What changed in this filing

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Item 1. Financial Statements

2024-08-07 compared with 2024-05-08 · 283 added, 110 removed, 638 unchanged (38% of the section changed)

3 unchanged sentences

(In millions, except share and per share data)

March 31, 2024 December 31, 2023

June 30, 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, 81,626,016 shares and 81,539,871 shares issued at March 31, 2024 and December 31, 2023, respectively

Common stock, $ 0.01 par value, 110,000,000 shares authorized, 82,085,570 shares and 81,539,871 shares issued at June 30, 2024 and December 31, 2023, respectively

Additional paid-in capital 1,175.8 1,113.6

Accumulated other comprehensive loss ( 4.8 ) ( 4.8 )

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

Treasury stock, 17,575,527 shares, at cost, at June 30, 2024 and December 31, 2023, respectively

( 694.1 ) ( 694.1 )

8 unchanged sentences

(In millions, except share and per share data)

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2024 2023 2024 2023

Net revenues $ 3,421.7 $ 4,195.6 $ 6,649.3 $ 8,119.9

7 unchanged sentences

Depreciation and amortization 11.4 6.8 20.2 13.4

Asset impairment 22.1 — 22.1 —

Other operating income, net ( 79.9 ) ( 6.1 ) ( 81.5 ) ( 16.9 )

3 unchanged sentences

Income from equity method investments ( 30.4 ) ( 25.5 ) ( 52.3 ) ( 40.1 )

Other income, net ( 0.7 ) ( 7.1 )

Other expense (income), net — 0.5 ( 0.7 ) ( 6.6 )

Total non-operating expense, net 47.3 55.4 112.4 110.2

14 unchanged sentences

(In millions)

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2024 2023 2024 2023

Net (loss) income $ ( 26.1 ) $ ( 1.5 ) $ ( 51.3 ) $ 70.7

Other comprehensive (loss) income:

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

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

Comprehensive (loss) income $ ( 26.1 ) $ ( 1.6 ) $ ( 51.3 ) $ 70.6

6 unchanged sentences

(In millions, except share and per share data)

Three Months Ended March 31, 2024

Three Months Ended June 30, 2024

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 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

Net (loss) income — — — — ( 37.2 ) — — 11.1 ( 26.1 )

Common stock dividends ($ 0.25 per share)

— — — — ( 16.0 ) — — — ( 16.0 )

Distributions to non-controlling interests — — — — — — — ( 13.8 ) ( 13.8 )

Equity-based compensation expense — — 7.3 — — — — 0.3 7.6

Taxes paid due to the net settlement of equity-based compensation — — ( 3.9 ) — — — — ( 0.2 ) ( 4.1 )

Exercise of equity-based awards 402,665 — — — — — — — —

Other 56,889 — 0.6 — ( 0.2 ) — — ( 0.3 ) 0.1

Balance at June 30, 2024

82,085,570 $ 0.8 $ 1,175.8 $ ( 4.8 ) $ 328.1 ( 17,575,527 ) $ ( 694.1 ) $ 177.0 $ 982.8

Three Months Ended June 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 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

Net (loss) income — — — — ( 8.3 ) — — 6.8 ( 1.5 )

Common stock dividends ($ 0.23 per share)

— — — — ( 15.0 ) — — — ( 15.0 )

Distributions to non-controlling interests — — — — — — — ( 9.6 ) ( 9.6 )

Equity-based compensation expense — — 5.7 — — — — 0.2 5.9

Repurchase of common stock ( 1,795,335 ) ( 0.1 ) ( 24.2 ) — ( 15.7 ) — — — ( 40.0 )

Taxes paid due to the net settlement of equity-based compensation — — ( 2.9 ) — — — — ( 0.1 ) ( 3.0 )

Exercise of equity-based awards 308,196 — — — — — — — —

Other 68,331 — 2.0 ( 0.1 ) ( 0.1 ) — — — 1.8

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

Financial Statements

Delek US Holdings, Inc.

