What changed in this filing

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Item 2. Management’s Discussion and Analysis

2024-08-07 compared with 2024-05-08 · 376 added, 153 removed, 743 unchanged (42% of the section changed)

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These forward-looking statements reflect our current estimates, expectations and projections about our future results, performance, prospects and opportunities.

Forward-looking statements include, among other things, statements that refer to the acquisition of 3 Bear (subsequently renamed to Delek Delaware Gathering ("Delaware Gathering")) (the "Delaware Gathering Acquisition"), including any statements regarding the expected benefits, synergies, growth opportunities, impact on liquidity and prospects, and other financial and operating benefits thereof, the information concerning possible future results of operations, business and growth strategies, including as the same may be impacted by any ongoing military conflict, such as the war between Russia and Ukraine ("the Russia-Ukraine War"), financing plans, expectations that regulatory developments or other matters will or will not have a material adverse effect on our business or financial condition, our competitive position and the effects of competition, the projected growth of the industry in which we operate, and the benefits and synergies to be obtained from our completed and any future acquisitions, statements of management’s goals and objectives, and other similar expressions concerning matters that are not historical facts.

Forward-looking statements include, among other things, statements that refer to the acquisition of 3 Bear (subsequently renamed to Delek Delaware Gathering ("Delaware Gathering")) (the "Delaware Gathering Acquisition"), including any statements regarding the expected benefits, synergies, growth opportunities, impact on liquidity and prospects, and other financial and operating benefits thereof, the information concerning possible future results of operations, business and growth strategies, including as the same may be impacted by any ongoing military conflict, such as the war between Russia and Ukraine ("the Russia-Ukraine War"), financing plans, expectations that regulatory developments or other matters will or will not have a material adverse effect on our business or financial condition, our competitive position and the effects of competition, the projected growth of the industry in which we operate, and the benefits and synergies to be obtained from our completed and any future acquisitions or dispositions, including the planned sale of our Retail Stores and H2O Midstream acquisition, statements of management’s goals and objectives, and other similar expressions concerning matters that are not historical facts.

Words such as "may," "will," "should," "could," "would," "predicts," "potential," "continue," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates," "appears," "projects" and similar expressions, as well as statements in future tense, identify forward-looking statements.

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• changes in, or the failure to comply with, the extensive government regulations applicable to our industry segments, including current and future restrictions on commercial and economic activities in response to future public health crises;

• our ability to execute our long-term sustainability strategy and growth through acquisitions such as the Delaware Gathering Acquisition and joint ventures, including our ability to successfully integrate acquisitions, complete strategic transactions, safety initiatives and capital projects, realize expected synergies, cost savings and other benefits therefrom, return value to shareholders, or achieve operational efficiencies;

• our ability to execute our long-term sustainability strategy and growth through acquisitions and dispositions such as the planned sale of our Retail Stores, the planned H20 Midstream acquisition, the Delaware Gathering Acquisition and joint ventures, including our ability to successfully integrate acquisitions, complete strategic transactions, safety initiatives and capital projects, realize expected synergies, cost savings and other benefits therefrom, return value to shareholders, or achieve operational efficiencies;

• diminishment in value of long-lived assets may result in an impairment in the carrying value of the assets on our balance sheet and a resultant loss recognized in the statement of operations;

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• changes in our ability to pay dividends;

Management's Discussion and Analysis

• seasonality;

• earthquakes, hurricanes, tornadoes, and other weather events, which can unforeseeably affect the price or availability of electricity, natural gas, crude oil, and other feedstocks, critical supplies, refined petroleum products and ethanol;

Management's Discussion and Analysis

• increases in costs of compliance with, or liability for violation of, existing or future laws, regulations and other requirements;

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• impacts of global conflicts such as the war between Israel and Hamas and the Russia-Ukraine War;

• future decisions by the Organization of Petroleum Exporting Countries ("OPEC") and the members of other leading oil producing countries

(together with OPEC, “OPEC+”) regarding production and pricing and disputes between OPEC+ members regarding the same;

• future decisions by the Organization of Petroleum Exporting Countries ("OPEC") and the members of other leading oil producing countries (together with OPEC, “OPEC+”) regarding production and pricing and disputes between OPEC+ members regarding the same;

• disruption, failure, or cybersecurity breaches affecting or targeting our i nformation technology ("IT"), systems and controls, our infrastructure, or the infrastructure of our cloud-based IT service providers;

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Our operating segments consist of refining, logistics, and retail, and are discussed in the sections that follow.

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.

Business and Economic Environment Overview

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We continue to identify opportunities to mitigate market risk and focus on efforts that improve our overall cost structure while not compromising operational excellence.

Although overall average crack spreads were lower than the first quarter of 2023, crack spreads increased from the end of 2023.

Refining margins remained strong and demand for refined products continues to be robust driven by the continued constrained supply in the markets we serve.

We will continue to identify opportunities for operational efficiency improvements.

The domestic West Texas Intermediate ("WTI") differentials compared to Brent continued to be favorable, but the WTI Midland to Cushing remained consistent in comparison to the first quarter of 2023.

Our logistics segment again contributed strong results driven by increased volumes from the Delaware Basin and rate increases.

During the second quarter of 2024, we experienced narrowing crack spreads.

The domestic West Texas Intermediate ("WTI") differentials compared to Brent continued to be favorable, and the WTI Midland to Cushing differential narrowed favorably during the quarter.

The differentials remained relatively consistent with 2023.

Along with lower crack spreads driven by higher inventories, the industry experienced lower natural gas costs and lower RINs costs, which counterbalanced lower crack spreads.

Though refining margins softened, demand for refined products continues to be robust driven by the continued constrained supply in the markets we serve.

We achieved record throughput in the second quarter 2024, driven by increased reliability and we will continue to identify opportunities for operational efficiency improvements.

Our logistics segment (or "Logistics") continued to contributed strong results driven by increased volumes from the Delaware Basin and rate increases.

Logistics also continues to benefit from strong performance amongst our pipeline joint venture investments.

Retail stores experienced normal seasonal results and performed well and we are realizing the benefit of store optimization activities as margins have increased, and we expect to begin seeing benefits from successful re-branding.

The near term economic outlook still has some uncertainty with geopolitical instability, and as a result we continue to progress our business transformation focused on enterprise-wide opportunities to improve the efficiency of our cost structure.

The expectation of reduction in the reliance of liquid fuels, increased regulatory pressures, and volatility in the commodity markets, are considerations that Delek must balance as we move forward with our strategic initiatives.

The retail segment experienced decreased sales due to the remodeling of stores which limited some store availability during quarter.

We expect to begin seeing benefits from successful re-branding and remodeling in future periods.

The near term economic outlook still has some uncertainty with geopolitical instability and commodity market volatility, and as a result we continue to progress our business transformation focused on enterprise-wide opportunities to improve the efficiency of our cost structure.

During 2024, we have implemented additional cost reduction measures across the organization, including reducing contract services and reducing or eliminating non-critical travel.

By executing on our initiatives to optimize our cost structure, we are positioning the Company in the event of lower crack spreads and volatility in the commodity markets.

The energy-related legislation passed with the Inflation Reduction Act ("IRA") encompasses clean energy financial incentives that are expected to increase capital investment opportunities that focus on the development of production capacity for liquid fuels with lower GHG.

Gulf coast industries should be well positioned for growth, particularly if global trade becomes tied to environmental attributes.

Following the enactment of the IRA, Delek is also investing in carbon capture technology and continuing our production of biodiesel fuel to meet the world’s growing demand for low-carbon energy.

We were selected by the Department of Energy's ("DOE") Office of Clean Energy Demonstrations to negotiate a cost-sharing agreement in support of a carbon capture pilot project at the Big Spring refinery.

Following the enactment of the IRA, Delek is investing in carbon capture technology.

The DOE Carbon Capture Large-Scale Pilot Project program provides 70% cost-share for up to $95 million of federal funding to support project development.

The project will deploy carbon capture technology at the Big Spring refinery's FCC unit, while maintaining existing production capabilities and turnaround schedule.

The project will deploy carbon capture technology at the Big Spring refinery's Fluid Catalytic Cracking unit, while maintaining existing production capabilities and turnaround schedule.

Expectations for the project are to capture 145,000 metric tons of carbon dioxide per year, as well as reduce health-harming pollutants, such as sulfur oxide and particulate matter.

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As we strengthen our relative financial position, we believe a balanced approach between shareholder returns and balance sheet improvement is appropriate.

In 2024, we returned $15.7 million of capital to shareholders through dividends.

In 2024 to date, we have returned $31.7 million of capital to shareholders through dividends.

Our near-term focus is centered around the following:

(1) operations excellence, (2) financial strength and flexibility and (3) strategic initiatives which includes unlocking the "sum of the parts" value of our existing business while identifying growth opportunities to enhance the Company's scale and diversify revenue streams.

In 2024, we took steps to refinance the Delek Logistics long term debt, ending the quarter with a more attractive maturity profile.

In first half of 2024, we took steps to refinance the Delek Logistics Partners, LP ("Delek Logistics") long term debt, ending with a more attractive maturity profile.

Delek Logistics also completed a public equity offering of its common units in March 2024.

