What changed in this filing

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Item 1. Financial Statements

2023-05-09 compared with 2022-11-08 · 433 added, 854 removed, 461 unchanged (74% of the section changed)

3 unchanged sentences

(In millions, except share and per share data)

September 30, 2022 December 31, 2021 As Adjusted (1)

March 31, 2023 December 31, 2022

Current assets:

18 unchanged sentences

Current portion of long-term debt 49.5 74.5

Obligation under Supply and Offtake Agreements 596.2 487.5

Current portion of obligation under Inventory Intermediation Agreements 57.1 49.9

Current portion of operating lease liabilities 53.4 49.6

3 unchanged sentences

Long-term debt, net of current portion 2,725.5 2,979.2

Obligation under Inventory Intermediation Agreements 479.1 491.8

Environmental liabilities, net of current portion 111.5 111.5

6 unchanged sentences

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

Common stock, $ 0.01 par value, 110,000,000 shares authorized, 87,228,503 shares and 91,772,080 shares issued at September 30, 2022 and December 31, 2021, respectively

Common stock, $ 0.01 par value, 110,000,000 shares authorized, 84,569,103 shares and 84,509,517 shares issued at March 31, 2023 and December 31, 2022, respectively

Additional paid-in capital 1,141.2 1,134.1

Accumulated other comprehensive loss ( 5.2 ) ( 5.2 )

Treasury stock, 17,575,527 shares, at cost, as of September 30, 2022 and December 31, 2021

Treasury stock, 17,575,527 shares, at cost, at March 31, 2023 and December 31, 2022, respectively

( 694.1 ) ( 694.1 )

3 unchanged sentences

Total liabilities and stockholders’ equity $ 7,786.7 $ 8,192.8

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

See Note 7 for further discussion.

See accompanying notes to condensed consolidated financial statements

See accompanying notes to the condensed consolidated financial statements

Financial Statements

2 unchanged sentences

(In millions, except share and per share data)

Three Months Ended Nine Months Ended

September 30, September 30,

2022 As Adjusted (1)

Three Months Ended March 31,

Net revenues $ 3,924.3 $ 4,459.1

9 unchanged sentences

Total operating costs and expenses 3,781.5 4,412.4

Operating income (loss) 53.0 37.9 593.0 ( 59.7 )

Operating income 142.8 46.7

Interest expense, net 76.5 38.4

Income from equity method investments ( 14.6 ) ( 10.9 )

Other income, net ( 0.7 ) ( 21.8 ) ( 3.0 ) ( 16.0 )

Other (income) loss, net ( 7.1 ) 1.3

Total non-operating expense, net 54.8 28.8

Income (loss) before income tax expense (benefit) 20.8 25.1 507.7 ( 129.2 )

Income tax expense (benefit) 4.0 4.5 107.5 ( 39.0 )

Net income (loss) 16.8 20.6 400.2 ( 90.2 )

Income before income tax expense 88.0 17.9

Income tax expense 15.8 3.1

Net income 72.2 14.8

Net income attributed to non-controlling interests 7.9 8.2

Net income (loss) attributable to Delek $ 7.4 $ 11.8 $ 375.8 $ ( 114.9 )

Basic income (loss) per share $ 0.11 $ 0.16 $ 5.26 $ ( 1.55 )

Diluted income (loss) per share $ 0.10 $ 0.16 $ 5.21 $ ( 1.55 )

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

See Note 7 for further discussion.

See accompanying notes to condensed consolidated financial statements

Net income attributable to Delek $ 64.3 $ 6.6

Basic income per share $ 0.96 $ 0.09

Diluted income per share $ 0.95 $ 0.09

Weighted average common shares outstanding:

Basic 66,951,975 73,236,274

Diluted 67,369,374 73,649,266

See accompanying notes to the condensed consolidated financial statements

Financial Statements

2 unchanged sentences

(In millions)

Three Months Ended Nine Months Ended

September 30, September 30,

2022 As Adjusted (1)

Net income (loss) $ 16.8 $ 20.6 $ 400.2 $ ( 90.2 )

Other comprehensive income (loss):

Commodity contracts designated as cash flow hedges:

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

Three Months Ended March 31,

Net income $ 72.2 $ 14.8

Other comprehensive loss:

Other loss, net of taxes — ( 0.1 )

Total other comprehensive loss — ( 0.1 )

Comprehensive income (loss) 16.7 20.6 400.0 ( 90.4 )

Comprehensive income $ 72.2 $ 14.7

Comprehensive income attributable to non-controlling interest 7.9 8.2

Comprehensive income (loss) attributable to Delek $ 7.3 $ 11.8 $ 375.6 $ ( 115.1 )

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

See Note 7 for further discussion.

See accompanying notes to condensed consolidated financial statements

Comprehensive income attributable to Delek $ 64.3 $ 6.5

See accompanying notes to the condensed consolidated financial statements

Financial Statements

1 unchanged sentence

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

(In millions, except share data)

Three Months Ended September 30, 2022

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

(In millions, except share and per share data)

Three Months Ended March 31, 2023

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

Shares Amount Shares Amount

Balance at June 30, 2022

88,610,583 $ 0.9 $ 1,159.1 $ ( 3.9 ) $ 753.0 ( 17,575,527 ) $ ( 694.1 ) $ 122.4 $ 1,337.4

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

Net income — — — — 64.3 — — 7.9 72.2

7 unchanged sentences

Other 22,235 — 1.5 — ( 0.1 ) — — — 1.4

Balance at September 30, 2022

87,228,503 $ 0.9 $ 1,125.7 $ ( 4.0 ) $ 731.8 ( 17,575,527 ) $ ( 694.1 ) $ 122.7 $ 1,283.0

Three Months Ended September 30, 2021

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

Treasury Stock Non-Controlling Interest in Subsidiaries Total Stockholders' Equity

As Adjusted (1)

Shares Amount Shares Amount

Balance at June 30, 2021

91,637,661 $ 0.9 $ 1,192.6 $ ( 7.4 ) $ 386.3 ( 17,575,527 ) $ ( 694.1 ) $ 118.4 $ 996.7

Net income — — — — 11.8 — — 8.8 20.6

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

Equity-based compensation expense — — 6.8 — — — — 0.1 6.9

Taxes paid due to the net settlement of equity-based compensation — — ( 0.4 ) — — — — — ( 0.4 )

Exercise of equity-based awards 62,803 — — — — — — — —

Other — — 0.2 — — — — ( 0.2 ) —

Balance at September 30, 2021

91,700,464 $ 0.9 $ 1,199.2 $ ( 7.4 ) $ 398.1 ( 17,575,527 ) $ ( 694.1 ) $ 118.9 $ 1,015.6

Balance at March 31, 2023 84,569,103 $ 0.9 $ 1,141.2 $ ( 5.2 ) $ 557.2 ( 17,575,527 ) $ ( 694.1 ) $ 124.3 $ 1,124.3

Financial Statements

Delek US Holdings, Inc.

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

(In millions, except share data)

Nine Months Ended September 30, 2022

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

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

(In millions, except share and per share data)

Three Months Ended March 31, 2022

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

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

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

Net income — — — — 6.6 — — 8.2 14.8

Common stock dividends ($ 0.40 per share)

— — — — ( 28.3 ) — — — ( 28.3 )

Distributions to non-controlling interests — — — — — — — ( 26.9 ) ( 26.9 )

Equity-based compensation expense — — 5.3 — — — — 0.1 5.4

Repurchase of common stock ( 1,435,602 ) — ( 40.0 ) — — — — — ( 40.0 )

Distribution to non-controlling interest — — — — — — — ( 8.7 ) ( 8.7 )

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

3 unchanged sentences

Other — — — ( 0.1 ) — — — — ( 0.1 )

Balance at September 30, 2022

87,228,503 $ 0.9 $ 1,125.7 $ ( 4.0 ) $ 731.8 ( 17,575,527 ) $ ( 694.1 ) $ 122.7 $ 1,283.0

Nine Months Ended September 30, 2021

Common Stock Additional Paid-in Capital Accumulated Other Comprehensive Income 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 ) $ 522.0 ( 17,575,527 ) $ ( 694.1 ) $ 118.4 $ 1,125.1

Cumulative effect of change in accounting method for certain inventory from LIFO to FIFO, net — — — — ( 8.7 ) — — — ( 8.7 )

Net (loss) income — — — — ( 114.9 ) — — 24.7 ( 90.2 )

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

Distribution to non-controlling interest — — — — — — — ( 24.1 ) ( 24.1 )

Equity-based compensation expense — — 17.3 — — — — 0.1 17.4

Taxes paid due to the net settlement of equity-based compensation — — ( 3.4 ) — — — — — ( 3.4 )

Exercise of equity-based awards 343,596 — — — — — — — —

Other — — 0.2 — ( 0.3 ) — — ( 0.2 ) ( 0.3 )

Balance at September 30, 2021

91,700,464 $ 0.9 $ 1,199.2 $ ( 7.4 ) $ 398.1 ( 17,575,527 ) $ ( 694.1 ) $ 118.9 $ 1,015.6

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

See Note 7 for further discussion.

See accompanying notes to condensed consolidated financial statements

Balance at March 31, 2022 88,320,612 $ 0.9 $ 1,156.0 $ ( 3.9 ) $ 391.3 ( 17,575,527 ) $ ( 694.1 ) $ 124.5 $ 974.7

See accompanying notes to the condensed consolidated financial statements

Financial Statements

2 unchanged sentences

(In millions)

Nine Months Ended September 30,

2022 As Adjusted (1)

Three Months Ended March 31,

Cash flows from operating activities:

Net income (loss) $ 400.2 $ ( 90.2 )

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

Net income $ 72.2 $ 14.8

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization 83.4 68.3

11 unchanged sentences

Accounts payable and other current liabilities ( 293.1 ) 988.6

Obligation under Supply and Offtake Agreements 108.7 130.8

Obligation under Inventory Intermediation Agreements ( 63.5 ) 101.8

Non-current assets and liabilities, net ( 0.3 ) ( 5.9 )

1 unchanged sentence

Cash flows from investing activities:

Acquisition of 3 Bear ( 625.4 ) —

Equity method investment contributions ( 0.1 ) ( 1.6 )

Distributions from equity method investments 2.1 0.6

Purchases of property, plant and equipment ( 211.3 ) ( 29.5 )

Purchase of intangible assets ( 4.5 ) ( 0.8 )

Purchase of equity securities ( 7.5 ) —

Purchases of intangible assets ( 0.6 ) ( 2.4 )

Proceeds from sale of property, plant and equipment — 1.0

Insurance proceeds — 0.1

Other ( 4.8 ) —

Net cash used in investing activities ( 222.1 ) ( 30.2 )

2 unchanged sentences

Payments on long-term revolvers ( 1,123.5 ) ( 409.0 )

Proceeds from term debt — 400.0

Payments on term debt ( 6.1 ) ( 13.3 )

1 unchanged sentence

Repayments of product financing agreements ( 236.1 ) ( 253.1 )

Proceeds from Inventory Intermediation Agreement 32.2 —

Proceeds from termination of Supply & Offtake Obligation 25.8 —

Taxes paid due to the net settlement of equity-based compensation ( 0.6 ) ( 0.3 )

1 unchanged sentence

Distribution to non-controlling interest ( 9.5 ) ( 8.7 )

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

Dividends paid ( 28.3 ) —

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

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

Deferred financing costs paid ( 0.7 ) ( 6.2 )

Net cash provided by financing activities 401.1 ( 23.9 )

Net increase in cash and cash equivalents 297.3 43.1

Dividends paid ( 14.7 ) —

Net cash (used in) provided by financing activities ( 149.3 ) 1.0

Net increase (decrease) in cash and cash equivalents 23.7 ( 2.4 )

Cash and cash equivalents at the beginning of the period 841.3 856.5

3 unchanged sentences

(In millions)

Nine Months Ended September 30,

2022 As Adjusted (1)

Three Months Ended March 31,

Supplemental disclosures of cash flow information:

1 unchanged sentence

Interest, net of capitalized interest of $ 0.9 million and $ 0.4 million in the 2023,and 2022 periods, respectively

$ 113.5 $ 79.1

Income taxes $ 0.1 $ 1.0

Non-cash investing activities:

Decrease in accrued capital expenditures $ ( 10.5 ) $ ( 1.5 )

(Decrease) Increase in accrued capital expenditures $ ( 19.2 ) $ 3.4

Non-cash financing activities:

Non-cash lease liability arising from obtaining right-of-use assets during the period $ 19.8 $ 1.5

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

See Note 7 for further discussion.

