed or floating price and the market price on the settlement date, and options require payment/receipt of an upfront premium. Because these derivatives are entered into to achieve objectives specifically related to our inventory and production risks, such gains and losses (to the extent not designated as accounting hedges and recognized on an unrealized basis in other comprehensive income) are recognized in cost of materials and other. Forward contracts are agreements to buy or sell a commodity at a predetermined price at a specified future date, and for our transactions, generally require physical delivery. Forward contracts where the underlying commodity will be used or sold in the normal course of business qualify as NPNS pursuant to ASC 815. If we elect the NPNS exception, such forward contracts are not accounted for as derivative instruments but rather are accounted for under other applicable GAAP. Commodity forward contracts accounted for as derivative instruments are recorded at fair value with changes in fair value recognized in earnings in the period of change. Our Canadian crude trading operations are accounted for as derivative instruments, and the related unrealized and realized gains and losses are recognized in other operating income, net on the accompanying consolidated statements of income. Additionally, as of and for the year ended December 31, 2022, other forward contracts accounted for as derivatives that are specific to managing crude costs rather than for trading purposes are recognized in cost of materials and other on the consolidated statements of income in our refining segment, and are included in our disclosures of commodity derivatives in the tables below. Futures, swaps or other commodity related derivative instruments that are utilized to specifically provide economic hedges on our Canadian forward contract or investment positions are recognized in other operating income, net because that is where the related underlying transactions are reflected. From time to time, we also enter into future commitments to purchase or sell RINs at fixed prices and quantities, which are used to manage the costs associated with our RINs Obligation. These future RINs commitment contracts meet the definition of derivative instruments under ASC 815, and are recorded at estimated fair value in accordance with the provisions of ASC 815. Changes in the fair value of these future RINs commitment contracts are recorded in cost of materials and other on the consolidated statements of income. 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. F-40 | 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, 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. We have elected to offset the recognized fair value amounts for multiple derivative instruments executed with the same counterparty in our financial statements. As a result, the asset and liability amounts below differ from the amounts presented in our consolidated balance sheets. See Note 12 for further information regarding the fair value of derivative instruments (in millions). December 31, 2022 December 31, 2021 Derivative Type Balance Sheet Location Assets Liabilities Assets Liabilities Derivatives not designated as hedging instruments: Commodity derivatives (1) Other current assets $ 217.1 $ ( 204.4 ) $ 21.5 $ — Commodity derivatives (1) Other current liabilities 101.0 ( 129.5 ) 101.5 ( 102.3 ) Commodity derivatives (1) Other long-term assets 1.1 ( 0.8 ) — — Commodity derivatives (1) Other long-term liabilities — — 6.1 ( 6.1 ) RINs commitment contracts (2) Other current assets 9.7 — 1.6 — RINs commitment contracts (2) Other current liabilities — ( 6.6 ) — ( 0.7 ) Total gross fair value of derivatives 328.9 ( 341.3 ) 130.7 ( 109.1 ) Less: Counterparty netting and cash collateral (3) 306.2 ( 320.0 ) 107.1 ( 82.4 ) Total net fair value of derivatives $ 22.7 $ ( 21.3 ) $ 23.6 $ ( 26.7 ) (1) As of December 31, 2022 and 2021, we had open derivative positions representing 158,307,020 and 182,525,893 barrels, respectively, of crude oil and refined petroleum products. There were no open positions designated as cash flow hedging instruments as of December 31, 2022 and 2021. Additionally, as of December 31, 2022 and 2021, we had open derivative positions representing 2,310,000 and 1,320,000 million British Thermal Units ("MMBTU"), respectively, of natural gas products. (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, 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) : Year Ended December 31, 2022 2021 2020 (Losses) gains on hedging derivatives not designated as hedging instruments recognized in cost of materials and other (1) $ ( 38.0 ) $ 37.7 $ ( 88.0 ) (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 (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." F-41 | The effect of cash flow hedge accounting on the consolidated statements of income is as follows (in millions): Year Ended December 31, 2022 2021 2020 Gain (loss) on cash flow hedging relationships recognized in cost of materials and other: Commodity contracts: Hedged items $ — $ ( 0.2 ) $ ( 4.6 ) Derivative designated as hedging instruments — 0.2 4.6 Total $ — $ — $ — 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. 