What changed in this filing

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Item 1. Financial Statements

2024-11-07 compared with 2024-08-07 · 401 added, 196 removed, 725 unchanged (45% of the section changed)

3 unchanged sentences

(In millions, except share and per share data)

June 30, 2024 December 31, 2023

September 30, 2024 December 31, 2023

Current assets:

2 unchanged sentences

Inventories, net of inventory valuation reserves 915.0 941.2

Current assets of discontinued operations — 41.5

Other current assets 50.6 77.8

8 unchanged sentences

Equity method investments 408.7 360.7

Non-current assets of discontinued operations — 228.1

Other non-current assets 112.9 124.0

6 unchanged sentences

Current portion of operating lease liabilities 45.6 50.1

Current liabilities of discontinued operations — 11.5

Accrued expenses and other current liabilities 694.7 764.3

7 unchanged sentences

Operating lease liabilities, net of current portion 63.7 85.7

Non-current liabilities of discontinued operations — 34.3

Other non-current liabilities 87.0 33.1

Total non-current liabilities 3,617.9 3,527.0

Redeemable non-controlling interest 70.0 —

Stockholders’ equity:

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

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

Common stock, $ 0.01 par value, 110,000,000 shares authorized, 81,231,308 shares and 81,539,871 shares issued at September 30, 2024 and December 31, 2023, respectively

Additional paid-in capital 1,172.7 1,113.6

Accumulated other comprehensive loss ( 4.8 ) ( 4.8 )

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

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

( 694.1 ) ( 694.1 )

2 unchanged sentences

Total stockholders’ equity 875.4 959.7

Total liabilities and stockholders’ equity $ 6,943.5 $ 7,171.8

Total liabilities, redeemable non-controlling interest and stockholders’ equity $ 7,030.3 $ 7,171.8

See accompanying notes to the condensed consolidated financial statements

3 unchanged sentences

(In millions, except share and per share data)

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

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

2024 2023 2024 2023

5 unchanged sentences

Total cost of sales 3,062.6 4,350.8 9,387.0 11,931.5

Operating expenses related to retail and wholesale business (excluding depreciation and amortization presented below) 26.3 31.1 52.1 58.1

Operating expenses related to wholesale business (excluding depreciation and amortization presented below) 3.7 ( 3.7 ) 5.7 3.9

General and administrative expenses 70.4 67.7 191.6 208.0

1 unchanged sentence

Asset impairment 9.2 — 31.3 —

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

Other operating expense (income), net 12.8 ( 2.1 ) ( 67.6 ) ( 19.0 )

Total operating costs and expenses 3,164.3 4,416.7 9,566.6 12,136.5

Operating income 13.5 50.1 46.2 192.9

Operating (loss) income ( 121.9 ) 212.1 ( 88.1 ) 388.6

Interest expense, net 78.8 82.4 244.1 239.1

Income from equity method investments ( 25.1 ) ( 27.0 ) ( 77.4 ) ( 67.1 )

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

Other (income) expense, net ( 0.5 ) 2.0 ( 1.1 ) ( 4.6 )

Total non-operating expense, net 53.2 57.4 165.6 167.4

(Loss) income before income tax (benefit) expense ( 33.8 ) ( 5.3 ) ( 66.2 ) 82.7

(Loss) income from continuing operations before income tax (benefit) expense ( 175.1 ) 154.7 ( 253.7 ) 221.2

Income tax (benefit) expense ( 40.3 ) 29.1 ( 56.7 ) 38.3

(Loss) income from continuing operations, net of tax ( 134.8 ) 125.6 ( 197.0 ) 182.9

Discontinued operations:

Income from discontinued operations, including gain on sale of discontinued operations 95.4 12.9 107.8 29.1

Income tax expense 28.1 2.4 29.6 5.2

Income from discontinued operations, net of tax 67.3 10.5 78.2 23.9

Net (loss) income ( 67.5 ) 136.1 ( 118.8 ) 206.8

Net income attributed to non-controlling interests 11.1 6.8 18.5 14.7

Net income attributable to:

Non-controlling interests 9.3 7.4 27.8 22.1

Net (loss) income attributable to Delek $ ( 76.8 ) $ 128.7 $ ( 146.6 ) $ 184.7

Basic (loss) income per share:

(Loss) income from continuing operations $ ( 2.25 ) $ 1.82 $ ( 3.51 ) $ 2.44

Income from discontinued operations 1.05 0.16 1.22 0.36

Total basic (loss) income per share $ ( 1.20 ) $ 1.98 $ ( 2.29 ) $ 2.80

Diluted (loss) income per share:

(Loss) income from continuing operations $ ( 2.25 ) $ 1.81 $ ( 3.51 ) $ 2.42

Income from discontinued operations 1.05 0.16 1.22 0.36

Total diluted (loss) income per share $ ( 1.20 ) $ 1.97 $ ( 2.29 ) $ 2.78

Weighted average common shares outstanding:

6 unchanged sentences

(In millions)

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

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

2024 2023 2024 2023

3 unchanged sentences

Total other comprehensive loss — — — ( 0.1 )

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

Comprehensive income attributable to non-controlling interest 11.1 6.8 18.5 14.7

Comprehensive (loss) income attributable to:

$ ( 67.5 ) $ 136.1 $ ( 118.8 ) $ 206.7

Non-controlling interest 9.3 7.4 27.8 22.1

Comprehensive (loss) income attributable to Delek $ ( 76.8 ) $ 128.7 $ ( 146.6 ) $ 184.6

4 unchanged sentences

(In millions, except share and per share data)

Three Months Ended June 30, 2024

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

Three Months Ended September 30, 2024

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

Shares Amount Shares Amount

Balance at March 31, 2024

Balance at June 30, 2024

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

4 unchanged sentences

Equity-based compensation expense — — 10.0 — — — — 0.3 10.3 —

Repurchase of common stock ( 942,329 ) — ( 13.5 ) — ( 6.5 ) — — — ( 20.0 )

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

Exercise of equity-based awards 59,485 — — — — — — — — —

Issuance of Delek Logistics preferred units — — — — — — — — — 70.0

Other 28,582 — 0.9 — 0.1 — — 0.1 1.1 —

Balance at June 30, 2024

Balance at September 30, 2024

81,231,308 $ 0.8 $ 1,172.7 $ ( 4.8 ) $ 228.5 ( 17,575,527 ) $ ( 694.1 ) $ 172.3 $ 875.4 $ 70.0

Three Months Ended June 30, 2023

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

Three Months Ended September 30, 2023

Shares Amount Shares Amount

Balance at March 31, 2023

Balance at June 30, 2023

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

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

Net income — — — — 128.7 — — 7.4 136.1 —

Common stock dividends ($ 0.235 per share)

6 unchanged sentences

Other 24,760 — 0.6 — — — — 0.1 0.7 —

Balance at June 30, 2023

Balance at September 30, 2023

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

3 unchanged sentences

(In millions, except share and per share data)

Six Months Ended June 30, 2024

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

Nine Months Ended September 30, 2024

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

Shares Amount Shares Amount

5 unchanged sentences

Equity-based compensation expense — — 24.3 — — — — 0.8 25.1 —

Repurchase of common stock ( 942,329 ) — ( 13.5 ) — ( 6.5 ) — — — ( 20.0 )

Taxes paid due to the net settlement of equity-based compensation — — ( 4.9 ) — — — — ( 0.8 ) ( 5.7 ) —

1 unchanged sentence

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

Issuance of Delek Logistics preferred units — — — — — — — — — 70.0

Other 127,242 — 2.7 — ( 0.3 ) — — ( 0.3 ) 2.1 —

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

Six Months Ended June 30, 2023

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

Balance at September 30, 2024 81,231,308 $ 0.8 $ 1,172.7 $ ( 4.8 ) $ 228.5 ( 17,575,527 ) $ ( 694.1 ) $ 172.3 $ 875.4 $ 70.0

Nine Months Ended September 30, 2023

Shares Amount Shares Amount

9 unchanged sentences

Other 115,326 — 4.1 ( 0.1 ) ( 0.2 ) — — 0.1 3.9 —

Balance at June 30, 2023 83,150,295 $ 0.8 $ 1,121.8 $ ( 5.3 ) $ 518.1 ( 17,575,527 ) $ ( 694.1 ) $ 121.6 $ 1,062.9

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

See accompanying notes to the condensed consolidated financial statements

3 unchanged sentences

(In millions)

Six Months Ended June 30,

Nine Months Ended September 30,

Cash flows from operating activities:

10 unchanged sentences

Equity-based compensation expense 25.1 20.5

Income from discontinued operations, including gain on sale of discontinued operations, net ( 78.2 ) ( 23.9 )

Other 1.6 6.4

6 unchanged sentences

Non-current assets and liabilities, net ( 97.1 ) ( 5.6 )

Cash provided by operating activities - continuing operations 78.9 891.7

Cash provided by (used in) operating activities - discontinued operations 17.8 31.1

Net cash provided by operating activities 96.7 922.8

Cash flows from investing activities:

Acquisition of H2O ( 159.5 ) —

Equity method investment contributions ( 18.6 ) —

Distributions from equity method investments 4.1 10.5

3 unchanged sentences

Proceeds from sale of property, plant and equipment 10.6 1.3

Insurance proceeds 18.0 —

Insurance and settlement proceeds 15.5 1.5

Cash used in investing activities - continuing operations ( 387.4 ) ( 320.6 )

Cash provided by (used in) investing activities - discontinued operations 361.7 ( 18.0 )

Net cash used in investing activities ( 25.7 ) ( 338.6 )

15 unchanged sentences

Deferred financing costs paid ( 18.1 ) ( 1.3 )

Cash provided by (used in) financing activities - continuing operations 144.4 ( 523.8 )

Net used in financing activities 144.4 ( 523.8 )

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

Net increase in cash and cash equivalents 215.4 60.4

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

Cash and cash equivalents at the end of the period 1,037.6 901.7

Less cash and cash equivalents of discontinued operations at the end of the period — 0.4

Cash and cash equivalents of continuing operations at the end of the period $ 1,037.6 $ 901.3

Delek US Holdings, Inc.

1 unchanged sentence

(In millions)

Six Months Ended June 30,

Nine Months Ended September 30,

Supplemental disclosures of cash flow information:

4 unchanged sentences

Non-cash investing activities:

Delek Logistics preferred units issued in connection with H2O Acquisition $ 70.0 $ —

Decrease in accrued capital expenditures $ 7.4 $ ( 34.7 )

21 unchanged sentences

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

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

See Note 18 for further information.

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

Under the terms of the Retail Purchase Agreement, Delek agreed to sell, and FEMSA 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 $ 390.2 million including the purchase of inventory and other customary adjustments under the Retail Purchase Agreement for indebtedness (the “Retail Transaction”).

The Retail Transaction closed on September 30, 2024.

As a result of the Retail Purchase Agreement, we met the requirements under the provisions of Accounting Standards Codification ("ASC") 205-20, Presentation of Financial Statements - Discontinued Operations ("ASC 205-20") and ASC 360, Property, Plant and Equipment ("ASC 360"), to report the results of the Retail Stores as discontinued operations and to classify the Retail Stores as a group of discontinued operations assets.

On September 11, 2024, Delek Logistics completed the acquisition of 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 Acquisition") from H2O Midstream Holdings, LLC (the “Seller”).

The H2O Midstream Acquisition included water disposal and recycling operations in the Midland Basin in Texas.

See Note 2 for further information.

5 unchanged sentences

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

Accounting Pronouncements Not Yet Adopted

Having classified the Retail Stores as discontinued operations, the condensed consolidated balance sheets for all periods presented have been reclassified to reflect discontinued operations assets and discontinued operations liabilities.

The condensed consolidated statements of income for all periods presented have been reclassified to reflect the results of the Retail Stores as income from discontinued operations, net of taxes.

See Note 4 for further information regarding discontinued operations.

Notes to Consolidated Financial Statements

Accounting Pronouncements Adopted

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

2 unchanged sentences

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

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

Notes to Consolidated Financial Statements

The Company adopted the provisions of ASU 2024-02 in the third quarter of 2024, and the adoption of this standard did not have a material impact on the Company's condensed consolidated financial statements and related disclosures.

Accounting Pronouncements Not Yet Adopted

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

5 unchanged sentences

The amendments in this ASU are effective for annual periods beginning after December 15, 2024, with early adoption permitted, and should be applied on a prospective basis with the option to apply the standard retrospectively.

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

The adoption of ASU 2023-09 will result in additional disclosure requirements but is not anticipated to have a significant impact on our condensed consolidated financial statements.

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

5 unchanged sentences

ASU 2023-07 is effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024, and should be applied retrospectively to all prior periods presented in the financial statements.

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

See Note 2 for further information.

The adoption of ASU 2023-07 will result in additional segment reporting disclosure requirements but is not anticipated to have a significant impact on our condensed consolidated financial statements.

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

3 unchanged sentences

We aggregate our operating units into three reportable segments:

H2O Midstream

Delek Logistics completed the H2O Midstream Acquisition on September 11, 2024, in which it acquired water disposal and recycling operations, in the Midland Basin in Texas (the "Midland Water Gathering System") for total consideration of $ 229.5 million, subject to customary adjustments for net working capital and indebtedness ("H2O Transaction").

The purchase price was comprised of approximately $ 159.5 million in cash and $ 70.0 million of Delek Logistics’ preferred units.

See Note 6 for further information on Preferred Units.