See accompanying notes to condensed consolidated financial statements

See accompanying notes to the condensed consolidated financial statements

Notes to Condensed Financial Statements (Unaudited)

Delek US Holdings, Inc.

Notes to Condensed Consolidated Financial Statements (unaudited)

Note 1 - Organization and Basis of Presentation

Organization and Basis of Presentation

Delek US Holdings, Inc.

6 unchanged sentences

Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with United States ("U.S.") Generally Accepted Accounting Principles ("GAAP") have been condensed or omitted, although management believes that the disclosures herein are adequate to make the financial information presented not misleading.

Our unaudited condensed consolidated financial statements have been prepared in conformity with GAAP applied on a consistent basis with those of the annual audited consolidated financial statements included in our Annual Report on Form 10-K filed with the Securities and Exchange Commission ("SEC") on February 25, 2022 (the "Annual Report on Form 10-K") and in accordance with the rules and regulations of the SEC.

Our unaudited condensed consolidated financial statements have been prepared in conformity with GAAP applied on a consistent basis with those of the annual audited consolidated financial statements included in our Annual Report on Form 10-K filed with the Securities and Exchange Commission ("SEC") on March 1, 2023 (the "Annual Report on Form 10-K") and in accordance with the rules and regulations of the SEC.

These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto for the year ended December 31, 2022 included in our Annual Report on Form 10-K.

Our condensed 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").

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 (subsequently renamed to Delek Delaware Gathering ("Delaware Gathering")), 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 "Delaware Gathering Acquisition").

See Note 2 - Acquisitions for additional information.

6 unchanged sentences

Operating results for the interim period should not be viewed as representative of results that may be expected for any future interim period or for the full year.

Accounting Policies

With the exception of the policy updates below, there have been no new or material changes to the significant accounting policies discussed in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021.

Change in Accounting Principle

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

Total inventories accounted for using LIFO, prior to the accounting method change, comprised 28.0 % of the Company’s total inventories as of December 31, 2021.

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, 2021 beginning retained earnings.

See Note 7 - Inventory for additional information.

Reclassifications

Certain prior period amounts have been reclassified in order to conform to the current period presentation.

Notes to Condensed Consolidated Financial Statements (Unaudited)

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") issued Accounting Standards Update ("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.

Accounting Pronouncements Not Yet Adopted

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 expect to adopt this guidance on or before the effective date and do not expect the adoption to have a material impact on our condensed consolidated financial statements and related disclosures.

Note 2 - 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 $ 628.1 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 9 of these condensed consolidated financial statements).

For the three and nine months ended September 30, 2022, we incurred $ 4.2 million and $ 10.6 million, respectively, 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 condensed 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 $ 60.9 million and $ 8.3 million, respectively, for the three months ended September 30, 2022 and $ 81.5 million and $ 9.8 million, respectively, for the nine months ended September 30, 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.

Delek Delaware Gathering (formally 3 Bear)

Delek Logistics completed the Delaware Gathering 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 Delaware Gathering was $ 628.3 million.

The Delaware Gathering Acquisition was financed through a combination of cash on hand and borrowings under the Delek Logistics' Revolving Facility (as discussed in Note 9 of these consolidated financial statements).

For the three months ended March 31, 2023, we incurred no incremental direct acquisition and integration costs.

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

Our results of operations included revenue and net income of $ 44.3 million and $ 11.5 million, respectively, for the three months ended March 31, 2023.

The Delaware Gathering 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.

Notes to Condensed Financial Statements (Unaudited)

Determination of Purchase Price

6 unchanged sentences

Purchase price $ 628.3

Notes to Condensed Consolidated Financial Statements (Unaudited)

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):

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

Assets acquired:

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

• Customer relationship 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.

We recognized amortization expense for the three and nine months ended September 30, 2022 of $ 4.5 million and $ 6.0 million, respectively.

The estimated amortization is $ 18.0 million for each of the five succeeding fiscal years.

• 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.

We recognized amortization expense for the three and nine months ended September 30, 2022 of $ 0.2 million and $ 0.2 million, respectively..

The estimated amortization is $ 0.6 million for each of the five succeeding fiscal 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, the final working capital adjustment is complete, 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 September 30, 2022.

To the extent possible, estimates have been considered and recorded, as appropriate, for the items above based on the information available as of March 31, 2023.

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").

3 unchanged sentences

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, attrition rate, operating margins and discount rates.

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 payables were equivalent to their carrying values due to their short-term nature.

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

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

Notes to Condensed Financial Statements (Unaudited)

The goodwill recognized in the Delaware Gathering 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.

Notes to Condensed Consolidated Financial Statements (Unaudited)

Goodwill related to the Delaware Gathering 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 relationship intangibles (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.

The following table summarizes the unaudited pro forma financial information of the Company assuming the Delaware Gathering Acquisition had occurred on January 1, 2022.

The unaudited pro forma financial information has been adjusted to give effect to certain pro forma adjustments that are directly related to the Delaware Gathering 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 Delaware Gathering 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 Delaware Gathering Acquisition.

The unaudited pro forma financial information is not necessarily indicative of the results of operations that would have been achieved had the Delaware Gathering 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.

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

Three Months Ended March 31,

(in millions, except per share data) 2022

Net sales $ 4,509.5

Net income (loss) attributable to Delek $ 10.1 $ 15.7 $ 376.3 $ ( 184.2 )

Net income (loss) per share:

Basic income (loss) per share $ 0.14 $ 0.21 $ 5.26 $ ( 2.49 )

Diluted income (loss) per share $ 0.14 $ 0.21 $ 5.22 $ ( 2.49 )

Note 3 - Segment Data

Net income attributable to Delek $ 0.5

Net income per share:

Basic income per share $ 0.01

Diluted income per share $ 0.01

We aggregate our operating units into three reportable segments:

3 unchanged sentences

• results of certain immaterial operating segments, including our Canadian crude trading operations (as discussed in Note 10);

• wholesale crude operations;

• Alon's asphalt terminal operations;

• intercompany eliminations.

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

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

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

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 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 attributable to Delek.

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

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

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

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

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

Refining Segment

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

The refining segment has a combined nameplate capacity of 302,000 barrels per day ("bpd") as of September 30, 2022, including the following:

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

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

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

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

The refining segment has a combined nameplate capacity of 302,000 barrels per day ("bpd") as of March 31, 2023, including the following:

Notes to Condensed Financial Statements (Unaudited)

• Tyler, Texas refinery (the "Tyler refinery");

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

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

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

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.

Notes to Condensed Consolidated Financial Statements (Unaudited)

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

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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.

The operating results and assets acquired in the Delaware Gathering Acquisition have been included in the logistics segment since June 1, 2022.

Retail Segment

Our retail segment consists of 248 owned and leased convenience store sites as of September 30, 2022, located primarily in West Texas and New Mexico.

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

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.

Significant Inter-segment Transactions

All inter-segment transactions have been eliminated in consolidation and consist 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;

• logistics segment crude transportation, terminalling and storage fee revenue from our refining segment for the utilization of pipeline, terminal and storage assets.

Notes to Condensed Consolidated Financial Statements (Unaudited)

Our retail segment consists of 249 owned and leased convenience store sites as of March 31, 2023, located primarily in West Texas and New Mexico.

These convenience stores typically offer various grades of fuel, food and beverage products, general merchandise, and certain food and other services.

Substantially all of the motor fuel sold through our retail segment is supplied by our Big Spring refinery.

Business Segment Operating Performance

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

Three Months Ended September 30, 2022

Refining Logistics Retail Corporate,

Other and Eliminations Consolidated

Net revenues (excluding inter-segment fees and revenues)

$ 3,989.3 $ 166.9 $ 253.1 $ 915.6 $ 5,324.9

Inter-segment fees and revenues 256.8 127.2 — ( 384.0 ) —

Operating costs and expenses:

Cost of materials and other 3,968.1 177.7 210.3 559.9 4,916.0

Operating expenses (excluding depreciation and amortization presented below) 172.0 25.9 25.4 3.1 226.4

Segment contribution margin $ 106.0 $ 90.5 $ 17.4 $ ( 31.4 ) 182.5

Income from equity method investments 0.1 8.6 — 9.1

Segment contribution margin and income (loss) from equity method investments $ 106.1 $ 99.1 $ 17.4 $ ( 22.3 )

Depreciation and amortization $ 48.9 $ 19.6 $ 2.6 $ 1.8 72.9

General and administrative expenses

Other operating income, net ( 5.8 )

Operating income $ 53.0

Capital spending (excluding business combinations) $ 22.7 $ 32.2 $ 13.6 $ 12.3 $ 80.8

Three Months Ended September 30, 2021

Logistics Retail Corporate,

Other and Eliminations (1)

Consolidated (1)

Net revenues (excluding inter-segment fees and revenues)

$ 2,603.8 $ 79.8 $ 206.5 $ 66.4 $ 2,956.5

Inter-segment fees and revenues

210.8 109.8 — ( 320.6 ) —

Operating costs and expenses:

Cost of materials and other 2,648.3 105.1 165.2 ( 240.6 ) 2,678.0

Operating expenses (excluding depreciation and amortization presented below) 84.2 17.6 23.4 3.3 128.5

Segment contribution margin $ 82.1 $ 66.9 $ 17.9 $ ( 16.9 ) 150.0

Income (loss) from equity method investments 0.2 7.3 — ( 4.6 )

Segment contribution margin and income (loss) from equity method investments $ 82.3 $ 74.2 $ 17.9 $ ( 21.5 )

Depreciation and amortization $ 45.9 $ 10.2 $ 3.0 $ 1.7 60.8

General and administrative expenses

Other operating income, net ( 1.7 )

Operating income $ 37.9

Capital spending (excluding business combinations)

$ 14.5 $ 4.2 $ 1.9 $ 8.3 $ 28.9

Notes to Condensed Consolidated Financial Statements (Unaudited)