These steps allowed us to further execute on our "sum of the parts" plan by facilitating Delek Logistics' planned acquisition of H2O Midstream, purchase of the Wink to Webster Pipeline joint venture and planned expansion of its natural gas processing plant.

These Delek Logistics transactions will enhance Delek Logistics position as a full service (crude, natural gas and water) provider in the most prolific areas of

Management's Discussion and Analysis

the Permian basin while increasing third party revenue.

In addition, the Retail Transaction will allow us to strengthen our balance sheet.

We believe each of these steps is consistent with our focus on strategic initiatives which includes unlocking the "sum of the parts".

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Other 2024 Developments

Delek Logistics Equity Offering

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.

The proceeds received from this offering (net of underwriting discounts, commissions and expenses) were $132.2 million and were used to repay a portion of the outstanding borrowings under the Delek Logistics Revolving Facility (as defined in Note 8 of the condensed consolidated financial statements in Item 1.

Financial Statements, of this Quarterly Report on Form 10-Q).

Delek Logistics Debt Agreements

On March 13, 2024, Delek Logistics sold $650.0 million in aggregate principal amount of 8.625% Senior Notes due 2029 (the “Delek Logistics 2029 Notes”), at par.

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.

Management's Discussion and Analysis

Net proceeds were used to redeem the Delek Logistics 2025 Notes including accrued interest, pay off the Delek Logistics Term Loan Facility (as defined in Note 8 of the condensed consolidated financial statements in Item 1.

Financial Statements, of this Quarterly Report on Form 10-Q) including accrued interest and to repay a portion of the outstanding borrowings under the 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.

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These steps improved availability under the Delek Logistics Revolving Facility to approximately $800 million and helped create the foundation for a "sum of the parts" initiative.

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.

Property Settlement

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.

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 reversed the $17.9 million asset retirement obligation since we intend to operate the property as an asphalt and marine fuel terminal.

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.

Refer to Note 11 of the condensed consolidated financial statements in Item 1.

Financial Statements, of this Quarterly Report on Form 10-Q for further information.

Delek Logistics Gas Plant Expansion

In Q2 2024, Delek Logistics made the final investment decision to build a new natural gas processing plant adjacent to its plant in the Permian Basin.

The plant is expected to have a capacity of approximately 110 MMcf/d (as defined below) and aims to meet the rising demand for natural gas in the region.

Total estimated cost is between $160.0 and $165.0 million with an anticipated start-up of early 2025.

This expansion project will also increase Delek Logistics' third party revenue.

Expected annual EBITDA is estimated to be approximately $40.0 million.

Management's Discussion and Analysis

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 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”).

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.

Refer to Note 18 of the condensed consolidated financial statements in Item 1.

Financial Statements, of this Quarterly Report on Form 10-Q for further information.

Planned Acquisition of H2O Midstream

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 (the "H2O Transaction").

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

Refer to Note 18 of the condensed consolidated financial statements in Item 1.

Financial Statements, of this Quarterly Report on Form 10-Q for further information.

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 W2W Holdings LLC ("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 Commercial Agreements

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, sale of substantially all assets, or other deconsolidation transaction involving Delek Logistics and extending (i) in the case of a deconsolidation involving a third party, for six months following closing, and (ii) for any other deconsolidation, for four years following closing.

Management's Discussion and Analysis

Refining Overview

The refining segment (or "Refining") processes crude oil and other feedstocks for the manufacture of transportation motor fuels, including various grades of gasoline, diesel fuel, 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 March 31, 2024.

The refining segment has a combined nameplate capacity of 302,000 barrels per day ("bpd") as of June 30, 2024.

A high-level summary of the refinery activities is presented below:

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Gulf Coast ("Gulf Coast") 5-3-2 crack spread because we believe it to be the most closely aligned benchmark.

(2) Our Big Spring refinery is capable of processing substantial volumes of sour crude oil, which has historically cost less than intermediate, and/or substantial volumes of sweet crude oil, and therefore the West Texas Intermediate ("WTI") Cushing/ West Texas Sour ("WTS") price differential, taking into account differences in production yield, is an important measure for helping us make strategic, market-respondent production decisions.

(2) Our Big Spring refinery is capable of processing substantial volumes of sour crude oil, which has historically cost less than intermediate, and/or substantial volumes of sweet crude oil, and therefore the WTI Cushing/ West Texas Sour ("WTS") price differential, taking into account differences in production yield, is an important measure for helping us make strategic, market-respondent production decisions.

(3) The Krotz Springs refinery has the capability to process substantial volumes of light sweet crude oil to produce a high percentage of refined light products.

Our 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.

Our refining segment also owns three biodiesel facilities involved in the production of biodiesel fuels and related activities, 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 of the condensed consolidated financial statements in Item 1.

Financial Statements, of this Quarterly Report on Form 10-Q 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 Overview

Our logistics segment (or "Logistics") gathers, transports and stores crude oil and natural gas;

Our logistics segment gathers, transports and stores crude oil and natural gas;

markets, distributes, transports and stores refined products;

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It is comprised of the consolidated balance sheet and results of operations of Delek Logistics (NYSE:

DKL), where we owned a 72.7% interest at March 31, 2024.

DKL), where we owned a 72.6% interest at June 30, 2024.

Delek Logistics was formed by Delek in 2012 to own, operate, acquire and construct crude oil and refined products logistics and marketing assets.

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Retail Overview

Our retail segment (or "Retail") at March 31, 2024 includes the operations of 250 owned and leased convenience store sites located primarily in West Texas and New Mexico.

Our convenience stores typically offer various grades of gasoline and diesel under the DK or Alon brand name and food products, food service, tobacco products, non-alcoholic and alcoholic beverages, general merchandise as well as money orders to the

Management's Discussion and Analysis

public, primarily under the DK or Alon brand names.

Our retail segment (or "Retail") at June 30, 2024 includes the operations of 250 owned and leased convenience store sites located primarily in West Texas and New Mexico.

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.

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Additionally, our corporate activities include certain of our commodity and other hedging activities.

Management's Discussion and Analysis

Strategic Objectives

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We believe that focusing on people, processes and equipment will lead to improved utilization and yields and ultimately better employee retention and lower costs, which translates to improved returns for our shareholders.

For 2024, we will be focused on the following:

For 2024, we are focused on the following:

• Prioritize safety and environmental compliance by implementing foundational best practices to increase operations ability to provide safe, compliant, and reliable operations.

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We are also committed to lowering costs and improving the efficiency of our cost structure in all aspects of our business.

For 2024, we will be focused on the following:

For 2024, we are focused on the following:

• Reward our shareholders and investors with a disciplined and balanced capital allocation framework, including opportunities to strengthen our balance sheet by reducing debt or opportunistically repurchasing shares with excess cash.

• Pursue strategic investments and acquisitions with a focus on geographic and revenue stream diversity.

Management's Discussion and Analysis

• Build upon the zero-based budget foundation set in 2022 by implementing phase 2, which includes further improvements to our operating and general and administrative cost structure.

Management's Discussion and Analysis

Strategic Initiatives

One of our near-term strategic initiatives is centered around unlocking the "sum of the parts" value of our existing business while identifying growth opportunities to diversify the Company’s geographic footprint and revenue stream, including in the alternative energy markets, as well as enhance its scale, compensate investors and develop other areas of its business.

For 2024, we will be focused on the following:

For 2024, we are focused on the following:

• Execute on our strategic initiatives, which may include opportunities to monetize our retail operations or some of our investment in Delek Logistics.

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• Deploy integrated solutions to simplify architecture, data management and cybersecurity.

Management's Discussion and Analysis

2024 Strategic Developments

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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 borrowings under the Delek Logistics Revolving Facility.

On April 17, 2024, Delek Logistics sold $200 million in aggregate principal amount of additional 8.625% senior notes due 2029 (the “Additional 2029 Notes”), at 101.25%.

On April 17, 2024, Delek Logistics sold $200 million in aggregate principal amount of additional 8.625% senior notes due 2029, 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.

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The proceeds received from this offering (net of underwriting discounts, commissions and expenses) were $132.2 million and were used to repay borrowings under the Delek Logistics Revolving Facility.

Executing Safe and Reliable Operations:

Our focus on safe and reliable operations allowed us to achieve record throughput for the second quarter of 2024 as reliability continues to increase.

Enhancing Environmental Standards with Capital Expenditures:

We successfully completed a benzene stripper project at the Big Spring Refinery, which supports achievement of our Clean Air Act Consent Decree requirements related to benzene in wastewater.

Expanding Delek Logistics' Natural Gas Processing:

In Q2 2024, Delek Logistics made the final investment decision to build a new natural gas processing plant adjacent to its plant in the Permian Basin.

The plant is expected to have a capacity of approximately 110 MMcf/d (as defined below) and aims to meet the rising demand for natural gas in the region.

(1) Total estimated cost is between $160.0 and $165.0 million with an anticipated start-up of early 2025.

This expansion project will also increase Delek Logistics' third party revenue.

Monetizing Our Retail Operations:

On July 31, 2024, we entered into the Retail Purchase Agreement with FEMSA to sell 249 retail fuel and convenience stores that we own and operate under the DK 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 Stores are located in Texas, New Mexico, and Arkansas.