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

(In millions, except share and per share data)

Six Months Ended June 30, 2024

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

8 unchanged sentences

Exercise of equity-based awards 447,039 — — — — — — — —

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

Equity attributable to issuance of Delek Logistics common limited partner units, net of tax — — 50.5 — — — — 68.3 118.8

Other 98,660 — 1.8 — ( 0.4 ) — — ( 0.4 ) 1.0

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

Balance at June 30, 2024 82,085,570 $ 0.8 $ 1,175.8 $ ( 4.8 ) $ 328.1 ( 17,575,527 ) $ ( 694.1 ) $ 177.0 $ 982.8

Six Months Ended June 30, 2023

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

10 unchanged sentences

Other 90,566 — 3.5 ( 0.1 ) ( 0.2 ) — — — 3.2

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

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

See accompanying notes to the condensed consolidated financial statements

3 unchanged sentences

(In millions)

Three Months Ended March 31,

Six Months Ended June 30,

Cash flows from operating activities:

4 unchanged sentences

Deferred income taxes ( 15.9 ) 12.0

Asset impairment 22.1 —

Income from equity method investments ( 52.3 ) ( 40.1 )

17 unchanged sentences

Purchases of intangible assets ( 1.3 ) ( 1.3 )

Proceeds from sale of property, plant and equipment 9.5 0.7

Insurance proceeds 18.0 —

Other — ( 4.8 )

Net cash used in investing activities ( 104.1 ) ( 279.9 )

16 unchanged sentences

Net used in financing activities ( 178.5 ) ( 230.0 )

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

Net increase (decrease) in cash and cash equivalents ( 164.3 ) ( 19.7 )

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

3 unchanged sentences

(In millions)

Three Months Ended March 31,

Six Months Ended June 30,

Supplemental disclosures of cash flow information:

1 unchanged sentence

Interest, net of capitalized interest of $ 0.7 million and $ 0.7 million in the 2024 and 2023 periods, respectively

$ 145.2 159.9

Income taxes $ 3.2 $ 6.6

22 unchanged sentences

In the event that Delek Logistics incurs a loss, our operating results will reflect such loss, net of intercompany eliminations, to the extent of our ownership interest in this entity.

On July 31, 2024, a wholly owned subsidiary of Delek, entered into a definitive equity purchase agreement (the "Retail Purchase Agreement") with a subsidiary of Fomento Económico Mexicano, S.A.B.

Under the terms of the Retail Purchase Agreement, Delek agreed to sell, and FEMSA has agreed to purchase, 100 % of the equity interests in four of Delek’s wholly-owned subsidiaries that own and operate 249 retail fuel and convenience stores (the "Retail Stores") under the Delek US Retail brand for a cash consideration of $ 350.0 million plus the purchase of inventory and other customary adjustments under the Retail Purchase Agreement for indebtedness (the “Retail Transaction”).

See Note 18 for further information.

On August 2, 2024, Delek Logistics entered into a Purchase and Sale Agreement with H2O Midstream Holdings, LLC (the “Seller”) to purchase 100 % of the limited liability company interests in H2O Midstream Intermediate, LLC, H2O Midstream Permian LLC, and H2O Midstream LLC (the “Purchased Interests” or "H2O Midstream"), related to the Seller’s water disposal and recycling operations, in the Midland Basin in Texas (the “H2O Purchase Agreement”) for total consideration of $ 230.0 million, subject to customary adjustments under the H2O Purchase Agreement for net working capital and indebtedness.

See Note 18 for further information.

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

2 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.

Accounting Pronouncements Not Yet Adopted

ASU 2024-02, Codification Improvements - Amendments to Remove References to the Concepts Statements

In March 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2024-02 Codificatio n Improvements - Amendments to Remove References to the Concepts Statements (" ASU 2024-02"), which amends the Accounting Standards Codification ("Codification") to remove references to various concepts statements and impacts a variety of topics in the Codification.

The ASU is intended to simplify the Codification and draw a distinction between authoritative and non-authoritative literature.

ASU 2024-02 is effective for annual reporting periods beginning after December 15, 2024, with early adoption permitted and can be applied on either a prospective or retroactive basis.

The Company does not expect this update to have a material impact on our condensed consolidated financial statements and related disclosures.

Notes to Consolidated Financial Statements

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):

In December 2023, the FASB issued ASU 2023-09 Income Taxes(Topic 740):

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

8 unchanged sentences

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.

The ASU also requires disclosure of the title and position of the individual or group 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.

1 unchanged sentence

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

9 unchanged sentences

• intercompany eliminations.