Nine Months Ended September 30, 2022

Refining Logistics Retail Corporate,

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

Three Months Ended March 31, 2023

(In millions) Refining Logistics Retail Corporate,

Other and Eliminations Consolidated

Net revenues (excluding inter-segment fees and revenues)

$ 11,755.3 $ 390.3 $ 739.7 $ 2,881.3 $ 15,766.6

Net revenues (excluding intercompany fees and revenues) $ 3,600.8 $ 118.5 $ 205.0 $ — $ 3,924.3

Inter-segment fees and revenues 193.7 125.0 — ( 318.7 ) —

Operating costs and expenses:

Cost of materials and other 11,272.2 480.3 617.1 1,781.5 14,151.1

Operating expenses (excluding depreciation and amortization presented below) 456.9 65.0 73.2 20.7 615.8

Segment contribution margin $ 821.2 $ 222.1 $ 49.4 $ ( 93.0 ) 999.7

Income from equity method investments 0.5 22.7 — 21.2

Segment contribution margin and income (loss) from equity method investments $ 821.7 $ 244.8 $ 49.4 $ ( 71.8 )

Total revenues $ 3,794.5 $ 243.5 $ 205.0 $ ( 318.7 ) $ 3,924.3

Segment EBITDA attributable to Delek $ 192.1 $ 91.4 $ 6.4 $ ( 49.9 ) $ 240.0

Depreciation and amortization ( 56.6 ) ( 21.1 ) ( 2.7 ) ( 3.0 ) ( 83.4 )

General and administrative expenses

Other operating income, net ( 44.5 )

Operating income $ 593.0

Interest expense, net ( 9.0 ) ( 32.6 ) ( 0.2 ) ( 34.7 ) ( 76.5 )

Income tax expense ( 15.8 )

Net income attributable to Delek $ 64.3

Capital spending (excluding business combinations) $ 147.6 $ 36.1 $ 2.7 $ 5.7 $ 192.1

Nine Months Ended September 30, 2021

Logistics Retail Corporate,

Three Months Ended March 31, 2022

(In millions) Refining Logistics Retail Corporate,

Other and Eliminations Consolidated

Net revenues (excluding inter-segment fees and revenues)

$ 6,415.1 $ 202.6 $ 590.3 $ 332.2 $ 7,540.2

Net revenues (excluding intercompany fees and revenues) $ 4,166.5 $ 82.8 $ 209.5 $ 0.3 $ 4,459.1

Inter-segment fees and revenues 225.8 123.8 — ( 349.6 ) —

555.3 308.4 — ( 863.7 ) —

Operating costs and expenses:

Cost of materials and other 6,549.9 275.0 466.4 ( 479.9 ) 6,811.4

Operating expenses (excluding depreciation and amortization presented below) 313.9 48.0 67.4 20.7 450.0

Segment contribution margin $ 106.6 $ 188.0 $ 56.5 $ ( 72.3 ) 278.8

Income (loss) from equity method investments 0.5 18.0 — ( 4.0 )

Segment contribution margin and income (loss) from equity method investments $ 107.1 $ 206.0 $ 56.5 $ ( 76.3 )

Total revenues $ 4,392.3 $ 206.6 $ 209.5 $ ( 349.3 ) $ 4,459.1

Segment EBITDA attributable to Delek $ 80.0 $ 64.2 $ 10.3 $ ( 38.1 ) $ 116.4

Depreciation and amortization ( 52.8 ) ( 10.4 ) ( 3.5 ) ( 1.6 ) ( 68.3 )

General and administrative expenses

Other operating income, net ( 4.7 )

Operating loss $ ( 59.7 )

Interest expense, net ( 0.6 ) ( 14.2 ) — ( 23.6 ) ( 38.4 )

Income tax expense ( 3.1 )

Net income attributable to Delek $ 6.6

Capital spending (excluding business combinations) $ 14.3 $ 9.1 $ 3.0 $ 6.5 $ 32.9

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

See Note 7 for further discussion.

Other Segment Information

Assets by segment are not a measure used to assess the performance of the company by the chief operating decision maker and thus are not disclosed .

Note 4 - 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) attributable to Delek, 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.

Notes to Condensed Financial Statements (Unaudited)

Earnings Per Share

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

Diluted earnings per share is computed by dividing net income, 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 16 to these condensed consolidated financial statements.

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

Notes to Condensed Consolidated Financial Statements (Unaudited)

Three Months Ended Nine Months Ended

September 30, September 30,

2022 2021 (1)

Three Months Ended March 31,

Numerator for EPS

Net income (loss) $ 16.8 $ 20.6 $ 400.2 $ ( 90.2 )

Net income $ 72.2 $ 14.8

Income attributed to non-controlling interest 7.9 8.2

3 unchanged sentences

Weighted average common shares outstanding, assuming dilution (denominator for diluted EPS) 67,369,374 73,649,266

Basic income (loss) per share $ 0.11 $ 0.16 $ 5.26 $ ( 1.55 )

Diluted income (loss) per share $ 0.10 $ 0.16 $ 5.21 $ ( 1.55 )

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

Basic income per share $ 0.96 $ 0.09

Diluted income per share $ 0.95 $ 0.09

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) 2,181,281 3,088,678

Antidilutive due to loss — — — 605,270

Total antidilutive stock-based compensation 2,138,130 3,711,184 2,380,376 3,572,995

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

See Note 7 for further discussion.

Note 5 - 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 September 30, 2022, we owned a 78.9 % 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 condensed consolidated statements of income and in non-controlling interest in subsidiaries in the accompanying condensed consolidated balance sheets.

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 $ 628.1 million.

See Note 2 - 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 nine months ended September 30, 2022, we sold 385,522 units for gross proceeds of $ 16.4 million or $ 13.6 million net of taxes, all of which was completed in the first quarter.

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 under this registration in 2022..

As of March 31, 2023, we owned a 78.7 % 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.

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.

Notes to Condensed Consolidated Financial Statements (Unaudited)

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

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 condensed consolidated balance sheets as presented below are included in the condensed consolidated balance sheets of Delek (unaudited, in millions).

September 30, 2022 December 31, 2021

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):

Notes to Condensed Financial Statements (Unaudited)

As of March 31, 2023

As of December 31, 2022

Cash and cash equivalents $ 11.0 $ 8.0

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Accounts payable to related parties 4.5 6.1

Current portion of long-term debt 15.0 15.0

Current portion of operating lease liabilities 8.1 8.0

6 unchanged sentences

Total liabilities and deficit $ 1,691.6 $ 1,679.3

Note 6 - Equity Method Investments

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 in WWP 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.

Through our wholly-owned direct subsidiary Delek Energy, we own a 50 % investment in W2W Holdings LLC ("HoldCo") which was formed by us and MPLX Operations LLC ("MPLX") to obtain financing and fund capital calls associated with our collective and contributed interests in the Wink to Webster Pipeline LLC ("WWP") Joint Venture.

The Company has determined that HoldCo is a VIE.

While we have the ability to exert significant influence through participation in board and management committees, we are not the primary beneficiary since we do not have a controlling financial interest in HoldCo, and no single party has the power to direct the activities that most significantly impact HoldCo's economic performance.

We account for HoldCo using the equity method of accounting.

On June 2, 2022, HoldCo's wholly-owned finance LLC ("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 Energy's investment in W2W Holdings LLC ("HoldCo") and determined that HoldCo is a VIE.

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

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

Notes to Condensed Consolidated Financial Statements (Unaudited)

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

The obligations of the HoldCo members under the W2W Holdings LLC Agreement are guaranteed by the parents of the member entities.

As of March 31, 2023, except for the guarantee of member obligations under the joint venture, we do not have other guarantees with or to HoldCo, nor any third-party associated with HoldCo contracted work.

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

As of September 30, 2022, except for the guarantee of member obligations under the W2W Holdings LLC Agreement, the Company does not have other existing guarantees with or to HoldCo, or any third-party for work contracted with it.

On September 30, 2021, WWP made the decision to buy Delek out of the Midland Connector Financing Commitment Agreement which provided an interest-free commitment to fund us up to $ 65.0 million upon completion of a connector to connect the WWP long-haul pipeline to our Big Spring 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 during the third quarter.

As a result of the transaction, we recognized $ 20.9 million of other non-operating income in the third quarter, representing the excess over our current period recognized write-offs.

As of September 30, 2022 and December 31, 2021, Delek's investment balance in WWP Project Financing Joint Venture totaled $ 54.7 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 on the investment, we recognized income of $ 1.2 million and $ 5.4 million for the three and nine months ended September 30, 2022, respectively, and a loss of $ 8.8 million and $ 12.9 million for the three and nine months ended September 30, 2021, respectively.

As of March 31, 2023 and December 31, 2022, Delek's HoldCo investment balance totaled $ 53.5 million and $ 49.0 million, respectively, and is included in total assets in corporate, other and eliminations in our segment disclosure.

For the three months ended March 31, 2023 and 2022, we recognized income of $ 4.5 million and $ 2.1 million, respectively, associated with HoldCo activities.

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 September 30, 2022 and December 31, 2021, Delek's investment balance in Red River totaled $ 143.7 million and $ 144.0 million, respectively.

We made no capital contributions during the nine months ended September 30, 2022 and made $ 1.4 million in capital contributions during the nine months ended September 30, 2021 based on capital calls.

We recognized income on the investment totaling $ 4.7 million and $ 14.6 million for the three and nine months ended September 30, 2022, respectively, and $ 3.9 million and $ 9.9 million for the three and nine months ended September 30, 2021, respectively.

As of March 31, 2023 and December 31, 2022, Delek's investment balance in Red River totaled $ 141.6 million and $ 149.6 million, respectively.

We recognized income on the investment totaling $ 3.8 million and $ 5.2 million for the three months ended March 31, 2023 and 2022, respectively.

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

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

Notes to Condensed Financial Statements (Unaudited)

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 September 30, 2022 and December 31, 2021, Delek Logistics' investment balances in these joint ventures totaled $ 104.3 million and $ 106.0 million, respectively, and were accounted for using the equity method.

We recognized income on these investments totaling $ 3.9 million and $ 8.1 million for the three and nine months ended September 30, 2022, respectively, and $ 3.4 million and $ 8.0 million for the three and nine months ended September 30, 2021, respectively.

As of March 31, 2023 and December 31, 2022, Delek Logistics' investment balance in these joint ventures was $ 101.7 million and $ 107.4 million, respectively, and are accounted for using the equity method.

We recognized income on these investments totaling $ 2.5 million and $ 1.8 million for the three months ended March 31, 2023 and 2022, 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 September 30, 2022 and December 31, 2021, Delek's investment balance in these joint ventures was $ 57.9 million and $ 44.8 million, respectively.

We recognized income on these investments totaling $ 8.0 million and $ 16.3 million for the three and nine months ended September 30, 2022, respectively, and $ 4.4 million and $ 9.5 million for the three and nine months ended September 30, 2021, respectively.

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

Note 7 - Inventory

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 FIFO basis or net realizable value.

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

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

Total inventories accounted for using LIFO, prior to the accounting method change, comprised 28.0 % of the Company’s total inventories as of December 31, 2021.