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

The closing of the Retail Transaction is currently anticipated to occur by the end of 2024, subject to certain customary closing conditions.

Executing Strategic Midstream Acquisition:

On August 2, 2024, Delek Logistics entered into the H2O Purchase Agreement related to the Seller’s water disposal and recycling operations, in the Midland Basin in Texas for total consideration of $230.0 million, subject to customary adjustments under the H2O Purchase Agreement for net working capital and indebtedness.

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

This transaction will enhance Delek Logistics' position as a full service (crude, natural gas and water) provider in the most prolific areas of the Permian basin.

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

Maximizing Shareholder Value:

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.

(1) Million cubic feet ("MMcf") per day ("MMcf/d").

Management's Discussion and Analysis

Market Trends

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Many uncertainties remain with respect to the global supply and demand of the crude oil and refined products markets and it is difficult to predict the ultimate economic impacts this may have on our operations.

We expect gasoline and diesel demand to continue to follow typical seasonal patterns as we continue into the spring and summer driving season.

Management's Discussion and Analysis

We expect gasoline and diesel demand to continue to follow typical seasonal patterns as we continue through the summer driving season.

See below for further discussion on how certain key market trends impact our operating results.

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We manage market price risk on crude oil through financial derivative hedges, in accordance with our risk management strategies.

The table below reflects the quarterly average prices of WTI Midland and WTI Cushing crude oil for each of the quarterly periods in 2023 and for the first quarterly period in 2024.

The table below reflects the quarterly average prices of WTI Midland and WTI Cushing crude oil for each of the quarterly periods in 2023 and for the two quarterly periods in 2024.

Crude Pricing Differentials

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Conversely, as these price discounts widen, so does our competitive advantage, created specifically by our access to WTI Midland crude sourced through our gathering systems.

The chart below illustrates the key differentials impacting our refining operations, including WTI Cushing to Brent, WTI Midland to WTI Cushing, and Louisiana Light Sweet crude oil ("LLS") to WTI Cushing for each of the quarterly periods in 2023 and for the first quarterly period in 2024.

Management's Discussion and Analysis

Refined Product Prices

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High Sulfur Diesel ("HSD") and U.S.

Ultra Low Sulfur Diesel ("ULSD") for each of the quarterly periods in 2023 and for the first quarterly period in 2024.

Ultra Low Sulfur Diesel ("ULSD") for each of the quarterly periods in 2023 and for the two quarterly periods in 2024.

Management's Discussion and Analysis

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Generally, a crack spread represents the approximate refining margin resulting from processing one barrel of crude oil into its outputs, generally gasoline and diesel fuel.

The table below reflects the quarterly average Gulf Coast 5-3-2 ULSD, 3-2-1 ULSD and 2-1-1 HSD/LLS crack spreads for each of the quarterly periods in 2023 and for the one quarterly period in 2024.

The table below reflects the quarterly average Gulf Coast 5-3-2 ULSD, 3-2-1 ULSD and 2-1-1 HSD/LLS crack spreads for each of the quarterly periods in 2023 and for the two quarterly periods in 2024.

RIN Volatility

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Because of the volatility in RINs prices, it is not possible to predict future RINs cost with certainty, and movements in RINs prices can have significant and unanticipated adverse effects on our refining margins that are outside of our control.

The chart below illustrates the volatility in RINs for each of the quarterly periods in 2023 and for the one quarterly period in 2024.

The chart below illustrates the volatility in RINs for each of the quarterly periods in 2023 and for the two quarterly periods in 2024.

Management's Discussion and Analysis

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We manage our risk around natural gas prices by entering into variable and fixed-price supply contracts in both the Gulf and Permian Basin or by entering into derivative hedges based on forecasted consumption and forward curve prices, as appropriate, in accordance with our risk policy.

The chart below illustrates the quarterly average prices of Waha (Permian Basin) and Henry Hub (Gulf Coast) per million British Thermal Units ("MMBtu") beginning with the first quarter of 2023 through the first quarter of 2024.

Non-GAAP Measures

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GAAP financial measures.

Management's Discussion and Analysis

Non-GAAP Reconciliations

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Reconciliation of segment EBITDA to net (loss) income attributable to Delek (in millions)

Management's Discussion and Analysis

Three Months Ended March 31,

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

2024 2023 2024 2023

Refining segment EBITDA $ 17.3 $ 121.8 $ 122.4 $ 317.3

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Refining Segment

Three Months Ended March 31,

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

2024 2023 2024 2023

Total revenues $ 3,307.2 $ 4,052.5 $ 6,415.5 $ 7,847.0

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Summary Statement of Operations Data (1)

Three Months Ended March 31,

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

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

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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)

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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 expenses, net 47.3 55.4 112.4 110.2

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Results of Operations

Consolidated Results of Operations — Comparison of the Three Months Ended March 31, 2024 versus the Three Months Ended March 31, 2023.

Consolidated Results of Operations — Comparison of the Three and Six Months Ended June 30, 2024 versus the Three and Six Months Ended June 30, 2023.

Net (Loss) Income

Consolidated net loss for the three months ended March 31, 2024 was $25.2 million compared to a net income of $72.2 million for the three months ended March 31, 2023.

Consolidated net loss attributable to Delek for the three months ended March 31, 2024 was $32.6 million, or $(0.51) per basic share, compared to income of $64.3 million, or $0.96 per basic share, for the three months ended March 31, 2023.

Explanations for significant drivers impacting net (loss) income as compared to the comparable period of the prior year are discussed in the sections below.

Consolidated net loss for the second quarter of 2024 was $26.1 million compared to net loss of $1.5 million for the second quarter of 2023.

Consolidated net loss attributable to Delek for the second quarter of June 30, 2024 was $37.2 million, or $(0.58) per basic share, compared to a net loss of $8.3 million, or $(0.13) per basic share, for the second quarter 2023.

Explanations for significant drivers impacting net loss as compared to the comparable period of the prior year are discussed in the sections below.

Management's Discussion and Analysis

We generated net revenues of $3,227.6 million and $3,924.3 million during the three months ended March 31, 2024 and 2023, respectively, a decrease of $696.7 million, or 17.8%.

Consolidated net loss for the six months ended June 30, 2024 was $51.3 million compared to a net income of $70.7 million for the six months ended June 30, 2023.

Consolidated net loss attributable to Delek for the six months ended June 30, 2024 was $69.8 million, or $(1.09) per basic share, compared to income of $56.0 million, or $0.84 per basic share, for the six months ended June 30, 2023.

Explanations for significant drivers impacting net (loss) income as compared to the comparable period of the prior year are discussed in the sections below.

In the second quarter of 2024 and 2023, we generated net revenues of $3,421.7 million and $4,195.6 million, respectively, a decrease of $773.9 million, or 18.4%.

The decrease in net revenues was primarily driven by the following factors:

• in our refining segment, decreases in the average price of U.S.

Gulf Coast gasoline of 1.7% and decreases in wholesale activity, partially offset by increased sales volume and increases in the average price of U.S.

Gulf Coast ULSD of 2.5% and HSD of 30.3%;

• in our logistics segment, increases in our West Texas marketing operations and an increase in terminalling and marketing fees due to rate increases as well as higher volumes;

• in our retail segment, a decrease in total fuel sales primarily attributable to a 2.9% decrease in average price charged per gallon sold and a decrease in merchandise sales primarily driven by the same-store sales decrease of 5.2%.

We generated net revenues of $6,649.3 million and $8,119.9 million during the six months ended June 30, 2024 and 2023, respectively, a decrease of $1,470.6 million, or 18.1%.

The decrease in net revenues was primarily due to the following:

• in our refining segment, decreases in the average price of U.S.

Gulf Coast gasoline of 7.1% and ULSD of 8.7%,and decreases in wholesale activity, partially offset by an increase in sales volume and an increase in the average price of U.S.

Gulf Coast gasoline of 4.6% and ULSD of 3.4% and decreases in wholesale activity, partially offset by increased sales volume and an increase in the average price of U.S.

Gulf Coast HSD of 14.3%;

• in our logistics segment, an increase in terminalling and marketing fees due to rate increases as well as higher volumes associated with Tyler Refinery operations which were negatively impacted in prior year as a result of turnaround activities, partially offset by decreases in our West Texas marketing operations;

• in our logistics segment, increases in our West Texas marketing operations and an increase in terminalling and marketing fees due to rate increases as well as higher volumes;

• in our retail segment, a decrease in total fuel sales primarily attributable to a $0.13 decrease in average price charged per gallon sold and a decrease in merchandise sales primarily driven by the same-store sales decrease of 4.7%.

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Cost of Materials and Other

Cost of materials and other was $2,797.3 million for the three months ended March 31, 2024, compared to $3,439.6 million for three months ended March 31, 2023, a decrease of $642.3 million, or 18.7%.

Cost of materials and other was $3,099.4 million for the second quarter of 2024 compared to $3,766.6 million for the second quarter of 2023, a decrease of $667.2 million, or 17.7%.