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 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, 2022 2021 2020 Trading Physical Forward Contract Commodity Derivatives Realized gains (losses) $ 16.1 $ 6.5 $ ( 3.1 ) Unrealized losses ( 0.4 ) — ( 0.3 ) Total $ 15.7 $ 6.5 $ ( 3.4 ) Trading Hedging Commodity Derivatives Realized gains $ 13.5 $ 3.3 $ 7.5 Unrealized (losses) gains ( 18.5 ) 16.2 0.5 Total $ ( 5.0 ) $ 19.5 $ 8.0 12. Fair Value Measurements 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. Level 1 inputs are quoted prices in active markets for identical assets or liabilities. Level 2 inputs are observable inputs other than quoted prices included within Level 1 for the asset or liability, either directly or indirectly through market-corroborated inputs. Level 3 inputs are unobservable inputs for the asset or liability reflecting our assumptions about pricing by market participants. Our commodity derivative contracts, which consist of commodity swaps, exchange-traded futures, options and physical commodity forward purchase and sale contracts (that do not qualify for the NPNS exception under ASC 815), are valued based on exchange pricing and/or price index developers such as Platts or Argus and are, therefore, classified as Level 2. In April 2020, we entered into a contract with the Department of Energy to deposit one million barrels of crude oil into one of the Strategic Petroleum Reserve ("SPR") storage locations which was stored on our behalf until October 2020 for a fee of approximately 100,000 barrels. The fee of 100,000 barrels was recorded as a prepaid asset at cost, and the right to receive the 900,000 barrels was recorded as a financial asset, measured at fair value based on the value of the underlying commodity using published market prices of the commodity on the applicable exchange. Such asset was, therefore, classified as Level 2. 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, net. F-42 | 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. These RINs commitment contracts (which are forward contracts accounted for as derivatives – see Note 11) are categorized as Level 2, and are measured at fair value based on quoted prices from an independent pricing service. Our environmental credits obligation surplus or deficit includes the Consolidated Net RINs Obligation surplus or deficit, as well as other environmental credit obligation surplus or deficit positions subject to fair value accounting pursuant to our accounting policy (see Note 2). The environmental credits obligation surplus or deficit is categorized as Level 2, if measured at fair value either directly through observable inputs or indirectly through market-corroborated inputs, and gains (losses) related to changes in fair value are recorded as a component of cost of materials and other in the consolidated statements of income. With respect to our Consolidated Net RINs Obligation surplus or deficit, we recognized gains (losses) on changes in fair value totaling $( 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. 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 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. 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; 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. 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): As of December 31, 2022 Level 1 Level 2 Level 3 Total Assets Commodity derivatives $ — $ 319.2 $ — $ 319.2 RINs commitment contracts — 9.7 — 9.7 Total assets — 328.9 — 328.9 Liabilities Commodity derivatives — ( 334.7 ) — ( 334.7 ) RINs commitment contracts — ( 6.6 ) — ( 6.6 ) Environmental credits obligation deficit — ( 295.5 ) — ( 295.5 ) Inventory Intermediation Agreement obligation — ( 541.7 ) — ( 541.7 ) Total liabilities — ( 1,178.5 ) — ( 1,178.5 ) Net liabilities $ — $ ( 849.6 ) $ — $ ( 849.6 ) F-43 | As of December 31, 2021 Level 1 Level 2 Level 3 Total Assets Commodity derivatives $ — $ 129.1 $ — $ 129.1 RINs commitment contracts — 1.6 — 1.6 Total assets — 130.7 — 130.7 Liabilities Commodity derivatives — ( 108.4 ) — ( 108.4 ) RINs commitment contracts — ( 0.7 ) — ( 0.7 ) Environmental credits obligation deficit — ( 172.2 ) — ( 172.2 ) J. Aron Supply and Offtake obligations — ( 487.5 ) — ( 487.5 ) Total liabilities — ( 768.8 ) — ( 768.8 ) 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. In the table above, derivative assets and liabilities with the same counterparty are not netted where the legal right of offset exists. This differs from the presentation in the financial statements which reflects our policy, wherein we have elected to offset the fair value amounts recognized for multiple derivative instruments executed with the same counterparty and where the legal right of offset exists. As of December 31, 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. 13. Commitments and Contingencies Litigation In the ordinary conduct of our business, we are from time to time subject to lawsuits, investigations and claims, including environmental claims and employee-related matters. Although we cannot predict with certainty the ultimate resolution of lawsuits, investigations and claims asserted against us, including civil penalties or other enforcement actions, we do not believe that any currently pending legal proceeding or proceedings to which we are a party will have a material adverse effect on our financial statements. 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. Environmental, Health and Safety We are subject to extensive federal, state and local environmental and safety laws and regulations enforced by various agencies, including the EPA, the United States Department of Transportation and the Occupational Safety and Health Administration, as well as numerous state, regional and local environmental, safety and pipeline agencies. These laws and regulations govern the discharge of materials into the environment, waste management practices, pollution prevention measures and the composition of the fuels we produce, as well as the safe operation of our plants and pipelines and the safety of our workers and the public. Numerous permits or other authorizations are required under these laws and regulations for the operation of our refineries, renewable fuels facilities, terminals, pipelines, underground storage tanks, trucks, rail cars and related operations, and may be subject to revocation, modification and renewal. These laws and permits raise potential exposure to future claims and lawsuits involving environmental and safety matters which could include soil and water contamination, air pollution, personal injury and property damage allegedly caused by substances which we manufactured, handled, used, released or disposed of, transported, or that relate to pre-existing conditions for which we have