What changed in this filing

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Item 1. Financial Statements

2024-05-08 compared with 2023-11-08 · 224 added, 437 removed, 524 unchanged (56% of the section changed)

3 unchanged sentences

(In millions, except share and per share data)

September 30, 2023 December 31, 2022

March 31, 2024 December 31, 2023

Current assets:

33 unchanged sentences

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

Common stock, $ 0.01 par value, 110,000,000 shares authorized, 82,241,519 shares and 84,509,517 shares issued at September 30, 2023 and December 31, 2022, respectively

Common stock, $ 0.01 par value, 110,000,000 shares authorized, 81,626,016 shares and 81,539,871 shares issued at March 31, 2024 and December 31, 2023, respectively

Additional paid-in capital 1,171.8 1,113.6

Accumulated other comprehensive loss ( 4.8 ) ( 4.8 )

Treasury stock, 17,575,527 shares, at cost, at September 30, 2023 and December 31, 2022, respectively

Treasury stock, 17,575,527 shares, at cost, at March 31, 2024 and December 31, 2023, respectively

( 694.1 ) ( 694.1 )

8 unchanged sentences

(In millions, except share and per share data)

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

2023 2022 2023 2022

Three Months Ended March 31,

Net revenues $ 3,227.6 $ 3,924.3

12 unchanged sentences

Income from equity method investments ( 21.9 ) ( 14.6 )

Other expense (income), net 1.8 ( 0.7 ) ( 4.8 ) ( 3.0 )

Other income, net ( 0.7 ) ( 7.1 )

Total non-operating expense, net 65.1 54.8

Income before income tax expense 167.6 20.8 250.3 507.7

Income tax expense 31.5 4.0 43.5 107.5

Net income 136.1 16.8 206.8 400.2

(Loss) income before income tax (benefit) expense ( 32.4 ) 88.0

Income tax (benefit) expense ( 7.2 ) 15.8

Net (loss) income ( 25.2 ) 72.2

Net income attributed to non-controlling interests 7.4 7.9

Net income attributable to Delek $ 128.7 $ 7.4 $ 184.7 $ 375.8

Basic income per share $ 1.98 $ 0.11 $ 2.80 $ 5.26

Diluted income per share $ 1.97 $ 0.10 $ 2.78 $ 5.21

Net (loss) income attributable to Delek $ ( 32.6 ) $ 64.3

Basic (loss) income per share $ ( 0.51 ) $ 0.96

Diluted (loss) income per share $ ( 0.51 ) $ 0.95

Weighted average common shares outstanding:

4 unchanged sentences

Delek US Holdings, Inc.

Condensed Consolidated Statements of Comprehensive Income (unaudited)

Condensed Consolidated Statements of Comprehensive Income (Loss) (unaudited)

(In millions)

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

2023 2022 2023 2022

Net income $ 136.1 $ 16.8 $ 206.8 $ 400.2

Other comprehensive loss:

Other loss, net of taxes — ( 0.1 ) ( 0.1 ) ( 0.2 )

Total other comprehensive loss — ( 0.1 ) ( 0.1 ) ( 0.2 )

Comprehensive income $ 136.1 $ 16.7 $ 206.7 $ 400.0

Three Months Ended March 31,

Net (loss) income $ ( 25.2 ) $ 72.2

Comprehensive (loss) income $ ( 25.2 ) $ 72.2

Comprehensive income attributable to non-controlling interest 7.4 7.9

Comprehensive income attributable to Delek $ 128.7 $ 7.3 $ 184.6 $ 375.6

Comprehensive (loss) income attributable to Delek $ ( 32.6 ) $ 64.3

See accompanying notes to the condensed consolidated financial statements

3 unchanged sentences

(In millions, except share and per share data)

Three Months Ended September 30, 2023

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 June 30, 2023

83,150,295 $ 0.8 $ 1,121.8 $ ( 5.3 ) $ 518.1 ( 17,575,527 ) $ ( 694.1 ) $ 121.6 $ 1,062.9

Net income — — — — 128.7 — — 7.4 136.1

Common stock dividends ($ 0.235 per share)

— — — — ( 15.2 ) — — — ( 15.2 )

Distributions to non-controlling interests — — — — — — — ( 9.7 ) ( 9.7 )

Equity-based compensation expense — — 8.0 — — — — 0.2 8.2

Repurchase of common stock ( 981,690 ) — ( 13.3 ) — ( 11.7 ) — — — ( 25.0 )

Taxes paid due to the net settlement of equity-based compensation — — ( 0.7 ) — — — — ( 0.3 ) ( 1.0 )

Exercise of equity-based awards 48,154 — — — — — — — —

Other 24,760 — 0.6 — — — — 0.1 0.7

Balance at September 30, 2023

82,241,519 $ 0.8 $ 1,116.4 $ ( 5.3 ) $ 619.9 ( 17,575,527 ) $ ( 694.1 ) $ 119.3 $ 1,157.0

Three Months Ended September 30, 2022

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 June 30, 2022

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

Net income — — — — 7.4 — — 9.4 16.8

Common stock dividends ($ 0.40 per share)

— — — — ( 28.3 ) — — — ( 28.3 )

Distributions to non-controlling interests — — — — — — — ( 9.2 ) ( 9.2 )

Equity-based compensation expense — — 7.7 — — — — 0.1 7.8

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

Taxes paid due to the net settlement of equity-based compensation — — ( 1.1 ) — — — — — ( 1.1 )

Exercise of equity-based awards 53,522 — — — — — — — —

Other — — — ( 0.1 ) ( 0.3 ) — — — ( 0.4 )

Balance at September 30, 2022

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

Financial Statements

Delek US Holdings, Inc.

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

(In millions, except share and per share data)

Nine Months Ended September 30, 2023

Three Months Ended March 31, 2024

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

1 unchanged sentence

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

Net income — — — — 184.7 — — 22.1 206.8

Net (loss) income — — — — ( 32.6 ) — — 7.4 ( 25.2 )

Common stock dividends ($ 0.245 per share)

2 unchanged sentences

Equity-based compensation expense — — 7.0 — — — — 0.2 7.2

Repurchase of common stock ( 2,793,317 ) ( 0.1 ) ( 37.7 ) — ( 27.6 ) — — — ( 65.4 )

Taxes paid due to the net settlement of equity-based compensation — — ( 0.5 ) — — — — ( 0.3 ) ( 0.8 )

Exercise of equity-based awards 44,374 — — — — — — — —

Equity attributable to issuance of Delek Logistic common limited partner units, net of tax — — 50.5 — — — — 68.4 118.9

Other 41,771 — 1.2 — ( 0.2 ) — — ( 0.2 ) 0.8

Balance at September 30, 2023 82,241,519 $ 0.8 $ 1,116.4 $ ( 5.3 ) $ 619.9 ( 17,575,527 ) $ ( 694.1 ) $ 119.3 $ 1,157.0

Nine Months Ended September 30, 2022

Balance at March 31, 2024 81,626,016 $ 0.8 $ 1,171.8 $ ( 4.8 ) $ 381.5 ( 17,575,527 ) $ ( 694.1 ) $ 179.9 $ 1,035.1