The net decrease in cost of materials and other was primarily driven by the following:

• decreased wholesale activity and decreased RINs pricing, partially offset by increases in cost of crude oil feedstocks at the refineries, including a 9.9% increase in the average cost of WTI Cushing crude oil and a 9.9% increase in the average cost of WTI Midland crude oil and an increase in sales volume;

• increase in logistics costs due to increased costs of materials and other in our West Texas marketing operations primarily driven by increases in the volumes of gasoline and diesel sold, partially offset by decreases in the average cost per gallon;

• a decrease in retail cost of materials and other due to 2.1% decrease in average cost per gallon sold applied to lower fuel sales volumes.

Cost of materials and other was $5,896.7 million for the six months ended June 30, 2024, compared to $7,206.2 million for six months ended June 30, 2023, a decrease of $1,309.5 million, or 18.2%.

The net decrease in cost of materials and other primarily related to the following:

• decreased wholesale activity and decreased RINs pricing, partially offset by an increase in the cost of crude oil feedstocks at the refineries, including a 5.6% increase in the average cost of WTI Cushing crude oil and a 5.5% increase in the average cost of WTI Midland crude oil and an increase in sales volume;

• decrease in logistics costs due to lower natural gas costs partially offset by an increases in the average volumes of gasoline and diesel sold;

• a decrease in retail cost of materials and other due to 7.0% decrease in average cost per gallon sold.

• increase in logistics costs due to increased costs of materials and other in our West Texas marketing operations primarily driven by increases in the average volumes of gasoline and diesel sold, partially offset by decreased costs per gallon;

• a decrease in retail cost of materials and other due to 4.3% decrease in average cost per gallon sold applied to lower fuel sales volumes.

Management's Discussion and Analysis

Operating Expenses

Operating expenses (included in both cost of sales and other operating expenses) were $239.6 million for the three months ended March 31, 2024 compared to $197.8 million in three months ended March 31, 2023, an increase of $41.8 million, or 21.1%.

Operating expenses (included in both cost of sales and other operating expenses) were $211.4 million for the second quarter of 2024 compared to $219.8 million for the second quarter of 2023, a decrease of $8.4 million, or 3.8%.

The decrease in operating expenses was primarily driven by the following:

• a decrease in employee costs.

These decreases were partially offset by the following:

• an increase in maintenance costs.

Operating expenses (included in both cost of sales and other operating expenses) were $451.0 million for the six months ended June 30, 2024 compared to $417.6 million in six months ended June 30, 2023, an increase of $33.4 million, or 8.0%.

The increase in operating expenses was primarily driven by the following:

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General and Administrative Expenses

General and administrative expenses were $64.4 million for the three months ended March 31, 2024 compared to $71.5 million in three months ended March 31, 2023, a decrease of $7.1 million, or 9.9%.

General and administrative expenses were $63.1 million for the second quarter of 2024 compared to $75.8 million for the second quarter of 2023, a decrease of $12.7 million, or 16.8%.

The decrease was primarily driven by a decrease in employee costs including incentive compensation costs and decreased restructuring costs.

General and administrative expenses were $127.5 million for the six months ended June 30, 2024 compared to $147.3 million in six months ended June 30, 2023, a decrease of $19.8 million, or 13.4%.

The decrease was primarily driven by a decrease in employee costs including incentive compensation costs.

Depreciation and Amortization

Depreciation and amortization (included in both cost of sales and other operating expenses) was $95.2 million and $83.4 million for the three months ended March 31, 2024 and 2023, respectively, an increase of $11.8 million, or 14.1%.

Depreciation and amortization (included in both cost of sales and other operating expenses) was $92.1 million for the second quarter of 2024 compared to $89.4 million for the second quarter of 2023, an increase of $2.7 million, or 3.0%.

Depreciation and amortization (included in both cost of sales and other operating expenses) was $187.3 million and $172.8 million for the six months ended June 30, 2024 and 2023, respectively, an increase of $14.5 million, or 8.4%.

The increase was a result of a general increase in our fixed asset base due to capital projects and turnarounds completed.

Other Operating Income, Net

Other operating income, net was $1.6 million and $10.8 million for the three months ended March 31, 2024 and 2023, respectively, a decrease of $9.2 million, primarily due to decreased hedge gains associated with our derivatives.

Management's Discussion and Analysis

Asset Impairment

Asset impairment was $22.1 million for the three months ended June 30, 2024.

We recorded $22.1 million asset impairment as a result of our second quarter 2024 decision to idle the biodiesel facilities, while exploring viable and sustainable alternatives.

There was no asset impairment in the three months ended June 30, 2023.

Asset impairment was $22.1 million for the six months ended June 30, 2024.

We recorded $22.1 million asset impairment as a result of our second quarter 2024 decision to idle the biodiesel facilities, while exploring viable and sustainable alternatives.

There was no asset impairment in the six months ended June 30, 2023.

Refer to Note 15 condensed consolidated financial statements in Item 1.

Financial Statements, of this Quarterly Report on Form 10-Q for further information.

Other Operating Income, Net

Other operating income, net increased by $73.8 million in the second quarter of 2024 to $79.9 million compared to $6.1 million in the second quarter of 2023.

The increase was primarily driven by the following:

• for the three months ended June 30, 2024, we recorded a net gain of $53.4 million in the 2024 period related to a property settlement;

• for the three months ended June 30, 2024, we recorded a gain of $25.1 million related to insurance proceeds and other third party recoveries related to the 2021 El Dorado refinery fire and the 2022 Big Spring refinery fire related to property damage and business interruption claims, compared to $4.7 million of business interruption and property damage insurance recoveries in the 2023 period related to the fire and freeze events that occurred in 2021;

• for the three months ended June 30, 2024, we recorded a gain of $8.3 million related to Delek Logistics' sale of storage tanks in Texas due an eminent domain settlement.

Refer to Note 11 of the condensed consolidated financial statements in Item 1.

Financial Statements, of this Quarterly Report on Form 10-Q for further information.

Other operating income, net was $81.5 million and $16.9 million for the six months ended June 30, 2024 and 2023, respectively, an increase of $64.6 million.

The increase was primarily driven by the following:

• for the six months ended June 30, 2024, we recorded a net gain of $53.4 million in the 2024 period related to a property settlement;

• for the six months ended June 30, 2024, we recorded a gain of $28.7 million related to insurance proceeds and other third party recoveries related to the 2021 El Dorado refinery fire, the 2021 freeze events and the 2022 Big Spring refinery fire related to property damage and business interruption claims, compared to $9.8 million of business interruption and property damage insurance recoveries in the 2023 period related to the fire and freeze events that occurred in 2021;

• for the six months ended June 30, 2024, we recorded a gain of $8.3 million related to Delek Logistics' sale of storage tanks in Texas due to an eminent domain settlement;

• decreased hedge gains in 2024 compared to 2023 associated with our derivatives.

Refer to Note 11 of the condensed consolidated financial statements in Item 1.

Financial Statements, of this Quarterly Report on Form 10-Q for further information.

Non-Operating Expenses, Net

Interest Expense, Net

Interest expense, net was $87.7 million in the three months ended March 31, 2024, compared to $76.5 million for three months ended March 31, 2023, an increase of $11.2 million, or 14.6% primarily due to the following:

• an increase in the average effective interest rate of 257 basis points during the three months ended March 31, 2024 compared to the three months ended March 31, 2023 (where effective interest rate is calculated as interest expense divided by the net average borrowings/obligations outstanding);

• a decrease in net average borrowings outstanding (including the obligations under the supply and offtake agreements which have an associated interest charge) of approximately $454.8 million during the three months ended March 31, 2024 (calculated as a simple average of beginning borrowings/obligations and ending borrowings/obligations for the period) compared to the three months ended March 31, 2023;

• debt extinguishment costs of $3.6 million in the three months ended March 31, 2024 related to the payoff of the Delek Logistics Term Loan Facility and Delek Logistics 2025 Notes with proceeds from the Delek Logistics 2029 Notes issued in March 2024.

Interest expense, net decreased by $2.7 million, or (3.4)%, to $77.7 million in the second quarter of 2024 compared to $80.4 million in the second quarter of 2023, primarily driven by the following:

• a decrease in net average borrowings outstanding (including the obligations under the inventory intermediation agreements which have an associated interest charge) of approximately $326.0 million in the second quarter of 2024 (calculated as a simple average of beginning borrowings/obligations and ending borrowings/obligations for the period) compared to the second quarter of 2023;

Management's Discussion and Analysis

• an increase in the average effective interest rate of 92 basis points in the second quarter of 2024 compared to the second quarter of 2023 (where effective interest rate is calculated as interest expense divided by the net average borrowings/obligations outstanding).

Interest expense, net was $165.4 million in the six months ended June 30, 2024, compared to $156.9 million for six months ended June 30, 2023, an increase of $8.5 million, or 5.4% primarily due to the following:

• an increase in the average effective interest rate of 197 basis points during the six months ended June 30, 2024 compared to the six months ended June 30, 2023 (where effective interest rate is calculated as interest expense divided by the net average borrowings/obligations outstanding);

• debt extinguishment costs of $3.6 million in the six months ended June 30, 2024 related to the payoff of the Delek Logistics Term Loan Facility and Delek Logistics 2025 Notes with proceeds from the Delek Logistics 2029 Notes issued in March 2024;

• a decrease in net average borrowings outstanding (including the obligations under the inventory intermediation agreements which have an associated interest charge) of approximately $459.2 million during the six months ended June 30, 2024 (calculated as a simple average of beginning borrowings/obligations and ending borrowings/obligations for the period) compared to the six months ended June 30, 2023.