assumed responsibility. We believe that our current operations are in substantial compliance with existing environmental and safety requirements. However, there have been and will continue to be ongoing discussions about environmental and safety matters between us and federal and state authorities, including notices of violations, citations and other enforcement actions, some of which have resulted or may result in changes to operating procedures and in capital expenditures. While it is often difficult to quantify future environmental or safety related expenditures, we anticipate that continuing capital investments and changes in operating procedures will be required for the foreseeable future to comply with existing and new requirements, as well as evolving interpretations and more strict enforcement of existing laws and regulations. F-44 | As of December 31, 2022, we have recorded an environmental liability of approximately $ 114.6 million, primarily related to the estimated probable costs of remediating or otherwise addressing certain environmental issues of a non-capital nature at our refineries, as well as terminals, some of which we no longer own. This liability includes estimated costs for ongoing investigation and remediation efforts for known contamination of soil and groundwater. Approximately $ 3.1 million of the total liability is expected to be expended over the next 12 months, with most of the balance expended by 2032, although some costs may extend up to 30 years. In the future, we could be required to extend the expected remediation period or undertake additional investigations of our refineries, pipelines and terminal facilities, which could result in the recognition of additional remediation liabilities. Included in our environmental liabilities as of both December 31, 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 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. While the License Agreement expired in June 2020, it is currently being disputed in litigation where we have determined that no loss accrual is necessary and that the amount of incremental loss that is reasonably possible is immaterial as of December 31, 2022. Such ongoing dispute causes sufficient uncertainty around the release of risk and the appropriate joint and several liability allocations thereunder that we cannot currently determine a more reasonable estimate of the potential total contingent liability that is probable, nor do we have sufficient information to better estimate the fair value of any remaining noncontingent guarantee liability. As such, as of December 31, 2022 and 2021, except for accretion and expenditures, our combined environmental liability related to the terminal and property remained unchanged. Environmental liabilities with payments that are fixed or reliably determinable have been discounted to present value at various rates depending on their expected payment stream. These discount rates vary from 1.51 % to 2.84 %. The table below summaries our environmental liability accruals (in millions): December 31, 2022 2021 Discounted environmental liabilities $ 36.7 $ 34.4 Undiscounted environmental liabilities 77.9 77.8 Total accrued environmental liabilities $ 114.6 $ 112.2 As of December 31, 2022, the estimated future payments of environmental obligations for which discounts have been applied are as follows (in millions): 2023 $ 1.5 2024 1.5 2025 1.5 2026 1.6 2027 1.6 Thereafter 32.6 Discounted environmental liabilities, gross 40.3 Less: Discount applied 3.6 Discounted environmental liabilities $ 36.7 We are also subject to various regulatory requirements related to carbon emissions and the compliance requirements to remit environmental credit obligations due to the EPA or other regulatory agencies, the most significant of which relates to the RINs Obligation subject to the EPA’s RFS-2 regulations (See Note 2 for further discussion). The RFS-2 regulations are highly complex and evolving, requiring us to periodically update our compliance systems. As part of our on-going monitoring and compliance efforts, on an annual basis we engage a third party to perform procedures to review our RINs inventory, processes and compliance. The results of such procedures may include procedural findings but may also include findings regarding the usage of RINs to meet past obligations, the treatment of exported RINs, and the propriety of RINs on-hand and related adjustments to our RINs inventory, which (to the extent they are valued) offset our RINs Obligation. Such adjustments may also require communication with the EPA if they involve reportable non-compliance which could lead to the assessment of penalties. Based on management’s review 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. F-45 | 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 Delek maintains property damage insurance policies which have varying deductibles. Delek also maintains business interruption insurance policies, with varying coverage limits and waiting periods. Covered losses in excess of the deductible and outside of the waiting period will be recoverable under th e property and business interruption insurance policies. El Dorado Refinery Fire On February 27, 2021, our El Dorado refinery experienced a fire in its Penex unit. 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 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 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. If applicable, we accrue receivables for probable insurance or other third-party recoveries. Work to determine the full extent of covered business interruption and property and casualty losses and potential insurance claims is ongoing and may result in the future recognition of insurance recoveries. Winter Storm Uri During February 2021, 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 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. 