During the second quarter 2024, 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 represents reporting the operating results of our 50 % interest in a joint venture that owns asphalt terminals located in the southwestern region of the U.S.

within the refining segment.

Prior to this change, these operating results 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.

8 unchanged sentences

The refining segment includes the following:

Notes to Consolidated Financial Statements

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

2 unchanged sentences

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

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

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

The refining segment also owns three biodiesel facilities, located in Crossett, Arkansas, Cleburne, Texas and New Albany, Mississippi.

During the second quarter of 2024, we made the decision to idle the biodiesel facilities, while exploring viable and sustainable alternatives.

See Note 15 for further information.

In addition, the refining segment includes our wholesale crude operations and our 50 % interest in a joint venture that owns asphalt terminals located in the southwestern region of the U.S.

Logistics Segment

2 unchanged sentences

Retail Segment

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.

Our retail segment consists of 250 owned and leased convenience store sites as of June 30, 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.

2 unchanged sentences

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 June 30, 2024

(In millions) Refining Logistics Retail Corporate,

Other and Eliminations Consolidated

Net revenues (excluding intercompany fees and revenues) $ 3,097.9 $ 107.7 $ 216.1 $ — $ 3,421.7

Inter-segment fees and revenues 209.3 156.9 — ( 366.2 ) —

Total revenues $ 3,307.2 $ 264.6 $ 216.1 $ ( 366.2 ) $ 3,421.7

Segment EBITDA attributable to Delek $ 17.3 $ 100.6 $ 12.4 $ ( 5.4 ) $ 124.9

Depreciation and amortization ( 57.4 ) ( 24.2 ) ( 3.7 ) ( 6.8 ) ( 92.1 )

Interest expense, net ( 7.0 ) ( 35.2 ) ( 0.1 ) ( 35.4 ) ( 77.7 )

Income tax benefit 7.7

Net loss attributable to Delek $ ( 37.2 )

Income from equity method investments $ 11.9 $ 7.9 $ — $ 10.6 $ 30.4

Capital spending (1)

$ 47.0 $ 10.2 $ 6.5 $ 7.1 $ 70.8

Three Months Ended June 30, 2023

(In millions) Refining Logistics Retail Corporate,

Other and Eliminations Consolidated

Net revenues (excluding intercompany fees and revenues) $ 3,849.0 $ 113.9 $ 232.7 $ — $ 4,195.6

Inter-segment fees and revenues 203.5 133.0 — ( 336.5 ) —

Total revenues $ 4,052.5 $ 246.9 $ 232.7 $ ( 336.5 ) $ 4,195.6

Segment EBITDA attributable to Delek $ 121.8 $ 90.9 $ 15.0 $ ( 70.0 ) $ 157.7

Depreciation and amortization ( 59.8 ) ( 23.7 ) ( 2.6 ) ( 3.3 ) ( 89.4 )

Interest expense, net ( 12.2 ) ( 35.0 ) — ( 33.2 ) ( 80.4 )

Income tax benefit 3.8

Net loss attributable to Delek $ ( 8.3 )

Income from equity method investments $ 11.4 $ 7.3 $ — $ 6.8 $ 25.5

Capital spending (1)

$ 29.5 $ 19.4 $ 5.3 $ 7.0 $ 61.2

Notes to Consolidated Financial Statements

Three Months Ended March 31, 2024

Six Months Ended June 30, 2024

(In millions) Refining Logistics Retail Corporate,

11 unchanged sentences

$ 68.5 $ 25.4 $ 10.6 $ 12.2 $ 116.7

Three Months Ended March 31, 2023

Six Months Ended June 30, 2023

(In millions) Refining Logistics Retail Corporate,

19 unchanged sentences

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

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2024 2023 2024 2023

Numerator for EPS

14 unchanged sentences

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

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.

As of June 30, 2024, we owned a 72.6 % 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.

8 unchanged sentences

Notes to Consolidated Financial Statements

As of March 31, 2024

As of June 30, 2024

As of December 31, 2023

13 unchanged sentences

Accounts payable $ 26.2 $ 26.3

Accounts payable to related parties — —

Current portion of long-term debt — 30.0

1 unchanged sentence

Accrued expenses and other current liabilities 37.8 27.6

Long-term debt 1,601.2 1,673.8

Long-term debt, net of current portion 1,566.3 1,673.8

Asset retirement obligations 10.4 10.0

5 unchanged sentences

Wink to Webster Pipeline

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

The Company has determined that HoldCo is a VIE.