Results from Equity Method Investments

We recognized income from equity method investments of $21.9 million for the three months ended March 31, 2024, compared to $14.6 million for the three months ended March 31, 2023, an increase of $7.3 million.

We recognized income of $30.4 million from equity method investments during the second quarter of 2024, compared to $25.5 million for the second quarter of 2023, an increase of $4.9 million.

This increase was primarily driven by the following:

• an increase in income from our investment in W2W Holdings LLC to $9.4 million during the three months ended March 31, 2024 from $4.5 million in the three months ended March 31, 2023.

For the three months ended March 31, 2024, we recorded an income tax benefit of $7.2 million compared to expense of $15.8 million for the three months ended March 31, 2023, primarily driven by the following:

• an increase in income from our investment in W2W Holdings LLC to income of $10.6 million in the second quarter of 2024 from income of $6.8 million in the second quarter of 2023.

We recognized income from equity method investments of $52.3 million for the six months ended June 30, 2024, compared to $40.1 million for the six months ended June 30, 2023, an increase of $12.2 million.

This increase was primarily driven by the following:

• an increase in income from our investment in W2W Holdings LLC to $20.0 million during the six months ended June 30, 2024 from $11.3 million in the six months ended June 30, 2023.

For the second quarter of 2024, we recorded an income tax benefit of $7.7 million compared to $3.8 million for the second quarter of 2023, primarily driven by the following:

• a decrease in pre-tax net income of $28.5 million;

• our effective tax rates were 22.8% and 71.7% for the three months ended June 30, 2024 and 2023, respectively, due to the impact of fixed dollar permanent differences on the tax rate and changes to valuation allowances on certain attributes.

For the six months ended June 30, 2024, we recorded an income tax benefit of $14.9 million compared to expense of $12.0 million for the six months ended June 30, 2023, primarily driven by the following:

• a decrease in pre-tax net income of $148.9 million, and

• Our effective tax rates were 22.2% and 18.0% for the three months ended March 31, 2024 and 2023, respectively, due to the impact of fixed dollar favorable permanent differences on the tax rate and changes in valuation allowance on state attributes when calculating a year-to-date effective tax rate to approximate the estimated annual effective tax rate.

• our effective tax rates were 22.5% and 14.5% for the six months ended June 30, 2024 and 2023, respectively, due to the impact of fixed dollar favorable permanent differences on the tax rate and changes in valuation allowance on certain attributes.

Management's Discussion and Analysis

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Selected Refining Financial Information

Three Months Ended March 31,

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

2024 2023 2024 2023

Revenues $ 3,307.2 $ 4,052.5 $ 6,415.5 $ 7,847.0

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Refinery Statistics

Three Months Ended March 31,

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

2024 2023 2024 2023

Total Refining Segment

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Refinery Statistics (continued)

Three Months Ended March 31,

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

2024 2023 2024 2023

Tyler, TX Refinery

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Refinery Statistics (continued)

Three Months Ended March 31,

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

2024 2023 2024 2023

Big Spring, TX Refinery

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Other feedstocks

4,701 3,020 5,053 3,818

Total throughput 74,043 62,260 69,448 67,408

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32,468 31,968 30,356 32,373

1,033 3,725 1,882 3,618

Petrochemicals, LPG, NGLs

4,924 6,588 5,328 6,730

4,467 240 2,584 214

Total production

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Other feedstocks

4,906 4,002 6,861 5,224

Total throughput

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Refinery Sales to Other Segments

Three Months Ended March 31,

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

(in barrels per day) 2024 2023 2024 2023

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Pricing Statistics (average for the period presented)

Three Months Ended March 31,

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

2024 2023 2024 2023

WTI — Cushing crude oil (per barrel) $ 80.83 $ 73.57 $ 78.95 $ 74.78

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Management's Discussion and Analysis

Refining Segment Operational Comparison of the Three Months Ended March 31, 2024 versus the Three Months Ended March 31, 2023

Revenues for the refining segment decreased $686.2 million, or 18.1%, in the three months ended March 31, 2024 compared to the three months ended March 31, 2023.

Refining Segment Operational Comparison of the Three and Six Months Ended June 30, 2024 versus the Three and Six Months Ended June 30, 2023

Net revenues for the refining segment decreased by $745.3 million, or 18.4%, in the second quarter of 2024 compared to the second quarter of 2023.

The decrease was primarily driven by the following:

• a decrease in the average price of U.S.

Gulf Coast gasoline of 1.7%;

• a decrease in wholesale activity.

These decreases were partially offset by the following:

• an increase in sales volumes;

• an increase in the average price of U.S.

Gulf Coast ULSD of 2.5% and HSD of 30.3%.

Net revenues included sales to our retail segment of $102.6 million and $111.5 million and sales to our logistics segment of $106.7 million and $92.0 million for the three months ended June 30, 2024 and June 30, 2023, respectively.

We eliminate this intercompany revenue in consolidation.

Revenues for the refining segment decreased $1,431.5 million, or 18.2%, in the six months ended June 30, 2024 compared to the six months ended June 30, 2023.

The decrease was primarily driven by the following:

• a decrease in the average price of U.S.

Gulf Coast gasoline of 4.6% and ULSD of 3.4%;

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These decreases were partially offset by the following:

• an increase in sales volumes primarily associated with Tyler Refinery operations which were negatively impacted in prior year as a result of turnaround activities;

• an increase in sales volumes;

• an increase in the average price of U.S.

Gulf Coast HSD of 14.3%.

Revenues included sales to our retail segment of $93.9 million and $102.6 million and sales to our logistics segment of $92.9 million and $91.1 million for the three months ended March 31, 2024 and 2023, respectively.

Revenues included sales to our retail segment of $196.4 million and $214.1 million and sales to our logistics segment of $199.6 million and $183.1 million for the six months ended June 30, 2024 and 2023, respectively.

We eliminate this intercompany revenue in consolidation.

Cost of Materials and Other

Cost of materials and other decreased $618.9 million, or 17.9%, in the three months ended March 31, 2024 compared to the three months ended March 31, 2023.

Cost of materials and other decreased by $632.9 million, or 16.7%, in the second quarter of 2024 compared to the second quarter of 2023.

The decrease was primarily driven by the following:

• a decrease in wholesale activity;

• a decrease in RINs pricing

These decreases were partially offset by the following:

• increases in the cost of WTI Cushing crude oil, from an average of $73.57 per barrel to an average of $80.83, or 9.9%, and increases in the cost of WTI Midland crude oil, from an average of $74.40 per barrel to an average of $81.73, or 9.9%;

• an increase in sales volume.

Cost of materials and other decreased $1,251.8 million, or 17.3%, in the six months ended June 30, 2024 compared to the six months ended June 30, 2023.

This decrease was primarily driven by the following:

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• an increase in sales volumes primarily associated with Tyler Refinery operations which were negatively impacted in prior year as a result of turnaround activities.

Management's Discussion and Analysis

Our refining segment purchases finished product from our logistics segment and has multiple service agreements with our logistics segment which, among other things, require the refining segment to pay terminalling and storage fees based on the throughput volume of crude and finished product in the logistics segment pipelines and the volume of crude and finished product stored in the logistics segment storage tanks, subject to minimum volume commitments.

These costs and fees were $139.2 million and $124.6 million during the three months ended March 31, 2024 and 2023, respectively.

These costs and fees were $156.5 million and $132.6 million during the three months ended June 30, 2024 and 2023, respectively.

These costs and fees were $295.7 million and $257.2 million during the six months ended June 30, 2024 and 2023, respectively.

We eliminate these intercompany fees in consolidation.

Refining Margin

Refining margin decreased by $67.3 million, or 20.0%, for the three months ended March 31, 2024 compared to the three months ended March 31, 2023, with a refining margin percentage of 8.6% as compared to 8.8% for the three months ended March 31, 2024 and 2023, respectively, primarily driven by the following:

Refining segment margin decreased by $112.4 million, or 41.8%, in the second quarter of 2024 compared to the second quarter of 2023, with a refining margin percentage of 4.7% as compared to 6.6% for the second quarter of 2024 and 2023, respectively, primarily driven by the following:

• a 29.1% decrease in the 5-3-2 crack spread (the primary measure for the Tyler refinery and El Dorado refinery), and a 30.3% decrease in the average Gulf Coast 3-2-1 crack spread (the primary measure for the Big Spring refinery).

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• a 17.4% increase in the average Gulf Coast 2-1-1 crack spread (the primary measure for the Krotz Springs refinery);

• an increase in sales volume;

• lower RINs pricing.

Refining margin decreased by $179.7 million, or 29.7%, for the six months ended June 30, 2024 compared to the six months ended June 30, 2023, with a refining margin percentage of 6.6% as compared to 7.7% for the six months ended June 30, 2024 and 2023, respectively, primarily driven by the following:

• a 29.2% decrease in the 5-3-2 crack spread (the primary measure for the Tyler refinery and El Dorado refinery) and a 30.1% decrease in the average Gulf Coast 3-2-1 crack spread (the primary measure for the Big Spring refinery).

