14 unchanged sentences
Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies and procedures may deteriorate.
−Removed: On June 1, 2022, we completed the acquisition of 3 Bear.
−Removed: As part of our ongoing integration of the 3 Bear business, we are continuing to incorporate our controls and procedures into 3 Bear and to augment our company-wide controls to reflect the risks inherent in an acquisition of this type.
−Removed: 3 Bear accounted for approximately 8.3% of total assets as of December 31, 2022 and approximately 0.6% of net revenues of the Company for the year ended on December 31, 2022.
−Removed: As permitted by the SEC staff guidance for newly acquired businesses, our report on our internal control over financial reporting for the year ending December 31, 2022, includes a scope exception that excludes the acquired 3 Bear business in order for management to have sufficient time to evaluate and implement our internal control structure over the operations of the 3 Bear business.
Management has conducted its evaluation of the effectiveness of internal control over financial reporting as of December 31, 2023, based on the framework in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.
6 unchanged sentences
Changes in Internal Control over Financial Reporting
−Removed: Except as described below, there has been no change in our internal control over financial reporting (as described in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended December 31, 2022 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
−Removed: During the quarter ended December 31, 2022, we implemented a new enterprise resource planning (“ERP”) system.
−Removed: The new ERP system replaced our previous ERP including our accounting system and general ledger.
−Removed: As a result of this implementation, we modified certain existing controls and implemented new controls and procedures related to the new ERP system to maintain appropriate internal control over financial reporting during and after the system change.
+Added: There has been no change in our internal control over financial reporting (as described in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended December 31, 2023 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
OTHER INFORMATION
−Removed: Amendments to Executive Chairman Employment Agreement
−Removed: On February 27, 2023, the Human Capital and Compensation Committee of our Board approved amendments to the employment agreement with Ezra Uzi Yemin, our Executive Chairman of the Board (the “Employment Agreement Amendments”).
−Removed: The Employment Agreement Amendments extend the term during which Mr.
−Removed: Yemin will serve as Executive Chairman of the Company from December 31, 2023 to December 31, 2024.
−Removed: The Employment Agreement Amendments also provide for the grant of time vesting equity awards on March 10, 2023 consisting of $750,000 of RSUs under the Company's 2016 Long-Term Incentive Plan and $750,000 of phantom units under the Delek Logistics GP, LLC Amended and Restated 2012 Long-Term Incentive Plan.
−Removed: These grants will vest 50% on December 31, 2023 and 50% on December 31, 2024, subject to Mr.
−Removed: Yemin’s continued service to the Company.
+Added: Rule 10b5-1 Trading Plans
+Added: During the quarter ended December 31, 2023, none of our directors or officers (as defined in Rule 16a-1 under the Exchange Act) adopted , modified or terminated a "Rule 10b5-1 trading arrangement" or "non-Rule 105b-1 trading arrangement" (as those terms are defined in Item 408 of Regulation S-K).
DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
3 unchanged sentences
Our Board of Directors Governance Guidelines, our charters for our Audit, Human Capital and Compensation, Technology, Nominating and Corporate Governance and Environmental, Health and Safety Committees and our Code of Business Conduct & Ethics covering all employees, including our principal executive officer, principal financial officer, principal accounting officer and controllers, are available on our website, www.DelekUS.com, under the "About Us - Corporate Governance" caption.
−Removed: A print copy of any of these documents will be mailed upon a written request made by a stockholder to the Corporate Secretary, Delek US Holdings, Inc., 310 Seven Springs Way, Suite 400 and 500, Brentwood, Tennessee 37027.
+Added: A print copy of any of these documents will be mailed upon a written request made by a stockholder to the Corporate Secretary, Delek US Holdings, Inc., 310 Seven Springs Way, Suite 500, Brentwood, Tennessee 37027.
We intend to disclose any amendments to or waivers of the Code of Business Conduct & Ethics on behalf of our Chief Executive Officer, Chief Financial Officer and persons performing similar functions on our website, at www.DelekUS.com, under the "Investor Relations" caption, promptly following the date of any such amendment or waiver.
8 unchanged sentences
• Leonardo Moreno
+Added: • Christine Benson Schwartzstein
Sullivan, Jr.
−Removed: • Vasili (Vicky) Sutil
+Added: • Vasiliki (Vicky) Sutil
• Shlomo Zohar
1 unchanged sentence
• Avigal Soreq – President and Chief Executive Officer
−Removed: • Todd O’Malley – Executive Vice President, Chief Operating Officer
+Added: • Joseph Israel – Executive Vice President, Operations
• Reuven Spiegel – Executive Vice President and Chief Financial Officer
• Denise McWatters – Executive Vice President, General Counsel and Secretary
+Added: • Patrick Reilly - Executive Vice President, Chief Commercial Officer
• Jared Serff – Executive Vice President and Chief Human Resources Officer
3 unchanged sentences
• Ido Biger – Executive Vice President, Chief Technology Officer and Chief Data Officer
−Removed: • Nithia Thaver – Executive Vice President, President of Refining
EXECUTIVE COMPENSATION
7 unchanged sentences
The information required by this item will be included under “Independent Public Accountants” in the Definitive Proxy Statement and is incorporated herein by reference.
−Removed: Financial Statements and Schedules
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
25 unchanged sentences
Form of 7.125% Senior Note due 2028 (incorporated by reference to Exhibit 4.2 of the Partnership’s Form 8-K filed on May 26, 2021).
−Removed: Description of Common Stock (incorporated by reference to Exhibit 4.5 to the Company’s Form 10-K filed on February 25, 2022).
+Added: # Description of Common Stock.
* Form of Indemnification Agreement for Directors and Officers ((incorporated by reference to Exhibit 10.1 to the Company’s Form 10-K filed on February 25, 2022).
5 unchanged sentences
2006 Long-Term Incentive Plan Stock Appreciation Rights Agreement (incorporated by reference to Exhibit 10.4 to the Company's Form 10-Q filed on August 6, 2010, SEC File No.
−Removed: Tyler Throughput and Tankage Agreement, dated July 26, 2013, between Delek Refining, Ltd.
−Removed: and Delek Marketing & Supply, LP (incorporated by reference to Exhibit 10.1 to the Company's Form 8-K filed on August 1, 2013).
−Removed: Pipelines and Tankage Agreement, dated November 7, 2012, by and between Delek Refining, Ltd.
−Removed: and Delek Crude Logistics, LLC (incorporated by reference to Exhibit 10.4 to the Company's Form 8-K filed on November 14, 2012, SEC File No.
−Removed: Financial Statements and Schedules
−Removed: Pipelines and Storage Facilities Agreement, dated November 7, 2012, by and among Lion Oil Company, Delek Logistics Partners, LP, SALA Gathering Systems, LLC, El Dorado Pipeline Company, LLC, Magnolia Pipeline Company, LLC and J.
−Removed: Aron & Company (incorporated by reference to Exhibit 10.5 to the Company's Form 8-K filed on November 14, 2012, SEC File No.
−Removed: El Dorado Throughput and Tankage Agreement, executed as of February 10, 2014, between Lion Oil Company and Delek Logistics Operating LLC, and, for limited purposes, J.
−Removed: Aron & Company (incorporated by reference to Exhibit 10.1 to the Company's Form 8-K filed on February 14, 2014).
−Removed: Amendment to El Dorado Throughput and Tankage Agreement, executed as of July 22, 2016 but effective as of February 11, 2014, between Lion Oil Company and Delek Logistics Operating LLC, and, for limited purposes, J.
−Removed: Aron & Company (incorporated by reference to Exhibit 10.4 to the Company's Form 10-Q filed on August 5, 2016).
−Removed: Third Amended and Restated Omnibus Agreement, dated as of March 31, 2015, among Delek US Holdings, Inc., Lion Oil Company, Delek Logistics Operating, LLC, Delek Marketing & Supply, LP, Delek Refining, Ltd., Delek Logistics Partners, LP, Paline Pipeline Company, LLC, SALA Gathering Systems, LLC, Magnolia Pipeline Company, LLC, El Dorado Pipeline Company, LLC, Delek Crude Logistics, LLC, Delek Marketing-Big Sandy, LLC, DKL Transportation, LLC and Delek Logistics GP, LLC (incorporated by reference to Exhibit 10.1 to the Company's Form 10-Q filed on May 7, 2015).
−Removed: First Amendment to Third Amended and Restated Omnibus Agreement, dated as of August 3, 2015, by and among Delek US Holdings, Inc., Lion Oil Company, Delek Logistics Operating, LLC, Delek Marketing & Supply, LP, Delek Refining, Ltd., Delek Logistics Partners, LP, Paline Pipeline Company, LLC, SALA Gathering Systems, LLC, Magnolia Pipeline Company, LLC, El Dorado Pipeline Company, LLC, Delek Crude Logistics, LLC, Delek Marketing-Big Sandy, LLC, DKL Transportation, LLC and Delek Logistics GP, LLC (incorporated by reference to Exhibit 10.5 to the Company's Form 10-Q filed on August 5, 2015).
−Removed: Third Amendment and Restatement of Schedules to Third Amended and Restated Omnibus Agreement, dated and effective as of May 15, 2020 (incorporated by reference to Exhibit 10.2 of the Company’s Form 8-K filed on May 18, 2020).
* Delek US Holdings, Inc.
8 unchanged sentences
2016 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed on August 5, 2022).
+Added: * Fifth Amendment to the Delek US Holdings, Inc.
+Added: 2016 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.3 to the Company’s Form 10-Q filed on August 9, 2023).
* General Terms and Conditions for Restricted Stock Unit Awards to Executive Officers and Directors under the 2016 Delek US Holdings, Inc.
20 unchanged sentences
Form of Restricted Stock Award Agreement (incorporated by reference to Exhibit 10.1 to Alon USA Energy, Inc.’s Form 8-K filed on January 12, 2017, SEC File No.
−Removed: Financial Statements and Schedules
* Form of Appreciation Rights Award Agreement relating to Participant Grants pursuant Section 7 of the Alon USA Energy, Inc.
4 unchanged sentences
2005 Amended and Restated Incentive Compensation Plan (incorporated by reference to Exhibit 10.2 to Alon USA Energy, Inc.’s Form 8-K filed on May 9, 2011, SEC File No.
−Removed: * Amended and Restated Executive Employment Agreement, dated as of May 8, 2020, by and between Delek US Holdings, Inc.
−Removed: and Ezra Uzi Yemin (incorporated by reference to Exhibit 10.4 to the Company’s Form 10-Q filed on May 8, 2020).
* First Amendment to Amended and Restated Executive Employment Agreement by and between the Company and Ezra Uzi Yemin, dated for reference as of March 27, 2022 (incorporated by reference to Exhibit 10.2 to the Company’s Form 10-Q filed on May 5, 2022).
* Executive Chairman Employment Agreement by and between the Company and Ezra Uzi Yemin, dated for reference as of March 27, 2022 (incorporated by reference to Exhibit 10.3 to the Company’s Form 10-Q filed on May 5, 2022).
−Removed: * Offer Letter by and between the Company and Avigal Soreq, effective March 28, 2022 (incorporated by reference to Exhibit 10.4 to the Company’s Form 10-Q filed on May 5, 2022).
+Added: * First Amendment to Executive Chairman Employment Agreement, by and between Delek US Holdings, Inc.
+Added: and Ezra Uzi Yemin, dated as of March 1, 2023 (incorporated by reference to Exhibit 10.1 to the Company’s Form 10-Q filed on May 9, 2023).
* Executive Employment Agreement by and between the Company and Avigal Soreq, dated for reference as of March 28, 2022 (incorporated by reference to Exhibit 10.5 to the Company’s Form 10-Q filed on May 5, 2022).
−Removed: *# Change in Control Severance Agreement, dated for reference as of June 13, 2022, by and between the Company and Avigal Soreq.
+Added: * Change in Control Severance Agreement, dated for reference as of June 13, 2022, by and between the Company and Avigal Soreq (incorporated by reference to Exhibit 10.15 to the Company's Form 10-K filed on March 1, 2023).
* Executive Employment Agreement, dated August 1, 2020, by and between Delek US Holdings, Inc.
and Reuven Spiegel (incorporated by reference to Exhibit 10.5 of the Company’s Form 10-Q filed on August 7, 2020).
+Added: * First Amendment to Executive Employment Agreement, by and between Delek US Holdings, Inc.
+Added: and Reuven Spiegel, dated as of March 1, 2023 (incorporated by reference to Exhibit 10.2 to the Company’s Form 10-Q filed on May 9, 2023) .
+Added: * Executive Employment Agreement, effective February 3, 2021, by and between Delek US Holdings, Inc.
+Added: and Denise McWatters (incorporated by reference to Exhibit 10.25 to the Company’s Form 10-K filed on February 25, 2022).
+Added: * Executive Employment Agreement, by and between Delek US Holdings, Inc.
+Added: and Joseph Israel, dated as of March 27, 2023 (incorporated by reference to Exhibit 10.3 to the Company’s Form 10-Q filed on May 9, 2023) .
+Added: * Consulting Agreement, dated as of November 3, 2020, by and between Delek US Holdings, Inc.
+Added: and Frederec Green (incorporated by reference to Exhibit 10.29 to the Company’s Form 10-K filed on March 1, 2021).
+Added: Promissory Note, dated as of November 6, 2023, by and among Delek US Holdings, Inc.
+Added: and Delek Logistics Partners, LP (incorporated by reference to Exhibit 10.2 of the Company’s Form 10-Q filed on November 8, 2023)
+Added: * Form of Change in Control Severance Agreement for Officers (incorporated by reference to Exhibit 10.8 to the Company’s Form 10-Q filed on May 5, 2022).
+Added: Tyler Throughput and Tankage Agreement, dated July 26, 2013, between Delek Refining, Ltd.
+Added: and Delek Marketing & Supply, LP (incorporated by reference to Exhibit 10.1 to the Company's Form 8-K filed on August 1, 2013).
+Added: Pipelines and Tankage Agreement, dated November 7, 2012, by and between Delek Refining, Ltd.
+Added: and Delek Crude Logistics, LLC (incorporated by reference to Exhibit 10.4 to the Company's Form 8-K filed on November 14, 2012, SEC File No.
+Added: Pipelines and Storage Facilities Agreement, dated November 7, 2012, by and among Lion Oil Company, Delek Logistics Partners, LP, SALA Gathering Systems, LLC, El Dorado Pipeline Company, LLC, Magnolia Pipeline Company, LLC and J.
+Added: Aron & Company (incorporated by reference to Exhibit 10.5 to the Company's Form 8-K filed on November 14, 2012, SEC File No.
+Added: El Dorado Throughput and Tankage Agreement, executed as of February 10, 2014, between Lion Oil Company and Delek Logistics Operating LLC, and, for limited purposes, J.
+Added: Aron & Company (incorporated by reference to Exhibit 10.1 to the Company's Form 8-K filed on February 14, 2014).
+Added: Amendment to El Dorado Throughput and Tankage Agreement, executed as of July 22, 2016 but effective as of February 11, 2014, between Lion Oil Company and Delek Logistics Operating LLC, and, for limited purposes, J.
+Added: Aron & Company (incorporated by reference to Exhibit 10.4 to the Company's Form 10-Q filed on August 5, 2016).
+Added: Third Amended and Restated Omnibus Agreement, dated as of March 31, 2015, among Delek US Holdings, Inc., Lion Oil Company, Delek Logistics Operating, LLC, Delek Marketing & Supply, LP, Delek Refining, Ltd., Delek Logistics Partners, LP, Paline Pipeline Company, LLC, SALA Gathering Systems, LLC, Magnolia Pipeline Company, LLC, El Dorado Pipeline Company, LLC, Delek Crude Logistics, LLC, Delek Marketing-Big Sandy, LLC, DKL Transportation, LLC and Delek Logistics GP, LLC (incorporated by reference to Exhibit 10.1 to the Company's Form 10-Q filed on May 7, 2015).
+Added: First Amendment to Third Amended and Restated Omnibus Agreement, dated as of August 3, 2015, by and among Delek US Holdings, Inc., Lion Oil Company, Delek Logistics Operating, LLC, Delek Marketing & Supply, LP, Delek Refining, Ltd., Delek Logistics Partners, LP, Paline Pipeline Company, LLC, SALA Gathering Systems, LLC, Magnolia Pipeline Company, LLC, El Dorado Pipeline Company, LLC, Delek Crude Logistics, LLC, Delek Marketing-Big Sandy, LLC, DKL Transportation, LLC and Delek Logistics GP, LLC (incorporated by reference to Exhibit 10.5 to the Company's Form 10-Q filed on August 5, 2015).
+Added: Third Amendment and Restatement of Schedules to Third Amended and Restated Omnibus Agreement, dated and effective as of May 15, 2020 (incorporated by reference to Exhibit 10.2 of the Company’s Form 8-K filed on May 18, 2020).
Pipelines, Storage and Throughput Facilities Agreement (Big Spring Refinery Logistics Assets and Duncan Terminal), dated March 20, 2018 and effective as of March 1, 2018, by and among Alon USA, LP, DKL Big Spring, LLC, for the limited purposes specified therein, Delek US, and for the limited purposes specified therein, J.
1 unchanged sentence
Marketing Agreement, dated as of March 20, 2018 and effective as of March 1, 2018, by and among Alon USA, LP, DKL Big Spring, LLC, and for the limited purposes specified therein, Delek US (incorporated by reference to Exhibit 10.3 to the Company's Form 8-K filed on March 26, 2018).
−Removed: Term Loan Credit Agreement, dated as of March 30, 2018, by and among Delek US Holdings, Inc., as borrower, the lenders from time to time party thereto, Wells Fargo Bank, National Association, as administrative agent for each member of the Lender Group, Wells Fargo Securities, LLC, Barclays Bank PLC, SunTrust Robinson Humphrey, Inc., and Regions Capital Markets, a division of Regions Bank, each as a joint lead arranger and joint bookrunner, and The Bank of Tokyo-Mitsubishi, Ltd., Credit Suisse Securities (USA) LLC, PNC Capital Markets LLC and Fifth Third Bank, each as a co-manager (incorporated by reference to Exhibit 10.1 to the Company's Form 8-K filed on April 5, 2018).
−Removed: Amendment No.
−Removed: 1 to Term Loan Credit Agreement, dated as of October 26, 2018 by and among Delek US Holdings, Inc., as borrower, the guarantors thereto, the lenders from time to time party thereto and Wells Fargo Bank, National Association, as administrative agent LLC (incorporated by reference to Exhibit 10.6 to the Company’s Quarterly Report on Form 10-Q filed on November 8, 2019).
−Removed: First Incremental Amendment to Term Loan Credit Agreement, dated as of May 22, 2019, by and among Delek US Holdings, Inc., as borrower, the guarantors party thereto, the lenders party thereto, and Wells Fargo Bank, National Association, as administrative agent (incorporated by reference to Exhibit 10.1 to the Company's Form 8-K filed on May 29, 2019).
−Removed: Second Incremental Amendment to Term Loan Credit Agreement, dated as of November 12, 2019, by and among Delek US Holdings, Inc., as borrower, the guarantors party thereto, the lenders party thereto, and Wells Fargo Bank, National Association, as administrative agent (incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K filed on November 15, 2019).
−Removed: Third Incremental Amendment to Term Loan Credit Agreement, dated as of May 19, 2020, among Delek US Holdings, Inc., as borrower, the guarantors party thereto, the lenders party thereto, and Wells Fargo Bank, National Association, as administrative agent (incorporated by reference to Exhibit 10.1 of the Company’s Form 8-K filed on May 21, 2020).
Amended and Restated Term Loan Credit Agreement, dated as of November 18, 2022, by and among Delek US Holdings, Inc., as borrower, the lenders from time to time party thereto, Wells Fargo Bank, National Association, as administrative agent for each member of the Lender Group and the Bank Product Providers, the Subsidiaries of Delek US Holdings, Inc.
from time to time party thereto, as guarantors, Wells Fargo Securities, LLC, MUFG Bank, Ltd., and BofA Securities Inc., each as a joint lead arranger and joint book runner, Mizuho Bank, Ltd., PNC Capital Markets LLC, Citizens Bank, N.A., Barclays Bank PLC and Truist Securities, Inc., each as senior co-managers (incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K on November 18, 2022).
−Removed: Financial Statements and Schedules
−Removed: Second Amended and Restated Credit Agreement, dated as of March 30, 2018, by and among Delek US Holdings, Inc., as borrower, the lenders from time to time party thereto, Wells Fargo Bank, National Association, as administrative agent for each member of the Lender Group and the Bank Product Providers, the Subsidiaries of Delek US Holdings, Inc.
−Removed: from time to time party thereto, as guarantors, Wells Fargo, Barclays Bank PLC, Regions Capital Markets, a division of Regions Bank, and SunTrust Robinson Humphrey, Inc., each as a joint lead arranger and joint book runner, Barclays Bank PLC, Regions Bank, and SunTrust Bank, each as a co-syndication agent, and Fifth Third Bank, The Bank of Tokyo-Mitsubishi UFJ, Ltd., PNC Bank, National Association, and Credit Suisse AG, Cayman Islands Branch, each as a co-documentation agent (incorporated by reference to Exhibit 10.2 to the Company's Form 8-K filed on April 5, 2018).
−Removed: First Amendment to Second Amended and Restated Credit Agreement, dated as of May 14, 2018, by and among Delek US Holdings, Inc., as borrower, Wells Fargo Bank, National Association, as administrative agent for each member of the Lender Group and the Bank Product Providers and the lenders from time to time party thereto (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed on November 8, 2019).
−Removed: Second Amendment to Second Amended and Restated Credit Agreement, dated as of July 13, 2018, by and among Delek US Holdings, Inc., as borrower, Wells Fargo Bank, National Association, as administrative agent for each member of the Lender Group and the Bank Product Providers and the lenders from time to time party thereto (incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q filed on November 8, 2019).
−Removed: Third Amendment to Second Amended and Restated Credit Agreement, dated October 18, 2019 (incorporated by reference to Exhibit 10.31 of the Company’s Form 10-K filed on February 28, 2020).
−Removed: Fourth Amendment to Second Amended and Restated Credit Agreement, dated December 18, 2019 (incorporated by reference to Exhibit 10.32 of the Company’s Form 10-K filed on February 28, 2020).
Third Amended and Restated Credit Agreement, dated as of October 26, 2022, by and among Delek US Holdings, Inc., as borrower, the lenders from time to time party thereto, Wells Fargo Bank, National Association, as administrative agent for each member of the Lender Group and the Bank Product Providers, the Subsidiaries of Delek US Holdings, Inc.
7 unchanged sentences
Transportation Services Agreement, dated May 15, 2020 and effective as of May 1, 2020, between Delek Refining, Ltd., Lion Oil Company and DKL Transportation, LLC (incorporated by reference to Exhibit 10.1 of the Company’s Form 8-K filed on May 18, 2020).
−Removed: Third Amended and Restated Supply and Offtake Agreement, dated as of April 7, 2020, between J.
−Removed: Aron & Company LLC and Alon Refining Krotz Springs, Inc.
−Removed: (incorporated by reference to Exhibit 10.9 of the Company’s Form 10-Q filed on August 7, 2020).
−Removed: Third Amended and Restated Master Supply and Offtake Agreement, dated as of April 7, 2020, among J.
−Removed: Aron & Company LLC, Lion Oil Company and Lion Oil Trading & Transportation, LLC (incorporated by reference to Exhibit 10.10 of the Company’s Form 10-Q filed on August 7, 2020).
−Removed: Letter Agreement, dated as of December 21, 2020 by and between J.
−Removed: Aron & Company LLC, Lion Oil Company, and Lion Oil Trading & Transportation, LLC (incorporated by reference to Exhibit 10.24 of the Company’s Form 10-K filed on March 1, 2021)
−Removed: Third Amended and Restated Supply and Offtake Agreement, dated as of April 7, 2020, between J.