Three Months Ended March 31, 2023

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

6 unchanged sentences

Distributions to non-controlling interests — — — — — — — ( 9.5 ) ( 9.5 )

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

Repurchase of common stock ( 16,292 ) — ( 0.2 ) — ( 0.2 ) — — — ( 0.4 )

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

Taxes paid due to the net settlement of equity-based compensation — — ( 0.5 ) — — — — ( 0.1 ) ( 0.6 )

1 unchanged sentence

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

Balance at September 30, 2022 87,228,503 $ 0.9 $ 1,125.7 $ ( 4.0 ) $ 731.8 ( 17,575,527 ) $ ( 694.1 ) $ 122.7 $ 1,283.0

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

See accompanying notes to the condensed consolidated financial statements

3 unchanged sentences

(In millions)

Nine Months Ended September 30,

Three Months Ended March 31,

Cash flows from operating activities:

Net income $ 206.8 $ 400.2

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

Net (loss) income $ ( 25.2 ) $ 72.2

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

Depreciation and amortization 95.2 83.4

4 unchanged sentences

Non-cash lower of cost or market/net realizable value adjustment ( 8.8 ) ( 1.7 )

Loss on extinguishment of debt 3.6 —

Equity-based compensation expense 7.2 6.4

9 unchanged sentences

Cash flows from investing activities:

Acquisition of 3 Bear — ( 625.4 )

Equity method investment contributions — ( 0.1 )

Distributions from equity method investments 2.8 2.1

2 unchanged sentences

Purchases of intangible assets ( 0.7 ) ( 0.6 )

Proceeds from sale of property, plant and equipment 1.3 1.2

Insurance proceeds 3.6 —

Other — ( 4.8 )

Net cash used in investing activities ( 41.6 ) ( 222.1 )

2 unchanged sentences

Payments on long-term revolvers ( 1,708.4 ) ( 1,123.5 )

Proceeds from term debt 650.0 —

Payments on term debt ( 533.7 ) ( 6.1 )

Proceeds from product financing agreements 908.2 744.6

Repayments of product financing agreements ( 922.6 ) ( 704.6 )

Proceeds from product and other financing agreements 101.0 335.0

Repayments of product and other financing agreements ( 290.7 ) ( 236.1 )

Proceeds from Inventory Intermediation Agreement — 32.2

3 unchanged sentences

Distribution to non-controlling interest ( 9.8 ) ( 9.5 )

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

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

Proceeds from issuance of Delek Logistic common limited partner units, net 132.3 —

Payment of debt extinguishment costs ( 0.3 ) —

Dividends paid ( 15.7 ) ( 14.7 )

Deferred financing costs paid ( 10.9 ) —

Net cash (used in) provided by financing activities ( 523.8 ) 401.1

Net increase in cash and cash equivalents 60.4 297.3

Net used in financing activities ( 193.9 ) ( 149.3 )

Net (decrease) increase in cash and cash equivalents ( 68.8 ) 23.7

Cash and cash equivalents at the beginning of the period 822.2 841.3

3 unchanged sentences

(In millions)

Nine Months Ended September 30,

Three Months Ended March 31,

Supplemental disclosures of cash flow information:

1 unchanged sentence

Interest, net of capitalized interest of $ 0.2 million and $ 0.9 million in the 2024 and 2023 periods, respectively

$ 232.3 113.5

Income taxes $ — $ 0.1

4 unchanged sentences

See accompanying notes to the condensed consolidated financial statements

Notes to Condensed Financial Statements (Unaudited)

Notes to Consolidated Financial Statements

Delek US Holdings, Inc.

9 unchanged sentences

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

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

Our unaudited condensed consolidated financial statements have been prepared in conformity with GAAP applied on a consistent basis with those of the annual audited consolidated financial statements included in our Annual Report on Form 10-K filed with the Securities and Exchange Commission ("SEC") on February 28, 2024 (the "Annual Report on Form 10-K") and in accordance with the rules and regulations of the SEC.

These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto for the year ended December 31, 2023 included in our Annual Report on Form 10-K.

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

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

See Note 2 - Acquisitions for additional information.

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.

5 unchanged sentences

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

Reclassifications

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

New Accounting Pronouncements Adopted During 2023

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)

In July 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“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”).

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.

ASU 2023-03 does not provide any new guidance, so there is no transition or effective date.

We adopted ASU 2023-03 in July 2023.

There was no material impact on our condensed consolidated financial statements.

Accounting Pronouncements Not Yet Adopted

ASU 2023-09, Income Taxes(Topic 740):

Improvements to Income Tax Disclosures

In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-09 Income Taxes(Topic 740):

Improvements to Income Tax Disclosures ("ASU 2023-09").

The standard is intended to enhance the transparency and decision usefulness of income tax disclosures.

ASU 2023-09 requires disaggregated information about a reporting entity's effective tax rate reconciliation as well as information on income taxes paid.

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.

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

ASU 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures

In November 2023, the FASB issued ASU 2023-07 Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures ("ASU 2023-07").

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.

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.

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.

The adoption of ASU 2023-07 should not have a material impact on our condensed consolidated financial statements and related disclosures.

See Note 2 for further information.

Notes to Consolidated Financial Statements

ASU 2023-06, Codification Amendments in Response to the SEC's Disclosure Update and Simplification Initiative

2 unchanged sentences

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.

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 its consolidated financial statements and related disclosures.

Notes to Condensed Financial Statements (Unaudited)

Delek Delaware Gathering (formally 3 Bear)

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

The purchase price for Delaware Gathering was $ 628.3 million.

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

For the three and nine months ended September 30, 2023, we incurred no incremental direct acquisition and integration costs.

For the three and nine months ended September 30, 2022, we incurred $ 4.2 million and $ 10.6 million, respectively, in incremental direct acquisition and integration costs that principally consist of legal, advisory and other professional fees.

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

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.

Determination of Purchase Price

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

Base purchase price:

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

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

Cash paid for the adjusted purchase price 547.7

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

Purchase price $ 628.3

Purchase Price Allocation

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

Assets acquired:

Cash and cash equivalents $ 2.7

Accounts receivables, net 28.9

Inventories 1.8

Other current assets 1.0

Property, plant and equipment 382.8

Operating lease right-of-use assets 7.4

Goodwill 14.8

Other intangibles, net (1)

Other non-current assets 0.5

Total assets acquired 663.4

Liabilities assumed:

Accounts payable 8.0

Accrued expenses and other current liabilities 22.4

Current portion of operating lease liabilities 1.0

Asset retirement obligations 2.3

Operating lease liabilities, net of current portion 1.4

Total liabilities assumed 35.1

Fair value of net assets acquired $ 628.3

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

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

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

Notes to Condensed Financial Statements (Unaudited)

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

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

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

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

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

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

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

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

This goodwill is deductible for income tax purposes.

Goodwill related to the Delaware Gathering Acquisition is included in the logistics segment.

Unaudited Pro Forma Financial Information

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

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

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

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

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

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

Three Months Ended September 30, 2022

Nine Months Ended September 30, 2022

(in millions, except per share data)

Net sales $ 5,324.9 $ 15,865.2

Net income attributable to Delek $ 10.1 $ 374.1

Net income per share:

Basic income per share $ 0.14 $ 5.23

Diluted income per share $ 0.14 $ 5.19

We aggregate our operating units into three reportable segments:

4 unchanged sentences

• intercompany eliminations.