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

Notes to Condensed Consolidated Financial Statements (Unaudited)

decrease to retained earnings of $ 8.7 million as of January 1, 2021 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:

December 31, 2021

(in millions) September 30, 2022 As Adjusted (1)

Refinery raw materials and supplies $ 756.9 $ 516.0

Refinery work in process 223.4 156.2

Refinery finished goods 611.2 550.6

Retail fuel 10.4 9.3

Retail merchandise 29.8 26.2

Logistics refined products 2.5 2.4

Total inventories $ 1,634.2 $ 1,260.7

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

In addition, certain financial statement line items in our Condensed Consolidated Statement of Income for the three and nine months ended September 30, 2021, our Condensed Consolidated Statement of Cash Flows for the nine months ended September 30, 2021 and our Consolidated Condensed Balance Sheet as of December 31, 2021, were retrospectively adjusted as follows:

Three Months Ended September 30, 2021

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

Condensed Consolidated Statements of Income

Cost of materials and other $ 2,670.1 $ 7.9 $ 2,678.0

Total cost of sales $ 2,828.1 $ 7.9 $ 2,836.0

Income before income tax expense $ 33.0 $ ( 7.9 ) $ 25.1

Income tax expense $ 6.1 $ ( 1.6 ) $ 4.5

As of March 31, 2023 and December 31, 2022, Delek's investment balance in these joint ventures was $ 57.4 million and $ 53.7 million, respectively.

We recognized income on these investments totaling $ 3.8 million and $ 1.8 million for the three months ended March 31, 2023 and 2022, 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 March 31, 2023 As of December 31, 2022

Current assets $ 132.2 $ 116.5

Non-current assets $ 1,326.3 $ 1,333.2

Current liabilities $ 28.7 $ 16.0

Non-current liabilities $ 547.6 $ 553.9

Three Months Ended March 31,

Revenues $ 84.9 $ 56.1

Gross profit $ 30.3 $ 21.1

Operating income $ 24.8 $ 17.0

Net income $ 31.4 $ 19.0

Net income attributable to Delek $ 18.1 $ ( 6.3 ) $ 11.8

Net income per share attributable to Delek

Basic $ 0.24 $ ( 0.08 ) $ 0.16

Diluted $ 0.24 $ ( 0.08 ) $ 0.16

Nine Months Ended September 30, 2021

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

Condensed Consolidated Statements of Income

Cost of materials and other $ 6,871.4 $ ( 60.0 ) $ 6,811.4

Total cost of sales $ 7,412.9 $ ( 60.0 ) $ 7,352.9

Loss before income tax benefit $ ( 189.2 ) $ 60.0 $ ( 129.2 )

Income tax benefit $ ( 52.3 ) $ 13.3 $ ( 39.0 )

Net loss $ ( 136.9 ) $ 46.7 $ ( 90.2 )

Net loss attributable to Delek $ ( 161.6 ) $ 46.7 $ ( 114.9 )

Net loss per share attributable to Delek

Basic $ ( 2.19 ) $ 0.64 $ ( 1.55 )

Diluted $ ( 2.19 ) $ 0.64 $ ( 1.55 )

Notes to Condensed Consolidated Financial Statements (Unaudited)

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.

The following table presents the components of inventory for each period presented:

Titled Inventory Inventory Intermediation Agreement (1)

March 31, 2023

Feedstocks, raw materials and supplies $ 392.1 $ 152.4 $ 544.5

Refined products and blendstock 374.1 366.4 740.5

Merchandise inventory and other 29.7 — 29.7

Total $ 795.9 $ 518.8 $ 1,314.7

December 31, 2022

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

Condensed 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

Nine Months Ended September 30, 2021

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

Condensed Consolidated Statements of Cash Flows

$ ( 136.9 ) $ 46.7 $ ( 90.2 )

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

$ ( 29.9 ) $ 30.2 $ 0.3

Deferred income taxes $ ( 50.3 ) $ 5.7 $ ( 44.6 )

Inventories and other current assets

$ ( 186.0 ) $ ( 53.1 ) $ ( 239.1 )

Accounts payable and other current liabilities $ 662.2 $ ( 29.5 ) $ 632.7

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

Three Months Ended September 30, 2022

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

Condensed Consolidated Statements of Income

Cost of materials and other $ 4,797.2 $ 4,916.0 $ ( 118.8 )

Total cost of sales $ 5,061.9 $ 5,180.7 $ ( 118.8 )

(Loss) income before income tax (benefit) expense $ 139.6 $ 20.8 $ 118.8

Income tax (benefit) expense $ 29.3 $ 4.0 $ 25.3

Net (loss) income attributable to Delek $ 100.9 $ 7.4 $ 93.5

Net (loss) income per share attributable to Delek

Basic $ 1.43 $ 0.11 $ 1.32

Diluted $ 1.42 $ 0.10 $ 1.32

Nine Months Ended September 30, 2022

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

Condensed Consolidated Statements of Income

Cost of materials and other $ 14,198.8 $ 14,151.1 $ 47.7

Total cost of sales $ 14,917.0 $ 14,869.3 $ 47.7

Income before income tax expense $ 460.0 $ 507.7 $ ( 47.7 )

Income tax expense $ 97.4 $ 107.5 $ ( 10.1 )

Net income attributable to Delek $ 338.2 $ 375.8 $ ( 37.6 )

Net income per share attributable to Delek

Basic $ 4.73 $ 5.26 $ ( 0.53 )

Diluted $ 4.69 $ 5.21 $ ( 0.52 )

Notes to Condensed Consolidated Financial Statements (Unaudited)

September 30, 2022

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

Condensed Consolidated Balance Sheet

Inventories, net inventory valuation reserves $ 1,527.9 $ 1,634.2 $ ( 106.3 )

Total Assets $ 8,290.5 $ 8,396.8 $ ( 106.3 )

Accrued expenses and other current

$ 990.5 $ 969.8 $ 20.7

Deferred tax liabilities

$ 286.7 $ 309.6 $ ( 22.9 )

Retained Earnings $ 627.7 $ 731.8 $ ( 104.1 )

Total liabilities and stockholders' equity $ 8,290.5 $ 8,396.8 $ ( 106.3 )

Nine Months Ended September 30, 2022

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

Condensed Consolidated Statements of Cash Flows

$ 362.6 $ 400.2 $ ( 37.6 )

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

$ 19.5 $ 19.1 $ 0.4

Deferred income taxes $ 90.8 $ 95.6 $ ( 4.8 )

Inventories and other current assets

$ ( 398.5 ) $ ( 419.8 ) $ 21.3

Accounts payable and other current liabilities $ 545.5 $ 524.8 $ 20.7

At September 30, 2022, we recorded a pre-tax inventory valuation reserve of $ 28.4 million due to a market price decline below our cost of certain inventory products.

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

(1) Refer to Note 8 - Inventory Intermediation Obligations for further information.

Notes to Condensed Financial Statements (Unaudited)

At March 31, 2023, we recorded a pre-tax inventory valuation reserve of $ 9.5 million due to a market price decline below our cost of certain inventory products.

At December 31, 2022, we recorded a pre-tax inventory valuation reserve of $ 11.2 million.

We recognized a net reduction (increase) in cost of materials and other in the accompanying condensed consolidated statements of income related to the change in pre-tax inventory valuation of $( 20.3 ) million and $( 19.1 ) million for the three and nine months ended September 30, 2022, respectively, and $( 0.2 ) million and $( 0.3 ) million for the three and nine months ended September 30, 2021, respectively.

As of September 30, 2021, we recorded an immaterial cumulative error correction relating to prior periods to capitalize manufacturing overhead costs that should have been included in refining finished goods totaling $ 21.5 million.

The impact of the balance sheet error correction would not have been material to the prior period financial statements and is not material to total inventory.

Of that amount, $ 14.0 million was recognized as a reduction of operating expenses and $ 7.5 million was recognized as a reduction of depreciation in the refining segment during the three and nine months ended September 30, 2021.

Note 8 - Crude Oil Supply and Inventory Purchase Agreement

Delek has Supply and Offtake Agreements with J.

Aron & Company ("J.

Aron") in connection with its El Dorado, Big Spring and Krotz Springs refineries (collectively, the "Supply and Offtake Agreements").

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

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

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

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

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

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

The Supply and Offtake Agreements are accounted for as inventory financing arrangements under the fair value election provided by ASC 815 Derivatives and Hedging ("ASC 815") and ASC 825, Financial Instruments ("ASC 825").

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

El Dorado Big Spring Krotz Springs

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

Barrels of inventory consigned under the respective Supply and Offtake Agreements as of September 30, 2022 (1)

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

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

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

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

Aron has the sole discretion to further extend the three Supply and Offtake Agreements to May 30, 2025 by giving notice at least 6 months prior to the current maturity date;

Aron did not provide notice to further extend to May 30, 2025.

As part of the April 2020 amendment, there were changes to the underlying market index, annual fee, the crude purchase fee, crude roll fees and timing of cash settlements related to periodic price adjustments (the "Periodic Price Adjustments").

The 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") continue to be recorded at fair value under the fair value election included under ASC 815 and ASC 825.

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

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

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

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

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

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

As of September 30, 2022, the fixed component of the Baseline Step-Out Liabilities subject to the Periodic Price Adjustments amounted to approximately $ 72.8 million.

Some portion of that amount may become due or payable if Periodic Price Adjustments are triggered on the Periodic Pricing Dates.

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 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 $ 124.2 million and $( 82.6 ) million during the three and nine months ended September 30, 2022, respectively, and $( 0.8 ) million and $( 104.9 ) million during the three and nine months ended September 30, 2021, respectively.

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

El Dorado Big Spring Krotz Springs Total

Balances as of September 30, 2022:

Baseline Step-Out Liability $ 200.1 $ 86.1 $ 126.8 $ 413.0

Revolving over/short inventory financing liability (receivable) 120.8 77.4 ( 15.0 ) 183.2

Total Obligations Under Supply and Offtake Agreements - Current portion $ 320.9 $ 163.5 $ 111.8 $ 596.2

For the three months ended March 31, 2023 and 2022, we recognized a net reduction (increase) in cost of materials and other in the accompanying condensed consolidated statements of income related to the change in pre-tax inventory valuation of $ 1.7 million and $ 8.5 million, respectively.