−Removed: Aron & Company LLC and Alon USA, LP (incorporated by reference to Exhibit 10.11 of the Company’s Form 10-Q filed on August 7, 2020)
Inventory Intermediation Agreement, dated as of December 22, 2022, by and between Citigroup Energy, Inc.
and DK Trading & Supply, LLC (incorporated by reference to Exhibit 10.1 of the Company’s Form 8-K filed on December 29, 2022).
+Added: Letter Agreement, dated as of April 6, 2023, by and between Citigroup Energy, Inc.
+Added: and DK Trading & Supply, LLC (incorporated by reference to Exhibit 10.1 of the Company’s Form 10-Q filed on August 9, 2023).
+Added: Letter Agreement, dated as of June 21, 2023, by and between Citigroup Energy, Inc.
+Added: and DK Trading & Supply, LLC (incorporated by reference to Exhibit 10.2 of the Company’s Form 10-Q filed on August 9, 2023).
+Added: Letter Agreement, dated as of September 18, 2023, by and between Citigroup Energy, Inc.
+Added: and DK Trading & Supply, LLC (incorporated by reference to Exhibit 10.1 of the Company’s Form 10-Q filed on November 8, 2023) .
+Added: # Amendment to Inventory Intermediation Agreement, dated as of December 21, 2023, by and between Citigroup Energy, Inc.
+Added: and DK Trading & Supply, LLC.
Pledge and Security Agreement, dated as of December 22, 2022, by and between Citigroup Energy, Inc.
and DK Trading & Supply, LLC (incorporated by reference to Exhibit 10.2 of the Company’s Form 8-K filed on December 29, 2022).
−Removed: * Consulting Agreement, dated as of November 3, 2020, by and between Delek US Holdings, Inc.
−Removed: and Frederec Green (incorporated by reference to Exhibit 10.29 to the Company’s Form 10-K filed on March 1, 2021).
−Removed: Financial Statements and Schedules
−Removed: * Executive Employment Agreement, effective February 3, 2021, by and between Delek US Holdings, Inc.
−Removed: and Denise McWatters (incorporated by reference to Exhibit 10.25 to the Company’s Form 10-K filed on February 25, 2022).
−Removed: * Executive Employment Agreement, effective March 1, 2021, by and between Delek US Holdings, Inc.
−Removed: and Todd O’Malley (incorporated by reference to Exhibit 10.26 to the Company’s Form 10-K filed on February 25, 2022).
−Removed: * Executive Employment Agreement by and between the Company and Todd O’Malley, dated as of March 28, 2022 (incorporated by reference to Exhibit 10.6 to the Company’s Form 10-Q filed on May 5, 2022).
−Removed: *# Change in Control and Severance Agreement, dated as of March 28, 2022, by and between the Company and Todd O’Malley.
Stock Purchase and Cooperation Agreement, dated as of March 7, 2022, by and among Delek US Holdings, Inc., IEP Energy Holding LLC American Entertainment Properties Corp., Icahn Enterprises Holdings L.P.
2 unchanged sentences
Icahn (incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K filed on March 7, 2022).
−Removed: * Letter Agreement by and between the Company and Nithia Thaver, effective as of January 1, 2022 (incorporated by reference to Exhibit 10.7 to the Company’s Form 10-Q filed on May 5, 2022).
−Removed: * Form of Change in Control Severance Agreement for Officers (incorporated by reference to Exhibit 10.8 to the Company’s Form 10-Q filed on May 5, 2022).
Assignment and Assumption Agreement and Guaranty, dated as of March 22, 2022, by and among Lion Oil Trading & Transportation, LLC, DK Trading & Supply, LLC, Delek Logistics Operating, LLC, Lion Oil Company, LLC, and Delek US Energy, Inc.
6 unchanged sentences
# Subsidiaries of the Registrant
−Removed: # Consent of Ernst & Young LLP.
+Added: # Consent of EY
# Certification of the Company's Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a) under the Securities Exchange Act.
4 unchanged sentences
Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
+Added: # Delek US Holdings, Inc.
+Added: Clawback Policy.
101 The following materials from Delek US Holdings, Inc.’s Annual Report on Form 10-K for the annual period ended December 31, 2023, formatted in iXBRL (Inline eXtensible Business Reporting Language):
6 unchanged sentences
The Company agrees to supplementally furnish a copy of any of the omitted schedules to the United States Securities and Exchange Commission upon request.
−Removed: Financial Statements and Schedules
Delek US Holdings, Inc.
7 unchanged sentences
Consolidated Statements of Income
−Removed: Consolidated Statements of Comprehensive Income
+Added: Consolidated Statements of Comprehensive Income (Loss)
Consolidated Statements of Changes in Stockholders' Equity
7 unchanged sentences
We have audited the accompanying consolidated balance sheets of Delek US Holdings, Inc.
−Removed: (the “Company”) as of December 31, 2022 and 2021, and the related consolidated statements of income, comprehensive income, changes in stockholders' equity, and cash flows for each of the three years in the period ended December 31, 2022, and the related notes (collectively referred to as the “consolidated financial statements”).
+Added: (the “Company”) as of December 31, 2023 and 2022, the related consolidated statements of income, comprehensive income (loss), changes in stockholders' equity, and cash flows for each of the three years in the period ended December 31, 2023, and the related notes (collectively referred to as the “consolidated financial statements”).
In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023, in conformity with U.S.
generally accepted accounting principles.
−Removed: We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated March 1, 2023 expressed an unqualified opinion thereon.
−Removed: Change in Accounting Principle
−Removed: As discussed in Note 2 to the consolidated financial statements, the Company has elected to change its method of accounting for inventory held at the Tyler, Texas refinery to the first-in, first-out costing method from the last-in, first-out costing method, and, retrospectively, adjusted the 2021 and 2020 consolidated financial statements for the change.
+Added: We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated February 28, 2024 expressed an unqualified opinion thereon.
Basis for Opinion
14 unchanged sentences
Financial Statements and Schedules
−Removed: Accounting for Business Combinations
−Removed: Description of the Matter During 2022, the Company completed its acquisition of 3 Bear Delaware Holding – NM, LLC (“3 Bear”) for net consideration of approximately $628.3 million as disclosed in Note 3 to the consolidated financial statements.
−Removed: The transaction was accounted for as a business combination.
−Removed: The Company allocated the purchase price, to the assets acquired and liabilities assumed based on their respective fair values, including a customer relationships intangible asset of $210.0 million.
−Removed: Auditing the Company's accounting for its acquisition of 3 Bear was complex due to the significant estimation required by management to determine the fair value of the customer relationships intangible asset acquired.
−Removed: The Company used the income approach in estimating the initial fair value of the acquired customer relationships intangible asset.
−Removed: There was a high degree of subjective auditor judgment in evaluating the assumptions used in the income approach as changes to the assumptions used could have a significant effect on the determination of the initial fair value.
−Removed: Assumptions used included projected revenue attributable to customer relationships, forecasted operating margins, and the discount rate, which are forward-looking and could be affected by future economic and market conditions.
−Removed: How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design and tested the operating effectiveness of controls that address the risks of material misstatement related to the Company's accounting for business combinations, including controls over the assumptions identified above.
−Removed: To test the estimated fair values, we performed audit procedures that included, among others, evaluating the Company's use of the income approach and testing the assumptions discussed above and the completeness and accuracy of the underlying data used by the Company in its analysis.
−Removed: Our audit procedures also included evaluating the professional qualifications and objectivity of the Company's external consultant that assessed the projected revenue assumptions.
−Removed: In addition, in evaluating whether we could use the work of the Company’s external consultant, we assessed the reasonableness of the projected revenue assumptions by identifying and evaluating corroborative and contrary evidence.
−Removed: We involved our valuation specialists to assist in evaluating the appropriateness of the valuation methods and the reasonableness of certain significant assumptions, including the evaluation of the discount rate used in the income approach.
+Added: Qualitative Goodwill Impairment Assessment
+Added: Description of the Matter The Company’s consolidated goodwill balance was $729.4 million as of December 31, 2023.
+Added: As disclosed in Note 16 to the consolidated financial statements $675.3 million relates to the reporting units within the Refining segment.
+Added: The Company assesses goodwill for impairment testing annually or more frequently if events or changes in circumstances indicate that the carrying value of a reporting unit might be impaired.
+Added: In evaluating whether it is more likely than not that the fair value of the reporting unit is less than its carrying amount, the Company performed a qualitative assessment of relevant events and circumstances that could impact the fair value of the reporting units within the Refining segment.
+Added: If, based on the qualitative assessment, it is more likely than not that the fair value of the reporting unit is less than its carrying amount, the Company estimates the fair value of the reporting unit by performing a quantitative goodwill impairment assessment.
+Added: As a result of the analysis performed during its annual assessment, the Company determined that the fair value of the reporting units in the Refining Segment are not more likely than not less than their carrying values, and no quantitative assessment was necessary.
+Added: Qualitative factors assessed included financial performance as compared to forecasts, macroeconomic conditions, and market discount rates, which required a higher degree of auditor judgment to evaluate, among other factors.
+Added: We identified the evaluation of the above qualitative factors as a critical audit matter as the assessment of the potential impact that these qualitative factors have on certain reporting units' fair value required the application of subjective auditor judgment.
+Added: How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design and tested the operating effectiveness of controls that address the risks of material misstatement related to the Company's evaluation of the qualitative factors used as part of management’s review of the qualitative assessment, including controls over the qualitative factors identified above.
+Added: To test the qualitative assessment performed by management, our audit procedures included, among others, an assessment of the factors described above with consideration of the Company’s last quantitative assessment performed.
+Added: We performed a comparison of the actual results to the projected results for the respective period.
+Added: We also evaluated information from macroeconomic and market considerations and, whether there were other significant adverse considerations that would impact the reporting units.
/s/ Ernst & Young LLP
1 unchanged sentence
Nashville, Tennessee
−Removed: March 1, 2023
+Added: February 28, 2024
Financial Statements and Schedules
6 unchanged sentences
(the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2023, based on the COSO criteria.
−Removed: As indicated in the accompanying Management’s Annual Report on Internal Control over Financial Reporting, management’s assessment of and conclusion on the effectiveness of internal control over financial reporting did not include the internal controls of 3 Bear Delaware Holding – NM, LLC (“3 Bear”), which is included in the 2022 consolidated financial statements of the Company and constituted 8.3% of total assets as of December 31, 2022, and 0.6% of net revenues for the year then ended.
−Removed: Our audit of internal control over financial reporting of the Company also did not include an evaluation of the internal control over financial reporting of 3 Bear.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of Delek US Holdings, Inc.
−Removed: as of December 31, 2022 and 2021, the related consolidated statements of income, comprehensive income, changes in stockholders' equity and cash flows for each of the three years in the period ended December 31, 2022, and the related notes, and our report dated March 1, 2023 expressed an unqualified opinion thereon.
+Added: as of December 31, 2023 and 2022, the related consolidated statements of income, comprehensive income (loss), changes in stockholders' equity and cash flows for each of the three years in the period ended December 31, 2023, and the related notes, and our report dated February 28, 2024 expressed an unqualified opinion thereon.
Basis for Opinion
16 unchanged sentences
Nashville, Tennessee
−Removed: March 1, 2023
+Added: February 28, 2024
Financial Statements and Schedules
2 unchanged sentences
(In millions, except share and per share data)
−Removed: December 31, 2021
−Removed: December 31, 2022 As Adjusted (1)
+Added: December 31, 2023 December 31, 2022
Current assets:
18 unchanged sentences
Current portion of long-term debt 44.5 74.5
−Removed: Current portion of obligation under Inventory Intermediation Agreements 49.9 487.5
+Added: Current portion of obligation under Inventory Intermediation Agreement 0.4 49.9
Current portion of operating lease liabilities 54.7 49.6
3 unchanged sentences
Long-term debt, net of current portion 2,555.3 2,979.2
−Removed: Obligation under Inventory Intermediation Agreements 491.8 —
+Added: Obligation under Inventory Intermediation Agreement 407.2 491.8
Environmental liabilities, net of current portion 110.9 111.5
6 unchanged sentences
Preferred stock, $ 0.01 par value, 10,000,000 shares authorized, no shares issued and outstanding
−Removed: Common stock, $ 0.01 par value, 110,000,000 shares authorized, 84,509,517 shares and 91,772,080 shares issued at December 31, 2022 and 2021, respectively
+Added: Common stock, $ 0.01 par value, 110,000,000 shares authorized, 81,539,871 shares and 84,509,517 shares issued at December 31, 2023 and December 31, 2022, respectively
Additional paid-in capital 1,113.6 1,134.1
Accumulated other comprehensive loss ( 4.8 ) ( 5.2 )
−Removed: Treasury stock, 17,575,527 shares, at cost, at December 31, 2022 and 2021, respectively
+Added: Treasury stock, 17,575,527 shares, at cost, at December 31, 2023 and December 31, 2022, respectively
( 694.1 ) ( 694.1 )
3 unchanged sentences
Total liabilities and stockholders’ equity $ 7,171.8 $ 8,192.8
−Removed: (1) Adjusted to reflect the retrospective change in accounting policy from LIFO to FIFO for certain inventories.
−Removed: See Note 8 for further discussion.
See accompanying notes to the consolidated financial statements
−Removed: Financial Statements and Schedules
+Added: Financial Statements
Delek US Holdings, Inc.
2 unchanged sentences
Year Ended December 31,
−Removed: 2022 As Adjusted (1)
−Removed: As Adjusted (1)
+Added: 2023 2022 2021
Net revenues $ 16,917.4 $ 20,245.8 $ 10,648.2
8 unchanged sentences
Depreciation and amortization 28.8 23.2 25.0
−Removed: Impairment of goodwill — — 126.0
+Added: Asset impairment 37.9 — —
Other operating income, net ( 7.2 ) ( 12.5 ) ( 27.3 )
3 unchanged sentences
Income from equity method investments ( 86.2 ) ( 57.7 ) ( 18.3 )
−Removed: Gain on sale of non-operating refinery — — ( 56.8 )
Other income, net ( 3.9 ) ( 2.5 ) ( 15.8 )
10 unchanged sentences
Diluted 65,975,301 71,516,361 73,984,104
−Removed: (1) Adjusted to reflect the retrospective change in accounting policy from LIFO to FIFO for certain inventories.
−Removed: See Note 8 for further discussion.
See accompanying notes to the consolidated financial statements
−Removed: Financial Statements and Schedules
+Added: Financial Statements
Delek US Holdings, Inc.
−Removed: Consolidated Statements of Comprehensive Income
+Added: Consolidated Statements of Comprehensive Income (Loss)
(In millions)
Year Ended December 31,
−Removed: 2022 As Adjusted (1)
−Removed: As Adjusted (1)
+Added: 2023 2022 2021
Net income (loss) $ 46.7 $ 290.5 $ ( 95.3 )
−Removed: Other comprehensive income (loss):
+Added: Other comprehensive (loss) income:
Commodity contracts designated as cash flow hedges:
−Removed: Net loss related to commodity cash flow hedges — ( 0.2 ) ( 1.3 )
−Removed: Income tax benefit — — ( 0.3 )
Comprehensive loss on commodity contracts designated as cash flow hedges, net of taxes — — ( 0.2 )
−Removed: Foreign currency translation gain, net of taxes — — 0.6
Postretirement benefit plans:
1 unchanged sentence
Net actuarial gain (loss) 0.7 ( 1.9 ) 4.7
−Removed: Reclassified to other expense (income), net:
−Removed: Amortization of net actuarial loss — — 0.1
−Removed: Gain (loss) related to postretirement benefit plans, net ( 1.9 ) 4.7 ( 8.8 )
+Added: Reclassified to other (income) expense, net:
+Added: Amortization of net actuarial gain ( 0.2 ) — —
+Added: Net change related to postretirement benefit plans 0.5 ( 1.9 ) 4.7
Income tax expense (benefit) 0.1 ( 0.5 ) 1.1
4 unchanged sentences
Comprehensive income (loss) attributable to Delek $ 20.2 $ 255.7 $ ( 124.9 )
−Removed: (1) Adjusted to reflect the retrospective change in accounting policy from LIFO to FIFO for certain inventories.
−Removed: See Note 8 for further discussion.
See accompanying notes to the consolidated financial statements
−Removed: Financial Statements and Schedules
+Added: Financial Statements
Delek US Holdings, Inc.
1 unchanged sentence
(In millions, except share and per share data)
−Removed: Common Stock Additional Paid-in Capital Accumulated Other Comprehensive Income (Loss) Retained Earnings As Adjusted (1)
−Removed: Treasury Shares Non-Controlling Interest in Subsidiaries Total Stockholders' Equity As Adjusted (1)
+Added: Common Stock Additional Paid-in Capital Accumulated Other Comprehensive Income (Loss) Retained Earnings Treasury Shares Non-Controlling Interest in Subsidiaries Total Stockholders' Equity
Shares Amount Shares Amount
1 unchanged sentence
91,356,868 $ 0.9 $ 1,185.1 $ ( 7.2 ) $ 513.3 ( 17,575,527 ) $ ( 694.1 ) $ 118.4 $ 1,116.4
−Removed: Cumulative effect of adopting accounting principle regarding measurement of credit losses on financial instruments, net — — — — ( 6.5 ) — — — ( 6.5 )
−Removed: Cumulative effect of change in accounting method for certain inventory valuation from LIFO to FIFO, net — — — — ( 5.3 ) — — — ( 5.3 )
−Removed: Net income — — — — ( 611.4 ) — — 37.6 ( 573.8 )
+Added: Net (loss) income — — — — ( 128.3 ) — — 33.0 ( 95.3 )
Other comprehensive loss related to commodity contracts, net — — — ( 0.2 ) — — — — ( 0.2 )
−Removed: Other comprehensive loss related to postretirement benefit plans, net — — — ( 6.9 ) — — — — ( 6.9 )
−Removed: Foreign currency translation gain, net — — — 0.6 — — — — 0.6
−Removed: Common stock dividends ($ 0.93 per share)
−Removed: — — — — ( 69.1 ) — — — ( 69.1 )
+Added: Other comprehensive gain related to postretirement benefit plans, net — — — 3.6 — — — — 3.6
Equity-based compensation expense — — 24.4 — — — — 0.2 24.6
Distribution to non-controlling interest — — — — — — — ( 32.4 ) ( 32.4 )
−Removed: Repurchase of common stock — — — — — ( 58,713 ) ( 1.9 ) — ( 1.9 )
−Removed: Impact from incentive distribution rights ("IDRs") simplification transaction of Delek Logistics LP — — 37.2 — — — — ( 50.8 ) ( 13.6 )
−Removed: Repurchases of non-controlling interests — — ( 24.3 ) — — — — ( 4.6 ) ( 28.9 )
+Added: Sale of Delek Logistics common limited partner units, net — — 1.1 — — — — 0.6 1.7
Taxes paid due to the net settlement of equity-based compensation — — ( 4.2 ) — — — — — ( 4.2 )
Exercise of equity-based awards 415,212 — — — — — — — —
+Added: Other — — 0.1 — ( 0.3 ) — — — ( 0.2 )
Balance at December 31, 2021 91,772,080 $ 0.9 $ 1,206.5 $ ( 3.8 ) $ 384.7 ( 17,575,527 ) $ ( 694.1 ) $ 119.8 $ 1,014.0
−Removed: 91,356,868 $ 0.9 $ 1,185.1 $ ( 7.2 ) $ 513.3 ( 17,575,527 ) $ ( 694.1 ) $ 118.4 $ 1,116.4
−Removed: Financial Statements and Schedules
+Added: Financial Statements
Delek US Holdings, Inc.
1 unchanged sentence
(In millions, except share and per share data)
−Removed: Common Stock Additional Paid-in Capital Accumulated Other Comprehensive Income (Loss) Retained Earnings As Adjusted (1)
−Removed: Treasury Stock Non-Controlling Interest in Subsidiaries Total Stockholders' Equity As Adjusted (1)
+Added: Common Stock Additional Paid-in Capital Accumulated Other Comprehensive (Loss) Retained Earnings Treasury Stock Non-Controlling Interest in Subsidiaries Total Stockholders' Equity
Shares Amount Shares Amount
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
+Added: Net income — — — — 257.1 — — 33.4 290.5
+Added: Other comprehensive loss related to postretirement benefit plans, net — — — ( 1.4 ) — — — — ( 1.4 )
+Added: Common stock dividends ($ 0.610 per share)
— — — — ( 42.8 ) — — — ( 42.8 )
−Removed: Net (loss) income — — — — ( 128.3 ) — — 33.0 ( 95.3 )
−Removed: Other comprehensive loss related to commodity contracts, net — — — ( 0.2 ) — — — — ( 0.2 )
−Removed: Other comprehensive gain related to postretirement benefit plans, net — — — 3.6 — — — — 3.6
Equity-based compensation expense — — 28.6 — — — — 0.5 29.1
−Removed: Distribution to non-controlling interest — — — — — — — ( 32.4 ) ( 32.4 )
+Added: Distributions to non-controlling interests — — — — — — — ( 36.0 ) ( 36.0 )
Sale of Delek Logistics common limited partner units, net — — 8.5 — — — — 5.1 13.6
+Added: Repurchase of common stock ( 4,261,185 ) — ( 56.9 ) — ( 72.7 ) — — — ( 129.6 )
+Added: Purchase of Delek common stock from IEP Energy Holding LLC ( 3,497,268 ) — ( 46.0 ) — ( 18.0 ) — — — ( 64.0 )
+Added: Issuance of Delek Logistic common limited partner units, net — — — — — — — 3.1 3.1
Taxes paid due to the net settlement of equity-based compensation — — ( 6.5 ) — — — — — ( 6.5 )
2 unchanged sentences
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
−Removed: 91,772,080 $ 0.9 $ 1,206.5 $ ( 3.8 ) $ 384.7 ( 17,575,527 ) $ ( 694.1 ) $ 119.8 $ 1,014.0
−Removed: Financial Statements and Schedules
+Added: Financial Statements
Delek US Holdings, Inc.
4 unchanged sentences
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
−Removed: As Adjusted (1)
−Removed: 91,772,080 $ 0.9 $ 1,206.5 $ ( 3.8 ) $ 384.7 ( 17,575,527 ) $ ( 694.1 ) $ 119.8 $ 1,014.0
Net income — — — — 19.8 — — 26.9 46.7
−Removed: Other comprehensive loss related to postretirement benefit plans, net — — — ( 1.4 ) — — — — ( 1.4 )
+Added: Other comprehensive gain related to postretirement benefit plans, net — — — 0.4 — — — — 0.4
Common stock dividends ($ 0.925 per share)
2 unchanged sentences
Equity-based compensation expense — — 26.8 — — — — 0.7 27.5
−Removed: Sale of Delek Logistics common limited partner units, net — — 8.5 — — — — 5.1 13.6
Repurchase of common stock ( 3,562,767 ) ( 0.1 ) ( 48.1 ) — ( 37.2 ) — — — ( 85.4 )
−Removed: Purchase of Delek common stock from IEP Energy Holding LLC ( 3,497,268 ) — ( 46.0 ) — ( 18.0 ) — — — ( 64.0 )
Taxes paid due to the net settlement of equity-based compensation — — ( 4.5 ) — — — — ( 0.7 ) ( 5.2 )
Exercise of equity-based awards 450,123 — — — — — — — —
−Removed: Issuance of Delek Logistic common limited partner units, net — — — — — — — 3.1 3.1
Other 142,998 — 5.3 — ( 0.2 ) — — — 5.1
Balance at December 31, 2023 81,539,871 $ 0.8 $ 1,113.6 $ ( 4.8 ) $ 430.0 ( 17,575,527 ) $ ( 694.1 ) $ 114.2 $ 959.7
−Removed: 84,509,517 $ 0.9 $ 1,134.1 $ ( 5.2 ) $ 507.9 ( 17,575,527 ) $ ( 694.1 ) $ 125.9 $ 1,069.5
−Removed: (1) Adjusted to reflect the retrospective change in accounting policy from LIFO to FIFO for certain inventories.
−Removed: See Note 8 for further discussion.