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

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

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

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

The 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.

4 unchanged sentences

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

Notes to Condensed Financial Statements (Unaudited)

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

1 unchanged sentence

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

The refining segment has a combined nameplate capacity of 302,000 barrels per day ("bpd") as of September 30, 2023, including the following:

The refining segment includes the following:

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

3 unchanged sentences

The refining segment also owns and operates three biodiesel facilities involved in the production of biodiesel fuels and related activities, located in Crossett, Arkansas, Cleburne, Texas and New Albany, Mississippi.

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

Logistics Segment

1 unchanged sentence

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

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

Retail Segment

Our retail segment consists of 250 owned and leased convenience store sites as of September 30, 2023, located primarily in West Texas and New Mexico.

Our retail segment consists of 250 owned and leased convenience store sites as of March 31, 2024, located primarily in West Texas and New Mexico.

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

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

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.

Business Segment Operating Performance

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

Three Months Ended September 30, 2023

(In millions) Refining Logistics Retail Corporate,

Other and Eliminations Consolidated

Net revenues (excluding intercompany fees and revenues) $ 4,392.4 $ 119.5 $ 236.5 $ — $ 4,748.4

Inter-segment fees and revenues 232.1 156.4 — ( 388.5 ) —

Total revenues $ 4,624.5 $ 275.9 $ 236.5 $ ( 388.5 ) $ 4,748.4

Segment EBITDA attributable to Delek $ 285.1 $ 96.5 $ 16.2 $ ( 64.0 ) $ 333.8

Depreciation and amortization ( 60.1 ) ( 24.6 ) ( 3.6 ) ( 3.0 ) ( 91.3 )

Interest expense, net ( 12.0 ) ( 37.0 ) 0.1 ( 33.4 ) ( 82.3 )

Income tax expense ( 31.5 )

Net income attributable to Delek $ 128.7

Income from equity method investments $ 0.2 $ 9.3 $ — $ 17.5 $ 27.0

Capital spending (excluding business combinations) $ 20.2 $ 13.1 $ 8.0 $ 7.0 $ 48.3

Notes to Condensed Financial Statements (Unaudited)

Three Months Ended September 30, 2022

(In millions) Refining Logistics Retail Corporate,

Other and Eliminations Consolidated

Net revenues (excluding intercompany fees and revenues) $ 4,904.5 $ 166.9 $ 253.1 $ 0.4 $ 5,324.9

Inter-segment fees and revenues 262.9 127.2 — ( 390.1 ) —

Total revenues $ 5,167.4 $ 294.1 $ 253.1 $ ( 389.7 ) $ 5,324.9

Segment EBITDA attributable to Delek $ 90.3 $ 87.3 $ 13.5 $ ( 56.1 ) $ 135.0

Depreciation and amortization ( 49.2 ) ( 19.6 ) ( 2.6 ) ( 1.5 ) ( 72.9 )

Interest expense, net ( 0.2 ) ( 22.6 ) — ( 27.9 ) ( 50.7 )

Income tax expense ( 4.0 )

Net income attributable to Delek $ 7.4

Income from equity method investments $ 0.1 $ 8.6 $ — $ 9.1 $ 17.8

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

Nine Months Ended September 30, 2023

Notes to Consolidated Financial Statements

Three Months Ended March 31, 2024

(In millions) Refining Logistics Retail Corporate,

6 unchanged sentences

Interest expense, net ( 12.1 ) ( 40.3 ) — ( 35.3 ) ( 87.7 )

Income tax expense ( 43.5 )

Net income attributable to Delek $ 184.7

Income tax benefit 7.2

Net loss attributable to Delek $ ( 32.6 )

Income from equity method investments $ — $ ( 8.5 ) $ — $ ( 13.4 ) $ ( 21.9 )

Capital spending (excluding business combinations) $ 197.3 $ 68.6 $ 16.0 $ 19.7 $ 301.6

Nine Months Ended September 30, 2022

Capital spending (1)

$ 21.5 $ 15.2 $ 4.1 $ 5.1 $ 45.9

Three Months Ended March 31, 2023

(In millions) Refining Logistics Retail Corporate,

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Income from equity method investments $ ( 0.4 ) $ ( 6.3 ) $ — $ ( 7.9 ) $ ( 14.6 )

Capital spending (excluding business combinations) $ 56.0 $ 68.0 $ 22.6 $ 27.5 $ 174.1

Notes to Condensed Financial Statements (Unaudited)

Capital spending (1)

$ 147.6 $ 36.1 $ 2.7 $ 5.7 $ 192.1

(1) Capital spending includes additions on an accrual basis.

Earnings Per Share

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

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

Diluted earnings per share is computed by dividing net income, 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.

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

Notes to Consolidated Financial Statements

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

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

2023 2022 2023 2022

Three Months Ended March 31,

Numerator for EPS

Net income $ 136.1 $ 16.8 $ 206.8 $ 400.2

Income attributed to non-controlling interest 7.4 9.4 22.1 24.4

Net (loss) income $ ( 25.2 ) $ 72.2

Income attributed to non-controlling interests 7.4 7.9

Numerator for basic and diluted EPS attributable to Delek $ ( 32.6 ) $ 64.3

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Weighted average common shares outstanding, assuming dilution (denominator for diluted EPS) 64,021,988 67,369,374

Basic income per share $ 1.98 $ 0.11 $ 2.80 $ 5.26

Diluted income per share $ 1.97 $ 0.10 $ 2.78 $ 5.21

Basic (loss) income per share $ ( 0.51 ) $ 0.96

Diluted (loss) income per share $ ( 0.51 ) $ 0.95

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

Antidilutive stock-based compensation (because average share price is less than exercise price) 829,292 2,181,281

Antidilutive due to loss 550,254 —

Total antidilutive stock-based compensation 1,379,546 2,181,281

Delek Logistics

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

As of September 30, 2023, we owned a 78.7 % interest in Delek Logistics, consisting of 34,311,278 common limited partner units and the non-economic general partner interest.

The limited partner interests in Delek Logistics not owned by us are reflected in net income attributable to non-controlling interest in the accompanying consolidated statements of income and in non-controlling interest in subsidiaries in the accompanying consolidated balance sheets.

We have agreements with Delek Logistics that, among other things, establish fees for certain administrative and operational services provided by us and our subsidiaries to Delek Logistics, provide certain indemnification obligations and establish terms for fee-based commercial logistics and marketing services provided by Delek Logistics and its subsidiaries to us.

The revenues and expenses associated with these agreements are eliminated in consolidation.

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

As of March 31, 2024, we owned a 72.7 % interest in Delek Logistics, consisting of 34,311,278 common limited partner units and the non-economic general partner interest.

The limited partner interests in Delek Logistics not owned by us are reflected in net income attributable to non-controlling interest in the accompanying condensed consolidated statements of income and in non-controlling interest in subsidiaries in the accompanying condensed consolidated balance sheets.

On March 12, 2024, Delek Logistics completed a public offering of its common units in which it sold 3,584,416 common units (including an overallotment option of 467,532 common units) to the underwriters of the offering at a price to the public of $ 38.50 per unit.