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

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 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.

Prior to its contribution to Delek Logistics on August 5, 2024 (see Note 18 for additional information), we owned a 50 % investment in W2W Holdings LLC ("HoldCo") which was formed by us and MPLX Operations LLC ("MPLX") to obtain financing and fund capital calls associated with our collective and contributed interests in the Wink to Webster Pipeline LLC ("WWP") joint venture.

The Company had previously determined that HoldCo is a VIE.

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

Distributions received from WWP were first applied to service the debt of HoldCo's wholly owned finance LLC, with excess distributions 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 were guaranteed by the parents of the member entities.

As of June 30, 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 March 31, 2024 and December 31, 2023, Delek's HoldCo investment balance totaled $ 60.8 million and $ 51.4 million, respectively.

As of June 30, 2024 and December 31, 2023, Delek's HoldCo investment balance totaled $ 70.3 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 March 31, 2024 and December 31, 2023, Delek's investment balance in Red River totaled $ 140.0 million and $ 141.1 million, respectively.

As of June 30, 2024 and December 31, 2023, Delek's investment balance in Red River totaled $ 139.1 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.

As of June 30, 2024 and December 31, 2023, Delek Logistics' investment balance in these joint ventures was $ 96.8 million and $ 100.3 million, respectively.

Notes to Consolidated Financial Statements

1 unchanged sentence

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

As of June 30, 2024 and December 31, 2023, Delek's investment balance in these joint ventures was $ 80.7 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.

2 unchanged sentences

Titled Inventory Inventory Intermediation Agreement (1)

March 31, 2024

June 30, 2024

Feedstocks, raw materials and supplies $ 258.8 $ 143.6 $ 402.4

8 unchanged sentences

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

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 June 30, 2024, we recorded a pre-tax inventory valuation reserve of $ 0.9 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.

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.

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 $ 1.9 million and $ 10.7 million for the three and six months ended June 30, 2024, respectively, and $ 7.9 million and $ 9.6 million for the three and six months ended June 30, 2023, respectively.

Notes to Consolidated Financial Statements

1 unchanged sentence

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

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

As of June 30, 2024 As of December 31, 2023

Obligations under Inventory Intermediation Agreement

7 unchanged sentences

The following table summarizes these fees:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2024 2023 2024 2023

Net fees and (income) expenses:

7 unchanged sentences

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.

As of June 30, 2024 and December 31, 2023, we had letters of credit outstanding of $ 195.0 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 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.

As of June 30, 2024 and December 31, 2023, the volumes subject to the Inventory Intermediation Agreement totaled 5.4 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").

4 unchanged sentences

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 $ 81.8 million and gains totaling $ 12.7 million during the three months ended March 31, 2024 and 2023, respectively.

With respect to the repurchase obligation, we recognized gains (losses) attributable to changes in fair value due to commodity-index price totaling $ 19.3 million and $( 62.5 ) million during the three and six months ended June 30, 2024, respectively, and totaling $ 26.3 million and $ 39.0 million during the three and six months ended June 30, 2023, respectively.

Notes to Consolidated Financial Statements

1 unchanged sentence

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

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

Delek Term Loan Credit Facility 935.7 940.5

6 unchanged sentences

Principle amount of long-term debt 2,520.9 2,657.3

Unamortized discount and deferred financing costs ( 61.4 ) ( 57.5 )

Total debt, net of unamortized discount and deferred financing costs 2,496.9 2,599.8

Unamortized discount and premium and deferred financing costs ( 59.2 ) ( 57.5 )

Total debt, net of unamortized discount and premium and deferred financing costs 2,461.7 2,599.8

Current portion of long-term debt 9.5 44.5

1 unchanged sentence

Delek Term Loan Credit Facility

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 %.

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 with 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.

1 unchanged sentence

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

At March 31, 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.

At June 30, 2024 and December 31, 2023, the weighted average borrowing rate was approximately 8.94 % and 8.96 %, respectively.

The effective interest rate was 10.23 % as of June 30, 2024.