See accompanying notes to the consolidated financial statements
−Removed: Financial Statements and Schedules
+Added: Financial Statements
Delek US Holdings, Inc.
Consolidated Statements of Cash Flows
−Removed: (In millions, except per share data)
+Added: (In millions)
Year Ended December 31,
−Removed: 2022 As Adjusted (1)
−Removed: As Adjusted (1)
+Added: 2023 2022 2021
Cash flows from operating activities:
4 unchanged sentences
Deferred income taxes ( 1.6 ) 61.6 ( 38.9 )
−Removed: Impairment of goodwill — — 126.0
+Added: Asset impairment 37.9 — —
Income from equity method investments ( 86.2 ) ( 57.7 ) ( 18.3 )
1 unchanged sentence
Non-cash lower of cost or market/net realizable value adjustment 0.4 1.9 8.3
−Removed: Gain on sale of non-operating refinery — — ( 56.8 )
Equity-based compensation expense 27.5 29.1 24.6
7 unchanged sentences
Non-current assets and liabilities, net ( 16.9 ) ( 10.0 ) ( 12.2 )
−Removed: Net cash provided by (used in) operating activities 425.3 371.4 ( 282.9 )
+Added: Net cash provided by operating activities 1,013.6 425.3 371.4
Cash flows from investing activities:
3 unchanged sentences
Purchases of property, plant and equipment ( 419.6 ) ( 311.4 ) ( 222.2 )
+Added: Purchase of equity securities ( 11.9 ) — —
Purchases of intangible assets ( 4.3 ) ( 5.6 ) ( 1.0 )
Proceeds from sale of property, plant and equipment 2.6 1.2 11.9
−Removed: Proceeds from sale of non-operating refinery — — 39.9
Insurance proceeds 10.3 — 7.0
6 unchanged sentences
Payments on term debt ( 28.2 ) ( 1,289.1 ) ( 43.4 )
−Removed: Proceeds from product financing agreements 994.6 916.1 297.2
−Removed: Repayments of product financing agreements ( 1,006.9 ) ( 877.6 ) ( 128.1 )
+Added: Proceeds from product and other financing agreements 1,187.3 994.6 916.1
+Added: Repayments of product and other financing agreements ( 1,212.7 ) ( 1,006.9 ) ( 877.6 )
Proceeds from Inventory Intermediation Agreement 32.2 538.8 —
−Removed: Payments for termination of Supply & Offtake Obligation ( 586.9 ) — —
+Added: Proceeds from termination of Supply & Offtake Obligation 25.8 ( 586.9 ) —
Taxes paid due to the net settlement of equity-based compensation ( 5.2 ) ( 6.5 ) ( 4.2 )
Repurchase of common stock ( 85.4 ) ( 129.6 ) —
−Removed: Repurchase of non-controlling interest — — ( 28.9 )
Distribution to non-controlling interest ( 38.6 ) ( 36.0 ) ( 32.4 )
5 unchanged sentences
Deferred financing costs paid ( 4.6 ) ( 62.5 ) ( 6.2 )
−Removed: Net cash provided by (used in) financing activities 491.1 ( 124.0 ) 306.4
+Added: Net cash (used in) provided by financing activities ( 624.7 ) 491.1 ( 124.0 )
Net (decrease) increase in cash and cash equivalents ( 19.1 ) ( 15.2 ) 69.0
3 unchanged sentences
Consolidated Statements of Cash Flows (Continued)
−Removed: (In millions, except per share data)
+Added: (In millions)
Year Ended December 31,
6 unchanged sentences
Non-cash investing activities:
−Removed: Increase (Decrease) in accrued capital expenditures $ 31.8 $ 4.9 $ ( 30.1 )
+Added: (Decrease) increase in accrued capital expenditures $ ( 30.3 ) $ 31.8 $ 4.9
Non-cash financing activities:
Non-cash lease liability arising from obtaining right-of-use assets during the period $ 57.1 $ 28.6 $ 102.8
−Removed: (1) Adjusted to reflect the retrospective change in accounting policy from LIFO to FIFO for certain inventories.
−Removed: See Note 8 for further discussion.
See accompanying notes to the consolidated financial statements
−Removed: Financial Statements and Schedules
+Added: Notes to Consolidated Financial Statements
Delek US Holdings, Inc.
5 unchanged sentences
Unless otherwise noted or the context requires otherwise, the terms "we," "our," "us," "Delek" and the "Company" are used in this report to refer to Delek and its consolidated subsidiaries for all periods presented.
−Removed: Delek's Common Stock is listed on the NYSE under the symbol "DK."
+Added: Delek's Common Stock is listed on the New York Stock Exchange ("NYSE") under the symbol "DK."
Accounting Policies
5 unchanged sentences
Our consolidated financial statements include Delek Logistics Partners, LP ("Delek Logistics", NYSE:DKL), which is a variable interest entity ("VIE").
−Removed: 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").
−Removed: See Note 3 - Acquisitions for additional information.
As the indirect owner of the general partner of Delek Logistics, we have the ability to direct the activities of this entity that most significantly impact its economic performance.
We are also considered to be the primary beneficiary for accounting purposes for this entity and are Delek Logistics' primary customer.
−Removed: As Delek Logistics does not derive an amount of gross margin material to us from third parties, there is limited risk to Delek associated with Delek Logistics' operations.
−Removed: However, in the event that Delek Logistics incurs a loss, our operating results will reflect such loss, net of intercompany eliminations, to the extent of our ownership interest in this entity.
+Added: If Delek Logistics incurs a loss, our operating results will reflect such loss, net of intercompany eliminations, to the extent of our ownership interest in this entity.
+Added: Use of Estimates
The preparation of financial statements in conformity with United States ("U.S.") Generally Accepted Accounting Principles ("GAAP") and in accordance with the rules and regulations of the Securities and Exchange Commission ("SEC") requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.
12 unchanged sentences
• intercompany eliminations.
−Removed: During the fourth quarter 2022, we realigned our reportable segments for financial reporting purposes to reflect changes in the manner in which our chief operating decision maker ("CODM"), assesses financial information for decision-making purposes.
−Removed: The change primarily represents reporting the operating results of wholesale crude operations within the refining segment.
−Removed: Prior to this change, wholesale crude operations were reported as part of corporate, other and eliminations.
−Removed: 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.
−Removed: The CODM evaluates performance based upon EBITDA.
−Removed: We define EBITDA for any period as net income (loss) to add back interest expense, income tax expense (benefit), depreciation and amortization.
Segment reporting is more fully discussed in Note 4.
16 unchanged sentences
Our allowance for doubtful accounts is reflected as a reduction of accounts receivable in the consolidated balance sheets.
−Removed: Two customers accounted for more than 10% of our consolidated accounts receivable balance as of December 31, 2022 and one customer as of December 31, 2021.
−Removed: One customer accounted for $ 3.9 billion of net sales which was more than 10% of consolidated net sales for the year ended December 31, 2022 and was recognized in the Refining segment while no customers exceeded 10% for the years ended December 31, 2021 or 2020, respectively.
−Removed: Change in Accounting Principle
−Removed: As of January 1, 2022, we changed our method for accounting for inventory held at the Tyler, Texas refinery ("the Tyler refinery") to the first-in, first-out ("FIFO") costing method from the last-in, first-out ("LIFO") costing method, which conforms the Company’s refining inventory to a single method of accounting.
−Removed: Total inventories accounted for using LIFO, prior to the accounting method change, comprised 27.1 % of the Company’s total inventories as of December 31, 2020.
−Removed: 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.
−Removed: The effects of this change have been retrospectively applied to all periods presented with a cumulative effect adjustment reflected in the January 1, 2020 beginning retained earnings.
−Removed: See Note 8 - Inventory for additional information.
−Removed: Crude oil, work-in-process, refined products, blendstocks and asphalt inventory for all of our operations, excluding merchandise inventory in our Retail segment, are stated at the lower of cost determined using the FIFO basis or net realizable value.
+Added: One customer accounted for more than 10 % of our consolidated accounts receivable balance as of December 31, 2023 and two customers as of December 31, 2022.
+Added: One customer accounted for $ 4.0 billion and $ 3.9 billion of net sales which was more than 10 % of consolidated net sales for the years ended December 31, 2023 and December 31, 2022, respectively, and was recognized in the Refining segment.
+Added: No customer exceeded more than 10% of consolidated net sales for the year ended December 31, 2021.
+Added: Crude oil, work-in-process, refined products, blendstocks and asphalt inventory for all of our operations, excluding merchandise inventory in our Retail segment, are stated at the lower of cost determined using the first-in, first-out ("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.
8 unchanged sentences
Betterments, renewals and extraordinary repairs that extend the life of an asset are capitalized.
+Added: Delek capitalizes interest on capital projects associated with the refining and logistics segments.
Maintenance and repairs are charged to expense as incurred.
15 unchanged sentences
Acquired intangible assets determined to have an indefinite useful life are not amortized, but are instead tested for impairment in connection with our evaluation of long-lived assets as events and circumstances indicate that the asset might be impaired.
−Removed: Property, Plant and Equipment and Other Intangibles Impairment
−Removed: Property, plant and equipment held and used and other intangibles are evaluated for impairment whenever indicators of impairment exist.
+Added: Long-Lived Assets and Other Intangibles Impairment
+Added: Long-lived assets held and used and other intangibles are evaluated for impairment whenever indicators of impairment exist.
In accordance with ASC 360, Property, Plant and Equipmen t ("ASC 360") and ASC 350, Intangibles - Goodwill and Other ("ASC 350"), Delek evaluates the realizability of these long-lived assets as events occur that might indicate potential impairment.
1 unchanged sentence
If the carrying amount is more than the recoverable amount, an impairment charge must be recognized based on the fair value of the asset.
−Removed: These impairment charges are included in other operating income in our consolidated statements of income.
+Added: These impairment charges are included in asset impairment in our consolidated statements of income.
+Added: There was a $ 23.1 million impairment related to right-of-use assets for the year ended December 31, 2023.
There were no impairment charges for the years ended December 31, 2022 or 2021.
+Added: See Note 23 for further information on our right-of-use assets impairment.
Equity Method Investments
11 unchanged sentences
If we are not the primary beneficiary, the general partner or another limited partner may consolidate the VIE, and we record the investment as an equity method investment.
−Removed: Capitalized Interest
−Removed: Delek capitalizes interest on capital projects associated with the refining and logistics segments.
Refinery Turnaround Costs
9 unchanged sentences
In assessing the recoverability of goodwill, assumptions are made with respect to future business conditions and estimated expected future cash flows to determine the fair value of a reporting unit.
−Removed: We may consider inputs such as a market participant weighted average cost of capital, gross margin, capital expenditures and long-term growth rates based on historical information and our best estimate of future forecasts, all of which are subject to significant judgment and estimates.
+Added: We may consider inputs such as a market participant weighted average cost of capital, gross margin, future volumes, capital expenditures and long-term growth rates based on historical information and our best estimate of future forecasts, all of which are subject to significant judgment and estimates.
We may also consider a market approach in determining or corroborating the fair values of the reporting units using a multiple of expected future cash flows, such as those used by third-party analysts, which is also subject to significant judgment and estimates.
6 unchanged sentences
Our annual assessment of goodwill resulted in an impairment of $ 14.8 million during the year ended December 31, 2023.
−Removed: There was no impairment during the years ended December 31, 2022 and 2021, respectively.
+Added: There was no impairment during the years ended December 31, 2022 and 2021.
Details of remaining goodwill balances by segment are included in Note 16.
8 unchanged sentences
Accordingly, actual results may differ materially from the projected results used to determine fair value.
−Removed: Delek records all derivative financial instruments, including any interest rate swap and cap agreements, fuel-related derivatives, over the counter ("OTC") future swaps, forward contracts and future RIN purchase and sales commitments that qualify as derivative instruments, at estimated fair value in accordance with the provisions of ASC 815, Derivatives and Hedging ("ASC 815").
+Added: Delek records all derivative financial instruments, including any interest rate swap and cap agreements, fuel-related derivatives, over the counter future swaps, forward contracts and future RIN purchase and sales commitments that qualify as derivative instruments, at estimated fair value in accordance with the provisions of ASC 815, Derivatives and Hedging ("ASC 815").
Changes in the fair value of the derivative instruments are recognized in operations, unless we elect to apply and qualify for the hedging treatment permitted under the provisions of ASC 815 allowing such changes to be classified as other comprehensive income for cash flow hedges.
9 unchanged sentences
Delek applies the provisions of ASC 820, Fair Value Measurements and Disclosure ("ASC 820"), which defines fair value, establishes a framework for its measurement and expands disclosures about fair value measurements.
−Removed: ASC 820 applies to our commodity and other derivatives that are measured at fair value on a recurring basis, and to our inventory intermediation agreement and environmental credit obligations that are accounted for under the fair value election.
+Added: ASC 820 applies to our commodity and other derivatives that are measured at fair value on a recurring basis, and to our inventory intermediation agreement that is accounted for under the fair value election.
ASC 820 also applies to the measurement of our equity method investment, goodwill and long-lived tangible and intangible assets when determining whether or not an impairment exists, when circumstances require evaluation.
2 unchanged sentences
Inventory Intermediation Obligations
−Removed: As of December 30, 2022, Delek has an inventory intermediation agreement ("Inventory Intermediation Agreement") with Citigroup Energy Inc.
+Added: Delek has an inventory intermediation agreement ("Inventory Intermediation Agreement") with Citigroup Energy Inc.
("Citi") in connection with DK Trading & Supply, LLC (“DKTS”), an indirect subsidiary of Delek, which provide a financing mechanism on contractual baseline inventory volumes and also revolving over and short volumes.
9 unchanged sentences
Additionally, we may generate, during the operation of our refining or other activities, or purchase on a market, environmental credits for purposes of ultimately meeting expected environmental credit obligations.
−Removed: These resultant net environmental credit obligations are financial instruments under ASC 825.
−Removed: For those financial instruments where (1) there are consistently available observable market inputs or market-corroborated inputs;
+Added: These resultant net environmental credit obligations are accounted for under ASC 825.
+Added: For those net credit obligations where (1) there are consistently available observable market inputs or market-corroborated inputs;
and (2) there continues to be (or is reasonably expected to be) sustained liquidity in the applicable credits market, we generally apply the fair value option, as available pursuant to ASC 825.
We recognize a current liability at the end of each reporting period in which we do not have sufficient environmental credits to cover the current environmental credits obligation (a “deficit”), and we recognize a current asset at the end of each reporting period in which we have generated or acquired environmental credits meeting our recognition criteria in excess of our current environmental credits obligation (a “surplus”).
−Removed: Any obligation surplus or deficit would be measured at fair value either directly through the observable inputs or indirectly through the market-corroborated inputs.
−Removed: The net cost of environmental credits used each period as well as changes to fair value attributable to our environmental credit obligations (surplus or deficit) are charged to cost of materials and other in the consolidated statements of income.
+Added: Any obligation would be measured at fair value either directly through the observable inputs or indirectly through the market-corroborated inputs.
+Added: The net cost of environmental credits used each period as well as changes to fair value attributable to our environmental credit obligations are charged to cost of materials and other in the consolidated statements of income.
Our environmental credit obligations predominantly relate to EPA’s Renewable Fuel Standard - 2 ("RFS-2"), which requires that certain refiners generate environmental credits, called Renewable Identification Numbers ("RINs"), by blending renewable fuels into the fuel products they produce, or else purchasing RINs on the market, and that such RINs shall be used to satisfy the related environmental credit obligation.
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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.
−Removed: Therefore, the sum of our individual obligated parties’ Net RINs Obligations as well as RINs held by our non-obligated parties which meet our recognition criteria, comprises the Company’s “Consolidated Net RINs Obligation.” For all periods presented in these consolidated financial statements, the individual financial instruments relating to specific category and vintage requirements under RFS-2 comprising our Consolidated Net RINs Obligation are subject to market risk and meet the criteria set forth above.
−Removed: Therefore, we have elected to apply the fair value option to the individual financial instruments comprising our Consolidated Net RIN Obligation, using the fair value guidance provided by ASC 820.
+Added: Therefore, the sum of our individual obligated parties’ Net RINs Obligations as well as RINs held by our non-obligated parties which meet our recognition criteria, comprises the Company’s “Consolidated Net RINs Obligation.” For all periods presented in these consolidated financial statements, the individual obligation relating to a specific category and vintage requirements under RFS-2 comprising our Consolidated Net RINs Obligation are subject to market risk and meet the criteria set forth above.
+Added: Therefore, we have elected to apply the fair value option to our Consolidated Net RIN Obligation, using the fair value guidance provided by ASC 820.
Recognition of production-related RINs Obligation expense reflects the accrual of our RINs Obligation based on the current period production using current market price of RINs.
48 unchanged sentences
Payment terms require customers to pay shortly after delivery and do not contain significant financing components.
−Removed: In the first quarter of 2020, we began selling crude barrels through supply agreements predominantly in the gulf coast region.
+Added: We sale crude barrels through supply agreements predominantly in the gulf coast region.
The transaction price for these products is based on contractual rates.
41 unchanged sentences
Depreciation and amortization is separately presented in our statement of income and disclosed by reportable segment in Note 4.
−Removed: Interest Expense
−Removed: Interest expense includes interest expense on debt, letters of credit, financing fees (including certain Citi fees associated with our Intermediation Agreements), the amortization, net of accretion, of debt discounts or premium and amortization of deferred debt issuance costs, and interest rate hedge settlements, if any, but excludes capitalized interest.
−Removed: Original issuance discount and debt issuance costs are amortized ratably over the term of the related debt when it is not materially different from the effective interest method.
Sales, Use and Excise Taxes
5 unchanged sentences
See Note 10 for further information.
−Removed: Advertising Costs
−Removed: Delek expenses advertising costs as the advertising space is utilized.
−Removed: Advertising expense for the years ended December 31, 2022, 2021 and 2020 was $ 3.8 million, $ 2.0 million and $ 1.9 million, respectively.
In accordance with ASC 842-20, Leases - Lessee ("ASC 842-20"), we classify leases with contractual terms longer than twelve months as either operating or finance.
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The right-of-use asset is amortized over the noncancelable lease period, considering renewals for all periods for which it is reasonably certain to be exercised.
+Added: For substantially all classes of underlying assets, we have elected the practical expedient not to separate lease and non-lease components, which allows us to combine the components if certain criteria are met.
See Note 23 for further information.
Income taxes are accounted for under the provisions of ASC 740, Income Taxes ("ASC 740").
−Removed: This standard generally requires Delek to record deferred income taxes for the differences between the book and tax bases of its assets and liabilities, which are measured using enacted tax rates and laws that will be in effect when the differences are expected to reverse.
+Added: This standard generally requires Delek to record deferred income taxes for the differences between the book and tax basis of its assets and liabilities, which are measured using enacted tax rates and laws that will be in effect when the differences are expected to reverse.
Deferred income tax expense or benefit represents the net change during the year in our deferred income tax assets and liabilities, exclusive of the amounts held in other comprehensive income.
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New Accounting Pronouncements Adopted During 2023
−Removed: 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):
−Removed: Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity
−Removed: In August 2020, the Financial Accounting Standards Board ("FASB") ASU 2020-06, which is intended to simplify the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts in an entity's own equity.
−Removed: The pronouncement is effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2021.
−Removed: 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.
−Removed: ASU 2020-04, Facilitation of the Effects of Reference Rate Reform on Financial Reporting (Topic 848)
−Removed: 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.
−Removed: 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.
−Removed: We adopted this guidance during 2022 and the adoption did not have a material impact on our business, financial condition or results of operations.
−Removed: 3 Bear Delaware Holding - NM, LLC Acquisition
−Removed: 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.
−Removed: The purchase price for 3 Bear was $ 628.3 million.
−Removed: The 3 Bear Acquisition was financed through a combination of cash on hand and borrowings under the Delek Logistics' Credit Facility (as defined in Note 10 of these consolidated financial statements).
−Removed: For the year ended December 31, 2022, we incurred $ 10.6 million in incremental direct acquisition and integration costs that principally consist of legal, advisory and other professional fees.
−Removed: Such costs are included in general and administrative expenses in the accompanying consolidated statements of income for these periods.
−Removed: Our consolidated financial and operating results reflect the 3 Bear Acquisition operations beginning June 1, 2022.
−Removed: Our results of operations included revenue and net income of $ 123.7 million and $ 14.2 million, respectively, for the year ended December 31, 2022.
−Removed: 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.
+Added: ASU 2023-03 , Presentation of Financial Statements (Topic 205), Income Statement - Reporting Comprehensive Income (Topic 220), Distinguishing Liabilities from Equity (Topic 480), Equity (Topic 505), and Compensation - Stock Compensation (Topic 718)
+Added: In July 2023, the Financial Accounting Standards Board (“FASB”) issued ASU 2023-03, Presentation of Financial Statements (Topic 205), Income Statement-Reporting Comprehensive Income (Topic 220), Distinguishing Liabilities from Equity (Topic 480), Equity (Topic 505), and Compensation-Stock Compensation (Topic 718) (“ASU 2023-03”).
+Added: This ASU amends or supersedes various SEC paragraphs within the FASB Accounting Standards Codification to conform to past SEC announcements and guidance issued by the SEC.
+Added: ASU 2023-03 does not provide any new guidance, so there is no transition or effective date.
+Added: ASU 2023-03 did not have a material impact on our consolidated financial statements.
+Added: Accounting Pronouncements Not Yet Adopted
+Added: ASU 2023-09, Income Taxes(Topic 740):
+Added: Improvements to Income Tax Disclosures
+Added: In December 2023, the FASB issued ASU 2023-09 Income Taxes(Topic 740):
+Added: Improvements to Income Tax Disclosures ("ASU 2023-09").
+Added: The standard is intended to enhance the transparency and decision usefulness of income tax disclosures.
+Added: ASU 2023-09 requires disaggregated information about a reporting entity's effective tax rate reconciliation as well as information on income taxes paid.
+Added: The amendments in this ASU are effective for annual periods beginning after December 15, 2024, with early adoption permitted, and should be applied on a prospective basis with the option to apply the standard retrospectively.
+Added: The Company is currently evaluating the provisions of the amendments and the impact on its future consolidated statements, but does not currently expect adopting this new guidance will have a material impact on our consolidated financial statements and related disclosures.
+Added: ASU 2023-07, Segment Reporting (Topic 280):
+Added: Improvements to Reportable Segment Disclosures
+Added: In November 2023, the FASB issued ASU 2023-07 Segment Reporting (Topic 280):
+Added: Improvements to Reportable Segment Disclosures ("ASU 2023-07").
+Added: ASU 2023-07 expands reportable segment disclosure requirements by requiring disclosures of significant reportable segment expenses that are regularly provided to the chief decision maker ("CODM") and included within each reported measure of a segment's profit or loss, an amount and description of its composition for other segment items, and interim disclosures of a reportable segment's profit or loss and assets.
+Added: The ASU also requires disclosure of the title and position of the individual identified as the CODM and an explanation of how the CODM uses the reported measures of a segment's profit or loss in assessing segment performance and deciding how to allocate resources.
+Added: ASU 2023-07 is effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024, and should be applied retrospectively to all prior periods presented in the financial statements.
+Added: The adoption of ASU 2023-07 should not have a material impact on our consolidated financial statements.
+Added: See Note 4 for further information.
+Added: ASU 2023-06, Codification Amendments in Response to the SEC's Disclosure Update and Simplification Initiative
+Added: In October 2023, the FASB issued ASU 2023-06 Codification Amendments in Response to the SEC's Disclosure Update and Simplification Initiative ("ASU 2023-06").
+Added: The main provision of ASU 2023-06 is to clarify or improve disclosure and presentation requirements of a variety of topics, which will allow users to more easily compare entities subject to the SEC's existing disclosures with those entities that were not previously subject to the requirements, and align the requirements in the FASB accounting standard codification with the SEC's regulations.
+Added: The effective date for each amendment will be the date on which the SEC’s removal of that related disclosure from Regulation S-X or Regulation S-K becomes effective, with early adoption prohibited.