The proceeds received from this offering (net of underwriting discounts, commissions and expenses) were $ 132.3 million and were used to repay a portion of the outstanding borrowings under the Delek Logistics Revolving Facility (defined below).

Underwriting discounts totaled $ 5.5 million.

As a result of this common unit issuance and our resulting Delek Logistics ownership change, we adjusted additional paid-in capital and equity attributable to Delek Logistics’ non-controlling interest holders to reallocate Delek Logistics' equity among its unitholders.

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

The assets of Delek Logistics can only be used to settle its own obligations and its creditors have no recourse to our assets.

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

Notes to Condensed Financial Statements (Unaudited)

As of September 30, 2023

Notes to Consolidated Financial Statements

As of March 31, 2024

As of December 31, 2023

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

We account for HoldCo using the equity method of accounting.

On June 2, 2022, HoldCo's wholly-owned finance LLC ("WWP Project Financing JV") refinanced its project finance debt using the proceeds from a $ 535.0 million senior secured notes issuance due January 31, 2032.

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

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

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

Distributions received from WWP are first applied to service the debt of HoldCo's wholly owned finance LLC, with excess distributions being made to the HoldCo members as provided for in the W2W Holdings LLC Agreement and as allowed for under its debt agreements.

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

As of September 30, 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.

As of March 31, 2024, except for the guarantee of member obligations under the joint venture, we do not have other guarantees with or to HoldCo, nor any third-party associated with HoldCo contracted work.

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

As of September 30, 2023 and December 31, 2022, Delek's HoldCo investment balance totaled $ 56.2 million and $ 49.0 million, respectively, and is included in total assets in corporate, other and eliminations in our segment disclosure.

In addition, on the investment, we recognized income of $ 6.9 million and $ 18.2 million for the three and nine months ended September 30, 2023, respectively, and $ 1.2 million and $ 5.4 million for the three and nine months ended September 30, 2022, respectively.

Notes to Condensed Financial Statements (Unaudited)

As of March 31, 2024 and December 31, 2023, Delek's HoldCo investment balance totaled $ 60.8 million and $ 51.4 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.

As of September 30, 2023 and December 31, 2022, Delek's investment balance in Red River totaled $ 140.9 million and $ 149.6 million, respectively.

We recognized income on the investment totaling $ 5.5 million and $ 13.3 million for the three and nine months ended September 30, 2023, respectively, and $ 4.7 million and $ 14.6 million for the three and nine months ended September 30, 2022, respectively.

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

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

We own a 50 % membership interest in the entity formed with an affiliate of Plains All American Pipeline, L.P.

to operate one of these pipeline systems (the "Caddo Pipeline") and a 33 % membership interest in Andeavor Logistics Rio Pipeline LLC which operates the other pipeline system (the "Rio Pipeline").

As of September 30, 2023 and December 31, 2022, Delek Logistics' investment balance in these joint ventures was $ 101.0 million and $ 107.4 million, respectively, and are accounted for using the equity method.

We recognized income on these investments totaling $ 3.8 million and $ 9.6 million for the three and nine months ended September 30, 2023, respectively, and $ 3.9 million and $ 8.1 million for the three and nine months ended September 30, 2022, respectively.

As of March 31, 2024 and December 31, 2023, Delek's investment balance in Red River totaled $ 140.0 million and $ 141.1 million, respectively.

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.

to operate one of these pipeline systems and a 33 % membership interest in Andeavor Logistics Rio Pipeline LLC which operates the other pipeline system.

As of March 31, 2024 and December 31, 2023, Delek Logistics' investment balance in these joint ventures was $ 98.2 million and $ 100.3 million.

Notes to Consolidated Financial Statements

Other Investments

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

As of September 30, 2023 and December 31, 2022, Delek's investment balance in these joint ventures was $ 73.1 million and $ 53.7 million, respectively.

We recognized income on these investments totaling $ 10.8 million and $ 26.0 million for the three and nine months ended September 30, 2023, respectively, and $ 8.0 million and $ 16.3 million for the three and nine months ended September 30, 2022, respectively.

Both investments are accounted for using the equity method.

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

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

As of September 30, 2023 As of December 31, 2022

Current assets $ 184.5 $ 54.5

Non-current assets $ 1,344.4 $ 1,275.1

Current liabilities $ 61.1 $ 8.3

Non-current liabilities $ 552.3 $ 548.5

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

2023 2022 2023 2022

Revenues $ 151.4 $ 162.6 $ 373.1 $ 334.8

Gross profit $ 54.5 $ 53.5 $ 132.8 $ 123.7

Operating income $ 47.9 $ 46.6 $ 114.5 $ 107.9

Net income $ 61.9 $ 40.1 $ 148.6 $ 97.3

As of March 31, 2024 and December 31, 2023, Delek's investment balance in these joint ventures was $ 71.3 million and $ 67.9 million, respectively.

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 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.

Notes to Condensed Financial Statements (Unaudited)

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

Titled Inventory Inventory Intermediation Agreement (1)

September 30, 2023

March 31, 2024

Feedstocks, raw materials and supplies $ 294.1 $ 150.5 $ 444.6

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(1) Refer to Note 7 - Inventory Intermediation Obligations for further information.

At September 30, 2023, we recorded a pre-tax inventory valuation reserve of $ 5.0 million due to a market price decline below our cost of certain inventory products.

At March 31, 2024, we recorded a pre-tax inventory valuation reserve of $ 2.8 million due to a market price decline below our cost of certain inventory products.

At December 31, 2023, we recorded a pre-tax inventory valuation reserve of $ 11.6 million.

We recognized a net reduction (increase) in cost of materials and other in the accompanying condensed consolidated statements of income related to the change in pre-tax inventory valuation of $( 3.4 ) million and $ 6.2 million for the three and nine months ended September 30, 2023, respectively, and $( 20.3 ) million and $( 19.1 ) million for the three and nine months ended September 30, 2022, respectively.

For the three months ended March 31, 2024 and 2023, we recognized a net reduction in cost of materials and other in the accompanying condensed consolidated statements of income related to the change in pre-tax inventory valuation of $ 8.8 million and $ 1.7 million, respectively.

Notes to Consolidated Financial Statements

Inventory Intermediation Obligations

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

As of September 30, 2023 As of December 31, 2022

The following table summarizes our outstanding obligations under our Inventory Intermediation Agreement:

As of March 31, 2024 As of December 31, 2023

Obligations under Inventory Intermediation Agreement

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Other (receivable) payable for monthly activity true-up $ ( 23.8 ) $ ( 9.3 )

Obligations under Supply and Offtake Agreements

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

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

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 condensed consolidated statements of income.

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

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The following table summarizes these fees:

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

2023 2022 2023 2022

Net fees and expenses:

Three Months Ended March 31,

Net fees and (income) expenses:

Inventory intermediation fees $ ( 5.6 ) $ 5.9

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

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

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

Aron Agreements") with J.

Aron & Company ("J.

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

Notes to Condensed Financial Statements (Unaudited)

On September 18, 2023, DKTS entered into a letter agreement to the Inventory Intermediation Agreement with Citi to temporarily increase its letter of credit issued to Citi by $ 180.0 million which allowed DKTS to defer payments of certain obligations under the Inventory Intermediation Agreement until October 2023.