These decreases were partially offset by the following:

• a 7.0% increase in the average Gulf Coast 2-1-1 crack spread (the primary measure for the Krotz Springs refinery);

• an increase in sales volumes primarily associated with Tyler Refinery operations which were negatively impacted in prior year as a result of turnaround activities;

• lower natural gas prices.

Management's Discussion and Analysis

• lower RINs pricing.

Operating Expenses

Operating expenses increased by $26.7 million, or 19.2%, in the three months ended March 31, 2024, compared to three months ended March 31, 2023.

Operating expenses decreased by $5.2 million, or 3.4%, in the second quarter of 2024 compared to the second quarter of 2023.

The decrease in operating expenses was primarily driven by the following:

• decrease in outside services.

Operating expenses increased by $21.5 million, or 7.3%, in the six months ended June 30, 2024, compared to six months ended June 30, 2023.

The increase in operating expenses was primarily driven by the following:

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• lower natural gas prices in 2024.

EBITDA decreased by $91.0 million, for the three months ended March 31, 2024 compared to the three months ended March 31, 2023, primarily due to a decrease in refining margin driven by decreased crack spreads, partially offset by an increase in sales volumes primarily associated with Tyler Refinery operations which were negatively impacted in prior year as a result of turnaround activities.

EBITDA decreased by $104.5 million, or 85.8%, in the three months ended June 30, 2024 compared to the three months ended June 30, 2023, primarily due to a decrease in refining margin driven by decreased crack spreads, partially offset by an increase in sales volume and insurance and third party proceeds related to the fires in 2021 and 2022.

Management's Discussion and Analysis

EBITDA decreased by $194.9 million, for the six months ended June 30, 2024 compared to the six months ended June 30, 2023, primarily due to a decrease in refining margin driven by decreased crack spreads, partially offset by an increase in sales volume and insurance and third party proceeds related to the fires in 2021 and 2022.

Management's Discussion and Analysis

Logistics Segment

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Selected Logistics Financial and Operating Information

Three Months Ended March 31,

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

2024 2023 2024 2023

Revenues $ 264.6 $ 246.9 $ 516.7 $ 490.4

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Management's Discussion and Analysis

Logistics Segment Operational Comparison of the Three Months Ended March 31, 2024 versus the Three Months Ended March 31, 2023

Net revenues increased by $8.6 million, or 3.5%, in the three months ended March 31, 2024 compared to the three months ended March 31, 2023 primarily driven by the following:

• increase in terminalling and marketing fees due to rate increases as well as higher volumes associated with Tyler Refinery operations which were negatively impacted in prior year as a result of turnaround activities.

These increases were partially offset by the following:

• decreased revenue of $0.6 million in our West Texas marketing operations primarily driven by decreases in RIN prices.

Revenues included sales to our refining segment of $139.2 million and $124.6 million for the three months ended March 31, 2024 and 2023, respectively, and sales to our other segment of $0.4 million and $0.4 million for the three months ended March 31, 2024 and 2023, respectively.

Logistics Segment Operational Comparison of the Three and Six Months Ended June 30, 2024 versus the Three and Six Months Ended June 30, 2023

Net revenues increased by $17.7 million, or 7.2%, in the second quarter of 2024 compared to the second quarter of 2023, primarily driven by:

• increased revenue of $11.4 million in our West Texas marketing operations primarily driven by increases in volumes sold, partially offset by a decrease in average sales prices per gallon and decrease in RINs revenue:

◦ the volumes of gasoline and diesel sold increased by 3.6 million and 3.4 million gallons, respectively;

◦ the average sales prices per gallon of gasoline and diesel sold decreased by $0.14 and $0.06 per gallon, respectively;

• increase in terminalling and marketing revenue primarily due to rate increases and increased volumes.

Net revenues included sales to our refining segment of $156.5 million and $132.6 million for the three months ended June 30, 2024 and June 30, 2023, respectively, and sales to our other segment of $0.4 million and $0.4 million for the three months June 30, 2024 and 2023, respectively.

We eliminate this intercompany revenue in consolidation.

Net revenues increased by $26.3 million, or 5.4%, in the six months ended June 30, 2024 compared to the six months ended June 30, 2023 primarily driven by the following:

• increased revenue of $10.8 million in our West Texas marketing operations primarily driven by increases in volumes sold, partially offset by a decrease in average sales prices per gallon and decrease in RINs revenue:

◦ the volumes of gasoline and diesel sold increased by 7.6 million and 3.9 million gallons, respectively;

◦ the average sales prices per gallon of gasoline and diesel sold decreased by $0.19 and $0.19 per gallon, respectively;

• increase in terminalling and marketing revenue primarily due to rate increases and increased volumes.

Revenues included sales to our refining segment of $295.7 million and $257.2 million for the six months ended June 30, 2024 and 2023, respectively, and sales to our other segment of $0.8 million and $0.8 million for the six months ended June 30, 2024 and 2023, respectively.

We eliminate this intercompany revenue in consolidation.

Cost of Materials and Other

Cost of materials and other for the logistics segment decreased by $2.4 million, or 1.9%, in the three months ended March 31, 2024 compared to the three months ended March 31, 2023.

This decrease was primarily driven by the following:

• decrease of $5.2 million in our gathering and processing segment driven primarily by lower natural gas costs.

These decrease was partially offset by the following:

• increase in costs of materials and other of $1.8 million in our West Texas marketing operations primarily driven by increases in the average volumes of gasoline and diesel sold, partially offset by decreases in the average cost per gallon:

Cost of materials and other for the logistics segment increased by $10.0 million, or 7.8%, in the second quarter of 2024 compared to the second quarter of 2023.

The increase was primarily driven by the following:

• increased costs of materials and other of $14.4 million in our West Texas marketing operations primarily driven by increases in the volumes of gasoline and diesel sold, partially offset by decreases in the average cost per gallon:

◦ the volumes of gasoline and diesel sold increased by 3.6 million and 3.4 million gallons, respectively;

◦ the average cost per gallon of gasoline sold decreased by $0.14 per gallon, partially offset by an increase in average cost per gallon of diesel sold of $0.03 per gallon.

Our logistics segment purchased product from our refining segment of $106.7 million and $92.0 million for the three months ended June 30, 2024 and June 30, 2023, respectively.

We eliminate these intercompany costs in consolidation.

Cost of materials and other for the logistics segment increased by $7.6 million, or 3.0%, in the six months ended June 30, 2024 compared to the six months ended June 30, 2023.

This increase was primarily driven by the following:

• increased costs of materials and other of $16.2 million in our West Texas marketing operations primarily driven by increases in the average volumes of gasoline and diesel sold, partially offset by decreased costs per gallon:

◦ the volumes of gasoline and diesel sold increased by 7.6 million and 3.9 million gallons, respectively;

◦ the average cost per gallon of gasoline and diesel sold decreased by $0.21 per gallon and $0.10 per gallon, respectively.

Our logistics segment purchased product from our refining segment of $92.9 million and $91.1 million for the three months ended March 31, 2024 and 2023, respectively.

These increase was partially offset by the following:

• decrease of $7.4 million in our gathering and processing segment driven primarily by lower natural gas costs.

Management's Discussion and Analysis

Our logistics segment purchased product from our refining segment of $199.6 million and $183.1 million for the six months ended June 30, 2024 and 2023, respectively.

We eliminate these intercompany costs in consolidation.

Operating Expenses

Operating expenses increased by $7.2 million, or 29.1%, in the three months ended March 31, 2024 compared to the three months ended March 31, 2023, primarily driven by an increase in contract services.

Management's Discussion and Analysis

EBITDA increased by $8.3 million, or 9.1%, in the three months ended March 31, 2024 compared to the three months ended March 31, 2023, primarily driven by the following:

• higher terminalling and marketing fees due to rate increases as well as higher throughput volumes primarily associated with the Tyler Refinery operations which were negatively impacted in the prior year as a result of turnaround activities.

These increases were partially offset by the following:

• increases in operating expenses primarily due to contract services

Operating expenses increased by $0.6 million, or 2.1%, in the second quarter of 2024 compared to the second quarter of 2023.

Operating expenses increased by $7.8 million, or 14.5%, in the six months ended June 30, 2024 compared to the six months ended June 30, 2023, primarily driven by an increase in contract services.

EBITDA increased by $9.7 million, or 10.7%, in the three months ended June 30, 2024 compared to the three months ended June 30, 2023, primarily driven by higher contributions from the Delaware Gathering systems and terminalling and marketing rate increases.

EBITDA increased by $18.0 million, or 9.9%, in the six months ended June 30, 2024 compared to the six months ended June 30, 2023, primarily driven by higher terminalling and marketing fees due to rate increases as well as higher throughput volumes primarily associated with the Tyler Refinery operations which were negatively impacted in the prior year as a result of turnaround activities, partially offset by increases in operating expenses primarily due to contract services.