+Added: The Company is currently evaluating the provisions of the amendments and the impact on its future consolidated statements, but does not currently expect adopting this new guidance will have a material impact on our consolidated financial statements and related disclosures.
+Added: Delek Delaware Gathering (formally 3 Bear)
+Added: 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").
+Added: The purchase price for Delaware Gathering was $ 628.3 million.
+Added: 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 10 of these consolidated financial statements).
+Added: 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.
8 unchanged sentences
Purchase Price Allocation
−Removed: 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):
+Added: The following table summarizes the final fair values of assets acquired and liabilities assumed in the Delaware Gathering Acquisition as of June 1, 2022 (in millions):
Assets acquired:
17 unchanged sentences
Fair value of net assets acquired $ 628.3
−Removed: (1) The acquired intangible assets amount includes the following identified intangibles:
−Removed: • 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.
−Removed: • 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.
−Removed: These fair value estimates are preliminary and therefore, the final fair value of assets acquired and liabilities assumed and the resulting effect on our financial position may change once all necessary information has become available and we finalize our valuations.
−Removed: To the extent possible, estimates have been considered and recorded, as appropriate, for the items above based on the information available as of December 31, 2022.
−Removed: 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").
−Removed: The fair value of property, plant and equipment was based on the combination of the cost and market approaches.
−Removed: Key assumptions in the cost approach include determining the replacement cost by evaluating recently published data and adjusting replacement cost for physical deterioration, functional and economic obsolescence.
−Removed: We used the market approach to measure the value of certain assets through an analysis of recent sales or offerings of comparable properties.
−Removed: The fair value of customer relationships was based on the income approach.
−Removed: Key assumptions in the income approach include projected revenue attributable to customer relationships, operating margins and discount rates.
−Removed: The fair values discussed above were based on significant inputs that are not observable in the market and, therefore, represent Level 3 measurements.
−Removed: The fair values of all other current assets and liabilities were equivalent to their carrying values due to their short-term nature.
−Removed: 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.
−Removed: This goodwill is deductible for income tax purposes.
−Removed: Goodwill related to the 3 Bear Acquisition is included in the logistics segment.
−Removed: Unaudited Pro Forma Financial Information
−Removed: The following table summarizes the unaudited pro forma financial information of the Company assuming the 3 Bear Acquisition had occurred on January 1, 2021.
−Removed: 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.
−Removed: The most significant pro forma adjustments relate to (i) incremental interest expense and amortization of deferred financing costs associated with revolving credit facility borrowings incurred in connection with the 3 Bear Acquisition, (ii) incremental depreciation resulting from the estimated fair values of acquired property, plant and equipment, (iii) incremental amortization resulting from the estimated fair values of acquired customer relationships intangible (iv) accounting policy alignment, and (v) transaction costs.
−Removed: The unaudited pro forma financial information excludes any expected cost savings or other synergies as a result of the 3 Bear Acquisition.
−Removed: 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.
−Removed: Actual results may differ significantly from the unaudited pro forma financial information.
−Removed: Year Ended December 31,
−Removed: (in millions, except per share data) 2022 2021
−Removed: Net sales $ 20,344.4 $ 10,806.4
−Removed: Net income (loss) attributable to Delek $ 255.6 $ ( 162.8 )
−Removed: Net income (loss) per share:
−Removed: Basic income (loss) per share $ 3.61 $ ( 2.20 )
−Removed: Diluted income (loss) per share $ 3.57 $ ( 2.20 )
We aggregate our operating segments into three reportable segments:
4 unchanged sentences
• intercompany eliminations.
−Removed: 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.
−Removed: The change primarily represents reporting the operating results of wholesale crude operations within the refining segment.
−Removed: Prior to this change, wholesale crude operations were reported as part of corporate, other and eliminations.
−Removed: While this reporting change did not change our consolidated results, segment data for previous years has been restated and is consistent with the current year presentation throughout the financial statements and the accompanying notes.
The accounting policies of the reporting segments are the same as those described in Note 2, except that the disaggregated financial results for the reporting segments have been prepared using a management approach, which is consistent with the basis and manner in which management internally disaggregates financial information for the purposes of assisting internal operating decisions.
−Removed: The CODM evaluates performance based upon EBITDA.
−Removed: We define EBITDA for any period as net income (loss) to add back interest expense, income tax expense (benefit), depreciation and amortization.
−Removed: Through September 30, 2022, the CODM believed that contribution margin was a meaningful measure of performance, and it was used by the CODM to analyze the Company and stand-alone operating segment performance.
−Removed: During the fourth quarter 2022, the CODM determined that EBITDA is the key performance measure for planning and forecasting purposes and discontinued the use of contribution margin as a measure of performance.
+Added: The CODM evaluates performance based upon EBITDA attributable to Delek.
+Added: 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.
−Removed: 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.
+Added: GAAP and should not be considered an alternative 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.
2 unchanged sentences
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.
−Removed: The refining segment has a combined nameplate capacity of 302,000 barrels per day ("bpd") as of December 31, 2022, including the following:
−Removed: • Tyler, Texas refinery;
+Added: The refining segment includes the following:
+Added: • Tyler, Texas refinery (the "Tyler refinery");
• El Dorado, Arkansas refinery (the "El Dorado refinery");
4 unchanged sentences
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").
−Removed: 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.
−Removed: The blender's tax credit was re-enacted in December 2019 for the years 2020 through 2022.
+Added: The BTC provides a $1.00 refundable tax credit per gallon of pure
+Added: biodiesel to the first blender of biodiesel with petroleum-based diesel fuel.
+Added: The blender's tax credit was originally set to expire December 31, 2022, but was extended through December 31, 2024.
In addition, the refining segment also includes our wholesale crude operations.
On May 7, 2020, we sold our equity interests in Alon Bakersfield Property, Inc., an indirect wholly-owned subsidiary that owns the non-operating refinery located in Bakersfield, California, to a subsidiary of Global Clean Energy Holdings, Inc.
−Removed: (“GCE”) for total cash consideration of $ 40.0 million.
−Removed: As a result of this sale, we recognized a gain of $ 56.8 million, largely due to the buyer assuming substantially all of the asset retirement obligations and environmental liabilities associated with this refinery, which is included in gain on sale of non-operating refinery on the accompanying consolidated statements of income.
As part of the transaction, GCE granted a call option to Delek to acquire up to a 33 1/3% limited member interest in the acquiring subsidiary of GCE for up to $ 13.3 million, subject to certain adjustments.
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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.
−Removed: The operating results and assets acquired in the 3 Bear Acquisition have been included in the logistics segment beginning on June 1, 2022.
+Added: The operating results and assets acquired in the Delaware Gathering Acquisition have been included in the logistics segment beginning on June 1, 2022.
Retail Segment
Our retail segment includes the operations of owned and leased convenience store sites located primarily in West Texas and New Mexico.
−Removed: These convenience stores typically offer various grades of gasoline and diesel under the Alon or Delek brand name and food products, food service, tobacco products, non-alcoholic and alcoholic beverages, general merchandise as well as money orders to the public, primarily under the 7-Eleven and DK or Alon brand names.
+Added: These convenience stores typically offer various grades of gasoline and diesel under the Alon or Delek brand name and food products, food service, tobacco products, non-alcoholic and alcoholic beverages, general merchandise as well as money 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.
1 unchanged sentence
In November 2018, we terminated the license agreement with 7-Eleven, Inc.
−Removed: 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.
+Added: According to the terms of such agreement and subsequent amendments, all 7-Eleven branding was removed on a store-by-store basis by December 31, 2023.
Significant Inter-segment Transactions
8 unchanged sentences
Year Ended December 31, 2023
−Removed: (In millions) Refining Logistics Retail Corporate,
−Removed: Other and Eliminations Consolidated
+Added: (In millions) Refining Logistics (1)
+Added: Retail Corporate,
+Added: Other and Eliminations (2)
Net revenues (excluding intercompany fees and revenues) $ 15,578.1 $ 456.6 $ 882.7 $ — $ 16,917.4
3 unchanged sentences
Depreciation and amortization ( 234.2 ) ( 92.4 ) ( 12.1 ) ( 12.9 ) ( 351.6 )
−Removed: Interest income (expense), net ( 4.1 ) ( 82.3 ) 0.5 ( 109.4 ) ( 195.3 )
+Added: Interest expense, net ( 42.3 ) ( 143.2 ) ( 0.2 ) ( 132.5 ) ( 318.2 )
Income tax expense ( 5.1 )
Net income attributable to Delek $ 19.8
−Removed: Capital spending (excluding business combinations) $ 138.0 $ 130.7 $ 34.2 $ 40.2 $ 343.1
+Added: Income from equity method investments $ ( 0.6 ) $ ( 31.4 ) $ — $ ( 54.2 ) $ ( 86.2 )
+Added: Capital spending (3)
+Added: $ 246.9 $ 81.3 $ 29.8 $ 31.1 $ 389.1
Year Ended December 31, 2022
−Removed: (In millions) Refining (1)
−Removed: Logistics Retail Corporate,
+Added: (In millions) Refining Logistics Retail Corporate,
Other and Eliminations Consolidated
4 unchanged sentences
Depreciation and amortization ( 205.4 ) ( 63.0 ) ( 12.0 ) ( 6.6 ) ( 287.0 )
−Removed: Interest income (expense), net 17.4 ( 50.2 ) — ( 103.9 ) ( 136.7 )
−Removed: Income tax benefit 42.0
−Removed: Net loss attributable to Delek $ ( 128.3 )
+Added: Interest expense, net ( 4.1 ) ( 82.3 ) 0.5 ( 109.4 ) ( 195.3 )
+Added: Income tax expense ( 63.9 )
+Added: Net income attributable to Delek $ 257.1
+Added: Income from equity method investments $ ( 1.0 ) $ ( 31.7 ) $ — $ ( 25.0 ) $ ( 57.7 )
Capital spending (excluding business combinations) (3)
+Added: $ 138.0 $ 130.7 $ 34.2 $ 40.2 $ 343.1
Year Ended December 31, 2021
−Removed: (In millions) Refining (1)
−Removed: Logistics Retail Corporate,
+Added: (In millions) Refining Logistics Retail Corporate,
Other and Eliminations Consolidated
4 unchanged sentences
Depreciation and amortization ( 198.7 ) ( 42.8 ) ( 12.7 ) ( 10.4 ) ( 264.6 )
−Removed: Interest income (expense), net 34.9 ( 42.9 ) — ( 117.7 ) ( 125.7 )
+Added: Interest expense, net 17.4 ( 50.2 ) — ( 103.9 ) ( 136.7 )
Income tax benefit 42.0
Net loss attributable to Delek $ ( 128.3 )
−Removed: Capital spending (excluding business combinations) $ 201.0 $ 15.8 $ 9.1 $ 13.7 $ 239.6
−Removed: (1) Adjusted to reflect the retrospective change in accounting policy from LIFO to FIFO for certain inventories.
−Removed: See Note 8 for further discussion.
−Removed: Earnings (Loss) Per Share
+Added: Income from equity method investments $ ( 0.7 ) $ ( 24.6 ) $ — $ 7.0 $ ( 18.3 )
+Added: Capital spending (3)
+Added: $ 172.4 $ 27.5 $ 5.1 $ 22.1 $ 227.1
+Added: (1) Includes a $ 14.8 million goodwill impairment charge.
+Added: Refer to Note 16 - Goodwill and Intangible Assets for further information.
+Added: (2) Includes a $ 23.1 million right-of-use asset impairment charge.
+Added: Refer to Note 19 - Restructuring and Other Charges for further information.
+Added: (3) Capital spending includes additions on an accrual basis.
+Added: Earnings Per Share
Basic earnings per share (or "EPS") is computed by dividing net income (loss) by the weighted average common shares outstanding.
−Removed: Diluted earnings per share is computed by dividing net income (loss), as adjusted for changes to income that would result from the assumed settlement of the dilutive equity instruments included in diluted weighted average common shares outstanding, by the diluted weighted average common shares outstanding.
+Added: 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 20 to these consolidated financial statements.
2 unchanged sentences
Year Ended December 31,
−Removed: 2022 2021 (1)
−Removed: Numerator for EPS - continuing operations
+Added: Numerator for EPS
Net income (loss) $ 46.7 $ 290.5 $ ( 95.3 )
5 unchanged sentences
Basic income (loss) per share $ 0.30 $ 3.63 $ ( 1.73 )
−Removed: Diluted income (loss) income per share $ 3.59 $ ( 1.73 ) $ ( 8.31 )
+Added: Diluted income (loss) per share $ 0.30 $ 3.59 $ ( 1.73 )
The following equity instruments were excluded from the diluted weighted average common shares outstanding because their effect would be anti-dilutive:
2 unchanged sentences
Total antidilutive stock-based compensation 1,718,880 2,299,660 3,587,493
−Removed: (1) Adjusted to reflect the retrospective change in accounting policy from LIFO to FIFO for certain inventories.
−Removed: See Note 8 for further discussion.
Delek Logistics
−Removed: 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.
2 unchanged sentences
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.
+Added: In September 2023, 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 13.6 million common limited partner units representing our limited partner interests in Delek Logistics.
+Added: No units were sold for the year ended December 31, 2023.
On November 14, 2022, Delek Logistics entered into an Equity Distribution Agreement with RBC Capital Markets, LLC (the “Manager”) under which we may issue and sell, from time to time, to or through the Manager, as sales agent and/or principal, as applicable, common units representing limited partner interests, having an aggregate offering price of up to $ 100.0 million.
3 unchanged sentences
Underwriting discounts were immaterial.
−Removed: 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.
+Added: No common units were sold for the year ended December 31, 2023.
+Added: On June 1, 2022, DKL Delaware Gathering, LLC, a subsidiary of Delek Logistics, completed the Delaware Gathering Acquisition related to crude oil and natural gas gathering, processing and transportation businesses, as well as water disposal and recycling operations, in the Delaware Basin in New Mexico.
The purchase price was $ 628.3 million.
3 unchanged sentences
For the years ended December 31, 2022 and 2021, we sold 385,522 and 49,068 units, respectively, for gross proceeds of $ 16.4 million ($ 13.6 million, net of taxes) and $ 2.1 million ($ 1.7 million, net of taxes).
−Removed: On August 13, 2020, Delek Logistics completed a transaction to eliminate the IDRs held by Delek Logistics GP, LLC ("Logistics GP"), the general partner, and convert the 2.0 % economic general partner interest into a non-economic general partner interest in exchange for total consideration consisting of $ 45.0 million cash and 14.0 million newly issued common limited partner units.
−Removed: Contemporaneously, we repurchased the 5.2 % ownership interest in the general partner from affiliates, who were also members of the general partner's management and board of directors, for $ 23.1 million, increasing our ownership interest in the general partner to 100.0 %.
−Removed: As a result of these transactions, the non-controlling interest in our consolidated balance sheets decreased by $ 50.8 million, with a $ 37.2 million increase to additional paid-in capital which is net of $ 11.5 million related to deferred income taxes and $ 2.1 million of transaction costs.
−Removed: 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.
−Removed: No units were sold for the year ended December 31, 2022.
We have agreements with Delek Logistics that, among other things, establish fees for certain administrative and operational services provided by us and our subsidiaries to Delek Logistics, provide certain indemnification obligations and establish terms for fee-based commercial logistics and marketing services provided by Delek Logistics and its subsidiaries to us.
8 unchanged sentences
Accounts receivable 41.1 53.3
+Added: Accounts receivable from related parties 28.4 —
Inventory 2.3 1.5
19 unchanged sentences
Total liabilities and deficit $ 1,642.2 $ 1,679.3
−Removed: Effective May 1, 2020, Delek through its wholly owned subsidiaries Lion Oil Company (“Lion Oil”) and Delek Refining, Ltd.
−Removed: (“Delek Refining”) contributed certain leased and owned tractors and trailers and related assets used in the provision of trucking and transportation services for crude oil, petroleum and certain other products throughout Arkansas, Oklahoma and Texas to Delek Trucking, LLC (“Delek Trucking”), a direct wholly owned subsidiary of Lion Oil.
−Removed: Following this contribution, Lion Oil sold all of the issued and outstanding membership interests in Delek Trucking (the “Trucking Acquisition”) to DKL Transportation, LLC (“DKL Transportation”), a wholly owned subsidiary of Delek Logistics.
−Removed: Promptly following the consummation of the Trucking Acquisition, Delek Trucking merged with and into DKL Transportation, with DKL Transportation continuing as the surviving entity.
−Removed: Total consideration for the Trucking Acquisition was approximately $ 48.0 million in cash, subject to certain post-closing adjustments, financed primarily with borrowings under Delek Logistics’ revolving credit facility.
−Removed: In connection with the Trucking Acquisition, Delek Refining, Lion Oil and DKL Transportation entered into a Transportation Services Agreement pursuant to which DKL Transportation will gather, coordinate the pickup of, transport and deliver petroleum products for Delek Refining and Lion Oil, as well as provide ancillary services as requested.
−Removed: Prior periods have not been recast in our Note 4 - Segment Data, as these assets did not constitute a business in accordance with ASU 2017-01, Clarifying the Definition of a Business ("ASU 2017-01" ) , and the transaction was accounted for as an acquisition of assets between entities under common control.
−Removed: Effective March 31, 2020, Delek Logistics, through its wholly-owned subsidiary DKL Permian Gathering, LLC, acquired the Midland Gathering System (previously referred to as the Permian Gathering System), located in Howard, Borden and Martin Counties, Texas, from Delek, which included the execution of related commercial agreements.
−Removed: In connection with the closing of the transaction, Delek, Delek Logistics and various of their respective subsidiaries entered into a Throughput and Deficiency Agreement (the “T&D Agreement”).
−Removed: Under the T&D Agreement, Delek Logistics will operate and maintain the Midland Gathering System connecting our interests in and to certain crude oil production with the Delek Logistics' Big Spring, Texas terminal and provide gathering, transportation and other related services.
−Removed: The total consideration was subject to certain post-closing adjustments and was comprised of $ 100.0 million in cash and 5.0 million common units representing limited partner interest in Delek Logistics.
−Removed: The cash component of this dropdown was financed with borrowings on the Delek Logistics Credit Facility (as defined in Note 10).
−Removed: Prior periods have not been recast in our Note 4 - Segment Data, as these assets did not constitute a business in accordance with ASU 2017-01 and the transaction was accounted for as an acquisition of assets between entities under common control.
−Removed: Additionally, in March 2020, we purchased 451,822 of Delek Logistics limited partner units from an investor pursuant to a Common Unit Purchase Agreement between Delek Marketing & Supply, LLC and such investor.
−Removed: The purchase price of the units amounted to approximately $ 5.0 million.
Equity Method Investments
Wink to Webster Pipeline
−Removed: 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").
−Removed: 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.
−Removed: In connection with the arrangement, both Delek Energy and MPLX contributed their respective 15 % ownership interests to the WWP Project Financing JV as collateral for and in service of the related project financing.
−Removed: 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.
−Removed: 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.
−Removed: The maturity date of the revolver and letter credit commitments is June 2, 2027.
−Removed: 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.
−Removed: 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.
−Removed: On October 13, 2022, we received a $ 7.9 million excess distribution in accordance with financing arrangements and the W2W Holdings LLC Agreement.
−Removed: The Company evaluated Delek's investment in W2W Holdings LLC ("HoldCo") and determined that HoldCo is a VIE.
−Removed: The Company determined it is not the primary beneficiary since it does not have the power to direct activities that most significantly impact HoldCo.
−Removed: 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.
−Removed: The Company accounts for its investment in HoldCo using the equity method of accounting due to its significant influence with its 50 % membership interest.
+Added: 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.
+Added: The Company has determined that HoldCo is a VIE.
+Added: 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.
+Added: Distributions received from WWP are first applied to service the debt of HoldCo's wholly owned finance LLC, with excess distributions being
+Added: made to the HoldCo members as provided for in the W2W Holdings LLC Agreement and as allowed for under its debt agreements.
+Added: The obligations of the HoldCo members under the W2W Holdings LLC Agreement are guaranteed by the parents of the member entities.
+Added: As of December 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.
−Removed: As of December 31, 2022, except for the guarantee of member obligations under the joint venture, the Company does not have other existing guarantees with or to HoldCo, or any third-party for work contracted with it.
On September 30, 2021 WWP made the decision to buy Delek out of the Midland Connector Financing Commitment Agreement which provided an interest-free commitment to fund us up to $ 65.0 million upon completion of a connector to connect the WWP long-haul pipeline to our Midland Gathering System, with repayment over 14 years.
1 unchanged sentence
As a result of the transaction, for the year ended December 31, 2021 we recognized $ 20.9 million of other non-operating income, representing the excess over recognized write-offs.
−Removed: As of December 31, 2022 and 2021, Delek's investment balance in WWP Project Financing Joint Venture totaled $ 49.0 million and $ 49.3 million, respectively, and is included as part of total assets in corporate, other and eliminations in our segment disclosure.
−Removed: In addition to the investment, we recognized income of $ 7.6 million and a loss of $ 17.7 million for the years ended December 31, 2022 and 2021, respectively.
+Added: As of December 31, 2023 and December 31, 2022, Delek's HoldCo investment balance totaled $ 51.4 million and $ 49.0 million, respectively.
Delek Logistics Investments
Delek Logistics has a 33 % membership interest in Red River Pipeline Company LLC (“Red River”), which owns a 16-inch crude oil pipeline running from Cushing, Oklahoma to Longview, Texas.
−Removed: As of December 31, 2022 and 2021, Delek's investment balance in Red River totaled $ 149.6 million and $ 144.0 million, respectively.
−Removed: We made no capital contributions during the year ended December 31, 2022 and made $ 1.4 million in capital contributions during the year ended December 31, 2021 based on capital calls.
−Removed: We recognized income on the investment totaling $ 20.5 million and $ 14.5 million for the year ended December 31, 2022 and 2021, respectively.
−Removed: This investment is accounted for using the equity method and is included as part of total assets in our logistics segment.
−Removed: 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.
−Removed: We own a 50 % membership interest in the entity formed with an affiliate of Plains All American Pipeline, L.P.
−Removed: 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").
−Removed: As of December 31, 2022 and 2021, Delek Logistics' investment balance in these joint ventures was $ 107.4 million and $ 106.0 million, respectively, and are accounted for using the equity method.
−Removed: We recognized income on these investments totaling $ 11.1 million and $ 10.1 million for the years ended December 31, 2022 and 2021, respectively.
+Added: As of December 31, 2023 and December 31, 2022, Delek's investment balance in Red River totaled $ 141.1 million and $ 149.6 million, respectively.
+Added: In addition to Red River, Delek Logistics has two other pipeline joint ventures in which we own a 50 % membership interest in the entity formed with an affiliate of Plains All American Pipeline, L.P.
+Added: to operate one of these pipeline systems and a 33 % membership interest in Andeavor Logistics Rio Pipeline LLC which operates the other pipeline system.
+Added: As of December 31, 2023 and December 31, 2022, Delek Logistics' investment balance in these joint ventures was $ 100.3 million and $ 107.4 million.
Other Investments
1 unchanged sentence
As of December 31, 2023 and December 31, 2022, Delek's investment balance in these joint ventures was $ 67.9 million and $ 53.7 million, respectively.
−Removed: We recognized income on these investments totaling $ 18.5 million and $ 11.4 million for the years ended December 31, 2022 and 2021, respectively.
−Removed: Both investments are accounted for using the equity method.
−Removed: 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.
−Removed: Combined summarized financial information for our equity method investees on a 100% basis is shown below (in millions):
−Removed: As of December 31, 2022 As of December 31, 2021
−Removed: Current assets $ 116.5 $ 94.1
−Removed: Non-current assets $ 1,333.2 $ 1,335.9
−Removed: Current liabilities $ 16.0 $ 18.7
−Removed: Non-current liabilities $ 553.9 $ 534.9
−Removed: Years Ended December 31,
−Removed: 2022 2021 2020
−Removed: Revenues $ 441.8 $ 258.5 $ 267.8
−Removed: Gross profit $ 165.6 $ 76.7 $ 98.4
−Removed: Operating income $ 147.4 $ 55.1 $ 80.1
−Removed: Net income $ 130.3 $ 55.6 $ 81.2
−Removed: 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.