These deferred obligations were subject to applicable interest charges.

As of September 30, 2023, we had letters of credit outstanding of $ 260.0 million supporting the Inventory Intermediation Agreement.

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.

As of March 31, 2024 and December 31, 2023, we had letters of credit outstanding of $ 185.0 million and $ 230.0 million, respectively, supporting the Inventory Intermediation Agreement.

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

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

As of September 30, 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 Derivatives and Hedging ("ASC 815") and ASC 825, Financial Instruments ("ASC 825").

As of March 31, 2024 and December 31, 2023, the volumes subject to the Inventory Intermediation Agreement totaled 5.5 million barrels and 5.4 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 Accounting Standards Codification ("ASC") 815 Derivatives and Hedging ("ASC 815") and ASC 825, Financial Instruments ("ASC 825").

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

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

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

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

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

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

With respect to the repurchase obligation, we recognized losses attributable to changes in fair value due to commodity-index price totaling $ 83.5 million and $ 44.5 million during the three and nine months ended September 30, 2023, respectively.

Supply & Offtake Agreements

Prior to December 30, 2022, Delek was a party to Supply and Offtake Agreements with J.

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

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

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

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

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

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

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

For the three and nine months ended September 30, 2022, we recognized gains (losses) in cost of materials and other attributable to changes in fair value due to commodity-index price totaling $ 124.2 million and $( 82.6 ) million, respectively.

Notes to Condensed Financial Statements (Unaudited)

With respect to the repurchase obligation, we recognized losses attributable to changes in fair value due to commodity-index price totaling $ 81.8 million and gains totaling $ 12.7 million during the three months ended March 31, 2024 and 2023, respectively.

Notes to Consolidated Financial Statements

Long-Term Obligations

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

September 30, 2023 December 31, 2022

Delek Revolving Credit Facility $ 0.3 $ 450.0

March 31, 2024 December 31, 2023

Delek Term Loan Credit Facility 938.1 940.5

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Delek Logistics 2028 Notes 400.0 400.0

Delek Logistics 2029 Notes 650.0 —

United Community Bank Revolver 5.0 5.0

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Delek Term Loan Credit Facility

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

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 %.

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

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

At September 30, 2023 and December 31, 2022, the weighted average borrowing rate was approximately 8.92 % and 7.92 %;

respectively.

The effective interest rate was 10.16 % as of September 30, 2023.

At March 31, 2024 and December 31, 2023, the weighted average borrowing rate was approximately 8.93 % and 8.96 %, respectively.

The effective interest rate was 10.15 % as of March 31, 2024.

Delek Logistics Term Loan Facility

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

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 Term Loan Facility to April 15, 2025.

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.

This senior secured facility requires four quarterly amortization payments of $ 3.8 million in 2023, 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.

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

On October 13, 2022, Delek Logistics entered into a senior secured term loan with an original principal of $ 300.0 million ("the Delek Logistics Term Loan Facility").

The outstanding principal balance of $ 281.3 million was paid on March 13, 2024 from a portion of the proceeds received from the issuance of the Delek Logistics 2029 Notes as indicated below.

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

dollar prime rate, plus an applicable margin.

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

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

dollar primate rate borrowings.

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

At September 30, 2023 and December 31, 2022, the weighted average borrowing rate was approximately 8.92 % and 7.92 %, respectively.

The effective interest rate was 9.48 % as of September 30, 2023.

Notes to Condensed Financial Statements (Unaudited)

Debt extinguishment costs were $ 2.1 million and are recorded in interest expense, net in the accompanying condensed consolidated statements of income.

Revolving Credit Facilities

Available capacity and amounts outstanding for each of our revolving credit facilities as of September 30, 2023 are shown below (in millions):

Available capacity and amounts outstanding for each of our revolving credit facilities as of March 31, 2024 are shown below (in millions):

Total Capacity

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

As of September 30, 2023 and December 31, 2022, the weighted average interest rate was 6.68 % and 5.67 %, respectively.

(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.

(2) Total capacity includes letters of credit up to $ 146.9 million and $ 31.9 million for swing line loans.

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

As of September 30, 2023 and December 31, 2022, the weighted average interest rate was 8.45 % and 7.55 %, respectively.

As of March 31, 2024 and December 31, 2023, the weighted average interest rate was 8.18 % and 8.46 %, respectively.

(3) Interest is measured as a variable rate equal to the Wall Street Journal Prime Rate minus 0.75 %.

Requires a quarterly fee of 0.25 % per year on the average unused revolving commitment.

The weighted average borrowing rate as of September 30, 2023 and December 31, 2022 was 7.75 % and 6.75 %, respectively.

Delek Logistics Revolving Credit Facility

On November 6, 2023, Delek Logistics entered into the Amendments which among other things:

(i) increased the U.S.

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

United Community Bank Revolver

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.

The weighted average borrowing rate as of March 31, 2024 and December 31, 2023 was 7.75 % and 7.75 %, respectively.

Notes to Consolidated Financial Statements

Delek Logistics Revolving Facility

On March 29, 2024, Delek Logistics entered into a fourth amendment to the Delek Logistics Revolving Facility which among other things increased the U.S.

Revolving Credit Commitments (as defined in the Delek Logistics Credit Facility) by an amount equal to $ 100.0 million resulting in aggregate lender commitments under the Delek Logistics Revolving Credit Facility in an amount of $ 1,150.0 million.

Delek Logistics 2029 Notes

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

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

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

As of September 30, 2023, the effective interest rate was 7.18 %.

On March 13, 2024, Delek Logistics and its wholly owned subsidiary Delek Logistics Finance Corp.

(“Finance Corp.” and together with Delek Logistics, the “Co-issuers”), sold $ 650.0 million in aggregate principal amount of the Co-issuers 8.625 % Senior Notes due 2029 (the “Delek Logistics 2029 Notes”), at par, pursuant to an indenture with U.S.

Bank Trust Company, National Association as trustee.

Net proceeds were used to redeem the Delek Logistics 2025 Notes including accrued interest, pay off the Delek Logistics Term Loan Facility including accrued interest and to repay a portion of the outstanding borrowings under the Delek Logistics Revolving Facility.

On April 17, 2024, the Co-issuers sold $ 200.0 million in aggregate principal amount of additional 8.625 % senior notes due 2029 (the “Additional 2029 Notes”), at 101.25 %.

The Additional 2029 Notes were issued under the same indenture as the Delek Logistics 2029 Notes and formed a part of the same series of notes as the Delek Logistics 2029 Notes.

The net proceeds were used to repay a portion of the outstanding borrowings under the Delek Logistics Revolving Facility.

The Delek Logistics 2029 Notes are general unsecured senior obligations of the Co-issuers and are unconditionally guaranteed jointly and severally on a senior unsecured basis by Delek Logistics’ subsidiaries other than Finance Corp.

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

The Delek Logistics 2029 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.

Delek Logistics recorded $ 10.4 million of debt issuance costs which will be amortized over the term of the Delek Logistics 2029 Notes and included in interest expense in the condensed consolidated statements of income.

The Delek Logistics 2029 Notes will mature on March 15, 2029, and interest is payable semi-annually in arrears on each March 15 and September 15, commencing September 15, 2024.