Inventory Intermediation Obligations

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

As of March 31, 2023 As of December 31, 2022

Obligations under Inventory Intermediation Agreements

Obligations related to Base Layer Volumes $ 479.1 $ 491.8

Current portion 57.1 49.9

Total Obligations under Inventory Intermediation Agreements $ 536.2 $ 541.7

Other (receivable) payable for monthly activity true-up $ ( 10.0 ) $ 5.6

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 inventory financing liability (receivable) 120.9 41.1 ( 4.9 ) 157.1

Total Obligations Under Supply and Offtake Agreements - Current portion $ 280.5 $ 109.5 $ 97.5 $ 487.5

Obligations under Supply and Offtake Agreements

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

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

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 three months ended September 30, 2022

$ 3.6 $ 1.3 $ 1.0 $ 5.9

Recurring cash fees paid during the three months ended September 30, 2021

$ 2.5 $ 0.9 $ 1.0 $ 4.4

Recurring cash fees paid during the nine months ended September 30, 2022

$ 9.5 $ 3.3 $ 3.3 $ 16.1

Recurring cash fees paid during the nine months ended September 30, 2021

$ 7.7 $ 2.4 $ 3.2 $ 13.3

We maintained letters of credit under the Supply and Offtake Agreements as follows (in millions):

Letters of credit outstanding as of September 30, 2022

Letters of credit outstanding as of December 31, 2021

Note 9 - Long-Term Obligations and Notes Payable

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

September 30, 2022 December 31, 2021

Revolving Credit Facility $ — $ —

Term Loan Credit Facility (1)

1,234.8 1,240.0

Hapoalim Term Loan (2)

Delek Logistics Credit Facility (3)

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

In addition to the cost of financing charges, we have other intermediation fees which include market structure settlements, where we may pay or receive amounts based on market conditions and volumes subject to the intermediation agreement.

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

The following table summarizes these fees:

Three Months Ended March 31,

Net fees and expenses:

Inventory intermediation fees $ 5.9 $ 19.1

Interest expense, net $ 14.0 $ 5.0

Inventory Intermediation Agreements

On December 22, 2022, Delek entered into 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.

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 March 31, 2023, we had letters of credit outstanding of $ 90.0 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 .

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.

The Inventory Intermediation Agreement replaced the Supply and Offtake Agreements that expired on December 30, 2022.

The Inventory Intermediation Agreement provides 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 March 31, 2023 and December 31, 2022, the volumes subject to the Inventory Intermediation Agreement totaled 6.4 million barrels and 6.3 million barrels, 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 Derivatives and Hedging ("ASC 815") and ASC 825, Financial Instruments ("ASC 825").

Therefore, the crude oil and refined products barrels subject to the Inventory Intermediation Agreement will continue to be reported in our condensed 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 repurchase obligations associated with the Base Layer Volumes are reflected as non-current liabilities on our condensed 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 condensed consolidated balance sheet.

Notes to Condensed Financial Statements (Unaudited)

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 condensed consolidated statements of income.

With respect to the repurchase obligation, for the three months ended March 31, 2023, we recognized gains of $ 12.7 million attributable to changes in fair value due to commodity-index price.

Supply & Offtake Agreements

Prior to December 30, 2022, Delek was a party to 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.

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.

For the three months ended March 31, 2022, we recognized gains in cost of materials and other attributable to changes in fair value due to commodity-index price totaling $ 148.8 million.

Long-Term Obligations

Outstanding borrowings under debt instruments are as follows (in millions):

March 31, 2023 December 31, 2022

Delek Revolving Credit Facility $ 150.0 $ 450.0

Delek Term Loan Credit Facility 947.6 950.0

Delek Logistics Revolving Facility 770.6 720.5

Delek Logistics Term Loan Facility 296.3 300.0

Delek Logistics 2025 Notes 250.0 250.0

1 unchanged sentence

United Community Bank Revolver 25.0 50.0

2,733.6 2,218.0

Current portion of long-term debt and notes payable 63.0 92.2

$ 2,670.6 $ 2,125.8

(1) Net of deferred financing costs of $ 1.7 million and $ 2.2 million at September 30, 2022 and December 31, 2021, respectively and debt discount of $ 13.7 million and $ 17.8 million at September 30, 2022 and December 31, 2021, respectively.

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

(3) Net of deferred financing costs of $ 0.5 million at September 30, 2022.

(4) Net of deferred financing costs of $ 2.0 million and $ 2.5 million at September 30, 2022 and December 31, 2021, respectively and debt discount of $ 0.6 million and $ 0.8 million at September 30, 2022 and December 31, 2021, respectively.

(5) Net of deferred financing costs of $ 5.0 million and $ 5.7 million at September 30, 2022 and December 31, 2021, respectively.

Delek Revolver and Term Loan

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

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

Effective March 21, 2022, the limits for the issuance of letters of credit for the Revolving Credit Facility increased from of up to $ 400.0 million to up to $ 500.0 million, including letters of credit denominated in Canadian dollars of up to $ 10.0 million.

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

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

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

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

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

Pursuant to the Incremental Amendment, the Company borrowed $ 250.0 million in aggregate principal amount of incremental term loans (the “Incremental Term Loans”) at an original issue discount of 0.75 %.

On November 12, 2019 (the "Second Incremental Effective Date"), we amended the Term Loan Credit facility agreement pursuant to the terms of the Second Incremental Amendment to the Term Loan Credit Agreement (the "Second Incremental Amendment") and borrowed $ 150.0 million in aggregate principal amount of incremental term loans (the "Incremental

Notes to Condensed Consolidated Financial Statements (Unaudited)

Loans") at an original issue discount of 1.21 %.

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

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

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

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

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

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

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

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

Interest and Unused Line Fees

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

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

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

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

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

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

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

As of September 30, 2022, the unused line fee was 0.375 % per annum.

Maturity and Repayments

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

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

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

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

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

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

Guarantee and Security

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

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

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

Notes to Condensed Consolidated Financial Statements (Unaudited)

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

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

Additional Information

At September 30, 2022, the borrowing rate for base rate loans under the Revolving Credit Facility was 6.50 % and there was no principal amount outstanding thereunder.

Additionally, there were letters of credit issued of approximately $ 212.6 million as of September 30, 2022 under the Revolving Credit Facility.

Unused credit commitments under the Revolving Credit Facility, as of September 30, 2022, were approximately $ 787.4 million.

At September 30, 2022, the weighted average borrowing rate under the Term Loan Credit Facility was approximately 5.87 % comprised entirely of LIBOR borrowings, and the principal amount outstanding thereunder was $ 1,250.2 million.

As of September 30, 2022, the effective interest rate related to the Term Loan Credit Facility was 6.41 %.

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

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

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

Proceeds may be used for general corporate purposes.

On December 30, 2020 and June 28, 2021, we amended the BHI Agreement to modify one of the required quarterly financial covenant metrics;

there were no other changes as a result of these amendments.

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 Credit Facility

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

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

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

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

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

dollar prime rate , Canadian dollar prime rate , or recently amended term Secured Overnight Financing Rate (“Term SOFR”), or a CDOR rate, in each case plus applicable margins, at the election of the borrowers and as a function of draw down currency.

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

At September 30, 2022, the weighted average borrowing rate was approximately 5.64 %.

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

As of September 30, 2022, this fee was 0.50 % on an annualized basis.

In August 2020, Delek Logistics entered into a First Amendment to the Delek Logistics Credit Facility which, among other things, permitted the transfer of cash and equity consideration for the elimination of incentive distribution rights held by Delek Logistics GP, LLC, the general partner.

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

On May 13, 2022, Delek Logistics entered into a Second Amendment to the Delek Logistics Credit Facility which, among other things, provided for the transition from a LIBOR benchmark to Term SOFR with credit spread adjustments for 1-month and 3-month Term SOFR loans and provided consent and flexibility related to the previously announced 3 Bear Acquisition with respect to certain covenants in the Delek Logistics Credit Facility.

On May 26, 2022, Delek Logistics entered into a Third Amendment to the Delek Logistics Credit Facility which, among other things, provides for certain changes to the Delek Logistics Credit Facility in connection with the previously announced acquisition of 3 Bear in respect of pro forma calculations and certain other requirements under the Delek Logistics Credit Facility.

Further, on May 26, 2022, Delek Logistics entered into a Fourth Amendment (the “Fourth Amendment”) to the Delek Logistics Credit Facility.

Among other things, the Fourth Amendment:

(i) increased the U.S.

Revolving Credit Commitments (as defined in the Delek Logistics Credit Facility) by an amount equal to $ 150.0 million, resulting in aggregate lender commitments under the Delek Logistics Credit

Notes to Condensed Consolidated Financial Statements (Unaudited)

Facility in an amount of $ 1.0 billion, (ii) increased the U.S.

L/C Sublimit (as defined in the Delek Logistics Credit Facility) to an aggregate amount equal to $ 90.0 million and (iii) increased the U.S.

Swing Line Sublimit (as defined in the Delek Logistics Credit) to an aggregate amount equal to $ 18.0 million.

As of September 30, 2022, Delek Logistics had $ 806.9 million of outstanding borrowings under the Delek Logistics Credit Facility, with no letters of credit in place.

Unused credit commitments under the Delek Logistics Credit Facility, as of September 30, 2022, were $ 193.1 million.

Principle amount of long-term debt 2,839.5 3,120.5

Unamortized discount and deferred financing costs ( 64.5 ) ( 66.8 )

Total debt, net of unamortized discount and deferred financing costs 2,775.0 3,053.7

Current portion of long-term debt 49.5 74.5

Long-term debt, net of current portion $ 2,725.5 $ 2,979.2

Delek Term Loan Credit Facility

The Delek Term Loan Credit Facility principal of $ 950.0 million was drawn on November 18, 2022 at a discount of 4.00 %.

This senior secured facility allows for $ 400.0 million in incremental loans subject to certain restrictions.

Repayment terms include quarterly principal payments of $ 2.4 million with the balance of principal due on November 19, 2029.

At Delek’s option, borrowings bear interest at either the Adjusted Term Secured Overnight Financing Rate ("SOFR") or base rate as defined by the agreement, plus an applicable margin of 2.50 % per annum with respect to base rate borrowings and 3.50 % per annum with respect to SOFR borrowings.

At March 31, 2023 and December 31, 2022, the weighted average borrowing rate was approximately 8.41 % and 7.92 %;

respectively.

The effective interest rate was 9.71 % as of March 31, 2023.

Delek Logistics Term Loan Facility

The Delek Logistics Term Loan Facility principal of $ 300.0 million was drawn on October 13, 2022.

This senior secured facility requires four quarterly amortization payments of $ 3.8 million in 2023 and three quarterly amortization payments of $ 7.5 million in 2024 with final maturity and principal due on October 13, 2024.

At Delek Logistics' option, borrowings bear interest at either the SOFR or U.S.

dollar prime rate, plus an applicable margin.

The applicable margin is 2.50 % for the first year and 3.00 % for the second year for U.S.

dollar primate rate borrowings.

SOFR borrowings include a credit spread adjustment of 0.10 % to 0.25 % plus an applicable margin of 3.50 % for the first year and 4.00 % for the second year.

At March 31, 2023 and December 31, 2022, the weighted average borrowing rate was approximately 8.41 % and 7.92 %, respectively.

The effective interest rate was 8.83 % as of March 31, 2023.

Notes to Condensed Financial Statements (Unaudited)

Revolving Credit Facilities

Available capacity and amounts outstanding for each of our revolving credit facilities as of March 31, 2023 are shown below (in millions):

Total Capacity

Outstanding Borrowings

Outstanding Letters of Credit

Available Capacity

Maturity Date

Delek Revolving Credit Facility (1)

$ 1,100.0 $ 150.0 $ 238.6 $ 711.4 October 26, 2027

Delek Logistics Revolving Facility (2)

900.0 770.6 — 129.4 October 13, 2027

United Community Bank Revolver (3)

50.0 25.0 — 25.0 June 30, 2023

(1) Total Capacity includes letters of credit up to $ 500.0 million.