Delek Logistics Term Loan Facility

8 unchanged sentences

Revolving Credit Facilities

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

Available capacity and amounts outstanding for each of our revolving credit facilities as of June 30, 2024 are shown below (in millions):

Total Capacity

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

As of June 30, 2024 and December 31, 2023, the weighted average interest rate was 8.00 % and 8.46 %, respectively.

(3) Interest is measured as a variable rate equal to the Wall Street Journal Prime Rate minus 0.50 %.

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

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

The weighted average borrowing rate as of June 30, 2024 and December 31, 2023 was 7.75 % and 7.75 %, respectively.

Notes to Consolidated Financial Statements

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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.

United Community Bank Revolver

On June 20, 2024, we amended the United Community Bank Revolver to extend the maturity date to June 30, 2026.

Delek Logistics 2029 Notes

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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.

Delek Logistics recorded $ 13.5 million of debt issuance costs and 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 premium recognized for the Additional 2029 Notes was $ 2.5 million and 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.

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In the event of a change of control, accompanied or followed by a ratings downgrade within a certain period of time, subject to certain conditions and limitations, the Co-issuers will be obligated to make an offer for the purchase of the Delek Logistics 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 %.

As of June 30, 2024, the effective interest rate was 8.95 %.

Delek Logistics 2028 Notes

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

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

As of June 30, 2024, the effective interest rate was 7.39 %.

Delek Logistics 2025 Notes

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

Notes to Consolidated Financial Statements

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.

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.

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

As of June 30, 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 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.

As of June 30, 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 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.

Additionally, as of and for the three and six months ended June 30, 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.

Notes to Consolidated Financial Statements

From time to time, we also enter into future commitments to purchase or sell RINs at fixed prices and quantities, which are used to manage the costs associated with our RINs Obligation.

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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 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.

As of June 30, 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 June 30, 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 Consolidated Financial Statements

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

Derivative Type Balance Sheet Location Assets Liabilities Assets Liabilities

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Other current liabilities 27.8 ( 38.3 ) — ( 0.8 )

Commodity derivatives (1)

Other long-term assets — — — —

RINs commitment contracts (2)

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Total net fair value of derivatives $ 0.3 $ ( 10.0 ) $ 1.3 $ ( 3.9 )

(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.

(1) As of June 30, 2024 and December 31, 2023, we had open derivative positions representing 33,183,000 and 55,336,870 barrels, respectively, of crude oil and refined petroleum products.

Additionally, as of June 30, 2024, we had open derivative positions representing 4,005,000 million British Thermal Units ("MMBTU") of natural gas products.

We had no open derivative positions of natural gas products as of December 31, 2023.

(2) As of June 30, 2024 and December 31, 2023, we had open RINs commitment contracts representing 50,750,000 and 41,636,461 RINs, respectively.

(3) As of June 30, 2024 and December 31, 2023, $ 8.0 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 March 31,

Three Months Ended June 30, Six Months Ended June 30,

2024 2023 2024 2023

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

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Total (losses) gains $ ( 7.5 ) 5.3 $ ( 29.2 ) $ 8.3

(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.

(1) (Losses) gains on commodity derivatives that are economic hedges but not designated as hedging instruments include unrealized (losses) gains of $( 0.2 ) million and $( 9.2 ) million for the three and six months ended June 30, 2024, respectively, and $( 6.6 ) million and $ 23.3 million for the three and six months ended June 30, 2023, respectively.

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

Notes to Consolidated Financial Statements

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

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2024 2023 2024 2023

Trading Physical Forward Contract Commodity Derivatives

Realized gains $ 0.1 $ 5.9 $ ( 0.1 ) $ 7.2

Unrealized losses — ( 1.8 )

Unrealized gains — 1.9 — 0.1

Total $ 0.1 $ 7.8 $ ( 0.1 ) $ 7.3

Trading Hedging Commodity Derivatives

Realized gains $ — $ 1.4

Realized losses $ — $ ( 3.1 ) $ — $ ( 1.7 )

Unrealized gains — 1.2 — 2.3

Total $ — $ ( 1.9 ) $ — $ 0.6

Notes to Consolidated Financial Statements

Fair Value Measurements

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

Our RINs commitment contracts are future commitments to purchase or sell RINs at fixed prices and quantities, which are used to manage the costs associated with our Consolidated Net RINs Obligation.