Management's Discussion and Analysis

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Selected Retail Financial and Operating Information

Three Months Ended March 31,

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

2024 2023 2024 2023

Revenues $ 216.1 $ 232.7 $ 409.6 $ 437.7

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Operating Information

Three Months Ended March 31,

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

2024 2023 2024 2023

Number of stores (end of period) 250 247 250 247

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Average retail gallons per average number of stores (in thousands)

176 189 339 354

Average retail sales price per gallon sold $ 3.16 $ 3.25 $ 3.13 $ 3.26

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Same-Store Comparison (2)

Three Months Ended March 31,

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

2024 2023 2024 2023

Change in same-store retail fuel gallons sold (4.0) % (1.5) % (1.8) % (1.6) %

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Management's Discussion and Analysis

Retail Segment Operational Comparison of the Three Months Ended March 31, 2024 versus the Three Months Ended March 31, 2023

Revenues for the retail segment decreased by $11.5 million, or 5.6%, for the three months ended March 31, 2024 compared to the three months ended March 31, 2023, primarily driven by the following:

• a decrease in total fuel sales which were $122.8 million for the three months ended March 31, 2024 compared to $131.1 million for the three months ended March 31, 2023, primarily attributable to a $0.19 decrease in average price charged per gallon sold;

• a decrease in merchandise sales to $70.7 million for the three months ended March 31, 2024 compared to $73.9 million for the three months ended March 31, 2023, primarily driven by the same-store sales decrease of 4.1% mostly attributable to tobacco sales.

Retail Segment Operational Comparison of the Three and Six Months Ended June 30, 2024 versus the Three and Six Months Ended June 30, 2023

Net revenues for the retail segment decreased by $16.6 million, or 7.1%, in the second quarter of 2024 compared to the second quarter of 2023, primarily driven by the following:

• a decrease in total fuel sales which were $136.4 million in the second quarter of 2024 compared to $148.4 million in the second quarter of 2023, primarily attributable to a decrease of $0.09 in average price charged per gallon sold and decreased volume;

• a decrease in merchandise sales to $79.6 million in the second quarter of 2024 compared to $84.3 million in the second quarter of 2023, primarily driven by the same-store sales decrease of 5.2% as a result of remodeling activities.

Revenues for the retail segment decreased by $28.1 million, or 6.4%, for the six months ended June 30, 2024 compared to the six months ended June 30, 2023, primarily driven by the following:

• a decrease in total fuel sales which were $259.2 million for the six months ended June 30, 2024 compared to $279.5 million for the six months ended June 30, 2023, primarily attributable to a $0.13 decrease in average price charged per gallon sold and decreased volume;

• a decrease in merchandise sales to $150.4 million for the six months ended June 30, 2024 compared to $158.2 million for the six months ended June 30, 2023, primarily driven by the same-store sales decrease of 4.7% mostly attributable to tobacco sales.

Cost of Materials and Other

Cost of materials and other for the retail segment decreased by $11.7 million, or 6.9%, for the three months ended March 31, 2024 compared to the three months ended March 31, 2023, primarily driven by the following:

• a decrease in average cost per gallon of $0.21, or 7.0%.

Our retail segment purchased finished product from our refining segment of $93.9 million and $102.6 million for the three months ended March 31, 2024 and 2023, respectively.

Cost of materials and other for the retail segment decreased by $12.1 million, or 6.4%, in the second quarter of 2024 compared to the second quarter of 2023, primarily driven by the following:

• a decrease in average cost per gallon of $0.06, or 2.1%, applied to fuel sales volumes that decreased period over period.

Our retail segment purchased finished product from our refining segment of $102.6 million and $111.5 million for the three months ended June 30, 2024 and June 30, 2023, respectively, which is eliminated in consolidation.

Cost of materials and other for the retail segment decreased by $23.8 million, or 6.6%, for the six months ended June 30, 2024 compared to the six months ended June 30, 2023, primarily driven by the following:

• a decrease in average cost per gallon of $0.13, or 4.3%, applied to fuel sales volumes that decreased period over period.

Our retail segment purchased finished product from our refining segment of $196.4 million and $214.1 million for the six months ended June 30, 2024 and 2023, respectively.

We eliminate this intercompany cost in consolidation.

Operating Expenses

Operating expenses for the retail segment increased by $0.5 million, or 2.0%, for the three months ended March 31, 2024 compared to the three months ended March 31, 2023.

EBITDA for the retail segment increased by $0.1 million, or 1.6%, for the three months ended March 31, 2024 compared to the three months ended March 31, 2023, primarily driven by the following:

• an increase in average fuel margin of $0.024;

Retail segment operating expenses decreased by $0.5 million, or 1.9%, in the second quarter of 2024 compared to the second quarter of 2023.

Operating expenses for the retail segment remained consistent at $50.5 million for the six months ended June 30, 2024 compared to the six months ended June 30, 2023.

Management's Discussion and Analysis

EBITDA for the retail segment decreased by $2.6 million, or 17.3%, for the three months ended June 30, 2024 compared to the three months ended June 30, 2023, primarily driven by the following:

• a decrease in average fuel margin of $0.030 per gallon and a decrease in fuel sales volume;

• a decrease in merchandise margin percentage of 1.0%.

EBITDA for the retail segment decreased by $2.5 million, or 11.7%, for the six months ended June 30, 2024 compared to the six months ended June 30, 2023, primarily driven by the following:

• a decrease in sales volume and a decrease in average fuel margin of $0.005;

• a 5.0% decrease in merchandise sales.

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• potential issuances of additional equity and debt securities.

At March 31, 2024 our total liquidity amounted to $2.2 billion comprised primarily of $1,424.3 million in unused credit commitments under our revolving credit facilities (as discussed in Note 8 of our condensed consolidated financial statements in Item 1.

At June 30, 2024 our total liquidity amounted to $2,328.2 million comprised primarily of $1,670.3 million in unused credit commitments under our revolving credit facilities (as discussed in Note 8 of our condensed consolidated financial statements in Item 1.

Financial Statements, of this Quarterly Report on Form 10-Q) and $657.9 million in cash and cash equivalents.

Historically, we have generated adequate cash from operations to fund ongoing working capital requirements, pay quarterly cash dividends and fund operational capital expenditures.

On May 2, 2024, our Board of Directors approved a quarterly cash dividend of $0.250 per share of our common stock.

On July 31, 2024, our Board of Directors approved a quarterly cash dividend of $0.255 per share of our common stock.

Other funding sources including borrowings under existing credit agreements, and issuance of equity and debt securities have been utilized to meet our funding requirements and support our growth capital projects and acquisitions.

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Additionally, our ability to satisfy working capital requirements, to service our debt obligations, to fund planned capital expenditures, or to pay dividends will depend upon future operating performance, which will be affected by prevailing economic conditions in the oil industry and other financial and business factors, including oil prices, some of which are beyond our control.

As of March 31, 2024, we believe we were in compliance with all of our debt maintenance covenants, where the most significant long-term obligation subject to such covenants was the Delek Term Loan Credit Facility (see further discussion in Note 8 of our condensed consolidated financial statements in Item 1.

As of June 30, 2024, we believe we were in compliance with all of our debt maintenance covenants, where the most significant long-term obligation subject to such covenants was the Delek Term Loan Credit Facility (see further discussion in Note 8 of our condensed consolidated financial statements in Item 1.

Financial Statements, of this Quarterly Report on Form 10-Q).

Additionally, we were in compliance with covenants during the quarter ended March 31, 2024.

Additionally, we were in compliance with covenants during the quarter ended June 30, 2024.

Failure to meet the incurrence covenants could impose certain incremental restrictions on our ability to incur new debt and also may limit whether and the extent to which we may pay dividends, as well as impose additional restrictions on our ability to repurchase our stock, make new investments and incur new liens (among others).

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Cash Position and Indebtedness

As of March 31, 2024, our total cash and cash equivalents were $753.4 million and we had total long-term indebtedness of approximately $2,496.9 million.

As of June 30, 2024, our total cash and cash equivalents were $657.9 million and we had total long-term indebtedness of approximately $2,461.7 million.

The total long-term indebtedness is net of deferred financing costs and debt discount of $59.2 million.

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Total unused credit commitments or borrowing base availability, as applicable, under our revolving credit facilities was approximately $1,670.3 million.

The decrease of $99.0 million in total long-term principle indebtedness as of March 31, 2024 compared to December 31, 2023 resulted primarily from a decrease in net borrowings under the Delek Revolving Credit Facility and the United Community Bank Revolver, partially offset by an increase in net borrowings under the Delek Logistics Revolving Facility.

As of March 31, 2024, our total long-term indebtedness (as defined in Note 8 of the condensed consolidated financial statements in Item 1.

The decrease of $136.4 million in total long-term principle indebtedness as of June 30, 2024 compared to December 31, 2023 resulted primarily from a decrease in net borrowings under the Delek Logistics Revolving Facility, payment of the outstanding balance of the Delek Logistics Term Loan Facility, and extinguishment of the Delek Logistics 2028 Notes, partially offset by the issuance of the Delek Logistics 2029 Notes.

As of June 30, 2024, our total long-term indebtedness (as defined in Note 8 of the condensed consolidated financial statements in Item 1.