At any time prior to March 15, 2026, the Co-issuers may redeem up to 35 % of the aggregate principal amount of the Delek Logistics 2029 Notes with the net cash proceeds of one or more equity offerings by Delek Logistics at a redemption price of 108.625 % of the redeemed principal amount, plus accrued and unpaid interest, if any, subject to certain conditions and limitations.

Prior to March 15, 2026, the Co-issuers may also redeem all or part of the Delek Logistics 2029 Notes at a redemption price of the principal amount plus accrued and unpaid interest, if any, plus a "make whole" premium, subject to certain conditions and limitations.

In addition, beginning on March 15, 2026, the Co-issuers may, subject to certain conditions and limitations, redeem all or part of the Delek Logistics 2029 Notes, at a redemption price of 104.313 % of the redeemed principal for the twelve-month period beginning on March 15, 2026, 102.156 % for the twelve-month period beginning on March 15, 2027, and 100.00 % beginning on March 15, 2028 and thereafter, plus accrued and unpaid interest, if any.

In the event of a change of control, accompanied or followed by a ratings downgrade within a certain period of time, subject to certain conditions and limitations, the Co-issuers will be obligated to make an offer for the purchase of the Delek Logistics 2029 Notes from holders at a price equal to 101.00 % of the principal amount thereof, plus accrued and unpaid interest.

As of March 31, 2024, the effective interest rate was 8.81 %.

Delek Logistics 2028 Notes

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

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

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").

The Delek Logistics 2028 Notes are unconditionally guaranteed jointly and severally on a senior unsecured basis by Delek Logistics’ subsidiaries (other than Finance Corp.) and will be unconditionally guaranteed on the same basis by certain of Delek Logistics’ future subsidiaries.

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

As of September 30, 2023, the effective interest rate was 7.39 %.

As of March 31, 2024, the effective interest rate was 7.39 %.

Delek Logistics 2025 Notes

In May 2018, Delek Logistics and Finance Corp.

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").

Concurrent with the issuance of the Delek Logistics 2029 Notes, Delek Logistics made a cash tender offer (the "Offer") for all of the outstanding Delek Logistic 2025 Notes with a conditional notice of full redemption for the remaining balance not received from the Offer.

The Company received tenders from holders of approximately $ 156.2 million in aggregate principal amount.

All the remaining Delek Logistic 2025 Notes were redeemed by March 29, 2024, pursuant to the notice of conditional redemption.

Debt extinguishment costs were $ 1.5 million and are recorded in interest expense, net in the accompanying condensed consolidated statements of income.

Guarantees Under Revolver and Term Facilities

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

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

Notes to Condensed Financial Statements (Unaudited)

Notes to Consolidated Financial Statements

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

Restrictive Terms and Covenants

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

As of September 30, 2023, we were in compliance with covenants on all of our debt instruments.

As of March 31, 2024, we were in compliance with covenants on all of our debt instruments.

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

As of September 30, 2023, we had no subsidiaries with restricted net assets which would prohibit earnings from being transferred to the parent company for its use.

As of March 31, 2024, we had no subsidiaries with restricted net assets which would prohibit earnings from being transferred to the parent company for its use.

Derivative Instruments

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

Additionally, as of and for the three and nine months ended September 30, 2023, other forward contracts accounted for as derivatives that are specific to managing crude costs rather than for trading purposes are recognized in cost of materials and other on the condensed consolidated statements of income in our refining segment, and are included in our disclosures of commodity derivatives in the tables below.

Additionally, as of and for the three months ended March 31, 2024, other forward contracts accounted for as derivatives that are specific to managing crude costs rather than for trading purposes are recognized in cost of materials and other on the condensed consolidated statements of income in our refining segment, and are included in our disclosures of commodity derivatives in the tables below.

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

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

As of September 30, 2023, we do not believe there is any material credit risk with respect to the counterparties to any of our derivative contracts.

The following table presents the fair value of our derivative instruments as of September 30, 2023 and December 31, 2022.

As of March 31, 2024, we do not believe there is any material credit risk with respect to the counterparties to any of our derivative contracts.

The following table presents the fair value of our derivative instruments as of March 31, 2024 and December 31, 2023.

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

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See Note 10 for further information regarding the fair value of derivative instruments (in millions).

Notes to Condensed Financial Statements (Unaudited)

September 30, 2023 December 31, 2022

Notes to Consolidated Financial Statements

March 31, 2024 December 31, 2023

Derivative Type Balance Sheet Location Assets Liabilities Assets Liabilities

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Total net fair value of derivatives $ 8.2 $ ( 24.3 ) $ 1.3 $ ( 3.9 )

(1) As of September 30, 2023 and December 31, 2022, we had open derivative positions representing 86,907,586 and 158,307,020 barrels, respectively, of crude oil and refined petroleum products.

Additionally, as of September 30, 2023 and December 31, 2022, we had open derivative positions representing 1,705,000 and 2,310,000 million British Thermal Units ("MMBTU"), respectively, of natural gas products.

(2) As of September 30, 2023 and December 31, 2022, we had open RINs commitment contracts representing 17,000,000 and 259,022,967 RINs, respectively.

(3) As of September 30, 2023 and December 31, 2022, $ 21.8 million and $ 13.8 million, respectively, of cash collateral held by counterparties has been netted with the derivatives with each counterparty.

(1) As of March 31, 2024 and December 31, 2023, we had open derivative positions representing 43,355,000 and 55,336,870 barrels, respectively, of crude oil and refined petroleum products.

(2) As of March 31, 2024 and December 31, 2023, we had open RINs commitment contracts representing 161,850,000 and 41,636,461 RINs, respectively.

(3) As of March 31, 2024 and December 31, 2023, $ 5.7 million and $ 1.8 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 condensed consolidated statements of income are as follows (in millions) (2) :

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

2023 2022 2023 2022

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

Three Months Ended March 31,

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

$ ( 21.7 ) $ 5.3

Gains (losses) on non-trading physical forward contract commodity derivatives in cost of materials and other — 0.3 ( 2.4 ) 5.1

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

Total gains (losses) $ ( 97.1 ) 78.3 $ ( 88.8 ) $ ( 24.3 )

(1) Gains (losses) on commodity derivatives that are economic hedges but not designated as hedging instruments include unrealized gains (losses) of $( 78.8 ) million and $( 55.5 ) million for the three and nine months ended September 30, 2023 , respectively, and $ 24.8 million and $ 20.2 million for the three and nine months ended September 30, 2022, respectively.

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

Total (losses) gains $ ( 21.7 ) $ 2.9

(1) (Losses) gains on commodity derivatives that are economic hedges but not designated as hedging instruments include unrealized (losses) gains of $( 9.0 ) million and $ 30.0 million for the three months ended March 31, 2024 and 2023, respectively.