+Added: 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 the FIFO basis or net realizable value.
Retail merchandise inventory consists of cigarettes, beer, convenience merchandise and food service merchandise and is stated at estimated cost as determined by the retail inventory method.
−Removed: 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.
−Removed: Total inventories accounted for using LIFO, prior to the accounting method change, comprised 27.1 % of the Company’s total inventories as of December 31, 2020.
−Removed: 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.
−Removed: 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.
−Removed: The effects of this change have been retrospectively applied to all periods presented.
−Removed: This change resulted in a decrease to retained earnings of $ 5.3 million as of January 1, 2020 in accordance with ASC 250, Accounting Changes and Error Corrections.
−Removed: The following table presents the components of inventory for each period presented reflecting the accounting method change discussed above:
+Added: The following table presents the components of inventory for each period presented:
Titled Inventory Inventory Intermediation Agreement (1)
4 unchanged sentences
Total $ 560.2 $ 421.7 $ 981.9
−Removed: December 31, 2021 - As Adjusted (1)
+Added: December 31, 2022
Feedstocks, raw materials and supplies $ 479.7 $ 163.8 $ 643.5
2 unchanged sentences
Total $ 999.9 $ 518.6 $ 1,518.5
−Removed: (1) Adjusted to reflect the retrospective change in accounting policy from LIFO to FIFO for certain inventories, as described above.
(1) Refer to Note 9 - Inventory Intermediation Obligations for further information.
−Removed: In addition, certain financial statement line items in our Consolidated Statement of Income for the years ended December 31, 2021 and 2020, our Consolidated Statement of Cash Flows for the years ended December 31, 2021 and 2020, and our Consolidated Balance Sheet as of December 31, 2021, were retrospectively adjusted as follows:
−Removed: Year Ended December 31, 2021
−Removed: (In millions) As Reported (using LIFO) Adjustment As Adjusted (using FIFO)
−Removed: Consolidated Statements of Income
−Removed: Cost of materials and other $ 9,739.6 $ ( 95.7 ) $ 9,643.9
−Removed: Total cost of sales $ 10,481.2 $ ( 95.7 ) $ 10,385.5
−Removed: Loss before income tax benefit $ ( 233.0 ) $ 95.7 $ ( 137.3 )
−Removed: Income tax benefit $ ( 62.5 ) $ 20.5 $ ( 42.0 )
−Removed: Net loss $ ( 170.5 ) $ 75.2 $ ( 95.3 )
−Removed: Net loss attributable to Delek $ ( 203.5 ) $ 75.2 $ ( 128.3 )
−Removed: Net loss per share attributable to Delek
−Removed: Basic $ ( 2.75 ) $ 1.02 $ ( 1.73 )
−Removed: Diluted $ ( 2.75 ) $ 1.02 $ ( 1.73 )
−Removed: December 31, 2021
−Removed: (In millions) As Reported (using LIFO) Adjustment As Adjusted (using FIFO)
−Removed: Consolidated Balance Sheet
−Removed: Inventories, net of inventory valuation reserves $ 1,176.1 $ 84.6 $ 1,260.7
−Removed: Total Assets $ 6,728.0 $ 84.6 $ 6,812.6
−Removed: Deferred tax liabilities
−Removed: $ 196.4 $ 18.1 $ 214.5
−Removed: Retained Earnings $ 318.2 $ 66.5 $ 384.7
−Removed: Total liabilities and stockholders' equity $ 6,728.0 $ 84.6 $ 6,812.6
−Removed: Year Ended December 31, 2021
−Removed: (In millions) As Reported (using LIFO) Adjustment As Adjusted (using FIFO)
−Removed: Consolidated Statements of Cash Flows
−Removed: $ ( 170.5 ) $ 75.2 $ ( 95.3 )
−Removed: Non-cash lower of cost or market/net realizable value adjustment
−Removed: $ ( 22.3 ) $ 30.6 $ 8.3
−Removed: Deferred income taxes $ ( 59.4 ) $ 20.5 $ ( 38.9 )
−Removed: Inventories and other current assets
−Removed: $ ( 342.3 ) $ ( 126.3 ) $ ( 468.6 )
−Removed: Year Ended December 31, 2020
−Removed: (In millions) As Reported (using LIFO) Adjustment As Adjusted (using FIFO)
−Removed: Consolidated Statements of Income
−Removed: Cost of materials and other $ 6,841.2 $ 4.3 $ 6,845.5
−Removed: Total cost of sales $ 7,558.5 $ 4.3 $ 7,562.8
−Removed: Loss before income tax benefit $ ( 763.1 ) $ ( 4.3 ) $ ( 767.4 )
−Removed: Income tax benefit $ ( 192.7 ) $ ( 0.9 ) $ ( 193.6 )
−Removed: Net loss $ ( 570.4 ) $ ( 3.4 ) $ ( 573.8 )
−Removed: Net loss attributable to Delek $ ( 608.0 ) $ ( 3.4 ) $ ( 611.4 )
−Removed: Net loss per share attributable to Delek
−Removed: Basic $ ( 8.26 ) $ ( 0.05 ) $ ( 8.31 )
−Removed: Diluted $ ( 8.26 ) $ ( 0.05 ) $ ( 8.31 )
−Removed: Year Ended December 31, 2020
−Removed: (In millions) As Reported (using LIFO) Adjustment As Adjusted (using FIFO)
−Removed: Consolidated Statements of Cash Flows
−Removed: $ ( 570.4 ) $ ( 3.4 ) $ ( 573.8 )
−Removed: Non-cash lower of cost or market/net realizable value adjustment
−Removed: $ 29.2 $ ( 29.0 ) $ 0.2
−Removed: Deferred income taxes $ ( 32.1 ) $ ( 0.9 ) $ ( 33.0 )
−Removed: Inventories and other current assets
−Removed: $ 244.4 $ 33.3 $ 277.7
−Removed: The following tables reflect the effect of the change in the accounting principle on the current period Consolidated Financial Statements:
−Removed: Year Ended December 31, 2022
−Removed: (In millions) As Computed (using LIFO) As Reported (using FIFO) Effect of Change
−Removed: Consolidated Statements of Income
−Removed: Cost of materials and other $ 18,366.4 $ 18,355.6 $ 10.8
−Removed: Total cost of sales $ 19,332.0 $ 19,321.2 $ 10.8
−Removed: Income before income tax expense $ 343.6 $ 354.4 $ ( 10.8 )
−Removed: Income tax expense $ 61.6 $ 63.9 $ ( 2.3 )
−Removed: Net income attributable to Delek $ 248.6 $ 257.1 $ ( 8.5 )
−Removed: Net income per share attributable to Delek
−Removed: Basic $ 3.51 $ 3.63 $ ( 0.12 )
−Removed: Diluted $ 3.48 $ 3.59 $ ( 0.11 )
−Removed: December 31, 2022
−Removed: (In millions) As Computed (using LIFO) As Reported (using FIFO) Effect of Change
−Removed: Consolidated Balance Sheet
−Removed: Inventories, net inventory valuation reserves $ 1,423.0 $ 1,518.5 $ ( 95.5 )
−Removed: Total Assets $ 8,097.3 $ 8,192.8 $ ( 95.5 )
−Removed: Accrued expenses and other current
−Removed: $ 1,166.8 $ 1,166.8 $ —
−Removed: Deferred tax liabilities
−Removed: $ 246.0 $ 266.5 $ ( 20.5 )
−Removed: Retained Earnings $ 432.9 $ 507.9 $ ( 75.0 )
−Removed: Total liabilities and stockholders' equity $ 8,097.3 $ 8,192.8 $ ( 95.5 )
−Removed: Year Ended December 31, 2022
−Removed: (In millions) As Computed (using LIFO) As Reported (using FIFO) Effect of Change
−Removed: Consolidated Statements of Cash Flows
−Removed: $ 282.0 $ 290.5 $ ( 8.5 )
−Removed: Non-cash lower of cost or market/net realizable value adjustment
−Removed: $ ( 0.9 ) $ 1.9 $ ( 2.8 )
−Removed: Deferred income taxes $ 59.2 $ 61.6 $ ( 2.4 )
−Removed: Inventories and other current assets
−Removed: $ ( 240.7 ) $ ( 254.4 ) $ 13.7
−Removed: Accounts payable and other current liabilities $ 298.7 $ 298.7 $ —
At December 31, 2023, we recorded a pre-tax inventory valuation reserve of $ 11.6 million due to a market price decline below our cost of certain inventory products.
3 unchanged sentences
As of December 31, 2023 As of December 31, 2022
−Removed: Obligations under Inventory Intermediation Agreements
+Added: Obligations under Inventory Intermediation Agreement
Obligations related to Base Layer Volumes $ 407.2 $ 491.8
Current portion 0.4 49.9
−Removed: Total Obligations under Inventory Intermediation Agreements $ 541.7 $ —
−Removed: Other payable for monthly activity true-up $ 5.6 $ —
+Added: Total obligations under Inventory Intermediation Agreement $ 407.6 $ 541.7
+Added: Other (receivable) payable for monthly activity true-up $ ( 9.3 ) $ 5.6
Obligations under Supply and Offtake Agreements
−Removed: Baseline Step-Out Liability $ — $ 330.4
−Removed: Revolving over/short product financing liability — 157.1
−Removed: Total Obligation Under Supply and Offtake Agreements — 487.5
−Removed: Current portion — 487.5
−Removed: Obligations Under Supply and Offtake Agreements - Non-current portion $ — $ —
Other (receivable) payable for monthly activity true-up $ — $ ( 34.9 )
−Removed: Inventory Intermediation Agreements
−Removed: On December 22, 2022, DKTS, an indirect subsidiary of Delek entered into an Inventory Intermediation Agreement with Citi.
+Added: 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 consolidated statements of income.
+Added: 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.
+Added: These market structure settlements are recorded in cost of materials and other in the consolidated statements of income.
+Added: The following table summarizes these fees:
+Added: Year Ended December 31,
+Added: 2023 2022 2021
+Added: Net fees and expenses:
+Added: Inventory intermediation fees $ 75.5 $ 62.0 $ 13.0
+Added: Interest expense, net $ 61.4 $ 23.4 $ 18.1
+Added: Inventory Intermediation Agreement
+Added: On December 22, 2022, Delek entered into the Inventory Intermediation Agreement with Citi in connection with 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.
−Removed: As of December 31, 2022, we had letters of credit outstanding of $ 115.0 million supporting the Inventory Intermediation Agreement.
−Removed: The Inventory Intermediation Agreement expires December 30, 2024, subject to an extension that can be executed by Citi for an additional twelve months .
−Removed: The Inventory Intermediation Agreement replaces the Supply and Offtake Agreements with J.
−Removed: Aron that expired on December 30, 2022.
−Removed: The Inventory Intermediation Agreement provide for the lease to Citi of crude oil and refined product storage facilities.
−Removed: 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.
−Removed: As of December 31, 2022, the barrels subject to the Inventory Intermediation Agreement totaled 6.3 million, including Base Layer Volumes associated with our non-current inventory intermediation obligation of 5.5 million barrels.
+Added: On December 21, 2023, DKTS amended the Inventory Intermediation Agreement to among other things, (i) extend the term of the Inventory Intermediation Agreement from December 30, 2024 to January 31, 2026, (ii) reduce Citi’s unilateral term extension option from a twelve month extension period to a six month extension period and (iii) increase the amount of the payment deferral mechanism from $ 70 million to $ 250 million.
+Added: As of December 31, 2023 and 2022, we had letters of credit outstanding of $ 230.0 million and $ 115.0 million, respectively, supporting the Inventory Intermediation Agreement.
+Added: Prior to December 30, 2022, Delek had Supply and Offtake Agreements with J.
+Added: The Inventory Intermediation Agreement replaced the Supply and Offtake Agreements that expired on December 30, 2022.
+Added: The Inventory Intermediation Agreement provides for the lease to Citi of crude oil and refined product storage facilities.
+Added: 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 termination.
+Added: As of December 31, 2023 and December 31, 2022, the volumes subject to the Inventory Intermediation Agreement totaled 5.4 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 and ASC 825.
1 unchanged sentence
At each reporting period, we record a liability equal to the repurchase obligation to Citi at current market prices.
−Removed: The associated repurchase obligations associated with the Base Layer Volumes are reflected as non-current liabilities on our consolidated balance sheet to the extent that they are not contractually due within twelve months.
+Added: The repurchase obligations associated with the Base Layer Volumes are reflected as non-current liabilities on our consolidated balance sheet to the extent that they are not contractually due within twelve months.
The remaining obligation resulting from our monthly activity, including long and short inventory positions valued at market-indexed pricing, are included in current liabilities (or receivables) on our consolidated balance sheet.
Gains (losses) related to changes in fair value due to commodity-index price are recorded as a component of cost of materials and other in the consolidated statements of income.
−Removed: With respect to the repurchase obligation, we recognized gains (losses) in cost of materials and other attributable to changes in fair value due to commodity-index price.
+Added: With respect to the repurchase obligation, we recognized gains attributable to changes in fair value due to commodity-index price totaling $ 71.8 million during the year ended December 31, 2023.
F or the year ended December 31, 2022 there were no gains (losses) recognized due to the change in fair value.
−Removed: Included in the Inventory Intermediation Agreement are cost of financing associated with the value of the inventory and other periodic charges, which we include in interest expense, net in the consolidated statements of income.
−Removed: For the year ended December 31, 2022 we recognized $ 0.2 million in interest expense associated with the Inventory Intermediation Agreement.
−Removed: In addition to the cost of financing charges, we may pay or receive certain market structure settlements based on changes in market prices over time.
−Removed: These settlements are recorded in cost of materials and other in the consolidated statements of income.
Supply & Offtake Agreements
−Removed: Delek entered into Supply and Offtake Agreements with J.
+Added: 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.
3 unchanged sentences
Aron agreed to buy, at market prices, certain refined products produced at these refineries.
−Removed: and (ii) we agreed to sell, and J.
−Removed: Aron agreed to buy, at market prices, certain refined products produced at these refineries.
−Removed: The Supply and Offtake Agreements also provided for the lease to J.
−Removed: Aron of crude oil and refined product storage facilities, and the identification of prospective purchasers of refined products on J.
−Removed: Aron’s behalf.
−Removed: 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.
−Removed: Aron (the "Step-In"), and the Supply and Offtake Agreements required the repurchase of remaining inventory (including certain "Baseline Volumes") at the termination of those Agreements (the "Step-Out").
−Removed: The Supply and Offtake Agreements were accounted for as inventory financing arrangements under the fair value election provided by ASC 815 and ASC 825.
−Removed: Barrels subject to the Supply and Offtake Agreements were as follows (in millions):
−Removed: El Dorado Big Spring Krotz Springs
−Removed: Baseline Volumes pursuant to the respective Supply and Offtake Agreements 2.0 0.8 1.3
−Removed: Barrels of inventory consigned under the respective Supply and Offtake Agreements as of December 31, 2022
−Removed: Barrels of inventory consigned under the respective Supply and Offtake Agreements as of December 31, 2021 (1)
−Removed: (1) Includes Baseline Volumes plus/minus over/short quantities.
−Removed: The Supply and Offtake Agreements had certain termination provisions, which included requirements to negotiate with third parties for the assignment to us of certain contracts, commitments and arrangements, including procurement contracts, commitments for the sale of product, and pipeline, terminalling, storage and shipping arrangements.
−Removed: In April 2020, we amended and restated our three Supply and Offtake Agreements to renew and extend the terms to December 30, 2022, with J.
−Removed: Aron having the sole discretion to further extend to May 30, 2025 by giving at least 6 months prior notice to the current maturity date.
−Removed: As part of this amendment, there were changes to the underlying market index, annual fee, the crude purchase fee, crude roll fees and timing of cash settlements related to periodic price adjustments.
The repurchase of Baseline Volumes at the end of the Supply and Offtake Agreement term (representing the "Baseline Step-Out Liability" or, collectively, the "Baseline Step-Out Liabilities") continued to be recorded at fair value under the fair value election included under ASC 815 and ASC 825.
−Removed: The Baseline Step-Out Liabilities had a floating component whose fair value reflected changes to commodity price risk with changes in fair value recorded in cost of materials and other and a fixed component whose fair value reflected changes to interest rate risk with changes in fair value recorded in interest expense.
−Removed: There was no amendment date change in fair value resulting from the modification.
−Removed: The Baseline Step-Out Liabilities were reflected as non-current liabilities on our consolidated balance sheet to the extent that they were not contractually due within twelve months.
−Removed: Monthly activity resulting in over and short volumes were valued using market-indexed pricing, and were included in current liabilities (or receivables) on our consolidated balance sheet.
−Removed: Gains (losses) related to changes in fair value due to commodity-index price were recorded as a component of cost of materials and other, and changes in fair value due to interest rate risk were recorded as a component of interest expense in the consolidated statements of income.
−Removed: With respect to the Baseline Step-Out liabilities, we recognized gains (losses) in cost of materials and other attributable to changes in fair value due to commodity-index price totaling $ 63.0 million, an d $ 105.5 million for the y ears ended December 31, 2022 and 2021.
−Removed: Before the January 2020 amendments, the fair value of the fixed price Baseline Step-Out liabilities were based on changes to interest rates reflecting changes to the interest rate risk, and such effect is included in total interest expense for that period, as disclosed below.
−Removed: Net balances payable (receivable) under the Supply and Offtake Agreements were as follows as of the balance sheet dates (in millions):
−Removed: El Dorado Big Spring Krotz Springs Total
−Removed: Balances as of December 31, 2022:
−Removed: Baseline Step-Out Liability $ — $ — $ — $ —
−Removed: Revolving over/short product financing liability — — — —
−Removed: Total Obligations Under Supply and Offtake Agreements — — — —
−Removed: Current portion — — — —
−Removed: Obligations Under Supply and Offtake Agreements - Noncurrent portion $ — $ — $ — $ —
−Removed: Other (receivable) payable for monthly activity true-up $ ( 27.3 ) $ ( 16.6 ) $ 9.0 $ ( 34.9 )
−Removed: El Dorado Big Spring Krotz Springs Total
−Removed: Balances as of December 31, 2021:
−Removed: Baseline Step-Out Liability $ 159.6 $ 68.4 $ 102.4 $ 330.4
−Removed: Revolving over/short product financing liability (receivable) 120.9 41.1 ( 4.9 ) 157.1
−Removed: Total Obligations Under Supply and Offtake Agreements 280.5 109.5 97.5 487.5
−Removed: Current portion 280.5 109.5 97.5 487.5
−Removed: Obligations Under Supply and Offtake Agreements - Noncurrent portion $ — $ — $ — $ —
−Removed: Other (receivable) payable for monthly activity true-up $ ( 2.7 ) $ 1.0 $ 7.0 $ 5.3
−Removed: The Supply and Offtake Agreements require payments of fees which are factored into the interest rate yield under the fair value accounting model.
−Removed: Recurring cash fees paid during the periods presented were as follows (in millions):
−Removed: El Dorado Big Spring Krotz Springs Total
−Removed: Recurring cash fees paid during the year ended December 31, 2022
−Removed: $ 13.6 $ 5.1 $ 4.7 $ 23.4
−Removed: Recurring cash fees paid during the year ended December 31, 2021
−Removed: $ 10.5 $ 3.3 $ 4.3 $ 18.1
−Removed: Recurring cash fees paid during the year ended December 31, 2020
−Removed: $ 9.7 $ 3.4 $ 4.1 $ 17.2
−Removed: Interest expense recognized under the Supply and Offtake Agreements includes the yield attributable to recurring cash fees, one-time cash fees (e.g., in connection with amendments), as well as other changes in fair value which may increase or decrease interest expense.
−Removed: Total interest expense incurred during the periods presented was as follows (in millions):
−Removed: El Dorado Big Spring Krotz Springs Total
−Removed: Interest expense for the year ended December 31, 2022
−Removed: $ 13.6 $ 5.1 $ 4.7 $ 23.4
−Removed: Interest expense for the year ended December 31, 2021
−Removed: $ 10.5 $ 3.3 $ 4.3 $ 18.1
−Removed: Interest expense for the year ended December 31, 2020
−Removed: $ 10.1 $ 6.5 $ 4.5 $ 21.1
−Removed: Reflected in interest expense are gains totaling $ 3.9 million for the year ended December 31, 2020 related to the changes in fair value in the Baseline Step-Out Liabilities component of Obligations Under Supply and Offtake Agreements.
−Removed: There were no such gains or losses for the years ended December 31, 2022 and 2021.
−Removed: We maintained letters of credit under the Supply and Offtake Agreements for the El Dorado refinery at December 31, 2022 and December 31, 2021 of $ 70.0 million and $ 195.0 million, respectively.
−Removed: Long-Term Obligations and Notes Payable
−Removed: Outstanding borrowings, net of unamortized debt discounts and certain deferred financing costs, under Delek’s existing debt instruments are as follows (in millions):
+Added: 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.
+Added: For the years ended December 31, 2022 and 2021, we recognized gains in cost of materials and other attributable to changes in fair value due to commodity-index price totaling $ 63.0 million and $ 105.5 million, respectively.
+Added: As of December 31, 2022, we had letters of credit outstanding of $ 70.0 million supporting the Supply and Offtake Agreements.
+Added: Long-Term Obligations
+Added: Outstanding borrowings under debt instruments are as follows (in millions):
December 31, 2023 December 31, 2022
−Removed: Revolving Credit Facility $ 450.0 $ —
−Removed: Term Loan Credit Facility (1)
−Removed: 892.1 1,240.0
−Removed: Hapoalim Term Loan (2)
+Added: Delek Revolving Credit Facility $ — $ 450.0
+Added: Delek Term Loan Credit Facility 940.5 950.0
Delek Logistics Revolving Facility 780.5 720.5
3 unchanged sentences
United Community Bank Revolver 5.0 50.0
−Removed: 3,053.7 2,218.0
−Removed: Current portion of long-term debt and notes payable 74.5 92.2
−Removed: $ 2,979.2 $ 2,125.8
−Removed: (1) Net of deferred financing costs of $ 1.6 million and $ 2.2 million, respectively, and debt discount of $ 56.3 million and $ 17.8 million, respectively, at December 31, 2022 and December 31, 2021.
−Removed: (2) Net of deferred financing costs of $ 0.1 million and debt discount of $ 0.1 million at December 31, 2021.
−Removed: (3) Net of deb discount of $ 1.4 million at December 31, 2022.
−Removed: (4) Net of deferred financing costs of $ 1.8 million and $ 2.5 million, respectively, and debt discount of $ 0.6 million and $ 0.8 million, respectively, at December 31, 2022 and December 31, 2021.
−Removed: (5) Net of deferred financing costs of $ 4.8 million and $ 5.7 million at December 31, 2022 and December 31, 2021, respectively.
−Removed: Delek's Revolving Credit Facility and Term Loan Credit Facility
−Removed: On October 26, 2022, Delek entered into a third amended and restated credit agreement providing for a senior secured asset-based revolving credit facility with an initial commitment of $ 1.1 billion (the “Revolving Credit Facility”).
−Removed: The Revolving Credit Facility permits borrowings in Canadian dollars of up to $ 50.0 million and issuance of letters of credit up to $ 500.0 million, including letters of credit denominated in Canadian dollars of up to $ 10.0 million.
−Removed: The Revolving Credit Facility will mature and the commitments thereunder will terminate October 26, 2027.
−Removed: In connection with the refinancing of the Revolving Credit Facility, Delek incurred $ 7.1 million debt issuance costs which are being deferred and amortized over the term of the Revolving Credit Facility and are recorded as an asset within other current and other non-current assets on the company's consolidated balance sheets.
−Removed: On November 18, 2022, (the "Term Closing Date"), Delek entered into an amended and restated term loan credit agreement providing for a senior secured term loan facility in an initial principal amount of $ 950.0 million (the "Term Loan Credit Facility") with the ability to request up to $ 400.0 million in incremental loans subject to certain restrictions.