This facility requires a quarterly unused commitment fee based on average commitment usage, currently at 0.30 % per annum.

Interest is measured at either the SOFR, base rate, or Canadian dollar bankers’ acceptances rate (“CDOR”), plus an applicable margin of 0.25 % to 0.75 % per annum with respect to base rate borrowings or 1.25 % to 1.75 % per annum with respect to SOFR and CDOR.

As of March 31, 2023 and December 31, 2022, the weighted average interest rate was 6.31 % and 5.67 %, respectively.

(2) Total Capacity includes letters of credit up to $ 115.0 million and $ 25.0 million for swing line loans.

This facility requires a quarterly unused commitment fee based on average commitment usage, currently at 0.50 % per annum.

Interest is measured at either the U.S.

dollar prime rate plus an applicable margin of 1.00 % to 2.00 % depending on Delek Logistics’ leverage ratio, or a SOFR rate plus a credit spread adjustment of 0.10 % to 0.25 % and an applicable margin ranging from 2.00 % to 3.00 % depending on the leverage ratio.

As of March 31, 2023 and December 31, 2022, the weighted average interest rate was 7.57 % and 7.55 %, respectively.

(3) Requires a quarterly fee of 0.50 % per year on the average unused revolving commitment.

The weighted average borrowing rate as of March 31, 2023 and December 31, 2022 was 7.00 % and 6.75 %, respectively.

Delek Logistics 2025 Notes

On May 23, 2017, Delek Logistics and its wholly owned subsidiary 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 2025 (the “Delek Logistics 2025 Notes”) at a discount.

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

Our Delek Logistics 2025 Notes are general unsecured senior obligations comprised of $ 250.0 million in aggregate principal of 6.75 % senior notes maturing on May 15, 2025.

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 payme nt 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 i nterest on the Delek Logistics 2025 Notes is payable semi-annually in arrears on each May 15 and November 15.

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

All or part of the Delek Logistics 2025 Notes are currently redeemable, subject to certain conditions and limitations, at a redemption price of 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.

As of September 30, 2022, we had $ 250.0 million in outstanding principal amount under the Delek Logistics 2025 Notes, and the effective interest rate was 7.19 %.

Interest is payable semi-annually in arrears on May 15 and November 15.

As of March 31, 2023, the effective interest rate was 7.19 %.

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 % of the principal amount thereof, plus accrued and unpaid interest.

As of September 30, 2022, we had $ 400.0 million in outstanding principal amount under the Delek Logistics 2028 Notes, and the effective interest rate was 7.40 %.

Notes to Condensed Consolidated Financial Statements (Unaudited)

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 maximum borrowing commitment of $ 50.0 million.

On June 30, 2022, among other things, 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 % on an annualized basis on the average unused revolving commitment.

As of September 30, 2022, the interest rate was 7.00 % under the United Community Revolver and we had $ 50.0 million outstanding, with no unused credit commitments available.

Restrictive Covenants

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

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

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

We believe we were in compliance with all covenant requirements under each of our credit facilities as of September 30, 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, some of our debt facilities limit our ability to make investments, including extensions of loans or advances to, or acquisitions of equity interests in, or guarantees of obligations of, certain other entities.

Note 10 - Derivative Instruments

Our Delek Logistics 2028 Notes are general unsecured senior obligations comprised of $ 400.0 million in aggregate principal amount of 7.125 % senior notes maturing June 1, 2028.

The Delek Logistics 2028 Notes 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.

Interest is payable semi-annually in arrears on June 1 and December 1.

As of March 31, 2023, the effective interest rate was 7.40 %.

Guarantees Under Revolver and Term Facilities

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

Restrictive Terms and Covenants

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

Certain of our debt facilities contain limitations on future transactions such as incurrence of additional indebtedness, investments, affiliate transactions, asset acquisitions or dispositions, and dividends or distributions.

As of March 31, 2023, we were in compliance with covenants on all of our debt instruments.

Some of Delek's subsidiaries have restrictions in their respective credit facilities limiting their use of assets.

As of March 31, 2023, we had no subsidiaries with restricted net assets which would prohibit earnings from being transferred to the parent company for its use.

Notes to Condensed Financial Statements (Unaudited)

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.

7 unchanged sentences

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 a commodity at a predetermined price and location at a specified future date.

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

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.

5 unchanged sentences

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 condensed consolidated statements of income.

Additionally, as of and for the three and nine months ended September 30, 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 accompanying condensed 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

Notes to Condensed Consolidated Financial Statements (Unaudited)

underlying transactions are reflected.

Additionally, as of and for the three months ended March 31, 2023, 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 condensed consolidated statements of income in our refining segment, and are included in our disclosures of commodity derivatives in the tables below.

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.

1 unchanged sentence

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

As of September 30, 2022, we do not believe there is any material credit risk with respect to the counterparties to any of our derivative contracts.

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

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

The following table presents the fair value of our derivative instruments as of September 30, 2022 and December 31, 2021.

As of March 31, 2023, we do not believe there is any material credit risk with respect to the counterparties to any of our derivative contracts.

Notes to Condensed Financial Statements (Unaudited)

The following table presents the fair value of our derivative instruments as of March 31, 2023 and December 31, 2022.

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 condensed consolidated balance sheets.

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

See Note 11 for further information regarding the fair value of derivative instruments (in millions).

September 30, 2022 December 31, 2021

March 31, 2023 December 31, 2022

Derivative Type Balance Sheet Location Assets Liabilities Assets Liabilities

6 unchanged sentences

Other long-term assets 2.9 ( 2.3 ) 1.1 ( 0.8 )

Commodity derivatives (1)

Other long-term liabilities — — 6.1 ( 6.1 )

RIN commitment contracts (2)

RINs commitment contracts (2)

Other current assets 4.1 — 9.7 —

RIN commitment contracts (2)

RINs commitment contracts (2)

Other current liabilities — ( 14.4 ) — ( 6.6 )

3 unchanged sentences

Total net fair value of derivatives $ 20.9 $ ( 19.1 ) $ 22.7 $ ( 21.3 )

(1) As of September 30, 2022 and December 31, 2021, we had open derivative positions representing 115,800,264 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 September 30, 2022 and December 31, 2021.

Additionally, as of September 30, 2022 and December 31, 2021, we had open derivative positions representing 7,785,000 and 1,320,000 MMBTU of natural gas products.

(2) As of September 30, 2022 and December 31, 2021, we had open RINs commitment contracts representing 150,800,000 and 16,325,000 RINs, respectively.

(3) As of September 30, 2022 and December 31, 2021, $ 24.2 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 condensed consolidated statements of income are as follows (in millions):

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

2022 2021 2022 2021

(1) As of March 31, 2023 and December 31, 2022, we had open derivative positions representing 178,925,171 and 158,307,020 barrels, respectively, of crude oil and refined petroleum products.

Additionally, as of March 31, 2023 and December 31, 2022, we had open derivative positions representing 4,600,000 and 2,310,000 million British Thermal Units ("MMBTU"), respectively, of natural gas products.

(2) As of March 31, 2023 and December 31, 2022, we had open RINs commitment contracts representing 133,850,000 and 259,022,967 RINs, respectively.

(3) As of March 31, 2023 and December 31, 2022, $( 1.1 ) million and $ 13.8 million, respectively, of cash (obligation) collateral held by counterparties has been netted with the derivatives with each counterparty.

Total gains (losses) on our non-trading commodity derivatives and RINs commitment contracts recorded in the consolidated statements of income are as follows (in millions) (2) :

Three Months Ended March 31,

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

$ 5.3 $ ( 71.4 )

Gains (losses) on non-trading physical forward contract commodity derivatives in cost of materials and other 0.3 7.5 5.1 7.5

(Losses) gains 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

Losses on non-trading physical forward contract commodity derivatives in cost of materials and other ( 2.4 ) ( 3.4 )

Total gains (losses) $ 2.9 $ ( 74.8 )

(1) Gains (losses) on commodity derivatives that are economic hedges but not designated as hedging instruments include unrealized gains (losses) of $ 24.8 million and $ 20.2 million for the three and nine months ended September 30, 2022, respectively, and $( 6.8 ) million and $( 16.2 ) million for the three and nine months ended September 30, 2021, respectively.

Notes to Condensed Consolidated Financial Statements (Unaudited)

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

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

2022 2021 2022 2021

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

Commodity contracts:

Hedged items $ — $ — $ — $ ( 0.2 )

Derivative designated as hedging instruments — — — 0.2

Total $ — $ — $ — $ —

For cash flow hedges, no component of the derivative instruments’ gains or losses was excluded from the assessment of hedge effectiveness for the three and nine months ended September 30, 2022 or 2021.

There were no gains (losses), net of tax, on settled commodity contracts during the three and nine months ended September 30, 2022 and $ 0.2 million during the nine months ended September 30, 2021, respectively, which were reclassified into cost of materials and other in the condensed consolidated statements of income.

As of September 30, 2022, we estimate that no amount of deferred gains related to commodity cash flow hedges will be reclassified into cost of materials and other over the next 12 months as a result of hedged transactions that are forecasted to occur.

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

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

2022 2021 2022 2021

(1) Gains (losses) on commodity derivatives that are economic hedges but not designated as hedging instruments include unrealized gains (losses) of $ 30.0 million and $( 70.7 ) million for the three months ended March 31, 2023 and 2022.

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

Notes to Condensed Financial Statements (Unaudited)

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

Three Months Ended March 31,

Trading Physical Forward Contract Commodity Derivatives

Realized gains (losses) $ 1.2 $ 2.8 $ 19.7 $ 4.9

Realized gains $ 1.4 $ 18.0

Unrealized losses ( 1.8 ) ( 0.4 )

1 unchanged sentence

Trading Hedging Commodity Derivatives

Realized gains (losses) $ ( 0.3 ) $ ( 0.9 ) $ 11.6 $ ( 5.9 )

Realized gains $ 1.4 $ 15.0

Unrealized gains (losses) 1.1 ( 17.2 )

Total $ 2.5 $ ( 2.2 )

Note 11 - Fair Value Measurements

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

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

ASC 820 requires disclosures that categorize assets and liabilities measured at fair value into one of three different levels depending on the observability of the inputs employed in the measurement.

Fair Value Measurements

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

ASC 820, Fair Value Measurements ("ASC 820"), requires disclosures that categorize 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.

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Our commodity derivative contracts, which consist of commodity swaps, exchange-traded futures, options and physical commodity forward purchase and sale contracts (that do not qualify 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.

Our RINs commitment contracts are future commitments to purchase or sell RINs at fixed prices and quantities, which are used to manage the costs associated with our Consolidated Net RINs Obligation (as defined in our accounting policies in Note 2 to the audited consolidated financial statements included in Item.

8 Financial Statements and Supplementary Data, of our December 31, 2021 Annual Report on Form 10-K).

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.” 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 10) 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.

The environmental credits obligation surplus or deficit is categorized as Level 2, if measured at fair value either directly through observable

Notes to Condensed Consolidated Financial Statements (Unaudited)

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 $( 12.6 ) million and $( 53.6 ) million for three and nine months ended September 30, 2022, respectively, and $ 46.6 million and $( 58.3 ) million for three and nine months ended September 30, 2021, 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.