The cash portion was financed through a combination of cash on hand and borrowings under the Delek Logistics' Credit Facility (as defined in Note 10).

For the three and nine months ended September 30, 2024, we incurred $ 6.1 million in incremental direct acquisition and integration costs that principally consist of legal, advisory and other professional fees.

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

Our consolidated financial and operating results reflect the H2O Midstream Acquisition operations beginning September 11, 2024.

Our results of operations included revenue and net income of $ 3.6 million and $ 1.3 million, respectively, for the period from September 11, 2024 through September 30, 2024 related to these operations.

Notes to Consolidated Financial Statements

The H2O Midstream Acquisition was accounted for using the acquisition method of accounting, whereby the purchase price was allocated to the tangible and intangible assets acquired and the liabilities assumed based on their fair values.

Determination of Purchase Price (1)

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

Base purchase price:

closing net working capital (as defined in the H2O Purchase Agreement)

various closing adjustments

Adjusted purchase price 229.5

Cash paid 159.5

Fair value of preferred units issued 70.0

Preliminary purchase price $ 229.5

(1) These amounts are based upon estimates at closing, but are subject to a subsequent review and revision period pursuant to the H2O Midstream Acquisition agreement at which time final settlements for these components will be determined.

Such subsequent adjustments may result in changes to the preliminary purchase price.

Purchase Price Allocation

The following table summarizes the preliminary fair values of assets acquired and liabilities assumed in the H2O Midstream Acquisition as of September 11, 2024 (in millions):

Assets acquired:

Accounts receivables $ 6.7

Inventories 2.5

Other current assets 0.9

Property, plant and equipment 174.5

Operating lease right-of-use assets 0.5

Other intangibles (1)

Total assets acquired 244.0

Liabilities assumed:

Accounts payable 4.0

Accrued expenses and other current liabilities 5.1

Current portion of operating lease liabilities 0.3

Asset retirement obligations 4.9

Operating lease liabilities, net of current portion 0.2

Total liabilities assumed 14.5

Fair value of net assets acquired $ 229.5

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

• Customer relationship intangible that is subject to amortization with a preliminary fair value of $ 24.0 million, which will be amortized over an 12.6 years useful life.

The estimated amortization expense is $ 1.9 million for each of the five succeeding fiscal years.

• Rights-of-way intangibles valued at $ 30.1 million, of which, the majority has an indefinite life.

• Favorable supply contract intangible that is subject to amortization with a preliminary fair value of $ 4.8 million which will be amortized over a 4.8 years useful life.

The estimated amortization expense is $ 1.0 million for each of the next four fiscal years, and $ 0.4 million in the fifth succeeding fiscal year.

The amortization expense related to the above intangible assets for the three and nine months ended September 30, 2024 was immaterial.

These fair value estimates are preliminary and therefore, the final fair value of assets acquired and liabilities assumed and the resulting effect on our financial position may change once all necessary information has become available, the final working capital adjustment is complete, and we finalize our valuations.

To the extent possible, estimates have been considered and recorded, as appropriate, for the items above based on the information available as of September 30, 2024.

We will continue to evaluate these items until they are satisfactorily resolved and adjust our purchase price allocation accordingly, within the allowable measurement period (not to exceed one year from the date of acquisition), as defined by Accounting Standards Codification ("ASC") 805, Business Combinations ("ASC 805").

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

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

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

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

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

Notes to Consolidated Financial Statements

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

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

Unaudited Pro Forma Financial Information

The following table summarizes the unaudited pro forma financial information of the Company assuming the H2O Midstream Acquisition had occurred on January 1, 2023.

The unaudited pro forma financial information has been adjusted to give effect to certain pro forma adjustments that are directly related to the H2O Midstream Acquisition based on available information and certain assumptions that management believes are factually supportable.

The most significant pro forma adjustments relate to (i) incremental interest expense associated with revolving credit facility borrowings incurred in connection with the H2O Midstream Acquisition, (ii) incremental depreciation resulting from the estimated fair values of acquired property, plant and equipment, (iii) incremental amortization resulting from the estimated fair values of acquired customer relationship intangibles and (iv) transaction costs.

The unaudited pro forma financial information excludes any expected cost savings or other synergies as a result of the H2O Midstream Acquisition.

The unaudited pro forma financial information is not necessarily indicative of the results of operations that would have been achieved had the H2O Midstream Acquisition been effective as of the dates presented, nor is it indicative of future operating results of the combined company.