Financial Statements, of this Quarterly Report on Form 10-Q) consisted of the following:

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On April 17, 2024, Delek Logistics sold $200 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.

See Note 8 to our accompanying condensed consolidated financial statements in Item 1.

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Our inventory intermediation obligation with Citigroup Energy Inc.

("Citi") was $492.7 million at March 31, 2024.

("Citi") was $472.2 million at June 30, 2024.

See Note 7 of the accompanying condensed consolidated financial statements in Item 1.

Financial Statements, of this Quarterly Report on Form 10-Q for additional information about our inventory intermediation agreement.

Our product financing liabilities consisted primarily of RIN financings as of March 31, 2024, and totaled $31.0 million, all of which is due in the next 12 months.

Our product financing liabilities consisted primarily of RIN financings as of June 30, 2024, and totaled $110.7 million, all of which is due in the next 12 months.

See further description of these types of arrangements in the Environmental Credits and Related Regulatory Obligations accounting policy disclosed in Note 2 to our accompanying consolidated financial statements included in Item 8.

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The following table sets forth a summary of our consolidated cash flows (in millions):

Three Months Ended March 31,

Six Months Ended June 30,

Cash Flow Data:

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Financing activities (178.5) (230.0)

Net (decrease) increase $ (68.8) $ 23.7

Net decrease $ (164.3) $ (19.7)

Cash Flows from Operating Activities

Net cash provided by operating activities was $166.7 million for the three months ended March 31, 2024, compared to $395.1 million for the comparable period of 2023.

Net cash provided by operating activities was $118.3 million for the six months ended June 30, 2024, compared to $490.2 million for the comparable period of 2023.

Decreases were a result of cash receipts from customers and cash payments to suppliers and for salaries resulting in a net $393.2 million decrease in cash provided by operating activities, partially offset by a decrease in cash paid for debt interest of $14.7 million.

Cash Flows from Investing Activities

Net cash used in investing activities was $41.6 million for the three months ended March 31, 2024, compared to $222.1 million in the comparable period of 2023.

The decrease in cash flows used in investing activities was primarily due to a $164.0 million decrease in purchases of property, plant and equipment, substantially driven by maintenance projects associated with the Tyler turnaround in 2023, $3.6 million of insurance proceeds in 2024 and payments of $12.3 million for equity interests investments and other in 2023.

Net cash used in investing activities was $104.1 million for the six months ended June 30, 2024, compared to $279.9 million in the comparable period of 2023.

The decrease in cash flows used in investing activities was primarily due to a $144.3 million decrease in purchases of property, plant and equipment, substantially driven by maintenance projects associated with the Tyler turnaround in 2023, $18.0 million of insurance proceeds in 2024 and decrease of $8.6 million for equity interests investments and other.

Cash Flows from Financing Activities

Net cash used in financing activities was $193.9 million for the three months ended March 31, 2024, compared to $149.3 million in the

Net cash used in financing activities was $178.5 million for the six months ended June 30, 2024, compared to $230.0 million in the comparable 2023 period.

The decrease in cash used was primarily due to the receipt of net proceeds of $132.2 million from the Delek Logistics' public offering of common units in the six months ended June 30, 2024, net proceeds from term debt of $316.4 million for the six months ended June 30, 2024 compared to net payments on term debt of $12.3 million in the comparable 2023 period, primarily related to the issuance of the Delek Logistics 2029 Notes and the related repayment of the Delek Logistics Term Loan Facility and Delek Logistics 2025 Notes and $40.4 million of share buybacks in 2023.

Management's Discussion and Analysis

comparable 2023 period.

The increase in cash used was primarily due to net payments from product and other financing arrangements of $189.7 million for the three months ended March 31, 2024 compared to net proceeds of $98.9 million in the comparable 2023 period, the receipt of settlement proceeds of $58.0 million during the first quarter of 2023 associated with the termination of the J.

Aron Supply & Offtake Agreements and origination of the Citi Inventory Intermediation Agreement (as defined in Note 7 of the condensed consolidated financial statements in Item 1.

Financial Statements, of this Quarterly Report on Form 10-Q) and payment of $10.9 million of deferred financing costs primarily related to the issuance of the Delek Logistics 2029 Notes.

These increases in cash flows were partially offset by the receipt of net proceeds of $132.3 million from the Delek Logistics' public offering of common units in the three months ended March 31, 2024 and net proceeds from term debt of $116.3 million for the three months ended March 31, 2024 compared to net payments on term debt of $6.1 million in the comparable 2023 period, primarily related to the issuance of the Delek Logistics 2029 Notes and the related repayment of the Delek Logistics Term Loan Facility and Delek Logistics 2025 Notes and a decrease in net payments on long-term revolvers of $59.6 million.

These decreases in cash flows were partially offset by the net payments from product and other financing arrangements of $102.1 million for the six months ended June 30, 2024 compared to net proceeds of $52.8 million in the comparable 2023 period, an increase in net payments on long-term revolvers of $215.8 million, the receipt of settlement proceeds of $58.0 million during the first quarter of 2023 associated with the termination of the J.

Aron Supply & Offtake Agreements (as defined in Note 2 to the audited consolidated financial statements included in Item.

8 Financial Statements and Supplementary Data, of our December 31, 2023 Annual Report on Form 10-K) and origination of the Citi Inventory Intermediation Agreement (as defined in Note 7 of the condensed consolidated financial statements in Item 1.

Financial Statements, of this Quarterly Report on Form 10-Q) and an increase of $13.0 million related to the payment of deferred financing costs primarily related to the issuance of the Delek Logistics 2029 Notes.

Capital Spending

A key component of our long-term strategy is our capital expenditure program.

The following table summarizes our actual capital expenditures for the three months ended March 31, 2024, by operating segment and major category (in millions):

2024 Forecast Three Months Ended March 31, 2024 Actual

The following table summarizes our actual capital expenditures for the six months ended June 30, 2024, by operating segment and major category (in millions):

2024 Forecast (1)

Six Months Ended June 30, 2024 Actual (2)

Regulatory $ 42 $ 22.2

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Total capital spending $ 330 $ 116.7

(1) Excludes estimated 2024 costs of $90.0 million to $100.0 million related to the new Delek Logistics natural gas processing plant .

Refer to 'Other 2024 Developments' section of Item 2.

Management's Discussion and Analysis, of this Quarterly Report on Form 10-Q for further information.

(2) Excludes a $10.0 million land purchase in connection with a settlement that was in litigation related to a property that we historically operated as an asphalt and marine fuel terminal.

Refer to Note 11 of the condensed consolidated financial statements in Item 1.

Financial Statements, of this Quarterly Report on Form 10-Q for further information.

The amount of our capital expenditure forecast is subject to change due to unanticipated increases in the cost, scope and completion time for our capital projects and subject to the changes and uncertainties discussed under the 'Forward-Looking Statements' section of Item 2.

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Long-Term Cash Requirements Under Contractual Obligations

Information regarding our known cash requirements under contractual obligations of the types described below as of March 31, 2024, is set forth in the following table (in millions):

Information regarding our known cash requirements under contractual obligations of the types described below as of June 30, 2024, is set forth in the following table (in millions):

Payments Due by Period

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Total $ 1,049.8 $ 886.4 $ 2,190.0 $ 1,188.3 $ 5,314.5

(1) Expected interest payments on debt outstanding at March 31, 2024.

Floating interest rate debt is calculated using March 31, 2024 rates.

(1) Expected interest payments on debt outstanding at June 30, 2024.

Floating interest rate debt is calculated using June 30, 2024 rates.

For additional information, see Note 8 to the condensed consolidated financial statements in Item 1.

Financial Statements, of this Quarterly Report on Form 10-Q.

(2) Amounts reflect future estimated lease payments under operating leases having remaining non-cancelable terms in excess of one year as of March 31, 2024.

(2) Amounts reflect future estimated lease payments under operating leases having remaining non-cancelable terms in excess of one year as of June 30, 2024.

(3) We have purchase commitments to secure certain quantities of crude oil, finished product and other resources used in production at both fixed and market prices.

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Operating activities include cash outflows related to payments to suppliers for crude and other inventories (which are largely reflected in our contractual purchase commitments in the table above) and payments for salaries and other employee related costs.

Cash outlays in the first quarter of 2024 are planned to include incentive compensation payments that were earned and accrued in 2023.

Cash outlays in 2024 are planned to include incentive compensation payments that were earned and accrued in 2023.

In line with our long-term sustainable strategy, future cash requirements will include initiatives to build on our long-term sustainable business model, ESG initiatives and sum of the parts initiatives.

Refer to the cash flow section for our operating activities spend during the three months ended March 31, 2024.

Refer to the cash flow section for our operating activities spend during the six months ended June 30, 2024.

While many of the expenses related to the operating activities are variable in nature, some of the expenditures can be somewhat fixed in the short-term due to forward planning on our level of activity.

Refer to the 'Capital Spending' section for our capital expenditures for the three months ended March 31, 2024 and our anticipated cash requirements for planned capital expenditures for the full year 2024.

Refer to the 'Capital Spending' section for our capital expenditures for the six months ended June 30, 2024 and our anticipated cash requirements for planned capital expenditures for the full year 2024.

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 2. Management’s Discussion and Analysis