Our RINs commitment contracts are future commitments to purchase or sell RINs at fixed prices and quantities and are used to manage the costs associated with our "Consolidated Net RINs Obligation" which is 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.

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.

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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.

With respect to our Consolidated Net RINs Obligation, we recognized gains (losses) of $ 0.3 million on changes in fair value for the three and six months ended June 30, 2024, and totaling $( 2.1 ) million and $( 1.8 ) million for the three and six months ended June 30, 2023, respectively, 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.

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

Notes to Consolidated Financial Statements

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 $ 391.4 million, respectively, as of March 31, 2024, and $ 400.0 million and $ 380.4 million, respectively, at December 31, 2023.

The carrying value (excluding unamortized debt issuance costs) and estimated fair value of these notes was $ 400.0 million and $ 394.9 million, respectively, as of June 30, 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 carrying value (excluding unamortized debt issuance costs) and estimated fair value of these notes was $ 850.0 million and $ 874.2 million, respectively, as of June 30, 2024.

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 March 31, 2024

As of June 30, 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 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.

As of June 30, 2024 and December 31, 2023, $ 8.0 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

During the second quarter of 2024, we recorded an impairment for our three biodiesel facilities.

Our estimate of the fair value of the impaired long-lived assets as of June 30, 2024, were primarily based on the expectation that these assets are unlikely to generate future cash flows either through continued operation or through proceeds from the sale of the assets and thus they were written down to $ 0.5 million, which is the estimated fair value of the land.

See Note 15 for further information regarding the asset impairment recorded.

Notes to Consolidated Financial Statements

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 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 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.

As of June 30, 2024, we have recorded an environmental liability of approximately $ 35.5 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 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 March 31, 2024.

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

On June 27, 2024, we settled a dispute that was in litigation related to a property that we historically operated as an asphalt and marine fuel terminal both as an owner and, subsequently, as a lessee under an in-substance lease agreement (the “License Agreement”).

The settlement included the purchase of the property for $ 10.0 million and $ 42.0 million for settlement of the litigation for a total of $ 52.0 million.

The total settlement was comprised of $ 24.0 million of cash paid at closing and a promissory note for $ 28.0 million to be paid in three equal installments of $ 9.3 million on each of April 1, 2025, April 1, 2026 and April 1, 2027, plus accrued interest.

The settlement charge is recorded in other operating income, net in the condensed consolidated statements of income.

As a result of the termination of the License Agreement, we are no longer obligated to remove equipment from the property for certain development activities and as a result we have reversed the $ 17.9 million asset retirement obligation recorded in connection with the Delek/Alon Merger, effective July 1, 2017, since we own the property and intend to operate the property as an asphalt and marine fuel terminal and there was no remaining basis in the equipment.

Additionally, as a result of the settlement we reduced the non-contingent guarantee and environmental liability to $ 1.0 million since our risk of a contingent guarantee was eliminated and determined it appropriate to retain an accrual based on what we can reasonably estimate as the cost of the initial steps once operations cease or a cleanup is ordered.

Total net gain from the property settlement was $ 53.4 million and is recorded in other operating income, net in the condensed consolidated statements of income.

Notes to Consolidated Financial Statements

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.

Notes to Consolidated Financial Statements

Other Losses and Contingencies

Delek maintains property damage insurance policies which have varying deductibles.

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

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

El Dorado Refinery Fire

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

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

An additional $ 10.5 million of insurance proceeds and other recoveries was recognized as a gain, in excess of property damage losses, during the three and six months ended June 30, 2024.

An additional $ 10.6 million of other recoveries was recognized as a gain, related to business interruption claims, during the three and six months ended June 30, 2024.

We recognized a gain of $ 0.9 million during the three and six months ended June 30, 2023, respectively, related to business interruption claims.

Such gains are included in other operating income, net in the condensed consolidated statements of income.

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

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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.

In the three and six months ended June 30, 2024, income taxes were calculated based on the estimated annual effective tax rate versus the year-to-date effective tax rate.

In the three and six months ended June 30, 2023, income taxes were calculated based on the estimated annual tax rate.

Our effective tax rate was 22.8 % and 22.5 % for the three and six months ended June 30, 2024, respectively, and 71.7 % and 14.5 % for the three and six months ended June 30, 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 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.