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. If applicable, we accrue receivables for probable insurance or other third-party recoveries. Work to determine the full extent of covered business interruption and property and casualty losses and potential insurance claims is ongoing and may result in additional future recognition of insurance recoveries. Crude Oil and Other Releases We have experienced several crude oil and other releases involving our assets. 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. 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. Asset Retirement Obligations The reconciliation of the beginning and ending carrying amounts of asset retirement obligations is as follows (in millions): December 31, 2022 2021 Beginning balance $ 38.3 $ 37.5 Liabilities identified 2.3 — Liabilities settled ( 0.1 ) ( 0.4 ) Accretion expense 1.3 1.2 Ending balance $ 41.8 $ 38.3 F-46 | Letters of Credit As of December 31, 2022, we had in place letters of credit totaling approximately $ 287.4 million with various financial institutions securing obligations primarily with respect to our commodity purchases for the refining segment and certain of our insurance programs. There were no amounts drawn by beneficiaries of these letters of credit at December 31, 2022. 14. Income Taxes 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. 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): December 31, 2022 2021 (1) Non-Current Deferred Taxes: Property, plant and equipment, and intangibles $ ( 256.4 ) $ ( 270.6 ) Right-of-use asset ( 38.7 ) ( 44.6 ) Partnership and equity investments ( 189.1 ) ( 142.5 ) Total deferred tax liabilities ( 484.2 ) ( 457.7 ) Interest expense limitation under 163j 24.4 18.9 Compensation and employee benefits 20.5 12.6 Net operating loss carryforwards 147.6 181.2 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 Total deferred tax assets 294.8 307.3 Valuation allowance ( 73.0 ) ( 59.0 ) Total net deferred tax liabilities (2) $ ( 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. The difference between the actual income tax expense and the tax expense computed by applying the statutory federal income tax rate to income from continuing operations was attributable to the following (in millions): Year Ended December 31, 2022 2021 (1) 2020 (1) 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 ) Tax credits and incentives (2) ( 7.1 ) ( 8.6 ) ( 9.6 ) Changes in valuation allowance 14.0 4.0 ( 10.8 ) Impact of CARES Act net operating loss carryback — — ( 16.8 ) Goodwill impairment — — 21.4 Other items 4.8 — 2.7 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. F-47 | Income tax expense (benefit) was as follows (in millions): Year Ended December 31, 2022 2021 (1) 2020 (1) Current $ 2.3 $ ( 3.1 ) $ ( 160.6 ) Deferred 61.6 ( 38.9 ) ( 33.0 ) $ 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, 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. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. Based upon the level of historical taxable income and projections for future taxable income over the periods for which the deferred tax assets are deductible, management believes it is more likely than not Delek will realize the benefits of these deductible differences, net of the existing valuation allowance. The amount of the deferred tax assets considered realizable, however, could be reduced in the near term if estimates of future taxable income during the carryforward period are reduced. Subsequently recognized tax benefit or expense relating to the valuation allowance for deferred tax assets will be reported as an income tax benefit or expense in the consolidated statement of income. Federal net operating loss and credit carryforwards at December 31, 2022 totaled $ 308.9 million and $ 5.2 million, respectively, a portion of which are subject to a valuation allowance. Federal net operating losses have an indefinite carryforward life, and federal tax credit carryforwards will begin expiring in 2028. State net operating loss and credit carryforwards at December 31, 2022 totaled $ 1,694.5 million and $ 1.3 million, respectively, a portion of which are subject to a valuation allowance. State net operating losses and tax credit carryforwards will begin expiring in 2023. Delek files a consolidated U.S. federal income tax return, as well as income tax returns in various state jurisdictions. Delek is no longer subject to U.S. 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, 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 USA Partners, LP is currently under audit by the IRS for tax year 2019. Delek is currently under audit in various states for tax years 2016 through 2019. No material adjustments have been identified at this time. ASC 740 provides a recognition threshold and guidance for measurement of income tax positions taken or expected to be taken on a tax return. 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 interest and penalties, were as follows (in millions): Year Ended December 31, 2022 2021 2020 Balance at the beginning of the year $ 14.1 $ 9.6 $ 12.1 Additions based on tax positions related to current year 0.9 4.2 1.9 Additions for tax positions related to prior years and acquisitions 0.1 1.7 2.4 Reductions for tax positions related to prior years ( 6.5 ) ( 0.3 ) ( 0.8 ) Reductions for tax positions related to lapse of applicable statute of limitations ( 0.4 ) ( 1.1 ) ( 0.2 ) 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 The amount of the unrecognized benefit above, that if recognized would change the effective tax rate, is $ 6.1 million and $ 6.5 million as of December 31, 2022 and 2021, respectively. F-48 | 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 $ 0.1 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. Uncertain tax positions have been examined by Delek for any material changes in the next 12 months, and no material changes are expected. 