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

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

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

2023 2022 2023 2022

Three Months Ended March 31,

Trading Physical Forward Contract Commodity Derivatives

Realized (losses) gains $ 0.8 $ 1.2 $ 8.0 $ 19.7

Unrealized gains (losses) — — 0.1 ( 0.3 )

Realized gains $ 0.2 $ 1.4

Unrealized losses — ( 1.8 )

Total $ 0.2 $ ( 0.4 )

Trading Hedging Commodity Derivatives

Realized (losses) gains $ ( 0.4 ) $ ( 0.3 ) $ ( 2.1 ) $ 11.6

Unrealized gains (losses) 0.2 0.7 2.5 ( 15.8 )

Realized gains $ — $ 1.4

Unrealized gains — 1.1

Total $ — $ 2.5

Notes to Condensed Financial Statements (Unaudited)

Notes to Consolidated Financial Statements

Fair Value Measurements

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

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

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

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Our commodity derivative contracts, which consist of commodity swaps, exchange-traded futures, options and physical commodity forward purchase and sale contracts (that do not qualify for the NPNS exception under ASC 815), are valued based on exchange pricing and/or price index developers such as Platts or Argus and are, therefore, classified as Level 2.

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

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

Therefore, the sum of our individual obligated parties’ Net RINs Obligations as well as RINs held by our non-obligated parties which meet our recognition criteria, comprises the Company’s “Consolidated Net RINs Obligation.” Our RINs commitment contracts are future commitments to purchase or sell RINs at fixed prices and quantities, which are used to manage the costs associated with our Consolidated Net RINs Obligation.

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 9) are categorized as Level 2, and are measured at fair value based on quoted prices from an independent pricing service.

Our environmental credits obligation surplus or deficit includes the Consolidated Net RINs Obligation surplus or deficit, as well as other environmental credit obligation surplus or deficit positions subject to fair value accounting pursuant to our accounting policy.

The environmental credits obligation surplus or deficit is categorized as Level 2, if measured at fair value either directly through observable inputs or indirectly through market-corroborated inputs, and gains (losses) related to changes in fair value are recorded as a component of cost of materials and other in the consolidated statements of income.

With respect to our Consolidated Net RINs Obligation surplus or deficit, we recognized gains (losses) on changes in fair value totaling $ 3.6 million and $ 1.8 million for the three and nine months ended September 30, 2023, respectively, and $( 12.6 ) million and $( 53.6 ) million for the three and nine months ended September 30, 2022, respectively, primarily attributable to changes in the market prices of the underlying credits that occurred at the end of each quarter.

As of and for the three and nine months ended September 30, 2023 and 2022, we elected to account for our Inventory Intermediation step-out liability and our J.

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

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.

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 condensed consolidated statements of income.

With respect to our Consolidated Net RINs Obligation, we recognized no gain on changes in fair value for the three months ended March 31, 2024 and a gain totaling $ 0.3 million for the three months ended March 31, 2023, primarily attributable to changes in the market prices of the underlying credits that occurred at the end of each quarter.

We elected to account for our Inventory Intermediation step-out liability at fair value in accordance with ASC 825, as it pertains to the fair value option.

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

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

With respect to the Inventory Intermediation Agreement, 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.

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

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

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

See Note 7 for discussion of gains and losses recognized from changes in fair value.

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

The carrying value (excluding unamortized debt issuance costs) and estimated fair value of these notes was $ 400.0 million and $ 365.5 million, respectively, as of September 30, 2023, and $ 400.0 million and $ 359.7 million, respectively, at December 31, 2022.

Notes to Condensed Financial Statements (Unaudited)

The carrying value (excluding unamortized debt issuance costs) and estimated fair value of these notes was $ 400.0 million and $ 391.4 million, respectively, as of March 31, 2024, and $ 400.0 million and $ 380.4 million, respectively, at December 31, 2023.

Also, the fair value of the Delek Logistics 2029 Notes is measured based on quoted market prices in an active market, defined as Level 1 in the fair value hierarchy.

The carrying value (excluding unamortized debt issuance costs) and estimated fair value of these notes was $ 650.0 million and $ 664.3 million, respectively, as of March 31, 2024.

Notes to Consolidated Financial Statements

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

The fair value hierarchy for our financial assets and liabilities accounted for at fair value on a recurring basis was as follows (in millions):

As of September 30, 2023

As of March 31, 2024

Level 1 Level 2 Level 3 Total

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

As of September 30, 2023 and December 31, 2022, $ 21.8 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.

As of March 31, 2024 and December 31, 2023, $ 5.7 million and $ 1.8 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 9 for further information regarding derivative instruments.

Non-Recurring Fair Value Measurements

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.

Commitments and Contingencies

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

Notes to Condensed Financial Statements (Unaudited)

Notes to Consolidated Financial Statements

Environmental, Health and Safety

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

As of September 30, 2023, we have recorded an environmental liability of approximately $ 114.7 million, primarily related to the estimated probable costs of remediating or otherwise addressing certain environmental issues of a non-capital nature at our refineries, as well as terminals, some of which we no longer own.

As of March 31, 2024, we have recorded an environmental liability of approximately $ 113.4 million, primarily related to the estimated probable costs of remediating or otherwise addressing certain environmental issues of a non-capital nature at our refineries, as well as terminals, some of which we no longer own.

This liability includes estimated costs for ongoing investigation and remediation efforts for known contamination of soil and groundwater.

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

Included in our environmental liabilities as of both September 30, 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”).

Included in our environmental liabilities as of both March 31, 2024 and December 31, 2023 is a liability totaling $ 78.5 million related to a property that we have historically operated as an asphalt and marine fuel terminal both as an owner and, subsequently, as a lessee under an in-substance lease agreement (the “License Agreement”).

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

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

While the License Agreement expired in June 2020, it is currently being disputed in litigation where we have determined that no loss accrual is necessary and that the amount of incremental loss that is reasonably possible is immaterial as of September 30, 2023.

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

As such, as of September 30, 2023 and December 31, 2022, except for accretion and expenditures, our combined environmental liability related to the terminal and property remained unchanged.

As such, as of March 31, 2024 and December 31, 2023, except for accretion and expenditures, our combined environmental liability related to the terminal and property remained unchanged.

We are also subject to various regulatory requirements related to carbon emissions and the compliance requirements to remit environmental credit obligations due to the EPA or other regulatory agencies, the most significant of which relates to the RINs Obligation subject to the EPA’s Renewable Fuel Standard - 2 ("RFS-2") regulations.

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

Other Losses and Contingencies

Delek maintains property damage insurance policies which have varying deductibles.

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

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

Notes to Condensed Financial Statements (Unaudited)

El Dorado Refinery Fire

On February 27, 2021, our El Dorado refinery experienced a fire in its Penex unit.

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

We recognized a gain of $ 0.2 million and $ 1.1 million during the three and nine months ended September 30, 2023, respectively, and a gain of $ 0.5 million and $ 8.1 million during the three and nine months ended September 30, 2022, respectively, related to business interruption claims.

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

Additionally, during the three and nine months ended September 30, 2023, we accrued an additional $ 8.0 million for uncovered litigation, claims and assessments associated with the fire, which are included in operating expenses in the condensed consolidated statements of income.

In October 2023, we entered into a settlement agreement with six employees who were injured in the fire.

Net impact to us after considering insurance coverage is approximately $ 10.0 million.

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

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

Big Spring Refinery Fire

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

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

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

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

We recognized accelerated depreciation in 2022 due to property damaged in the fire, which was recovered during the three and nine months ended September 30, 2023.