The change in our effective tax rate for the three and six months ended June 30, 2024 as compared to the three and six months ended June 30, 2023 was primarily due to a decrease in quarter to date pre-tax earnings and the impact of fixed dollar favorable permanent adjustments on the quarter.

Related Party Transactions

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

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2024 2023 2024 2023

$ 39.5 $ 32.0 $ 61.5 $ 49.9

Cost of materials and other (2)

$ 48.2 $ 52.8 $ 106.0 $ 98.2

(1) Consists primarily of asphalt sales which are recorded in corporate, other and eliminations segment.

(1) Consists primarily of asphalt sales which are recorded in the refining segment.

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

Notes to Consolidated Financial Statements

Other Current Assets and Liabilities

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

Other Current Assets March 31, 2024 December 31, 2023

Other Current Assets June 30, 2024 December 31, 2023

Prepaid expenses $ 45.3 $ 47.8

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

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

Accrued Expenses and Other Current Liabilities June 30, 2024 December 31, 2023

Crude purchase liabilities $ 180.0 $ 190.7

Income and other taxes payable 136.2 166.9

Product financing agreements 110.7 224.2

Consolidated Net RINs Obligation deficit (see Note 10)

Deferred revenue 66.7 16.0

Employee costs 47.8 67.0

Product financing agreements 31.0 224.2

Short-term derivative liabilities (see Note 9)

Deferred revenue 7.2 16.0

Other 88.2 62.9

Total $ 642.9 $ 771.2

Restructuring and Other Charges

During the fiscal year 2022, we initiated a cost optimization plan to improve efficiencies and align our workforce with strategic activities and operations.

During the second quarter of 2024, we made the decision to idle the Crossett, Arkansas, Cleburne, Texas and New Albany, Mississippi biodiesel facilities, while exploring viable and sustainable alternatives.

Those alternatives could include restarting if market conditions improve, marketing for sale or permanently closing any of the facilities.

Our decision to idle these facilities was driven by the decline in the overall biodiesel market and aligns with our continued operational and cost optimization efforts.

As a result, we conducted an evaluation of impairment and based on our review we recorded a $ 22.1 million impairment which included property, plant and equipment and right of use assets.

In addition, $ 0.4 million of severance and benefit expenses were recognized in the three and six months ended June 30, 2024.

The detail of restructuring costs is as follows (in millions):

Three Months Ended June 30, 2024

Type of Costs Statement of Income Location Refining Logistics Retail Corporate,

Other and Eliminations Consolidated

Consulting fees and severance costs General and administrative expenses $ — $ — $ — $ 0.1 $ 0.1

Severance costs Operating expenses 0.4 — — — 0.4

Impairment Asset impairment 22.1 — — — 22.1

Total $ 22.5 $ — $ — $ 0.1 $ 22.6

Three Months Ended June 30, 2023

Type of Costs Statement of Income Location Refining Logistics Retail Corporate,

Other and Eliminations Consolidated

Consulting fees and severance costs General and administrative expenses $ — $ — $ — 4.3 $ 4.3

Total $ — $ — $ — $ 4.3 $ 4.3

Notes to Consolidated Financial Statements

Six Months Ended June 30, 2024

Type of Costs Statement of Income Location Refining Logistics Retail Corporate,

Other and Eliminations Consolidated

Consulting fees and severance costs General and administrative expenses $ — $ — $ — $ 3.3 $ 3.3

Severance costs Operating expenses 0.4 — — — 0.4

Impairment Asset impairment 22.1 — — — 22.1

Total $ 22.5 $ — $ — $ 3.3 $ 25.8

Six Months Ended June 30, 2023

Type of Costs Statement of Income Location Refining Logistics Retail Corporate,

Other and Eliminations Consolidated

Consulting fees and severance costs General and administrative expenses $ — $ — $ — $ 2.9 $ 2.9

Total $ — $ — $ — $ 2.9 $ 2.9

Equity-Based Compensation

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

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.

Compensation expense related to equity-based awards granted under the Incentive Plans amounted to $ 6.5 million and $ 12.8 million for the three and six months ended June 30, 2024, respectively, and $ 4.9 million and $ 10.8 million for the three and six months ended June 30, 2023, respectively.

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

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.

As of June 30, 2024, there was $ 54.4 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 1.8 years.