15. Related Party Transactions Our related party transactions consist primarily of transactions with our equity method investees (See Note 7). Transactions with our related parties were as follows for the periods presented (in millions): Year Ended December 31, 2022 2021 2020 Revenues (1) $ 98.7 $ 71.4 $ 69.0 Cost of materials and other (2) $ 117.4 $ 50.6 $ 46.7 (1) Consists primarily of asphalt sales which are recorded in corporate, other and eliminations segment. (2) Consists primarily of pipeline throughput fees paid by the refining segment and asphalt purchases. 16. Goodwill Goodwill represents the excess of the aggregate purchase price over the fair value of the identifiable net assets acquired and is not amortized. Delek performs an annual assessment of whether goodwill retains its value. This assessment is done more frequently if indicators of potential impairment exist. We performed our annual goodwill impairment review in the fourth quarter of 2022, 2021 and 2020. This review was performed at the reporting unit level, which is at or one level below our operating segment. 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. The market approach involves significant judgment, including selection of an appropriate peer group, selection of valuation multiples, and determination of the appropriate weighting in our valuation model. 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. For the years ended December 31, 2022 and 2021, no impairment of goodwill occurred. Accumulated goodwill impairment was $ 126.0 million as of December 31, 2022. A summary of our goodwill by segment is as follows (in millions): Refining Logistics Retail Corporate, Other and Eliminations Total 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 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 . F-49 | 17. Property, Plant and Equipment Property, plant and equipment, at cost, consist of the following (in millions): December 31, 2022 2021 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 Less: 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. 18. Other Intangible Assets A summary of our identifiable intangible assets are as follows (in millions): As of December 31, 2022 Useful Life Gross Accumulated Amortization Net Intangible Assets subject to amortization: Third-party fuel supply agreement 10 years $ 49.0 $ ( 26.9 ) $ 22.1 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: Rights-of-way Indefinite 58.4 58.4 Line space history Indefinite 12.0 12.0 Liquor licenses Indefinite 8.5 8.5 Refinery permits Indefinite 2.1 2.1 Total $ 357.5 $ ( 41.9 ) $ 315.6 As of December 31, 2021 Useful Life Gross Accumulated Amortization Net Intangible Assets subject to amortization: Third-party fuel supply agreement 10 years $ 49.0 $ ( 22.1 ) $ 26.9 Fuel trade name 5 years 4.0 ( 3.6 ) 0.4 Intangible assets not subject to amortization: Rights-of-way Indefinite 52.8 52.8 Line space history Indefinite 12.0 12.0 Liquor licenses Indefinite 8.5 8.5 Refinery permits Indefinite 2.1 2.1 Total $ 128.4 $ ( 25.7 ) $ 102.7 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. F-50 | Amortization expense for the next five years is estimated to be as follows (in millions): 2023 $ 23.6 2024 $ 23.6 2025 $ 23.6 2026 $ 23.6 2027 $ 23.6 19. Other Current Assets and Liabilities The detail of other current assets is as follows (in millions): Other Current Assets December 31, 2022 December 31, 2021 Prepaid expenses $ 45.4 $ 44.9 Investment commodities 29.8 45.0 Short-term derivative assets (see Note 11) 22.4 23.6 Income and other tax receivables 20.9 3.6 Other 4.2 8.9 Total $ 122.7 $ 126.0 The detail of accrued expenses and other current liabilities is as follows (in millions): Accrued Expenses and Other Current Liabilities December 31, 2022 December 31, 2021 Consolidated Net RINs Obligation deficit (see Note 12) $ 295.5 $ 172.2 Crude purchase liabilities 268.7 107.4 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) 21.3 26.8 Other 67.1 28.0 Total $ 1,166.8 $ 797.8 20. 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. 21. Equity-Based Compensation Delek US Holdings, Inc. 2006 Long-Term Incentive Plan The Delek US Holdings, Inc. 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. The vesting of all outstanding awards was subject to continued service to Delek or its affiliates except that vesting of awards granted to certain executive employees could, under certain circumstances, accelerate upon termination of their employment and the vesting of all outstanding awards could accelerate upon the occurrence of an Exchange Transaction (as defined in the 2006 Plan). In the second quarter of 2010, Delek's Board of Directors and its Incentive Plan Committee began using stock-settled SARs, rather than stock options, as the primary form of appreciation award under the 2006 Plan. The 2006 Plan expired in April 2016. F-51 | Delek US Holdings, Inc. 2016 Long-Term Incentive Plan 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 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. No awards will be made under the 2016 Plan after May 5, 2026. Alon USA Energy, Inc. 2005 Long-Term Incentive Plan In connection with the Delek/Alon Merger, Delek assumed the Alon USA Energy, Inc. Second Amended and Restated 2005 Incentive Compensation Plan (“the Alon 2005 Plan” and, collectively with the 2006 Plan and the 2016 Plan, the "Incentive Plans") as a component of its overall executive incentive compensation program. The Alon 2005 Plan permits the granting of awards to Alon's officers and key employees in the form of options to purchase common stock, SARs, restricted shares of common stock, RSUs, performance shares, performance units and senior executive plan bonuses. Effective with the Delek/Alon Merger, all contractually unvested share-based awards were converted into share-based awards denominated in Delek common stock. Committed but unissued share-based awards were exchanged and converted into rights to receive share-based awards indexed to Delek common stock. The Alon 2005 Plan was terminated June 4, 2021. Option and SAR Assumptions The table below provides the fair value assumptions for our outstanding stock options and SARs under the Incentive Plans. For all awards granted, we calculated volatility using historical and implied volatility of a peer group of public companies using weekly stock prices. 