−Removed: The Term Loan Credit Facility initial principal of $ 950.0 million was drawn in full on the Term Closing Date at an original issue discount of 4.00 %.
−Removed: Proceeds of the Term Loan Credit Facility, along with borrowings under Delek’s Revolving Credit Facility and cash on hand were used to refinance Delek’s Term Loan Credit Agreement dated March 30, 2018 as amended and supplemented.
−Removed: As a result of the refinancing, outstanding term loans were reduced by an aggregate of approximately $ 300.0 million.
−Removed: The Term Loan Credit Facility requires scheduled quarterly principal payments of $ 2.4 million commencing with March 31, 2023, with the balance of principal due on November 19, 2029.
−Removed: The Term Loan Credit Facility requires prepayments with the net cash proceeds from certain debt incurrences, asset dispositions and insurance or condemnation events, subject to specified exceptions, thresholds and reinvestment rights.
−Removed: The Term Loan Credit Facility also requires annual prepayments with a variable percentage of Delek’s excess cash flow, ranging from 50.00 % to 0.00 % depending on Delek’s consolidated fiscal year end secured net leverage ratio.
−Removed: In connection with the modification of the Term Loan Credit Facility, Delek recorded a $ 44.4 million debt discount which is being deferred and amortized over the life of the Term Loan Credit Facility and is netted against the outstanding borrowings within the long-term debt, less the current portion line item, on Delek's consolidated balance sheets.
−Removed: Interest and Unused Line Fees
−Removed: The interest rates applicable to borrowings under the Term Loan Credit Facility and the Revolving Credit Facility are based on a fluctuating rate of interest measured by reference to either, at Delek’s option, (i) a base rate, plus an applicable margin, or (ii) an Adjusted Term Secured Overnight Financing Rate (“SOFR”), plus an applicable margin (or, in the case of Revolving Credit Facility borrowings denominated in Canadian dollars, the Canadian dollar bankers' acceptances rate ("CDOR")).
−Removed: The applicable margin for the Term Loan Credit Facility borrowings is 2.50 % per annum with respect to base rate borrowings and 3.50 % per annum with respect to SOFR borrowings.
−Removed: The initial applicable margin for Revolving Credit Facility borrowings is 0.25 % per annum with respect to base rate borrowings and 1.25 % per annum with respect SOFR and CDOR borrowings.
−Removed: The applicable margin for such borrowings after December 31, 2022 is based on Delek’s quarterly average excess availability as determined by reference to a borrowing base, ranging from 0.25 % to 0.75 % per annum with respect to base rate borrowings and from 1.25 % to 1.75 % per annum with respect to SOFR and CDOR borrowings.
−Removed: In addition, the Revolving Credit Facility requires Delek to pay an unused line fee on the average amount of unused commitments thereunder in each quarter, which fee will be at a rate of 0.25 % or 0.30 % per annum, depending on average commitment usage for such quarter.
−Removed: As of December 31, 2022, the unused line fee was set at 0.30 % per annum.
−Removed: Guarantee and Security
−Removed: The obligations of the borrowers under the Term Loan Credit Facility and the Revolving Credit Facility are guaranteed by Delek and each of its direct and indirect, existing and future, wholly-owned domestic subsidiaries, subject to customary exceptions and limitations, and excluding Delek Logistics Partners, LP, Delek Logistics GP, LLC, and each subsidiary of the foregoing (collectively, the "MLP Subsidiaries").
−Removed: Borrowings under the Term Loan Credit Facility and the Revolving Credit Facility are also guaranteed by DK Canada Energy ULC, a British Columbia unlimited liability company and a wholly-owned restricted subsidiary of Delek.
−Removed: The Revolving Credit Facility is secured by a first priority lien over substantially all of Delek’s and each guarantor's receivables, inventory, RINs, instruments, intercompany loan receivables, deposit and securities accounts and related books and records and certain other personal property, subject to certain customary exceptions (the "Revolving Priority Collateral"), and a second priority lien over substantially all of Delek's and each guarantor's other assets, including all of the equity interests of any subsidiary held by Delek or any guarantor (other than equity interests in certain MLP Subsidiaries) subject to certain customary exceptions, but excluding real property (such real property and equity interests, the "Term Priority Collateral").
−Removed: 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.
−Removed: Certain excluded assets are not included in the Term Priority Collateral and the Revolving Priority Collateral.
−Removed: Additional Information
−Removed: At December 31, 2022 and 2021, the weighted average borrowing rate under the Revolving Credit Facility was 5.67 % and 3.50 %, respectively, there were $ 450.0 million principal amounts outstanding thereunder.
−Removed: Additionally, there were letters of credit issued of approximately $ 287.4 million as of December 31, 2022 under the Revolving Credit Facility.
−Removed: Unused credit commitments under the Revolving Credit Facility, as of December 31, 2022, were approximately $ 362.6 million.
−Removed: At December 31, 2022, the weighted average borrowing rate under the Term Loan Credit Facility was approximately 7.92 % and comprised entirely of SOFR borrowings.
−Removed: At December 31, 2021 the weighted average borrowing rate was 3.00 % comprised entirely of LIBOR borrowings.
−Removed: The principal amount outstanding thereunder was $ 950.0 million and $ 1,260.0 million at December 31, 2022 and 2021, respectively.
−Removed: As of December 31, 2022 and 2021, the effective interest rate related to the Term Loan Credit Facility was 9.14 % and 3.53 %, respectively.
−Removed: Delek Hapoalim Term Loan
−Removed: On December 31, 2019, Delek entered into an unsecured term loan credit and guaranty agreement (the "BHI Agreement") with Bank Hapoalim B.M.
−Removed: ("BHI") as the administrative agent, pursuant to which Delek borrowed $ 40.0 million (the "BHI Term Loan").
−Removed: The interest rate under the Agreement was equal to LIBOR plus a margin of 3.00 %.
−Removed: The BHI Agreement had a current maturity date of December 31, 2022 and required quarterly loan amortization payments of $ 0.1 million.
−Removed: 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.
−Removed: A final voluntary principal prepayment of $ 9.0 million was made on September 30, 2022, thereby repaying the BHI Term Loan in full.
−Removed: Delek Logistics Revolving Credit Facility and Term Loan Credit Facility
−Removed: On September 28, 2018, Delek Logistics and all of its subsidiaries entered into a third amended and restated senior secured revolving credit agreement (hereafter, the "2018 Credit Facility") with lender commitments of $ 850.0 million.
−Removed: On May 13, 2022 and May 26, 2022, Delek Logistics entered into amendments to the 2018 Credit Facility which provided for the transition from a LIBOR benchmark to Term SOFR, and secured consent and flexibility with respect to certain covenants.
−Removed: On May 26, 2022, Delek Logistics entered into a Third Amendment to the 2018 Credit Facility which, among other things, provided for certain changes to the Delek Logistics Credit Facility in connection with the pro forma calculations in conjunction with the 3 Bear Acquisition, increased the lender commitments to $ 1.0 billion, increased the line of credit sublimit to an aggregate amount of $ 90.0 million and increased the swing line sublimit to $ 18.0 million.
−Removed: On October 13, 2022, Delek Logistics amended and restated the 2018 Credit Facility by entering into and all of its subsidiaries entered into a fourth amended and restated senior secured revolving credit agreement (hereafter, the "Delek Logistics Credit Facility”) which (i) increased total aggregate commitments to $ 1.2 billion, comprised of $ 900.0 million in senior secured revolving commitments with a sublimit of up to $ 115.0 million for letters of credit and $ 25.0 million for swing line loans together referred to hereafter (the “Delek Logistics Revolving Facility”) and a new senior secured term loan with an original principal amount of $ 300.0 million (the “Delek Logistics Term Loan Facility”), (ii) reset the accordion feature under the Delek Logistics Revolving Facility, to allow increases up to $ 1.15 billion with the agreement of the Delek Logistics Partnership and one or more existing or new lenders, (iii) extended the maturity date of the Revolving Facility to October 13, 2027, and (iv) provided for the Delek Logistics Term Facility to be drawn in full on October 13, 2022, with a maturity date of October 13, 2024.
−Removed: The Delek Logistics Credit Facility contains a prepayment requirement for the proceeds obtained from certain senior unsecured notes issuances.
−Removed: 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.
−Removed: Borrowings under the Delek Logistics Revolving Facility bear interest at the election of Delek Logistics at either a U.S.
−Removed: dollar prime rate, plus an applicable margin ranging from 1.00 % to 2.00 % depending on Delek Logistics' leverage ratio, or a SOFR rate plus a credit spread adjustment of 0.10 % for one-month interest periods and 0.25 % for three-month interest periods plus an applicable margin ranging from 2.00 % to 3.00 % depending on the leverage ratio.
−Removed: Unused revolving commitments under the Delek Logistics Revolving Facility incur a commitment fee that ranges from 0.30 % to 0.50 % depending on the leverage ratio.
−Removed: Borrowings under the Delek Logistics Term Facility bear interest at the election of Delek Logistics at either a U.S.
−Removed: 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.
−Removed: The obligations under the Delek Logistics Credit Facility remain secured by first priority liens on substantially all of Delek Logistics' tangible and intangible assets.
−Removed: The Delek Logistics Credit Facility contains affirmative and negative covenants and events of default with Delek Logistics considers customary and similar to those in the 2018 Credit Facility.
−Removed: In connection with the refinancing of the Delek Logistics Credit Facility, we recorded a $ 1.9 million debt discount which is being deferred and amortized over the life of the Delek Logistics Term Facility and is netted against the outstanding borrowings within the long-term debt, less the current portion line item on the company's consolidated balance sheets, and $ 6.2 million of debt issuance costs which are being deferred and amortized over the life of the Delek Logistics Revolving Facility and are included in other current and other non-current assets on the company's consolidated balance sheets.
−Removed: As of December 31, 2022 and 2021, Delek Logistics had outstanding principal borrowings under the Delek Logistics Revolving Facility of $ 720.5 million and $ 258.0 million with weighted average borrowing rates of 7.55 % and 2.46 %, respectively.
−Removed: As of December 31, 2022, there were no letters of credit in place.
−Removed: Unused credit commitments under the Delek Logistics Revolving Facility as of December 31, 2022, were $ 179.5 million.
−Removed: At December 31, 2022, the weighted average borrowing rate under the Delek Logistics Term Loan Facility was approximately 7.92 %, comprised entirely of SOFR borrowings.
−Removed: The principal amount outstanding thereunder was $ 300.0 million, and the effective interest rate was 8.22 %.
+Added: Principle amount of long-term debt 2,657.3 3,120.5
+Added: Unamortized discount and deferred financing costs ( 57.5 ) ( 66.8 )
+Added: Total debt, net of unamortized discount and deferred financing costs 2,599.8 3,053.7
+Added: Current portion of long-term debt 44.5 74.5
+Added: Long-term debt, net of current portion $ 2,555.3 $ 2,979.2
+Added: Delek Term Loan Credit Facility
+Added: On November 18, 2022, Delek entered into an amended and restated term loan credit agreement (the "Delek Term Loan Credit Facility") providing for a senior secured term loan facility in an initial principal of $ 950.0 million at a discount of 4.00 %.
+Added: This senior secured facility allows for $ 400.0 million in incremental loans subject to certain restrictions.
+Added: Repayment terms include quarterly principal payments of $ 2.4 million with the balance of principal due on November 19, 2029.
+Added: 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.
+Added: At December 31, 2023 and December 31, 2022, the weighted average borrowing rate was approximately 8.96 % and 7.92 %;
+Added: respectively.
+Added: The effective interest rate was 10.19 % as of December 31, 2023.
+Added: Delek Logistics Term Loan Facility
+Added: On October 13, 2022, Delek Logistics entered into senior secured term loan with an original principal of $ 300.0 million ("the Delek Logistics Term Loan Facility").
+Added: On November 6, 2023, Delek Logistics entered into a First Amendment, a Second Amendment and a Third Amendment to the Delek Logistics Credit Facility (together, the “Amendments”) to extend the maturity of the Delek Logistics Term Loan Facility to April 15, 2025.
+Added: In addition, the Amendments added a maturity acceleration clause which will accelerate the maturity of the Delek Logistics Term Loan Facility to 180 days prior to the stated maturity date of the Delek Logistics 2025 Notes if any of the Delek Logistics 2025 Notes remain outstanding on that date.
+Added: As of December 31, 2023, the Delek Logistics Term Facility was classified as long-term in the accompanying consolidated balance sheets as Delek Logistics currently has the ability and intent to refinance the 2025 Notes on a long-term basis through available capacity under the Delek Logistics Revolving Facility and other funding sources.
+Added: This senior secured facility required four quarterly amortization payments of $ 3.8 million in 2023, requires four quarterly amortization payments of $ 7.5 million in 2024 and one quarterly amortization payment of $ 7.5 million in 2025 with final maturity and principal due on April 15, 2025.
+Added: At Delek Logistics' option, borrowings bear interest at either the SOFR or U.S.
+Added: dollar prime rate, plus an applicable margin.
+Added: The applicable margin is 2.50 % for the first year and 3.00 % for the second year for U.S.
+Added: dollar primate rate borrowings.
+Added: 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.
+Added: At December 31, 2023 and December 31, 2022, the weighted average borrowing rate was approximately 9.46 % and 7.92 %, respectively.
+Added: The effective interest rate was 9.93 % as of December 31, 2023.
+Added: Revolving Credit Facilities
+Added: Available capacity and amounts outstanding for each of our revolving credit facilities as of December 31, 2023 are shown below (in millions):
+Added: Total Capacity
+Added: Outstanding Borrowings
+Added: Outstanding Letters of Credit
+Added: Available Capacity
+Added: Maturity Date
+Added: Delek Revolving Credit Facility (1)
+Added: $ 1,100.0 $ — $ 305.5 $ 794.5 October 26, 2027
+Added: Delek Logistics Revolving Facility (2)
+Added: $ 1,050.0 $ 780.5 $ — $ 269.5 October 13, 2027
+Added: United Community Bank Revolver (3)
+Added: $ 25.0 $ 5.0 $ — $ 20.0 June 30, 2024
+Added: (1) Total capacity includes letters of credit up to $ 500.0 million.
+Added: This facility requires a quarterly unused commitment fee based on average commitment usage, currently at 0.30 % per annum.
+Added: 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.
+Added: As of December 31, 2022, the weighted average interest rate was 5.67 %.
+Added: (2) The Delek Logistics Revolving Facility's maturity date will accelerate to 180 days prior to the stated maturity date of the Delek Logistics 2025 Notes if any of the Delek Logistics 2025 Notes remain outstanding on that date.
+Added: As of December 31, 2023, the Delek Logistics Revolving Facility was classified as long-term in the accompanying consolidated balance sheets as Delek Logistics currently has the ability and intent to refinance the 2025 Notes on a long-term basis through available capacity under the Delek Logistics Revolving Facility and other funding sources.
+Added: Total capacity includes letters of credit up to $ 115.0 million and $ 25.0 million for swing line loans.
+Added: This facility requires a quarterly unused commitment fee based on average commitment usage, currently at 0.50 % per annum.
+Added: Interest is measured at either the U.S.
+Added: 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.
+Added: As of December 31, 2023 and December 31, 2022, the weighted average interest rate was 8.46 % and 7.55 %, respectively.
+Added: (3) Interest is measured as a variable rate equal to the Wall Street Journal Prime Rate minus 0.75 %.
+Added: Requires a quarterly fee of 0.25 % per year on the average unused revolving commitment.
+Added: The weighted average borrowing rate as of December 31, 2023 and December 31, 2022 was 7.75 % and 6.75 %, respectively.
+Added: Delek Logistics Revolving Credit Facility
+Added: On November 6, 2023, Delek Logistics entered into the Amendments which among other things:
+Added: (i) increased the U.S.
+Added: 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 Revolving Credit Facility in an amount of $ 1.050 billion and (ii) increased the limit allowed for general unsecured debt (as defined in the Delek Logistics Credit Facility) by an amount equal to $ 95.0 million, resulting in an unsecured general debt limit of $ 150.0 million.
+Added: United Community Bank Revolver
+Added: On June 9, 2023, we amended the United Community Bank Revolver to reduce commitments from $ 50.0 million to $ 25.0 million and extended the maturity date to June 30, 2024.
Delek Logistics 2025 Notes
−Removed: On May 23, 2017, Delek Logistics and Delek Logistics Finance Corp.
−Removed: (“Finance Corp.” and together with Delek Logistics, the “Issuers”) issued $ 250.0 million in aggregate principal amount of 6.75 % senior notes due in 2025 (the “Delek Logistics 2025 Notes”) at a discount.
−Removed: In May 2018, the Delek Logistics 2025 Notes were exchanged for new notes with terms substantially identical in all material respects with the exception that the new notes exclude transfer restriction terms.
−Removed: The Delek Logistics 2025 Notes are general unsecured senior obligations of the Issuers.
+Added: In May 2018, Delek Logistics and Finance Corp.
+Added: issued 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").
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.
−Removed: The Delek Logistics 2025 Notes rank equal in right of payment with all existing and future senior indebtedness of the Issuers, and senior in right of payment to any future subordinated indebtedness of the Issuers.
−Removed: The Delek Logistics 2025 Notes will mature on May 15, 2025, and interest is payable semi-annually in arrears on May 15 and November 15.
−Removed: 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.
+Added: Interest is payable semi-annually in arrears on May 15 and November 15.
+Added: As of December 31, 2023, the effective interest rate was 7.19 %.
+Added: All of the Delek Logistics 2025 Notes are currently redeemable, subject to certain conditions and limitations, at a redemption price of 100.00 % of the redeemed principal for the twelve-month period beginning on May 15, 2023 and thereafter, plus accrued and unpaid interest, if any.
In the event of a change of control, accompanied or followed by a ratings downgrade within a certain period of time, subject to certain conditions and limitations, the Issuers will be obligated to make an offer for the purchase of the Delek Logistics 2025 Notes from holders at a price equal to 101.00 % of the principal amount thereof, plus accrued and unpaid interest.
−Removed: As of December 31, 2022, we had $ 250.0 million in outstanding principal amount under the Delek Logistics 2025 Notes, and the effective interest rate was 7.21 %.
Delek Logistics 2028 Notes
On May 24, 2021, Delek Logistics and Finance Corp.
−Removed: (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.
−Removed: Bank, National Association as trustee.
−Removed: 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.
−Removed: and will be unconditionally guaranteed on the same basis by certain of Delek Logistics’ future subsidiaries.
−Removed: 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.
−Removed: 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.
+Added: issued 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").
+Added: 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.
+Added: Interest is payable semi-annually in arrears on June 1 and December 1.
+Added: As of December 31, 2023, the effective interest rate was 7.39 %.
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.
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In the event of a change of control, accompanied or followed by a ratings downgrade within a certain period of time, subject to certain conditions and limitations, the Co-issuers will be obligated to make an offer for the purchase of the Delek Logistics 2028 Notes from holders at a price equal to 101.00 % of the principal amount thereof, plus accrued and unpaid interest.
−Removed: As of December 31, 2022, we had $ 400.0 million in outstanding principal amount under the Delek Logistics 2028 Notes, and the effective interest rate was 7.40 %.
−Removed: United Community Bank Revolver
−Removed: Delek has an unsecured revolving credit agreement with United Community Bank (formally Reliant Bank) (the "United Community Bank Revolver") with a commitment amount of $ 50.0 million.
−Removed: On June 30, 2022, we amended the United Community Bank Revolver to extend the maturity date to June 30, 2023 and change the interest rate per annum to a variable rate equal to the Wall Street Journal Prime Rate plus 0.75 % effective July 1, 2022.
−Removed: The revolving credit agreement requires us to pay a quarterly fee of 0.50 % per year on the average unused revolving commitment.
−Removed: As of December 31, 2022, we had $ 50.0 million outstanding and no unused credit commitments under this facility.
−Removed: Restrictive Covenants
−Removed: Under the terms of our debt facilities, we are required to comply with certain usual and customary financial and non-financial covenants.
−Removed: 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.
−Removed: The Term Loan Credit Facility does not have any financial maintenance covenants.
−Removed: We believe we were in compliance with all covenant requirements under each of our credit facilities as of December 31, 2022.
−Removed: 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.
−Removed: 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.
−Removed: Additionally, certain of our debt facilities limit our ability to make investments, including extensions of loans or advances to, or acquisitions of equity interests in, or guarantees of obligations of, any other entities.
−Removed: Restricted Net Assets
−Removed: Some of Delek's subsidiaries have restrictions in their respective credit facilities limiting their use of assets, as has been discussed above.
+Added: Guarantees Under Revolver and Term Facilities
+Added: 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").
+Added: 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.
+Added: 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.
+Added: Restrictive Terms and Covenants
+Added: Under the terms of our debt facilities, we are required to comply with usual and customary financial and non-financial covenants.
+Added: 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.
+Added: As of December 31, 2023, we were in compliance with covenants on all of our debt instruments.
+Added: Some of Delek's subsidiaries have restrictions in their respective credit facilities limiting their use of assets.
As of December 31, 2023, we had no subsidiaries with restricted net assets which would prohibit earnings from being transferred to the parent company for its use.
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• managing the cost of our RINs Obligation using future commitments to purchase or sell RINs at fixed prices and quantities;
−Removed: • limiting the exposure to interest rate fluctuations on our floating rate bo rrowings.
+Added: • limiting the exposure to interest rate fluctuations on our floating rate borrowings.
We primarily utilize commodity swaps, futures, forward contracts and options contracts, generally with maturity dates of three years or less, and from time to time interest rate swaps or caps to achieve these objectives.
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Commodity forward contracts accounted for as derivative instruments are recorded at fair value with changes in fair value recognized in earnings in the period of change.
−Removed: Our Canadian crude trading operations are accounted for as derivative instruments, and the related unrealized and realized gains and losses are recognized in other operating income, net on the accompanying consolidated statements of income.
+Added: 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 consolidated statements of income.
Additionally, as of and for the year ended December 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 consolidated statements of income in our refining segment, and are included in our disclosures of commodity derivatives in the tables below.
4 unchanged sentences
As of December 31, 2023, we do not believe there is any material credit risk with respect to the counterparties to any of our derivative contracts.
−Removed: 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.
−Removed: The fair value of these contracts is recognized in income in the same financial statement line item as hedged transaction at the time the positions are closed and the hedged transactions are recognized in income.
The following table presents the fair value of our derivative instruments as of December 31, 2023 and December 31, 2022.
12 unchanged sentences
Other long-term assets — — 1.1 ( 0.8 )
−Removed: Commodity derivatives (1)
−Removed: Other long-term liabilities — — 6.1 ( 6.1 )
RINs commitment contracts (2)
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Total net fair value of derivatives $ 1.3 $ ( 3.9 ) $ 22.7 $ ( 21.3 )
−Removed: (1) As of December 31, 2022 and 2021, we had open derivative positions representing 158,307,020 and 182,525,893 barrels, respectively, of crude oil and refined petroleum products.
−Removed: There were no open positions designated as cash flow hedging instruments as of December 31, 2022 and 2021.
−Removed: Additionally, as of December 31, 2022 and 2021, we had open derivative positions representing 2,310,000 and 1,320,000 million British Thermal Units ("MMBTU"), respectively, of natural gas products.
−Removed: (2) As of December 31, 2022 and 2021, we had open RINs commitment contracts representing 259,022,967 and 16,325,000 RINs, respectively.
−Removed: (3) As of December 31, 2022 and 2021, $ 13.8 million and $( 24.7 ) million, respectively, of cash collateral (obligation) held by counterparties has been netted with the derivatives with each counterparty.
+Added: (1) As of December 31, 2023 and December 31, 2022, we had open derivative positions representing 55,336,870 and 154,263,020 barrels, respectively, of crude oil and refined petroleum products.
+Added: Additionally, as of December 31, 2022, we had open derivative positions representing 2,310,000 million British Thermal Units ("MMBTU"), respectively, of natural gas products.