As of and for the nine months ended September 30, 2022 and 2021, we elected to account for our J.

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 $ 0.3 million and $( 1.1 ) million for the three months ended March 31, 2023 and 2022, respectively, primarily attributable to changes in the market prices of the underlying credits that occurred at the end of each quarter.

Notes to Condensed Financial Statements (Unaudited)

As of and for the three months ended March 31, 2023 and 2022, we elected to account for our Inventory Intermediation step-out liability and our J.

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

This standard permits the election to carry financial instruments and certain other items similar to financial instruments at fair value on the balance sheet, with all changes in fair value reported in earnings.

With respect to the amended and restated Supply and Offtake Agreements, such amendments being effective April 2020 for all the agreements, we apply fair value measurement as follows:

(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 condensed 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 Supply and Offtake Agreements on our condensed 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 condensed consolidated statements of income.

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

With respect to the Inventory Intermediation Agreement and the amended and restated Supply and Offtake Agreements, we apply fair value measurement as follows:

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 condensed 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 condensed 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 8 for discussion of gains and losses recognized from changes in fair value.

The fair value of the Delek Logistics 2028 Notes is measured based on quoted market prices in an active market, defined as Level 1 in the fair value hierarchy.

The carrying value (excluding unamortized debt issuance costs) and estimated fair value of these notes was $ 400.0 million and $ 365.4 million, respectively, as of March 31, 2023, and $ 400.0 million and $ 359.7 million, respectively, at December 31, 2022.

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):

September 30, 2022

As of March 31, 2023

Level 1 Level 2 Level 3 Total

Commodity derivatives $ — $ 271.4 $ — $ 271.4

Commodity investments 9.8 — — 9.8

RINs commitment contracts — 4.1 — 4.1

9.8 253.9 — 263.7

Total assets — 275.5 — 275.5

Commodity derivatives — ( 258.2 ) — ( 258.2 )

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Environmental credits obligation deficit — ( 136.0 ) — ( 136.0 )

Aron supply and offtake obligations — ( 596.2 ) — ( 596.2 )

Inventory Intermediation Agreement obligation — ( 536.2 ) — ( 536.2 )

Total liabilities — ( 944.8 ) — ( 944.8 )

Net liabilities $ — $ ( 669.3 ) $ — $ ( 669.3 )

December 31, 2021

As of December 31, 2022

Level 1 Level 2 Level 3 Total

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Environmental credits obligation deficit — ( 295.5 ) — ( 295.5 )

Aron supply and offtake obligations — ( 487.5 ) — ( 487.5 )

Inventory Intermediation Agreement obligation — ( 541.7 ) — ( 541.7 )

Total liabilities — ( 1,178.5 ) — ( 1,178.5 )

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

Notes to Condensed Consolidated Financial Statements (Unaudited)

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

As of September 30, 2022 and December 31, 2021, $ 24.2 million and $( 24.7 ) million, respectively, of cash collateral (obligation) was held by counterparty brokerage firms and has been netted with the net derivative positions with each counterparty.

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

As of March 31, 2023 and December 31, 2022, $( 1.1 ) million and $ 13.8 million, respectively, of cash (obligation) collateral was held by counterparty brokerage firms and has been netted with the net derivative positions with each counterparty.

See Note 10 for further information regarding derivative instruments.

Notes to Condensed Financial Statements (Unaudited)

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 Delaware Gathering 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.

Note 12 - Commitments and Contingencies

Commitments and Contingencies

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.

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

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

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

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

and Alon USA Energy, Inc.

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

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

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

As of September 30, 2022 the remaining unpaid balance is $ 0.2 million, and is included in accrued expenses and other current liabilities on the accompanying condensed consolidated balance sheet.

Self-insurance

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

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

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

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, the Occupational Safety and Health Administration, as well as numerous state, regional and local environmental, safety and pipeline agencies.

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.

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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.

Notes to Condensed Consolidated Financial Statements (Unaudited)

future to comply with existing and new requirements, as well as evolving interpretations and more strict enforcement of existing laws and regulations.

As of September 30, 2022, we have recorded an environmental liability of approximately $ 115.1 million, primarily related to the estimated probable costs of remediating or otherwise addressing certain environmental issues of a non-capital nature at our refineries, as well as terminals, some of which we no longer own.

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

As of March 31, 2023, 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.

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

Included in our environmental liabilities as of both September 30, 2022 and December 31, 2021 is a liability totaling $ 78.5 million related to a property that we 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”).

Included in our environmental liabilities as of both March 31, 2023 and December 31, 2022 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 when Delek acquired the outstanding common stock of Alon, effective July 1, 2017 ("Delek/Alon Merger").

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 September 30, 2022.

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.

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 September 30, 2022 and December 31, 2021, except for accretion and expenditures, our combined environmental liability related to the terminal and property remained unchanged.

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 (as defined in our accounting policies in Note 2 to the audited consolidated financial statements included in Item.

8 Financial Statements and Supplementary Data, of our December 31, 2021 Annual Report on Form 10-K).

As such, as of March 31, 2023 and December 31, 2022, except for accretion and expenditures, our combined environmental liability related to the terminal and property remained unchanged.

Notes to Condensed Financial Statements (Unaudited)

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

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

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

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

In June 2022, the EPA finalized volumes for compliance years 2020, 2021 and 2022 under the RFS program (as defined in our accounting policies in Note 2 to the audited consolidated financial statements included in Item.

8 Financial Statements and Supplementary Data, of our December 31, 2021 Annual Report on Form 10-K), 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.

Other Losses and Contingencies

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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 nine months ended September 30, 2021, we incurred workers' compensation losses of $ 3.8 million associated with the fire, which is included in operating expenses in the accompanying condensed consolidated statements of income.

Additionally, we recognized accelerated depreciation of $ 1.0 million in the nine months ended September 30, 2021 due to property damaged in the fire, which was recovered during 2021.

An additional $ 3.4 million was recognized as a gain, in excess of these losses, during the three months ended September 30, 2021.

No expense was recorded related to the El Dorado refinery fire during the three and nine months ended September 30, 2022.

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

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

In addition, during the three and

Notes to Condensed Consolidated Financial Statements (Unaudited)

nine months ended September 30, 2022, we recognized a gain of $ 0.5 million and $ 8.1 million, respectively, related to business interruption claims.

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

During the three months ended March 31, 2022, we recognized a gain of $ 4.3 million related to business interruption claims.

This gain is included in other operating income in the condensed 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.

Big Spring Refinery Fire

On November 29, 2022, our Big Spring refinery experienced a fire in its diesel hydrotreater unit.

The facility suffered operational disruptions as a result of the fire.

Accelerated depreciation due to property damaged in the fire was immaterial.

We incurred repair costs that may be recoverable under property and casualty insurance policies and we submitted a claim in 2023.

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

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

Winter Storm Uri

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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 $ 0.9 million and $ 16.8 million in the three and nine months ended September 30, 2021 due to property damaged in the freeze, which was recovered during 2021.

No expense was recorded related to the Winter Storm Uri during the three and nine months ended September 30, 2022.

An additional $ 0.1 million was recognized as a gain in excess of losses during the nine months ended September 30, 2022.

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

In addition, during the three and nine months ended September 30, 2022, we recognized a gain of $ 6.9 million and $ 17.9 million, respectively, related to business interruption claims.

In addition, during the three months ended March 31, 2023 and 2022, we recognized a gain of $ 5.1 million and $ 5.7 million, respectively, related to property and business interruption claims.

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

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Crude Oil and Other Releases

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

There were no material releases that occurred during the nine months ended September 30, 2022.

There were no material releases that occurred during the three months ended March 31, 2023.

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

We expect regulatory closure in 2022 for the release sites that have not yet received it and do not anticipate material costs associated with any fines or penalties or to complete activities that may be needed to achieve regulatory closure.

We do not anticipate material costs associated with any fines or penalties or to complete activities that may be needed to achieve regulatory closure.

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

Letters of Credit

As of September 30, 2022, we had in place letters of credit totaling approximately $ 212.6 million with various financial institutions securing obligations primarily with respect to our commodity transactions for the refining segment and certain of our insurance programs.

There were no amounts drawn by beneficiaries of these letters of credit at September 30, 2022.

Note 13 - Income Taxes

Under ASC 740, Income Taxes (“ASC 740”) we used an estimated annual tax rate to record income taxes for the three and nine months ended September 30, 2022 and September 30, 2021.

Our effective tax rate was 19.2 % and 21.2 % for the three and nine months ended September 30, 2022, respectively, and 17.9 % and 30.2 % for the three and nine months ended September 30, 2021, respectively.

As of March 31, 2023, we had in place letters of credit totaling approximately $ 238.6 million with various financial institutions securing obligations primarily with respect to our commodity transactions for the refining segment and certain of our insurance programs.

There were no amounts drawn by beneficiaries of these letters of credit at March 31, 2023.

Under ASC 740, Income Taxes (“ASC 740”), we used an estimated annual tax rate to record income taxes for the three months ended March 31, 2023 and 2022.

Our effective tax rate was 18.0 % and 17.3 % for the three months ended March 31, 2023 and 2022, respectively.

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

The change in our effective tax rate for the three and nine months ended September 30, 2022 as compared to the three and nine months ended September 30, 2021 was primarily due to the impact of credits and permanent differences on the tax rate due to changes in pre-tax income and changes in the third quarter estimated annual effective tax rate applied to year-to-date loss for the nine months ended September 30, 2021 .

Note 14 - Related Party Transactions

The change in our effective tax rate for the three months ended March 31, 2023 as compared to the three months ended March 31, 2022 was primarily due to an increase in quarter to date pre-tax earnings and the impact of fixed dollar favorable permanent adjustments on the quarter.

Notes to Condensed Financial Statements (Unaudited)

Related Party Transactions

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

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

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

2022 2021 2022 2021

Three Months Ended March 31,

$ 17.9 $ 16.7

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

Notes to Condensed Consolidated Financial Statements (Unaudited)

Note 15 - Other Current Assets and Liabilities

Other Current Assets and Liabilities

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

Other Current Assets September 30, 2022 December 31, 2021

Other Current Assets March 31, 2023 December 31, 2022

Prepaid expenses $ 68.9 $ 45.4

Short-term derivative assets (see Note 10) 73.2 23.6

Investment commodities 40.4 29.8

Short-term derivative assets (see Note 10)

Income and other tax receivables 23.9 20.9

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

Accrued Expenses and Other Current Liabilities September 30, 2022 December 31, 2021

Product financing agreements $ 305.7 $ 249.6

Crude purchase liabilities 204.0 107.4

Accrued Expenses and Other Current Liabilities March 31, 2023 December 31, 2022

Consolidated Net RINs Obligation deficit (see Note 11)

$ 136.0 $ 295.5

Crude purchase liabilities 140.4 268.7

Product financing agreements 362.1 258.0

Income and other taxes payable 127.6 120.4

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Total $ 915.8 $ 1,166.8

Note 16 - Equity-Based Compensation

Equity-Based Compensation

Delek US Holdings, Inc.

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2005 Long-Term Incentive Plans (collectively, the "Incentive Plans")

On May 3, 2022, the Company's stockholders approved an amendment to the Delek US Holdings, Inc.