2020 Grants (Grade Vesting - 4 years) Expected volatility 48.86 % Dividend yield 3.13 % Expected term 4.57 years Risk free rate 1.57 %- 1.60 % Fair value per share $ 11.38 Stock Option and SAR Activity The following table summarizes our Incentive Plans stock option and SAR activity for the years ended December 31, 2022, 2021 and 2020: Number of Shares Under Option Weighted-Average Strike Price Weighted-Average Contractual Term (in years) Average Intrinsic Value (in millions) Options and SARs outstanding, December 31, 2019 3,206,210 $ 34.21 Granted 17,000 $ 36.56 Exercised ( 23,675 ) $ 14.68 Forfeited ( 709,055 ) $ 34.25 Options and SARs outstanding, December 31, 2020 2,490,480 $ 34.16 Granted — $ — Exercised ( 28,025 ) $ 15.67 Forfeited ( 389,225 ) $ 38.10 Options and SARs outstanding, December 31, 2021 2,073,230 $ 33.79 Granted — $ — Exercised ( 326,735 ) $ 26.04 Forfeited ( 219,450 ) $ 35.72 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 F-52 | Restricted Stock Units The Incentive Plans provide for the award of RSUs and PRSUs to certain employees and non-employee directors. RSUs granted to employees vest ratably over three to five years from the date of grant, and RSUs granted to non-employee directors vest quarterly over the year following the date of grant. The grant date fair value of RSUs is determined based on the closing price of Delek's common stock on the grant date. PRSUs initially granted to employees will typically vest in one to three tranches, the first of which vests on December 31 of the year following the grant date, the second and third on the subsequent December 31. PRSUs subsequently granted to employees will typically vest at the end of a three calendar year performance period. The number of PRSUs that will ultimately vest is based on the Company's total shareholder return over the performance period. The grant date fair value of PRSUs is determined using a Monte-Carlo simulation model. We record compensation expense for these awards based on the grant date fair value of the award, recognized ratably over the measurement period. Performance-Based Restricted Stock Unit Assumptions The table below provides the assumptions used in estimating the fair values of our outstanding PRSUs under the Incentive Plans. For all awards granted, we calculated volatility using historical volatility and implied volatility of a peer group of public companies using weekly stock prices. 2022 Grants 2021 Grants 2020 Grants Expected volatility 74.11 %- 77.89 % 70.49 % 45.06 %- 62.70 % Expected term 2.56 - 2.81 years 2.81 years 2.56 - 2.81 years Risk free rate 1.84 % - 3.12 % 0.14 % 0.20 %- 0.56 % Fair value per share $ 35.03 $ 36.23 $ 10.65 The following table summarizes the RSU and PRSU activity under the Incentive Plans for the years ended December 31, 2022, 2021 and 2020: Number of RSUs Weighted-Average Grant Date Price Balance December 31, 2019 1,112,842 $ 39.31 Granted 1,624,695 $ 15.14 Vested ( 512,914 ) $ 29.72 Forfeited ( 413,499 ) $ 24.98 Performance Achieved 18,651 $ 29.19 Balance December 31, 2020 1,829,775 $ 23.62 Granted 1,162,436 $ 26.07 Vested ( 583,638 ) $ 28.03 Forfeited ( 238,046 ) $ 22.58 Performance Achieved ( 23,896 ) $ 47.68 Balance December 31, 2021 2,146,631 $ 23.54 Granted 1,345,746 $ 31.87 Vested ( 611,440 ) $ 24.28 Forfeited ( 129,771 ) $ 24.22 Performance Not Achieved ( 129,833 ) $ 38.76 Balance December 31, 2022 2,621,333 $ 26.85 Compensation Expense Related to Equity-based Awards Granted Under the Incentive Plans Compensation expense for Delek equity-based awards amounted to $ 26.8 million, $ 23.5 million and $ 22.3 million for the years ended December 31, 2022, 2021 and 2020, respectively. These amounts are included in general and administrative expenses and operating expenses in the accompanying consolidated statements of income. 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. The aggregate intrinsic value, which represents the difference between the underlying stock's market price and the award's exercise price, of the share-based awards exercised or vested during the years ended December 31, 2022, 2021 and 2020 was $ 20.5 million, $ 13.0 million and $ 8.4 million, respectively. During the years December 31, 2022, 2021 and 2020, respectively, we issued net shares of common stock of 457,405 , 415,212 and 369,843 as a result of exercised or vested equity-based awards. These amounts are net of 463,677 , 196,451 and 167,094 shares, respectively, withheld to satisfy employee tax obligations related to the exercises and vesting for the years ended December 31, 2022, 2021 and 2020. Delek paid approximately $ 6.5 million, $ 4.2 million and $ 2.4 million of taxes in connection with the settlement of these awards for the years ended December 31, 2022, 2021 and 2020. We issue new shares of common stock upon exercise or vesting of share-based awards. F-53 | Delek Logistics GP, LLC 2012 Long-Term Incentive Plan Logistics GP maintains a unit-based compensation plan for officers, directors and employees of Logistics GP or its affiliates and certain consultants, affiliates of Logistics GP or other individuals who perform services for Delek Logistics. The Delek Logistics GP, LLC 2012 Long-Term Incentive Plan ("Logistics LTIP") permits the grant of unit options, restricted units, phantom units, unit appreciation rights, distribution equivalent rights, other unit-based awards, and unit awards. Awards granted under the Logistics LTIP will be settled with Delek Logistics units. On June 9, 2021, the Logistics GP board of directors amended the Logistics LTIP and increased the number of common units representing limited partner interests in Delek Logistics (the "Common Units") authorized for issuance under this plan by 300,000 Common Units to 912,207 Common Units. The term of the Logistics LTIP was also extended to June 9, 2031. Equity-based compensation expense is included in general and administrative expenses in the accompanying consolidated statements of income and is immaterial for the years ended December 31, 2022, 2021 and 2020. 