An additional $ 3.3 million was recognized as a gain, in excess of these losses, during the three and nine months ended September 30, 2023.

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

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

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

Winter Storm Uri

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

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

In addition, we recognized no gain and a gain of $ 8.9 million during the three and nine months ended September 30, 2023, respectively, and a gain of $ 6.9 million and $ 17.9 million during the three and nine months ended September 30, 2022, respectively, related to property and business interruption claims.

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 is expected to result in additional future recognition of insurance recoveries.

Under ASC 740, Income Taxes (“ASC 740”) we used an estimated annual tax rate to record income taxes for the three and nine months ended September 30, 2023 and September 30, 2022.

Our effective tax rate was 18.8 % and 17.4 % for the three and nine months ended September 30, 2023, respectively, and 19.2 % and 21.2 % for the three and nine months ended September 30, 2022, respectively.

Notes to Consolidated Financial Statements

Under ASC 740, Income Taxes (“ASC 740”), we generally use an estimated annual tax rate to record income taxes.

For interim financial reporting, except in specified cases, the quarterly income tax provision aligns with the estimated annual tax rate, updated each quarter based on revised full-year pre-tax book earnings.

In certain situations, the estimated annual tax rate may distort the interim income tax provision due to significant permanent differences.

In such cases, the interim income tax provision is based on the year-to-date effective tax rate, adjusting for permanent differences proportionall y.

In the three months ended March 31, 2024, income taxes were calculated based on the year-to-date effective tax rate.

In the three months ended March 31, 2023, income taxes were calculated based on the estimated annual tax rate.

Our effective tax rate was 22.2 % and 18.0 % for the three months ended March 31, 2024 and 2023, respectively.

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

The change in our effective tax rate for the three and nine months ended September 30, 2023 as compared to the three and nine months ended September 30, 2022 was primarily due to a change in pre-tax earnings and the impact fixed dollar favorable permanent differences on the tax rate, and adjustments to the third quarter estimated annual effective tax rate applied to year to date earnings.

The change in our effective tax rate for the three months ended March 31, 2024 as compared to the three months ended March 31, 2023 was primarily due to an decrease in quarter to date pre-tax earnings and the impact of fixed dollar favorable permanent adjustments on the quarter when applying a year-to-date effective tax rate.

Related Party Transactions

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

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

2023 2022 2023 2022

Three Months Ended March 31,

$ 22.0 $ 17.9

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

Notes to Condensed Financial Statements (Unaudited)

Other Current Assets and Liabilities

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

Other Current Assets September 30, 2023 December 31, 2022

Other Current Assets March 31, 2024 December 31, 2023

Prepaid expenses $ 62.1 $ 47.8

Income and other tax receivables 8.4 15.5

Short-term derivative assets (see Note 9)

Investment commodities 1.9 4.0

Income and other tax receivables 9.9 20.9

Other 4.6 9.6

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

Accrued Expenses and Other Current Liabilities September 30, 2023 December 31, 2022

Product financing agreements $ 260.8 $ 258.0

El Dorado refinery fire settlement (1)

Accrued Expenses and Other Current Liabilities March 31, 2024 December 31, 2023

Crude purchase liabilities $ 288.9 $ 190.7

Income and other taxes payable 158.7 166.9

Employee costs 57.1 89.2

Consolidated Net RINs Obligation deficit (see Note 10)

Deferred revenue 66.7 16.0

Employee costs 61.5 67.0

Product financing agreements 31.0 224.2

Short-term derivative liabilities (see Note 9)

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Total $ 808.2 $ 771.2

(1) Refer to Note 12 - Commitments and Contingencies for further information.

Notes to Consolidated Financial Statements

Equity-Based Compensation

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

On May 3, 2023, the Company's stockholders approved an amendment to the Delek US Holdings, Inc.

2016 Long-Term Incentive Plan that increased the number of shares of common stock available for issuance under this plan by 2,015,000 shares to 17,010,000 shares.

Compensation expense related to equity-based awards granted under the Incentive Plans amounted to $ 7.2 million and $ 18.0 million for the three and nine months ended September 30, 2023, respectively, and $ 7.3 million and $ 19.1 million for the three and nine months ended September 30, 2022, respectively.

Compensation expense related to equity-based awards granted under the Incentive Plans amounted to $ 6.3 million and $ 5.9 million for the three months ended March 31, 2024 and 2023, respectively.

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

As of September 30, 2023, there was $ 47.5 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 1.6 years.

We issued net shares of common stock of 48,154 and 409,993 as a result of exercised or vested equity-based awards during the three and nine months ended September 30, 2023, respectively, and 53,522 and 389,293 for the three and nine months ended September 30, 2022, respectively.

These amounts are net of 59,836 and 205,944 shares withheld to satisfy employee tax obligations related to the exercises and vesting during the three and nine months ended September 30, 2023, respectively, and 50,521 and 318,684 shares during the three and nine months ended September 30, 2022, respectively.

Notes to Condensed Financial Statements (Unaudited)

As of March 31, 2024, there was $ 42.7 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 1.5 years.

We issued net shares of common stock of 44,374 and 53,643 as a result of exercised or vested equity-based awards during the three months ended March 31, 2024 and 2023, respectively.

These amounts are net of 35,434 and 20,463 shares withheld to satisfy employee tax obligations related to the exercises and vesting during the three months ended March 31, 2024 and 2023, respectively.

Shareholders' Equity

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May 2, 2024 $ 0.250 May 17, 2024 May 24, 2024

August 4, 2023 $ 0.235 August 14, 2023 August 21, 2023

November 1, 2023 $ 0.240 November 13, 2023 November 20, 2023

Stock Repurchase Program

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The authorization has no expiration date.

During the three and nine months ended September 30, 2023, 981,690 and 2,793,317 shares of our common stock were repurchased and cancelled at the time of transaction for a total of $ 25.0 million and $ 65.4 million, respectively.

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

As of September 30, 2023, there was $ 205.1 million of authorization remaining under Delek's aggregate stock repurchase program.

Stock Purchase and Cooperation Agreement

On March 7, 2022, Delek entered into a stock purchase and cooperation agreement (the “Icahn Group Agreement”) with IEP Energy Holding LLC, a Delaware limited liability company, American Entertainment Properties Corp., a Delaware corporation, Icahn Enterprises Holdings L.P., a Delaware limited partnership, Icahn Enterprises G.P.

Inc., a Delaware corporation, Beckton Corp., a Delaware corporation, and Carl C.

Icahn (collectively, the “Icahn Group”), pursuant to which the Company purchased an aggregate of 3,497,268 shares of Company common stock from the Icahn Group at a price per share of $ 18.30 , the closing price of a share of Company common stock on the NYSE on March 4, 2022.

The aggregate purchase price of $ 64.0 million was funded from cash on hand.

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

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

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

Subsequent Events

Stock Repurchases

Subsequent to September 30, 2023, we made repurchases of 769,450 shares of our common stock that were cancelled at the time of transaction for approximately $ 20.0 million.

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

No common stock repurchases were made in the three month ended March 31, 2024.

As of March 31, 2024, there was $ 185.1 million of authorization remaining under Delek's aggregate stock repurchase program.

Management's Discussion and Analysis

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

What changed 10-Q

Item 1. Financial Statements