2016 Long-Term Incentive Plan that increased the number of shares of common stock available for issuance under this plan by 760,000 shares to 14,995,000 shares;

no awards will be made under this plan after May 5, 2026.

Compensation expense related to equity-based awards granted under the Incentive Plans amounted to $ 7.3 million and $ 19.1 million for the three and nine months ended September 30, 2022, respectively, and $ 6.5 million and $ 16.7 million for the three and nine months ended September 30, 2021, respectively.

Compensation expense related to equity-based awards granted under the Incentive Plans amounted to $ 5.9 million and $ 5.1 million for the three months ended March 31, 2023 and 2022, respectively.

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

As of September 30, 2022, there was $ 49.6 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 1.4 years.

We issued net shares of common stock of 53,522 and 389,293 as a result of exercised or vested equity-based awards during the three and nine months ended September 30, 2022, respectively, and 62,803 and 343,596 for the three and nine months ended September 30, 2021, respectively.

These amounts are net of 50,521 and 318,684 shares withheld to satisfy employee tax obligations related to the exercises and vesting during the three and nine months ended September 30, 2022, respectively, and 11,781 and 159,110 shares during the three and nine months ended September 30, 2021, respectively.

Delek Logistics GP, LLC 2012 Long-Term Incentive Plan

The Delek Logistics GP, LLC 2012 Long-Term Incentive Plan (the "LTIP") was adopted by the Delek Logistics GP, LLC board of directors in connection with the completion of Delek Logistics' initial public offering in November 2012.

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

The LTIP has 912,207 common units representing limited partner interests in Delek Logistics authorized for issuance and expires June 9, 2031.

Notes to Condensed Consolidated Financial Statements (Unaudited)

Note 17 - Shareholders' Equity

In 2022 , our Board of Directors declared the following dividends:

As of March 31, 2023, there was $ 45.6 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 1.4 years.

We issued net shares of common stock of 53,643 and 45,800 as a result of exercised or vested equity-based awards during the three months ended March 31, 2023 and 2022, respectively.

These amounts are net of 20,463 and 17,829 shares withheld to satisfy employee tax obligations related to the exercises and vesting during the three months ended March 31, 2023 and 2022, respectively.

Notes to Condensed Financial Statements (Unaudited)

Shareholders' Equity

For 2023, 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

May 2, 2023 $ 0.23 May 15, 2023 May 22, 2023

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 are made at the discretion of management and will depend on prevailing market prices, general economic and market conditions and other considerations.

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 both the three and nine months ended September 30, 2022, 1,435,602 shares of our common stock were repurchased and cancelled at the time of the transaction for a total of $ 40.0 million.

No repurchases of our common stock were made in the three and nine months ended September 30, 2021.

As of September 30, 2022, there was $ 360.0 million of authorization remaining under Delek's aggregate stock repurchase program.

Our Board of Directors has authorized a share repurchase program under which repurchases of Delek common stock may be executed through open market transactions or privately negotiated transactions, in accordance with applicable securities laws.

The timing, price and size of repurchases are made at the discretion of management and will depend on prevailing share prices, general economic and market conditions and other considerations.

The authorization has no expiration date.

During the three months ended March 31, 2023, 16,292 shares of our common stock were repurchased and cancelled at the time of transaction for a total of $ 0.4 million.

As of March 31, 2023, there was $ 270.0 million of authorization remaining under Delek's aggregate stock repurchase program.

Stock Purchase and Cooperation Agreement

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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 New York Stock Exchange on March 4, 2022, the last trading day prior to the execution of the Icahn Group Agreement, which equals an aggregate purchase price of $ 64.0 million.

The Company funded the transaction from cash on hand.

The 3,497,268 shares were cancelled at the time of the transaction.

In addition to the foregoing, under the terms of the Icahn Group Agreement, the Icahn Group withdrew its nomination notice for the nomination of nominees for election to the Company’s board of directors for the Company’s 2022 annual meeting of stockholders.

Under the terms of the Icahn Group Agreement, the Icahn Group agreed to standstill restrictions, which requires, among other things, that until the completion of the Company’s 2023 annual meeting of stockholders, the Icahn Group will refrain from acquiring additional shares of the Company Common Stock.

Note 18 - Leases

Icahn (collectively, the “Icahn Group”), pursuant to which the Company purchased an aggregate of 3,497,268 shares of Company common stock from the Icahn Group 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 aggregate purchase price of $ 64.0 million was funded from cash on hand.

All 3,497,268 shares were cancelled at the time of the transaction.

Under the terms of the Icahn Group Agreement, the Icahn Group withdrew its notice of nomination for members of the Company’s board of directors at the Company’s 2022 annual meeting of stockholders.

Under the terms of the Icahn Group Agreement, the Icahn Group agreed to standstill restrictions which require, 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.

We lease certain retail stores, land, building and various equipment from others.

9 unchanged sentences

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

As of September 30, 2022, $ 23.2 million of our net property, plant, and equipment balance is subject to an operating lease.

As of March 31, 2023, $ 22.2 million of our net property, plant, and equipment balance is subject to an operating lease to a third party.

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.

Notes to Condensed Consolidated Financial Statements (Unaudited)

The agreement includes a one year renewal option and certain variable payments based on usage.

Notes to Condensed Financial Statements (Unaudited)

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

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

(in millions) 2022 2021 2022 2021

(in millions) Three Months Ended March 31,

Operating lease costs (1)

1 unchanged sentence

Short-term lease costs (2)

9.2 7.0 26.5 27.5

Sublease income — ( 0.1 )

6 unchanged sentences

Leased assets obtained in exchange for new financing lease liabilities $ 1.4 $ —

September 30, 2022 September 30, 2021

March 31, 2023 March 31, 2022

Weighted-average remaining lease term (years) operating leases 4.2 4.5

5 unchanged sentences

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

Note 19 - Subsequent Events

Delek Logistics Credit Facility

On October 13, 2022, Delek Logistics entered into a fourth amended and restated senior secured revolving credit agreement with Fifth Third, as administrative agent and a syndicate of lenders (the “Amended and Restated Delek Logistics Credit Facility”).

The Amended and Restated Delek Logistics Credit Facility, among other things, (i) increased total aggregate commitments to $ 1.2 billion, comprised of (A) senior secured revolving commitments of $ 900.0 million in aggregate (eliminating the Canadian dollar tranche), with sublimit of up to $ 115.0 million for letters of credit and $ 25.0 million for swing line loans (the “Delek Logistics Revolving Facility”) with an extended maturity date of October 13, 2027, and (B) a new senior secured term loan facility for a term loan in the original principal amount of $ 300.0 million (the “Delek Logistics Term Facility”), (ii) reset the accordion feature under the Delek Logistics Revolving Facility, such that aggregate revolving commitments can be increased to up to $ 1.15 billion upon the agreement of Delek Logistics and one or more existing or new lenders and (ii) provided for the Delek Logistics Term Facility be drawn in full on October 13, 2022, with a maturity date of October 13, 2024 and with 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’s Total Leverage Ratio (as defined in the Delek Logistics Credit Agreement), 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 Delek Logistic’s Total 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 Delek Logistics’s Total 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.

Notes to Condensed Consolidated Financial Statements (Unaudited)

The Amended and Restated Delek Logistics Credit Facility contains affirmative and negative covenants and events of default which, Delek Logistics considers customary and are similar to those in the Delek Logistics Credit Facility.

Under the financial covenants in the Amended and Restated Delek Logistics Credit Facility, Delek Logistics cannot:

• permit, as of the last day of each fiscal quarter, the Total Leverage Ratio (as defined in the Amended and Restated Delek Logistics Credit Facility) to be greater than 5.25 to 1.00;

provided, that during any Temporary Increase Period (as defined in the Amended and Restated Delek Logistics Credit Facility), Delek Logistics cannot permit the foregoing ratio to be greater than 5.50 to 1.00 (a Temporary Increase Period with respect to the 3 Bear Acquisition (as defined in the Amended and Restated Delek Logistics Credit Facility) is in effect through March 31, 2023);

• permit, as of the last day of each fiscal quarter, the Senior Leverage Ratio (as defined in the Amended and Restated Delek Logistics Credit Facility) to be greater than 3.75 to 1.00;

• permit, as of the last day of each fiscal quarter, the interest coverage ratio to be equal to or less than 2.00 to 1.00.

The obligations under the Amended and Restated Delek Logistics Credit Facility remain secured by a first priority lien on substantially all of Delek Logistics' and its subsidiaries’ tangible and intangible assets.

Delek Revolver

On October 26, 2022, Delek entered into a third amended and restated credit agreement with Wells Fargo Bank, as administrative agent, Delek, as borrower, certain subsidiaries of Delek, as guarantors, and the other lenders party thereto, providing for a senior secured asset-based revolving credit facility with an initial commitment of $ 1.1 billion with an extended maturity date of October 26, 2027 (the “Amended and Restated Revolving Credit Facility”).

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

The Amended and Restated Revolving Credit Facility also permits the issuance of letters of credit of up to $ 500.0 million, including letters of credit denominated in Canadian dollars of up to $ 10.0 million.

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

The interest rates applicable to borrowings under the Amended and Restated 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) SOFR, plus an applicable margin (or, in the case of borrowings denominated in Canadian dollars, CDOR).

The initial applicable margin for Amended and Restated Revolving Credit Facility borrowings is 0.25 % per annum with respect to base rate borrowings and 1.25 % per annum with respect to SOFR and CDOR borrowings, and the applicable margin for such borrowings after December 31, 2022 will be 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 Amended and Restated Revolving Credit Facility will require 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 %, depending on average commitment usage for such quarter.

The Amended and Restated Revolving Credit Facility is secured by a first priority lien over substantially all of Delek’s and each guarantor’s 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 unrestricted subsidiaries, excluded subsidiaries and MLP Subsidiaries) subject to certain customary exceptions, but excluding real property.

The Amended and Restated Revolving Credit Facility contains a springing financial covenant that requires the Delek after excess availability under the Amended and Restated Revolving Credit Facility falls below the greater of (x) $ 90.0 million and (y) 0.10 % of the loan limit, to comply with a minimum fixed charge coverage ratio of 1.00 to 1.00 until excess availability is greater than such threshold for a period of 30 consecutive days.

In addition, the Amended and Restated Revolving Credit Facility is subject to negative covenants that, among other things and subject to certain exceptions, limit Delek’s ability and the ability of its restricted subsidiaries to:

(i) incur indebtedness or make guarantees of indebtedness;

(ii) incur liens;

(iii) make investments, loans and acquisitions;

(iv) merge, liquidate or dissolve;

(v) sell assets, including capital stock of subsidiaries;

(vi) pay dividends on capital stock or redeem, repurchase or retire capital stock;

(vii) alter Delek’s business;

(viii) engage in transactions with Delek’s affiliates;

(ix) enter into agreements limiting subsidiary dividends and distributions;

and (x) enter into certain hedging transactions.

Subsequent Events

Subsequent to March 31, 2023, we made repurchases of 1,795,335 shares of our common stock that were cancelled at the time of transaction for approximately $ 40 million.

Management's Discussion and Analysis

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

What changed 10-Q

Item 1. Financial Statements