22. Shareholders' Equity Dividends 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 On March 20, 2020, our Board of Directors declared a dividend of one preferred share purchase right (a “Right”) for each outstanding share of Delek’s common stock and adopted a stockholder rights plan (the “Rights Agreement”). The dividend was distributed in a non-cash transaction on March 30, 2020 to the stockholders of record on that date. The Rights initially traded with Delek’s common stock and expired in accordance with the terms of the Rights Agreement on March 19, 2021. Preferred Stock On March 20, 2020, our Board of Directors authorized 1,000,000 shares of preferred stock with a par value of $ 0.01 per share as Series A Junior Participating Preferred Stock. Stock Repurchase Program On November 6, 2018, our Board of Directors authorized a share repurchase program for up to $ 500.0 million of Delek common stock. Any share repurchases under the repurchase program may be implemented through open market transactions or in privately negotiated transactions, in accordance with applicable securities laws. The timing, price and size of repurchases will be made at the discretion of management and will depend on prevailing market prices, general economic and market conditions and other considerations. The repurchase program does not obligate us to acquire any particular amount of stock and does not expire. 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, 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 F-54 | 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. 23. Employees Workforce 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, 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, 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. We consider our relations with our employees to be satisfactory. Postretirement Benefits Pension Plans 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. Our funding policy is to contribute annually no less than the minimum required nor more than the maximum amount that can be deducted for federal income tax purposes. 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. 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. Financial information related to our pension plans is presented below (in millions): Year Ended December 31, 2022 2021 Change in projected benefit obligation: Benefit obligation at beginning of year $ 140.8 $ 148.7 Interest cost 3.7 3.5 Actuarial gain ( 33.5 ) ( 5.5 ) Benefits paid ( 5.7 ) ( 5.6 ) Other (effect of curtailment/settlement) — ( 0.3 ) Projected benefit obligations at end of year $ 105.3 $ 140.8 Change in plan assets: Fair value of plan assets at beginning of year $ 137.9 $ 138.5 Actual gain (loss) on plan assets ( 30.0 ) 5.0 Employer contribution — 0.3 Benefits paid ( 5.7 ) ( 5.6 ) Other (effect of curtailment/settlement) — ( 0.3 ) Fair value of plan assets at end of year $ 102.2 $ 137.9 Reconciliation of funded status: Fair value of plan assets at end of year $ 102.2 $ 137.9 Less projected benefit obligations at end of year 105.3 140.8 Under-funded status at end of year $ ( 3.1 ) $ ( 2.9 ) The pre-tax amounts in accumulated other comprehensive income (loss) that have not yet been recognized as components of net periodic benefit cost were as follows (in millions): Year Ended December 31, 2022 2021 Net actuarial loss $ 6.5 $ 4.9 Projected benefit obligations at end of year $ 6.5 $ 4.9 F-55 | The accumulated benefit obligation for each of our pension plans was in excess of the fair value of plan assets. The projected benefit obligation, accumulated benefit obligation and fair value of plan assets for the pension plans were as follows (in millions): Year Ended December 31, 2022 2021 Projected benefit obligation $ 105.3 $ 140.8 Accumulated benefit obligation $ 105.3 $ 140.8 Fair value of plan assets $ 102.2 $ 137.9 The weighted-average assumptions used to determine benefit obligations were as follows: Year Ended December 31, 2022 2021 Discount rate 5.10 % 2.75 % 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 long-term rate of return is based on the portfolio as a whole and not on the sum of the returns on individual asset categories. The weighted-average assumptions used to determine net periodic benefit costs were as follows: Year Ended December 31, 2022 2021 2020 Discount rate 2.75 % 2.45 % 3.20 % Expected long-term rate of return on plan assets 4.05 % 4.65 % 5.75 % The components of net periodic benefit cost related to our benefit plans consisted of the following (in millions): Year Ended December 31, Components of net periodic benefit: 2022 2021 2020 Interest cost 3.7 3.5 4.2 Expected return on plan assets ( 5.2 ) ( 6.0 ) ( 6.8 ) Net periodic benefit $ ( 1.5 ) $ ( 2.5 ) $ ( 2.6 ) The service cost component of net periodic benefit is included as part of general and administrative expenses in the accompanying statements of income. The other components of net periodic benefit are included as part of other non-operating expense (income), net . F-56 | The weighted-average asset allocation of our pension benefits plan assets were as follows: Year Ended December 31, 2022 2021 Investments in common collective trust consisting of: U.S. and International companies 20.2 % 21.2 % Fixed-income 79.8 % 78.8 % Total 100.0 % 100.0 % The fair value of our pension assets by category were as follows (in millions): Quoted Prices in Active Markets For Identical Assets or Liabilities (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Consolidated Total Year Ended December 31, 2022 U.S. companies $ — $ 14.3 $ — $ 14.3 International companies — 6.3 — 6.3 Fixed-income — 81.6 — 81.6 Total $ — $ 102.2 $ — $ 102.2 Year Ended December 31, 2021 U.S. companies $ — $ 19.3 $ — $ 19.3 International companies — 9.9 — 9.9 Fixed-income — 108.7 — 108.7 Total $ — $ 137.9 $ — $ 137.9 The investment policies and strategies for the