+Added: We had no open derivative positions of natural gas products as of December 31, 2023.
+Added: (2) As of December 31, 2023 and December 31, 2022, we had open RINs commitment contracts representing 41,636,461 and 259,022,967 RINs, respectively.
+Added: (3) As of December 31, 2023 and December 31, 2022, $ 1.8 million and $ 13.8 million, respectively, of cash 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) :
1 unchanged sentence
2023 2022 2021
−Removed: (Losses) gains on hedging derivatives not designated as hedging instruments recognized in cost of materials and other (1)
+Added: Gains (losses) on hedging derivatives not designated as hedging instruments recognized in cost of materials and other (1)
$ ( 68.6 ) $ ( 38.0 ) $ 37.7
−Removed: (Losses) gains on non-trading physical forward contract commodity derivatives in cost of materials and other 9.0 ( 6.6 ) —
+Added: Gains (losses) on non-trading physical forward contract commodity derivatives in cost of materials and other ( 2.4 ) 9.0 ( 6.6 )
Losses on hedging derivatives not designated as hedging instruments recognized in operating expenses — ( 1.7 ) —
Realized gains reclassified out of accumulated other comprehensive income and into cost of materials and other on commodity derivatives designated as cash flow hedging instruments — — 0.2
−Removed: Total (losses) gains $ ( 30.7 ) $ 31.3 $ ( 83.4 )
+Added: Total gains (losses) $ ( 71.0 ) $ ( 30.7 ) $ 31.3
(1) Gains (losses) on commodity derivatives that are economic hedges but not designated as hedging instruments include unrealized (losses) gains of $( 15.3 ) million , $( 15.4 ) million and $ 7.8 million for the years ended December 31, 2023, 2022 and 2021, respectively.
(2) See separate table below for disclosures about "trading derivatives."
−Removed: The effect of cash flow hedge accounting on the consolidated statements of income is as follows (in millions):
−Removed: Year Ended December 31,
−Removed: 2022 2021 2020
−Removed: Gain (loss) on cash flow hedging relationships recognized in cost of materials and other:
−Removed: Commodity contracts:
−Removed: Hedged items $ — $ ( 0.2 ) $ ( 4.6 )
−Removed: Derivative designated as hedging instruments — 0.2 4.6
−Removed: Total $ — $ — $ —
−Removed: For cash flow hedges, no component of the derivative instruments’ gains or losses was excluded from the assessment of hedge effectiveness for the years ended December 31, 2022, 2021 and 2020.
−Removed: During the years ended December 31, 2021 and 2020, there were losses of $ 0.2 million and $ 3.6 million, net of tax, respectively, on settled commodity contracts.
−Removed: There were no such losses during the year ended December 31, 2022.
−Removed: These losses were reclassified into cost of materials and other in the consolidated statements of income.
−Removed: As of December 31, 2022, we estimate that no deferred gains related to commodity cash flow hedges will be reclassified into cost of materials and other over the next 12 months as a result of hedged transactions that are forecasted to occur.
Total gains (losses) on our trading derivatives (none of which were designated as hedging instruments) recorded in other operating (income) expense, net on the consolidated statements of income are as follows (in millions):
2 unchanged sentences
Trading Physical Forward Contract Commodity Derivatives
−Removed: Realized gains (losses) $ 16.1 $ 6.5 $ ( 3.1 )
−Removed: Unrealized losses ( 0.4 ) — ( 0.3 )
+Added: Realized gains $ 8.3 $ 16.1 $ 6.5
+Added: Unrealized gains (losses) 0.2 ( 0.4 ) —
Total $ 8.5 $ 15.7 $ 6.5
Trading Hedging Commodity Derivatives
−Removed: Realized gains $ 13.5 $ 3.3 $ 7.5
−Removed: Unrealized (losses) gains ( 18.5 ) 16.2 0.5
+Added: Realized (losses) gains $ ( 1.9 ) $ 13.5 $ 3.3
+Added: Unrealized gains (losses) 2.3 ( 18.5 ) 16.2
Total $ 0.4 $ ( 5.0 ) $ 19.5
Fair Value Measurements
−Removed: Our assets and liabilities that are measured at fair value include commodity derivatives, investment commodities, environmental credits obligations, our Inventory Mediation Agreement, and Supply and Offtake Agreements.
−Removed: ASC 820 requires disclosures that categorizes assets and liabilities measured at fair value into one of three different levels depending on the observability of the inputs employed in the measurement.
+Added: 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.
+Added: 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.
2 unchanged sentences
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.
−Removed: In April 2020, we entered into a contract with the Department of Energy to deposit one million barrels of crude oil into one of the Strategic Petroleum Reserve ("SPR") storage locations which was stored on our behalf until October 2020 for a fee of approximately 100,000 barrels.
−Removed: The fee of 100,000 barrels was recorded as a prepaid asset at cost, and the right to receive the 900,000 barrels was recorded as a financial asset, measured at fair value based on the value of the underlying commodity using published market prices of the commodity on the applicable exchange.
−Removed: Such asset was, therefore, classified as Level 2.
−Removed: Such barrels were received in the fourth quarter of 2020.
−Removed: The realized gain on the underlying commodity related to the SPR financial asset for the year ended December 31, 2020 of $ 10.8 million was recorded in other income, net.
Our RINs commitment contracts are future commitments to purchase or sell RINs at fixed prices and quantities, which are used to manage the costs associated with our Consolidated Net RINs Obligation.
These RINs commitment contracts (which are forward contracts accounted for as derivatives – see Note 11) are categorized as Level 2, and are measured at fair value based on quoted prices from an independent pricing service.
−Removed: Our environmental credits obligation surplus or deficit includes the Consolidated Net RINs Obligation surplus or deficit, as well as other environmental credit obligation surplus or deficit positions subject to fair value accounting pursuant to our accounting policy (see Note 2).
−Removed: 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.
−Removed: With respect to our Consolidated Net RINs Obligation surplus or deficit, we recognized gains (losses) on changes in fair value totaling $( 61.2 ) million and $ 17.8 million for the years ended December 31, 2022 and 2020, respectively, primarily attributable to changes in the market prices of the underlying credits that occurred at the end of each quarter including changes in volume requirements related to the 2020, 2021 and 2022 RINs Obligation to reflect the June 2022 EPA finalized volume requirements.
+Added: Our environmental credits obligation includes the Consolidated Net RINs Obligation, as well as other environmental credit obligation positions subject to fair value accounting pursuant to our accounting policy (see Note 2).
+Added: The environmental credits obligation 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.
+Added: With respect to our Consolidated Net RINs Obligation, we recognized losses on changes in fair value totaling $( 1.8 ) million and $( 61.2 ) million for the years ended December 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.
For the year ended December 31, 2021, we recognized gains (losses) on changes in fair value totaling $( 44.5 ) million, which was attributable to changes in estimated volume requirements related to the 2021 RINs Obligation to reflect the December 2021 Proposed EPA Rule (where a rule regarding 2021 requirements had not been previously enacted) as well as to quarterly changes in the market prices of the underlying credits.
2 unchanged sentences
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.
−Removed: With respect to the Inventory Intermediation Agreement and the amended and restated Supply and Offtake Agreements, such amendments being effective April 2020 for all the agreements, we apply fair value measurement as follows:
+Added: With respect to the Inventory Intermediation Agreement and the amended and restated Supply and Offtake 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.
3 unchanged sentences
See Note 9 for discussion of gains and losses recognized from changes in fair value.
−Removed: The estimated fair value of the Delek Logistics 2028 Notes was $ 359.7 million as of December 31, 2022, measured based upon quoted market prices in an active market, defined as Level 1 in the fair value hierarchy.
−Removed: At December 31, 2021, the estimated fair value approximated the carrying value.
+Added: 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.
+Added: The carrying value (excluding unamortized debt issuance costs) and estimated fair value of these notes was $ 400.0 million and $ 380.4 million, respectively, as of December 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.
19 unchanged sentences
Environmental credits obligation deficit — ( 295.5 ) — ( 295.5 )
−Removed: Aron Supply and Offtake obligations — ( 487.5 ) — ( 487.5 )
+Added: Inventory Intermediation Agreement obligation — ( 541.7 ) — ( 541.7 )
Total liabilities — ( 1,178.5 ) — ( 1,178.5 )
3 unchanged sentences
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.
−Removed: As of December 31, 2022 and 2021, $ 13.8 million and $( 24.7 ) million, respectively, of cash collateral (obligation) collateral was held by counterparty brokerage firms and has been netted with the net derivative positions with each counterparty.
+Added: As of December 31, 2023 and December 31, 2022, $ 1.8 million and $ 13.8 million, respectively, of cash collateral was held by counterparty brokerage firms and has been netted with the net derivative positions with each counterparty.
See Note 11 for further information regarding derivative instruments.
Non-Recurring Fair Value Measurements
−Removed: 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.
+Added: 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.
+Added: See Note 3 for further information.
+Added: During the year ended December 31, 2023, we recognized goodwill impairment based on fair value measurements utilized during our goodwill impairment testing.
+Added: The fair value measurements were based on a combination of valuation methods including discounted cash flows, the guideline public company and guideline transaction methods, all of which are Level 3 inputs.
+Added: See Note 16 for further information.
+Added: During the year ended December 31, 2023, we recognized right-of-use asset impairment based on fair value measurements utilized during our impairment testing.
+Added: The fair value measurements were based on a combination of valuation methods including discounted cash flows, which includes estimates and assumptions for future sublease rental rates that reflect current sublease market conditions, as well as a discount rate, both of which are Level 3 inputs.
+Added: See Note 23 for further information.
Commitments and Contingencies
3 unchanged sentences
Environmental, Health and Safety
−Removed: 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.
+Added: We are subject to extensive federal, state and local environmental and safety laws and regulations enforced by various agencies, including the EPA, the U.S.
+Added: 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.
8 unchanged sentences
In the future, we could be required to extend the expected remediation period or undertake additional investigations of our refineries, pipelines and terminal facilities, which could result in the recognition of additional remediation liabilities.
−Removed: Included in our environmental liabilities as of both December 31, 2022 and 2021 is a liability totaling $ 78.5 million related to a property that we have historically operated as an asphalt and marine fuel terminal both as an owner and, subsequently, as a lessee under an in-substance lease agreement (the “License Agreement”).
+Added: Included in our environmental liabilities as of both December 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.
2 unchanged sentences
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.
−Removed: As such, as of December 31, 2022 and 2021, except for accretion and expenditures, our combined environmental liability related to the terminal and property remained unchanged.
+Added: As such, as of December 31, 2023 and December 31, 2022, except for accretion and expenditures, our combined environmental liability related to the terminal and property remained unchanged.
Environmental liabilities with payments that are fixed or reliably determinable have been discounted to present value at various rates depending on their expected payment stream.
18 unchanged sentences
Additionally, the EPA denied the petitions for small refinery exemptions for prior period compliance years.
−Removed: In December 2022, the EPA released proposed volume obligations for compliance years 2023, 2024 and 2025.
+Added: In July 2023, the EPA announced final volume obligations for compliance years 2023, 2024 and 2025.
Other Losses and Contingencies
5 unchanged sentences
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.
−Removed: During the year ended December 31, 2021, we incurred workers' compensation losses of $ 3.8 million associated with the fire and accrued an additional $ 4.0 million for uncovered litigation, claims and assessments associated with the fire, which are included in operating expenses in the consolidated statements of income.
+Added: During the year ended December 31, 2021, we incurred workers' compensation losses of $ 3.8 million associated with the fire and accrued an additional $ 4.0 million for litigation, claims and assessments associated with the fire and in excess of insurance coverage, which are included in operating expenses in the consolidated statements of income.
Additionally, we recognized accelerated depreciation of $ 1.0 million due to property damaged in the fire, which was recovered during 2021.
1 unchanged sentence
No expense was recorded related to the El Dorado refinery fire during the year ended December 31, 2022.
−Removed: We continue to incur repair costs that may be recoverable under property and casualty insurance policies.
−Removed: In addition, during the years ended December 31, 2022 and 2021, we recognized a gain of $ 9.1 million and $ 8.8 million, respectively, related to business interruption claims.
−Removed: Such gain is included in other operating income in the consolidated statements of income.
+Added: During the year ended December 31, 2023, we recorded an additional $ 8.7 million for litigation, claims and assessments associated with the fire and are in excess of insurance coverage, which are included in operating expenses in the consolidated statements of income.
+Added: In October 2023, we entered into a settlement agreement with six employees who were injured in the fire.
+Added: Net impact to us after considering insurance coverage is approximately $ 10.0 million.
+Added: In addition, during the years ended December 31, 2023, 2022 and 2021, we recognized a gain of $ 1.1 million, $ 9.1 million and $ 8.8 million, respectively, related to business interruption claims.
+Added: Such gain is included in insurance proceeds in the consolidated statements of income.
If applicable, we accrue receivables for probable insurance or other third-party recoveries.
Work to determine the full extent of covered business interruption and property and casualty losses and potential insurance claims is ongoing and may result in the future recognition of insurance recoveries.
+Added: Big Spring Refinery Fire
+Added: On November 29, 2022, our Big Spring refinery experienced a fire in its diesel hydrotreater unit.
+Added: The facility suffered operational disruptions as a result of the fire.
+Added: Accelerated depreciation due to property damaged in the fire was immaterial.
+Added: We incurred repair costs that may be recoverable under property and casualty insurance policies and we submitted a claim in 2023.
+Added: We recognized accelerated depreciation in 2022 due to property damaged in the fire, which was recovered during the year ended December 31, 2023.
+Added: An additional $ 6.5 million was recognized as a gain, in excess of these losses, during the year ended December 31, 2023.
+Added: This gain is included in insurance proceeds in the consolidated statements of income.
+Added: If applicable, we accrue receivables for probable insurance or other third-party recoveries.
+Added: 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
2 unchanged sentences
We recognized additional operating expenses in the amount of $ 17.5 million during the year ended December 31, 2021 due to property damaged in the freeze which was recovered during 2021.
−Removed: An additional $ 5.0 million was recognized as a gain, in excess of these losses during the year ended December 31, 2021.
−Removed: We continue to incur additional repair costs that may be recoverable under property and casualty insurance policies.
−Removed: In addition, during the years ended December 31, 2022 and 2021, we also recognized a gain of $ 22.0 million and $ 1.1 million, respectively, related to business interruption claims.
−Removed: Such gain is included in other operating income in the consolidated statements of income.
+Added: An additional $ 3.8 million and $ 5.0 million was recognized as a gain, in excess of these losses during the year ended December 31, 2023 and 2021, respectively.
+Added: In addition, during the years ended December 31, 2023, 2022 and 2021, we also recognized a gain of $ 8.9 million, $ 22.0 million and $ 1.1 million, respectively, related to business interruption claims.
+Added: Such gain is included in insurance proceeds in the consolidated statements of income.
If applicable, we accrue receivables for probable insurance or other third-party recoveries.
13 unchanged sentences
Ending balance $ 43.3 $ 41.8
−Removed: Letters of Credit
−Removed: As of December 31, 2022, we had in place letters of credit totaling approximately $ 287.4 million with various financial institutions securing obligations primarily with respect to our commodity purchases for the refining segment and certain of our insurance programs.
−Removed: There were no amounts drawn by beneficiaries of these letters of credit at December 31, 2022.
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.
Significant components of Delek's deferred tax assets (liabilities) reported in the accompanying consolidated financial statements as of December 31, 2023 and 2022 were as follows (in millions):
−Removed: 2022 2021 (1)
Non-Current Deferred Taxes:
16 unchanged sentences
$ ( 264.1 ) $ ( 262.4 )
−Removed: (1) Adjusted to reflect the retrospective change in accounting policy from LIFO to FIFO for certain inventories.
−Removed: See Note 8 for further discussion.
−Removed: (2) Total net deferred tax liabilities includes $ 4.1 million and $ 5.1 million of state deferred tax assets recorded in other non-current assets in our consolidated balance sheet at December 31, 2022 and December 31, 2021, respectively.
−Removed: The difference between the actual income tax expense and the tax expense computed by applying the statutory federal income tax rate to income from continuing operations was attributable to the following (in millions):
+Added: (1) Total net deferred tax liabilities includes $ 4.1 million of state deferred tax assets recorded in other non-current assets in our consolidated balance sheet at December 31, 2022 and none for December 31, 2023.
+Added: The difference between the actual income tax expense and the tax expense computed by applying the statutory federal income tax rate to income was attributable to the following (in millions):
Year Ended December 31,
6 unchanged sentences
Changes in valuation allowance 10.3 14.0 4.0
−Removed: Impact of CARES Act net operating loss carryback — — ( 16.8 )
−Removed: Goodwill impairment — — 21.4
+Added: Revaluation related to state legislative changes ( 2.5 ) — —
+Added: Impact of stock compensation 1.6 0.9 1.6
+Added: Impact of officer's compensation 3.2 3.2 1.1
Other items 0.7 0.7 ( 2.7 )
Income tax expense (benefit) $ 5.1 $ 63.9 $ ( 42.0 )
−Removed: (1) Adjusted to reflect the retrospective change in accounting policy from LIFO to FIFO for certain inventories.
−Removed: See Note 8 for further discussion.
(1) Tax credits and incentives include work opportunity and research and development credits, as well as incentives for the Company’s biodiesel blending operations.
5 unchanged sentences
$ 5.1 $ 63.9 $ ( 42.0 )
−Removed: (1) Adjusted to reflect the retrospective change in accounting policy from LIFO to FIFO for certain inventories.
−Removed: See Note 8 for further discussion.
We carry valuation allowances against certain state deferred tax assets and net operating losses that may not be recoverable with future taxable income.
1 unchanged sentence
During the years ended December 31, 2023 and 2022, we recorded an increase to the valuation allowance of $ 10.3 million and $ 14.0 million, respectively.
−Removed: The 2022 increase in the valuation allowance was primarily driven by changes in state attributes due to a legal entity restructuring that occurred during the fourth quarter of 2022, whereas in 2021 the increase was driven by changes in the state tax attributes.
+Added: The 2023 increase in the valuation allowance was primarily driven by changes in state attributes, whereas in 2022 the increase in the valuation allowance was primarily driven by changes in state attributes due to a legal entity restructuring that occurred during the fourth quarter of 2022.
In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will be realized.
12 unchanged sentences
federal income tax examinations by tax authorities for years through 2013.
−Removed: Delek is under Joint Committee of Taxation review for tax years 2012 through 2020, and Alon is under Joint Committee of Taxation review for the short tax year 2017.
−Removed: On January 18, 2023, the Company received notice that the Congressional Joint Committee has completed its consideration of both Delek and Alon's income tax returns for 2016-2020 with no material adjustments identified.
Pre-acquisition tax returns for Alon are closed for U.S.
federal income tax examinations through the tax year ended December 31, 2016 as of December 31, 2023.
+Added: On January 18, 2023, the Company received notice that the Congressional Joint Committee has completed its consideration of both Delek and Alon's income tax returns for 2016-2020 with no material adjustments identified.
Alon USA Partners, LP is currently under audit by the IRS for tax year 2019.
14 unchanged sentences
The amount of the unrecognized benefit above, that if recognized would change the effective tax rate, is $ 6.1 million and $ 6.1 million as of December 31, 2023 and 2022, respectively.
+Added: The Company expects $ 4.0 million of the 2023 ending reserve to no longer be uncertain and rolled out of the reserve within the next twelve months.
Delek recognizes accrued interest and penalties related to unrecognized tax benefits as an adjustment to the current provision for income taxes.
−Removed: We recognized interest expense (income) of $ 0.1 million, $ 0.3 million, and $ 0.5 million related to unrecognized tax benefits during the years ended December 31, 2022, 2021 and 2020, respectively.
+Added: We recognized interest expense of $ 0.2 million, $ 0.1 million, and $ 0.3 million related to unrecognized tax benefits during the years ended December 31, 2023, 2022 and 2021, respectively.
The total recognized liability for interest was $ 1.3 million and $ 1.3 million as of December 31, 2023 and 2022, respectively.
10 unchanged sentences
(2) Consists primarily of pipeline throughput fees paid by the refining segment and asphalt purchases.
+Added: Goodwill and Intangible Assets
Goodwill represents the excess of the aggregate purchase price over the fair value of the identifiable net assets acquired and is not amortized.
4 unchanged sentences
For a quantitative assessment, we estimated the value of each of our reporting units using a discounted cash flows ("DCF") analysis and a multiple of expected future cash flows, such as those used by third-party analysts.
−Removed: The DCF analysis included a market participant weighted average cost of capital, forecasted crack spreads, gross margin, capital expenditures, and long-term growth rate based on historical information and our best estimate of future forecasts.
+Added: The DCF analysis included a market participant weighted average cost of capital, forecasted crack spreads, future volumes, gross margin, capital expenditures, and long-term growth rate based on historical information and our best estimate of future forecasts.
The market approach involves significant judgment, including selection of an appropriate peer group, selection of valuation multiples, and determination of the appropriate weighting in our valuation model.
−Removed: With respect to the goodwill associated with the reporting units within the logistics segment, we performed a qualitative assessment in 2022, 2021 and 2020.
−Removed: With respect to the goodwill associated with the reporting units within the refining and retail segments, we performed a qualitative assessment in 2022 and a quantitative assessment in 2021 and 2020.
−Removed: For the year ended December 31, 2020, the annual impairment review resulted in an impairment charge of $ 126.0 million.
−Removed: For the years ended December 31, 2022 and 2021, no impairment of goodwill occurred.
−Removed: Accumulated goodwill impairment was $ 126.0 million as of December 31, 2022.
+Added: With respect to the goodwill associated with the reporting units within the logistics segment, we performed a quantitative assessment for our Delaware Gathering reporting unit and a qualitative assessment for our other reporting units.
+Added: Our 2023 testing of goodwill did not identify any impairments other than our Delaware Gathering reporting unit, which reported a goodwill impairment charge of $ 14.8 million.
+Added: The impairment was primarily driven by the significant increases in interest rates and timing of system connections with our producer customers.
+Added: We performed a qualitative assessment in 2022 and 2021 for the reporting units within the logistics segment.
+Added: With respect to the goodwill associated with the reporting units within the refining and retail segments, we performed a qualitative assessment in 2023 and 2022 and a quantitative assessment in 2021.
+Added: For the year ended December 31, 2023, the annual impairment review resulted in an impairment charge of $ 14.8 million, which is included in asset impairment in the consolidated statements of income.
+Added: For the years ended December 31, 2022 and 2021, there was no goodwill impairment charge.
A summary of our goodwill by segment is as follows (in millions):
Refining Logistics Retail Corporate, Other and Eliminations Total
−Removed: Balance, December 31, 2019 $ 801.3 $ 12.2 $ 42.2 $ — $ 855.7
−Removed: Goodwill impairment ( 126.0 ) — — — ( 126.0 )
−Removed: Balance, December 31, 2020 675.3 12.2 42.2 — 729.7
+Added: Gross goodwill balance $ 801.3 $ 12.2 $ 42.2 $ — $ 855.7
+Added: Accumulated impairment losses ( 126.0 ) — — ( 126.0 )
Balance, December 31, 2021 675.3 12.2 42.2 — 729.7
1 unchanged sentence
Write-off goodwill associated with stores sold — — ( 0.2 ) — ( 0.2 )
+Added: Gross goodwill balance 801.3 27.0 42.0 — 870.3
+Added: Accumulated impairment losses ( 126.0 ) — — — ( 126.0 )
Balance, December 31, 2022 675.3 27.0 42.0 — 744.3
−Removed: Property, Plant and Equipment
−Removed: Property, plant and equipment, at cost, consist of the following (in millions):
−Removed: Land $ 60.0 $ 57.5
−Removed: Building and building improvements 110.4 113.6
−Removed: Refinery machinery and equipment 2,095.4 2,006.1
−Removed: Pipelines and terminals 1,103.9 637.2
−Removed: Retail store equipment and site improvements 77.8 61.3
−Removed: Refinery turnaround costs 485.3 351.2
−Removed: Other equipment 169.4 152.3
−Removed: Construction in progress 246.8 266.2
−Removed: $ 4,349.0 $ 3,645.4
−Removed: accumulated depreciation ( 1,572.6 ) ( 1,338.1 )
−Removed: $ 2,776.4 $ 2,307.3
−Removed: Depreciation of property, plant and equipment assets was $ 272.0 million, $ 257.2 million and $ 260.0 million during the years ended December 31, 2022, 2021 and 2020, respectively, and is included in depreciation and amortization on the accompanying consolidated statements of income.