We issued net shares of common stock of 402,665 and 447,039 as a result of exercised or vested equity-based awards during the three and six months ended June 30, 2024, respectively, and 308,196 and 361,839 for the three and six months ended June 30, 2023, respectively.

These amounts are net of 167,658 and 203,092 shares withheld to satisfy employee tax obligations related to the exercises and vesting during the three and six months ended June 30, 2024, respectively, and 125,645 and 146,108 shares during the three and six months ended June 30, 2023, respectively.

Shareholders' Equity

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

July 31, 2024 $ 0.255 August 12, 2024 August 19, 2024

Stock Repurchase Program

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The authorization has no expiration date.

During the three months ended March 31, 2023, 16,292 shares of our common stock were repurchased and cancelled at the time of 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.

During the three and six months ended June 30, 2023, 1,795,335 and 1,811,627 shares of our common stock were repurchased and cancelled at the time of the transaction for a total of $ 40.0 million and $ 40.4 million, respectively.

No common stock repurchases were made in the three and six month ended June 30, 2024.

As of June 30, 2024, there was $ 185.1 million of authorization remaining under Delek's aggregate stock repurchase program.

Notes to Consolidated Financial Statements

Subsequent Events

Planned Sale of Retail

On July 31, 2024, a wholly owned subsidiary of Delek, entered into a definitive equity purchase agreement (the "Retail Purchase Agreement") with a subsidiary of FEMSA.

Under the terms of the Retail Purchase Agreement, Delek agreed to sell, and FEMSA has agreed to purchase, 100 % of the equity interests in four of Delek’s wholly-owned subsidiaries that own and operate 249 Retail Stores under the Delek US Retail brand for a cash consideration of $ 350.0 million plus the purchase of inventory and other customary adjustments under the Retail Purchase Agreement for indebtedness (the “Retail Transaction”).

The closing of the Retail Transaction is currently anticipated to occur by the end of 2024, subject to certain customary closing conditions, including, among other things, the receipt of required governmental and other third party approvals (or the termination or expiration of applicable waiting periods).

The Retail Transaction includes a long-term agreement whereby Delek will sell to FEMSA certain motor fuel products for use at the Retail Stores.

Planned H2O Midstream Acquisition

The purchase price is comprised of approximately $ 160.0 million in cash and $ 70.0 million of preferred equity.

Delek Logistics paid a deposit under the H2O Purchase Agreement of $ 23.0 million.

The deposit may be retained by the Seller upon certain termination events described in the H2O Purchase Agreement.

At closing, the deposit will be applied to the purchase price to be paid under the H2O Purchase Agreement.

The closing of the H2O Transaction is currently anticipated to occur by the end of 2024.

Wink to Webster Pipeline

On August 1, 2024, we purchased an additional 0.6 % indirect investment in Wink to Webster Pipeline LLC for $ 18.6 million, bringing our total indirect ownership in the pipeline joint venture to 15.6 %.

On August 5, 2024, we contributed all of our 50 % investment in HoldCo which includes our 15.6 % indirect interest in the Wink to Webster Pipeline LLC joint venture and related joint venture indebtedness, to a subsidiary of Delek Logistics.

Total consideration was comprised of $ 86.6 million in cash, forgiveness of a $ 60.0 million payable to Delek Logistics and 2,300,000 of Delek Logistics common units.

Delek Logistics

On August 5, 2024, we amended and extended expired, or soon to be expired, commercial agreements with subsidiaries of Delek Logistics under which the Delek Logistics subsidiaries provide various services, including crude oil gathering and crude oil, intermediate and refined products transportation and storage services, and marketing, terminalling and offloading services to us.

These agreements have an initial term of five to seven years , with the ability to extend for an additional five years at our option.

In addition, we also entered into an assignment agreement with a subsidiary of Delek Logistics to assign the Big Spring Refinery Marketing Agreement to Delek Holdings.

As a result of these agreements, we transferred 2,500,000 of our Delek Logistics common units to Delek Logistics to be retired.

We also entered into an amended and restated Omnibus Agreement with Delek Logistics that provides us an option to purchase certain critical assets from Delek Logistics at market value during the period beginning upon any change in control or sale of substantially all assets involving Delek Logistics and extending (i) in the case of a transaction involving a third party, for six months following closing, and (ii) for any other transaction, for four years following closing.

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