assets of our pension benefits is to, over a five-year period, provide returns in excess of the benchmark. The portfolio in our common collective trust is expected to earn long-term returns from capital appreciation and a stable stream of current income. This approach recognizes that assets are exposed to price risk and the market value of the plans’ assets may fluctuate from year to year. Risk tolerance is determined based on our specific risk management policies. In line with the investment return objective and risk parameters, the plans’ mix of assets includes a diversified portfolio of underlying securities in companies and fixed-income. The underlying securities include domestic and international companies of various sizes of capitalization. The asset allocation of the plan is reviewed on at least an annual basis. We made no contributions to the pension plans for the year ended December 31, 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 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. 401(k) Plans For the years ended December 31, 2022, 2021 and 2020, we sponsored a voluntary 401(k) Employee Retirement Savings Plans for eligible employees. Employees must be at least 21 years of age and eligibility to participate in the plan is immediate upon employment. Employee contributions are matched on a fully-vested basis by us up to a maximum of 6 % of eligible compensation. 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. Postretirement Medical Plan In addition to providing pension benefits, Alon has an unfunded postretirement medical plan covering certain health care and life insurance benefits for certain employees of Alon that retired prior to January 2, 2017, who met eligibility requirements in the plan documents. This plan is closed to new participants. The health care benefits in excess of certain limits are insured. 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. F-57 | 24. 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. 25. Leases We lease certain retail stores, land, building and various equipment from others. Leases with an initial term of 12 months or less are not recorded on the balance sheet; we recognize lease expense for these leases on a straight-line basis over the lease term. Most leases include one or more options to renew, with renewal terms that can extend the lease term from one to 15 years or more. The exercise of existing lease renewal options is at our sole discretion. Certain leases also include options to purchase the leased property. The depreciable life of assets and leasehold improvements are limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise. Some of our lease agreements include a rate based on equipment usage and others include a rate with fixed increases or inflationary indices based increase. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. We rent or sublease certain real estate and equipment to third parties. Our sublease portfolio consists primarily of operating leases within our retail stores and crude storage equipment. As of December 31, 2022, $ 22.7 million of our net property, plant, and equipment balance is subject to an operating lease. This agreement does not include options for the lessee to purchase our leasing equipment, nor does it include any material residual value guarantees or material restrictive covenants. The agreement includes a one year renewal option and certain variable payment based on usage. F-58 | The following table presents additional information related to our operating leases in accordance ASC 842, Leases ("ASC 842"): (in millions) Year Ended December 31, 2022 2021 Lease Cost Operating lease costs (1) $ 70.4 $ 67.7 Short-term lease costs (2) 35.9 33.9 Sublease income ( 0.2 ) ( 5.8 ) Net lease costs $ 106.1 $ 95.8 Other Information Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases (1) $ ( 70.4 ) $ ( 67.7 ) Leased assets obtained in exchange for new operating lease liabilities $ 28.5 $ 87.1 Leased assets obtained in exchange for new financing lease liabilities $ 0.1 $ 15.7 December 31, 2022 December 31, 2021 Weighted-average remaining lease term (years) operating leases 4.3 4.7 Weighted-average remaining lease term (years) financing leases 6.4 6.6 Weighted-average discount rate operating leases (3) 6.1 % 6.3 % Weighted-average discount rate financing leases (3) 3.4 % 3.2 % (1) Includes an immaterial amount of financing lease cost. (2) Includes an immaterial amount of variable lease cost. (3) Our discount rate is primarily based on our incremental borrowing rate in accordance with ASC 842. 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, 2022 (in millions) under the lease guidance ASC 842: Maturity of Lease Liabilities Total 12 months or less $ 61.3 13-24 months 46.7 25-36 months 37.8 37-48 months 20.8 49- 60 months 18.6 Thereafter 29.5 Total future lease payments 214.7 Less: Interest 42.7 Present Value of Lease Liabilities $ 172.0 F-59 | Financial Statements and Schedules ITEM 16. FORM 10-K SUMMARY None. F-101 | SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Delek US Holdings, Inc. By: /s/ Reuven Spiegel Reuven Spiegel Executive Vice President and Chief Financial Officer (Principal Financial Officer) Dated: March 1, 2023 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by or on behalf of the following persons on behalf of the registrant and in the capacities indicated on March 1, 2023: /s/ Ezra Uzi Yemin Ezra Uzi Yemin Executive Chairman /s/ Avigal Soreq Avigal Soreq Director, President and Chief Executive Officer (Principal Executive Officer) /s/ Robert Wright Robert Wright Senior Vice President, Chief Accounting Officer (Principal Accounting Officer) /s/ William J. Finnerty William J. Finnerty Director /s/ Richard J. Marcogliese Richard J. Marcogliese Director /s/ Gary M. Sullivan, Jr. Gary M. Sullivan, Jr. Director /s/ Vicky Sutil Vicky Sutil Director F-102 | /s/ Laurie Z. Tolson Laurie Z. Tolson Director /s/ Shlomo Zohar Shlomo Zohar Director /s/ Leonard Moreno Leonard Moreno Director F-103 |