−Removed: Other Intangible Assets
+Added: Goodwill Impairment — ( 14.8 ) — — ( 14.8 )
+Added: Gross goodwill balance 801.3 27.0 41.9 — 870.2
+Added: Accumulated impairment losses ( 126.0 ) ( 14.8 ) — — ( 140.8 )
+Added: Balance, December 31, 2023 $ 675.3 $ 12.2 $ 41.9 $ — $ 729.4
A summary of our identifiable intangible assets are as follows (in millions):
−Removed: As of December 31, 2022 Useful Life Gross Accumulated Amortization Net
+Added: As of December 31, 2023
+Added: As of December 31, 2022
+Added: Useful Life Gross Accumulated Amortization Net Gross Accumulated Amortization Net
Intangible Assets subject to amortization:
10 unchanged sentences
Total $ 361.8 $ ( 65.6 ) $ 296.2 $ 357.5 $ ( 41.9 ) $ 315.6
−Removed: As of December 31, 2021 Useful Life Gross Accumulated Amortization Net
−Removed: Intangible Assets subject to amortization:
−Removed: Third-party fuel supply agreement 10 years $ 49.0 $ ( 22.1 ) $ 26.9
−Removed: Fuel trade name 5 years 4.0 ( 3.6 ) 0.4
−Removed: Intangible assets not subject to amortization:
−Removed: Rights-of-way Indefinite 52.8 52.8
−Removed: Line space history Indefinite 12.0 12.0
−Removed: Liquor licenses Indefinite 8.5 8.5
−Removed: Refinery permits Indefinite 2.1 2.1
−Removed: Total $ 128.4 $ ( 25.7 ) $ 102.7
Amortization of intangible assets was $ 23.7 million, $ 16.2 million and $ 5.7 million during the years ended December 31, 2023, 2022 and 2021, respectively, and is included in depreciation and amortization on the accompanying consolidated statements of income.
Amortization expense for the next five years is estimated to be as follows (in millions):
+Added: Property, Plant and Equipment
+Added: Property, plant and equipment, at cost, consist of the following (in millions):
+Added: Land $ 61.8 $ 60.0
+Added: Building and building improvements 129.1 110.4
+Added: Refinery machinery and equipment 2,260.1 2,095.4
+Added: Pipelines and terminals 1,224.8 1,103.9
+Added: Retail store equipment and site improvements 96.5 77.8
+Added: Refinery turnaround costs 538.8 485.3
+Added: Other equipment 187.8 169.4
+Added: Construction in progress 191.8 246.8
+Added: $ 4,690.7 $ 4,349.0
+Added: accumulated depreciation ( 1,845.5 ) ( 1,572.6 )
+Added: $ 2,845.2 $ 2,776.4
+Added: Depreciation of property, plant and equipment assets was $ 326.6 million, $ 272.0 million and $ 257.2 million during the years ended December 31, 2023, 2022 and 2021, respectively, and is included in depreciation and amortization on the accompanying consolidated statements of income.
Other Current Assets and Liabilities
2 unchanged sentences
Prepaid expenses $ 47.8 $ 45.4
+Added: Income and other tax receivables 15.5 20.9
Investment commodities 4.0 29.8
Short-term derivative assets (see Note 11)
−Removed: Income and other tax receivables 20.9 3.6
Other 9.6 4.2
2 unchanged sentences
Accrued Expenses and Other Current Liabilities December 31, 2023 December 31, 2022
−Removed: Consolidated Net RINs Obligation deficit (see Note 12)
−Removed: $ 295.5 $ 172.2
−Removed: Crude purchase liabilities 268.7 107.4
Product financing agreements $ 224.2 $ 258.0
+Added: Crude purchase liabilities 190.7 268.7
Income and other taxes payable 166.9 120.4
Employee costs 67.0 91.2
+Added: Consolidated Net RINs Obligation deficit (see Note 12)
Deferred revenue 16.0 44.6
3 unchanged sentences
Restructuring and Other Charges
−Removed: During the year ending December 31, 2022, we initiated a cost optimization plan to improve efficiencies and align our workforce with strategic activities and operations.
−Removed: During the 2022 fiscal year, we recorded $ 12.5 million of costs associated with these restructuring related activities, primarily for consulting fees and severance costs.
−Removed: These amounts were recognized in general and administrative expenses within our consolidated statement of income and are included in Corporate, Other and Eliminations in our segment disclosures in Note 4 - Segment Data.
−Removed: The recorded costs include an accrual of $ 9.9 million as of December 31, 2022.
+Added: During the fiscal year 2022, we initiated a cost optimization plan to improve efficiencies and align our workforce with strategic activities and operations.
+Added: The recorded costs include an accrual of $ 0.9 million and $ 9.9 million as of December 31, 2023 and December 31, 2022, respectively.
+Added: During the fourth quarter of 2023, Delek determined that leased crude oil tanks in Canada were not needed to support the future growth of its business.
+Added: The exit of these leased crude oil tanks are intended to align with our continued operational and cost optimization efforts.
+Added: We have the ability and intent to sublease these crude oil tanks for the remainder of the respective lease terms, however, the expected sublease has a lower rate than the head lease, resulting in a right-of-use asset impairment of $ 23.1 million.
We anticipate concluding our restructuring activities by the end of fiscal year 2024.
Future cost estimates for these initiatives are continuing to be developed.
+Added: The detail of restructuring costs is as follows (in millions):
+Added: (In millions) Year Ended December 31, 2023
+Added: Type of Costs Statement of Income Location Refining Logistics Retail Corporate,
+Added: Other and Eliminations Consolidated
+Added: Consulting fees and severance costs General and administrative expenses $ 0.3 $ 0.4 $ — $ 12.8 $ 13.5
+Added: Other Cost of materials and other 1.2 — — — 1.2
+Added: Impairment Asset impairment — — — 23.1 23.1
+Added: Total $ 1.5 $ 0.4 $ — $ 35.9 $ 37.8
+Added: (In millions) Year Ended December 31, 2022
+Added: Type of Costs Statement of Income Location Refining Logistics Retail Corporate,
+Added: Other and Eliminations Consolidated
+Added: Consulting fees and severance costs General and administrative expenses $ — $ — $ — $ 12.5 $ 12.5
+Added: Total $ — $ — $ — $ 12.5 $ 12.5
Equity-Based Compensation
11 unchanged sentences
The 2016 Plan allows Delek to grant stock options, SARs, restricted stock, RSUs, performance awards and other stock-based awards of Delek's common stock to certain directors, officers, employees, consultants and other individuals who perform services for Delek or its affiliates.
−Removed: On May 3,2022, the Company's stockholders approved an amendment to the 2016 plan that increased the number of shares of common stock available under this plan by 760,000 shares to 14,995,000 shares.
+Added: On May 3, 2022 and May 3, 2023, the Company's stockholders approved an amendment to the 2016 plan that increased the number of shares of common stock available under this plan by 760,000 shares and 2,015,000 shares, respectively, to 17,010,000 shares.
Stock options and SARs issued under the 2016 Plan are granted at prices equal to (or greater than) the fair market value of Delek's common stock on the grant date and are generally subject to a vesting period of one year or more.
8 unchanged sentences
The Alon 2005 Plan was terminated June 4, 2021.
−Removed: Option and SAR Assumptions
−Removed: The table below provides the fair value assumptions for our outstanding stock options and SARs under the Incentive Plans.
−Removed: For all awards granted, we calculated volatility using historical and implied volatility of a peer group of public companies using weekly stock prices.
−Removed: (Grade Vesting - 4 years)
−Removed: Expected volatility 48.86 %
−Removed: Dividend yield 3.13 %
−Removed: Expected term 4.57 years
−Removed: Risk free rate 1.57 %- 1.60 %
−Removed: Fair value per share $ 11.38
Stock Option and SAR Activity
The following table summarizes our Incentive Plans stock option and SAR activity for the years ended December 31, 2023, 2022 and 2021:
−Removed: Number of Shares Under Option Weighted-Average Strike Price Weighted-Average Contractual Term (in years) Average Intrinsic Value
+Added: Number of Shares Under Option Weighted-Average Strike Price Weighted-Average Contractual Term (in years) Aggregate Intrinsic Value
(in millions)
Options and SARs outstanding, December 31, 2020 2,490,480 $ 34.16
−Removed: Granted 17,000 $ 36.56
Exercised ( 28,025 ) $ 15.67
1 unchanged sentence
Options and SARs outstanding, December 31, 2021 2,073,230 $ 33.79
−Removed: Granted — $ —
Exercised ( 326,735 ) $ 26.04
1 unchanged sentence
Options and SARs outstanding, December 31, 2022 1,527,045 $ 35.17
−Removed: Granted — $ —
Exercised ( 51,200 ) $ 25.06
2 unchanged sentences
Vested options and SARs exercisable, December 31, 2023 1,216,115 $ 35.14 4.1 $ 0.3
+Added: Vested options and SARs exercisable, December 31, 2022 1,447,795 $ 35.20 5.0 $ 1.0
Restricted Stock Units
19 unchanged sentences
The following table summarizes the RSU and PRSU activity under the Incentive Plans for the years ended December 31, 2023, 2022 and 2021:
−Removed: Number of RSUs Weighted-Average Grant Date Price
+Added: Number of RSUs and PRSUs Weighted-Average Grant Date Price Total Fair Value:
Balance December 31, 2020 1,829,775 $ 23.62
2 unchanged sentences
Forfeited ( 238,046 ) $ 22.58
−Removed: Performance Achieved 18,651 $ 29.19
+Added: Performance Not Achieved ( 23,896 ) $ 47.68
Balance December 31, 2021 2,146,631 $ 23.54
2 unchanged sentences
Forfeited ( 129,771 ) $ 24.22
−Removed: Performance Achieved ( 23,896 ) $ 47.68
+Added: Performance Not Achieved ( 129,833 ) $ 38.76
Balance December 31, 2022 2,621,333 $ 26.85
7 unchanged sentences
These amounts are included in general and administrative expenses and operating expenses in the accompanying consolidated statements of income.
−Removed: We recognized income tax expense for equity-based awards of $ 0.9 million, $ 1.7 million and $ 2.3 million for the years ended December 31, 2022, 2021 and 2020, respectively.
+Added: We recognized income tax (benefit) expense for equity-based awards of $( 2.0 ) million, $ 0.9 million and $ 1.7 million for the years ended December 31, 2023, 2022 and 2021, respectively.
As of December 31, 2023, there was $ 40.0 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.
2 unchanged sentences
These amounts are net of 223,645 , 463,677 and 196,451 shares, respectively, withheld to satisfy employee tax obligations related to the exercises and vesting for the years ended December 31, 2023, 2022 and 2021.
−Removed: Delek paid approximately $ 6.5 million, $ 4.2 million and $ 2.4 million of taxes in connection with the settlement of these awards for the years ended December 31, 2022, 2021 and 2020.
+Added: Delek paid approximately $ 4.5 million, $ 6.5 million and $ 4.2 million of taxes in connection with the settlement of
+Added: these awards for the years ended December 31, 2023, 2022 and 2021.
We issue new shares of common stock upon exercise or vesting of share-based awards.
9 unchanged sentences
Approval Date Dividend Amount Per Share Record Date Payment Date
−Removed: June 21, 2022 $ 0.20 July 12, 2022 July 20, 2022
−Removed: August 1, 2022 $ 0.20 August 22, 2022 September 6, 2022
−Removed: October 31, 2022 $ 0.21 November 18, 2022 December 2, 2022
February 27, 2023 $ 0.220 March 10, 2023 March 17, 2023
−Removed: Stockholder Rights Plan
−Removed: On March 20, 2020, our Board of Directors declared a dividend of one preferred share purchase right (a “Right”) for each outstanding share of Delek’s common stock and adopted a stockholder rights plan (the “Rights Agreement”).
−Removed: The dividend was distributed in a non-cash transaction on March 30, 2020 to the stockholders of record on that date.
−Removed: The Rights initially traded with Delek’s common stock and expired in accordance with the terms of the Rights Agreement on March 19, 2021.
−Removed: Preferred Stock
−Removed: On March 20, 2020, our Board of Directors authorized 1,000,000 shares of preferred stock with a par value of $ 0.01 per share as Series A Junior Participating Preferred Stock.
+Added: May 2, 2023 $ 0.230 May 15, 2023 May 22, 2023
+Added: August 4, 2023 $ 0.235 August 14, 2023 August 21, 2023
+Added: November 1, 2023 $ 0.240 November 13, 2023 November 20, 2023
+Added: February 20, 2024 $ 0.245 March 1, 2024 March 8, 2024
Stock Repurchase Program
1 unchanged sentence
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.
−Removed: The timing, price and size of repurchases will be made at the discretion of management and will depend on prevailing market prices, general economic and market conditions and other considerations.
−Removed: The repurchase program does not obligate us to acquire any particular amount of stock and does not expire.
−Removed: In the second quarter of 2020, we elected to suspend the share repurchase program with a $ 229.7 million remaining authorization balance.
+Added: 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.
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.
−Removed: During the year ended December 31, 2022, 4,261,185 shares of our common stock were repurchased and cancelled at the time of the transaction for a total of $ 129.6 million.
−Removed: No repurchases of our common stock were made in the year ended December 31, 2021.
+Added: During the years ended December 31, 2023 and 2022, 3,562,767 and 4,261,185 shares, respectively, of our common stock were repurchased and cancelled at the time of the transaction for a total of $ 85.4 million and $ 129.6 million, respectively.
As of December 31, 2023, there was $ 185.1 million of authorization remaining under Delek's aggregate stock repurchase program.
2 unchanged sentences
Inc., a Delaware corporation, Beckton Corp., a Delaware corporation, and Carl C.
−Removed: Icahn (collectively, the “Icahn Group”), pursuant to which the Company purchased an aggregate of 3,497,268 shares of common stock of the Company, at a price per share of $ 18.30 , the closing price of a share of Company common stock on the NYSE on March 4, 2022, the last trading day prior to the execution of the Icahn Group Agreement, which equals an aggregate purchase price of $ 64.0 million.
−Removed: The Company funded the transaction from cash on hand.
−Removed: The 3,497,268 shares were cancelled at the time of the transaction.
−Removed: 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.
−Removed: Under the terms of the
−Removed: 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.
+Added: 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.
+Added: The aggregate purchase price of $ 64.0 million was funded from cash on hand.
+Added: All 3,497,268 shares were cancelled at the time of the transaction.
+Added: 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.
+Added: 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.
As of December 31, 2023, operations, maintenance and warehouse hourly employees along with truck drivers at the Tyler refinery were represented by the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union and its Local 202.
−Removed: Of the Tyler refinery employees, 149 of operations, maintenance and warehouse hourly employees are currently covered by a collective bargaining agreement that expires January 31, 2028 while 66 of Tyler refinery truck drivers are currently covered by a collective bargaining agreement that expires November 3, 2024.
+Added: Of the Tyler refinery employees, 57.5 % of operations, maintenance and warehouse hourly employees are currently covered by a collective bargaining agreement that expires January 31, 2028 while 11.7 % of Tyler employees that are truck drivers are currently covered by a collective bargaining agreement that expires November 3, 2024.
As of December 31, 2023, operations, maintenance and warehouse hourly employees at the El Dorado refinery were represented by the International Union of Operating Engineers and its Local 351.
16 unchanged sentences
Interest cost 5.3 3.7
−Removed: Actuarial gain ( 33.5 ) ( 5.5 )
+Added: Actuarial loss (gain) 2.0 ( 33.5 )
Benefits paid ( 5.9 ) ( 5.7 )
−Removed: Other (effect of curtailment/settlement) — ( 0.3 )
Projected benefit obligations at end of year $ 106.7 $ 105.3
2 unchanged sentences
Actual gain (loss) on plan assets 7.9 ( 30.0 )
−Removed: Employer contribution — 0.3
Benefits paid ( 5.9 ) ( 5.7 )
−Removed: Other (effect of curtailment/settlement) — ( 0.3 )
Fair value of plan assets at end of year $ 104.2 $ 102.2
3 unchanged sentences
Under-funded status at end of year $ ( 2.5 ) $ ( 3.1 )
−Removed: The pre-tax amounts in accumulated other comprehensive income (loss) that have not yet been recognized as components of net periodic benefit cost were as follows (in millions):
+Added: The pre-tax amounts in accumulated other comprehensive loss that have not yet been recognized as components of net periodic benefit cost were as follows (in millions):
Year Ended December 31,
24 unchanged sentences
Expected return on plan assets ( 5.4 ) ( 5.2 ) ( 6.0 )
+Added: Amortization of net gain ( 0.1 ) — —
Net periodic benefit $ ( 0.2 ) $ ( 1.5 ) $ ( 2.5 )
36 unchanged sentences
Employee contributions are matched on a fully-vested basis by us up to a maximum of 6 % of eligible compensation.
−Removed: Eligibility for the Company matching contribution begins immediate upon employment with vesting after one year of service.
+Added: Eligibility for the Company matching contribution begins immediately upon employment with vesting after one year of service.
For the years ended December 31, 2023, 2022 and 2021, the 401(k) plans expense recognized was $ 14.8 million, $ 10.9 million and $ 4.8 million, respectively.
4 unchanged sentences
The accrued benefit liability related to this plan reflected in the consolidated balance sheet was $ 0.6 million and $ 0.8 million at December 31, 2023 and 2022, respectively.
−Removed: Selected Quarterly Financial Data (Unaudited)
−Removed: Quarterly financial information for the years ended December 31, 2022 and 2021 is summarized below.
−Removed: The sum of the quarterly results may differ from the annual results presented on our consolidated statements of operations due to rounding.
−Removed: The quarterly financial information summarized below has been prepared by Delek's management and is unaudited (in millions, except per share data).
−Removed: For the Three Month Periods Ended
−Removed: March 31, 2022 June 30, 2022 September 30, 2022 December 31, 2022
−Removed: Net revenues $ 4,459.1 $ 5,982.6 $ 5,324.9 $ 4,479.2
−Removed: Operating income (loss) $ 46.7 $ 493.3 $ 53.0 $ ( 103.5 )
−Removed: Net income (loss) from continuing operations $ 14.8 $ 368.6 $ 16.8 $ ( 109.7 )
−Removed: Net income (loss) $ 14.8 $ 368.6 $ 16.8 $ ( 109.7 )
−Removed: Net income (loss) attributable to Delek $ 6.6 $ 361.8 $ 7.4 $ ( 118.7 )
−Removed: Basic income (loss) per share from continuing operations $ 0.09 $ 5.11 $ 0.11 $ ( 1.73 )
−Removed: Diluted income (loss) per share from continuing operations $ 0.09 $ 5.05 $ 0.10 $ ( 1.73 )
−Removed: For the Three Month Periods Ended
−Removed: March 31, 2021 (1)
−Removed: June 30, 2021 (1)
−Removed: September 30, 2021 (1)
−Removed: December 31, 2021 (1)
−Removed: Net revenues $ 2,392.2 $ 2,191.5 $ 2,956.5 $ 3,108.0
−Removed: Operating income (loss) $ ( 47.4 ) $ ( 50.2 ) $ 37.9 $ 25.0
−Removed: Net income (loss) from continuing operations $ ( 62.7 ) $ ( 48.1 ) $ 20.6 $ ( 5.1 )
−Removed: Net income (loss) $ ( 62.7 ) $ ( 48.1 ) $ 20.6 $ ( 5.1 )
−Removed: Net income (loss) attributable to Delek $ ( 70.0 ) $ ( 56.7 ) $ 11.8 $ ( 13.4 )
−Removed: Basic income (loss) per share from continuing operations $ ( 0.95 ) $ ( 0.77 ) $ 0.16 $ ( 0.18 )
−Removed: Diluted income (loss) per share from continuing operations $ ( 0.95 ) $ ( 0.77 ) $ 0.16 $ ( 0.18 )
−Removed: (1) Adjusted to reflect the retrospective change in accounting policy from LIFO to FIFO for certain inventories.
−Removed: See Note 8 for further discussion.
We lease certain retail stores, land, building and various equipment from others.
4 unchanged sentences
Certain leases also include options to purchase the leased property.
−Removed: The depreciable life of assets and leasehold improvements are limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise.
−Removed: Some of our lease agreements include a rate based on equipment usage and others include a rate with fixed increases or inflationary indices based increase.
+Added: The depreciable life of assets and
+Added: leasehold improvements are limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise.
+Added: Some of our lease agreements include a rate based on equipment usage and others include a rate with fixed increases or inflationary index based increases.
Our lease agreements do not contain any material residual value guarantees or material restrictive covenants.
1 unchanged sentence
Our sublease portfolio consists primarily of operating leases within our retail stores and crude storage equipment.
−Removed: As of December 31, 2022, $ 22.7 million of our net property, plant, and equipment balance is subject to an operating lease.
+Added: As of December 31, 2023, an immaterial amount 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.
−Removed: The agreement includes a one year renewal option and certain variable payment based on usage.
+Added: The agreement includes 10 year renewal options and certain variable payments based on usage.
+Added: During the fourth quarter of 2023, Delek determined that leased crude oil tanks in Canada were not needed to support the future growth of its business.
+Added: We have the ability and intent to sublease these crude oil tanks for the remainder of the respective lease terms, however, the expected sublease has a lower rate than the head lease, resulting in a right-of-use asset impairment of $ 23.1 million and remaining right-of-use asset value of $ 21.2 million.
+Added: The impairment is included in asset impairment in the consolidated statements of income.
+Added: The fair value of the right-of-use asset was estimated using the discounted future cash flows method, which includes estimates and assumptions for future sublease rental rates that reflect current sublease market conditions, as well as a discount rate.
The following table presents additional information related to our operating leases in accordance ASC 842, Leases ("ASC 842"):
(in millions) Year Ended December 31,
+Added: 2023 2022 2021
Operating lease costs (1)
1 unchanged sentence
Short-term lease costs (2)
+Added: 45.1 35.9 33.9
Sublease income ( 3.5 ) ( 0.2 ) ( 5.8 )
25 unchanged sentences
Present Value of Lease Liabilities $ 165.9
−Removed: Financial Statements and Schedules
Form 10-K Summary
+Added: FORM 10-K SUMMARY
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
4 unchanged sentences
(Principal Financial Officer)
−Removed: March 1, 2023
−Removed: Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by or on behalf of the following persons on behalf of the registrant and in the capacities indicated on March 1, 2023:
+Added: February 28, 2024
+Added: Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by or on behalf of the following persons on behalf of the registrant and in the capacities indicated on February 28, 2024:
/s/ Ezra Uzi Yemin
2 unchanged sentences
/s/ Avigal Soreq
−Removed: Director, President and Chief Executive Officer
+Added: Director (Chair), President and Chief Executive Officer
(Principal Executive Officer)
1 unchanged sentence
Robert Wright
−Removed: Senior Vice President, Chief Accounting Officer
+Added: Senior Vice President, Deputy Chief Financial Officer
(Principal Accounting Officer)
1 unchanged sentence
/s/ Richard J.
+Added: /s/ Leo Moreno
+Added: /s/ Christine Benson Schwartzstein
+Added: Christine Benson Schwartzstein
Sullivan, Jr.
Sullivan, Jr.
−Removed: /s/ Vicky Sutil
+Added: /s/ Vasiliki (Vicky) Sutil
+Added: Vasiliki (Vicky) Sutil
/s/ Laurie Z.
/s/ Shlomo Zohar
−Removed: /s/ Leonard Moreno
−Removed: Leonard Moreno
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.