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

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

(in millions) 2024 2023 2024 2023

Net sales $ 3,054.6 $ 4,769.3 $ 9,523.1 $ 12,592.7

(Loss) income from continuing operations, net of tax $ ( 130.7 ) $ 129.9 $ ( 187.3 ) $ 196.8

Prior to July 2024, we aggregated our operating units into three reportable segments:

Refining, Logistics, and Retail.

However, on July 31, 2024, Delek entered into the Retail Purchase Agreement to sell the Retail Stores, which consist of the entire retail segment to FEMSA.

As a result of the Retail Purchase Agreement, we met the requirements of ASC 205-20, Presentation of Financial Statements - Discontinued Operations and ASC 360, Property, Plant and Equipment , to report the results of the Retail Stores as discontinued operations and to classify the Retail Stores as a group of discontinued operations assets.

The Retail Transaction closed on September 30, 2024.

Operations that are not specifically included in the reportable segments are included in Corporate, Other and Eliminations, which consist of the following:

7 unchanged sentences

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

On August 5, 2024, we contributed all of our 50 % investment in W2W Holdings LLC ("HoldCo") which included our 15.6 % indirect interest in the WWP joint venture and related joint venture indebtedness, to a subsidiary of Delek Logistics.

The operating results of HoldCo are now reported in our Logistics segment.

Previously, they were reported as part of corporate, other and eliminations.

The disaggregated financial results for the reporting segments have been prepared using a management approach, which is consistent with the basis and manner in which management internally disaggregates financial information for the purposes of assisting internal operating decisions.

19 unchanged sentences

Our logistics segment owns and operates crude oil, refined products and natural gas logistics and marketing assets as well as water disposal and recycling assets.

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

Retail Segment

Our retail segment consists of 250 owned and leased convenience store sites as of June 30, 2024, located primarily in West Texas and New Mexico.

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

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.

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

Business Segment Operating Performance

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

Three Months Ended June 30, 2024

(In millions) Refining Logistics Retail Corporate,

Other and Eliminations Consolidated

Three Months Ended September 30, 2024

(In millions) Refining Logistics Corporate,

Other and Eliminations (3)

Net revenues (excluding intercompany fees and revenues) $ 2,852.6 $ 99.2 $ — $ 2,951.8

Inter-segment fees and revenues (1)

175.2 114.9 ( 199.5 ) 90.6

Total revenues $ 3,027.8 $ 214.1 $ ( 199.5 ) $ 3,042.4

3 unchanged sentences

Income tax benefit 40.3

Income from discontinued operations, net of tax 67.3

Net loss attributable to Delek $ ( 76.8 )

2 unchanged sentences

$ 57.7 $ 65.2 $ 5.6 $ 128.5

Three Months Ended June 30, 2023

(In millions) Refining Logistics Retail Corporate,

Other and Eliminations Consolidated

Three Months Ended September 30, 2023

(In millions) Refining Logistics Corporate,

Other and Eliminations (3)

Net revenues (excluding intercompany fees and revenues) $ 4,392.4 $ 119.5 $ — $ 4,511.9

Inter-segment fees and revenues (1)

232.1 156.4 ( 271.6 ) 116.9

Total revenues $ 4,624.5 $ 275.9 $ ( 271.6 ) $ 4,628.8

2 unchanged sentences

Interest expense, net ( 12.0 ) ( 37.0 ) ( 33.4 ) ( 82.4 )

Income tax benefit 3.8

Net loss attributable to Delek $ ( 8.3 )

Income tax expense ( 29.1 )

Income from discontinued operations, net of tax 10.5

Net income attributable to Delek $ 128.7

Income from equity method investments $ 10.8 $ 9.3 $ 6.9 $ 27.0

2 unchanged sentences

Notes to Consolidated Financial Statements

Six Months Ended June 30, 2024

(In millions) Refining Logistics Retail Corporate,

Other and Eliminations Consolidated

Nine Months Ended September 30, 2024

(In millions) Refining Logistics Corporate,

Other and Eliminations (3)

Net revenues (excluding intercompany fees and revenues) $ 8,872.1 $ 319.4 $ — $ 9,191.5

5 unchanged sentences

Income tax benefit 56.7

Income from discontinued operations, net of tax 78.2

Net loss attributable to Delek $ ( 146.6 )

2 unchanged sentences

$ 126.2 $ 90.6 $ 17.8 $ 234.6

Six Months Ended June 30, 2023

(In millions) Refining Logistics Retail Corporate,

Other and Eliminations Consolidated

Nine Months Ended September 30, 2023

(In millions) Refining Logistics Corporate,

Other and Eliminations (3)

Net revenues (excluding intercompany fees and revenues) $ 11,842.2 $ 351.9 $ — $ 12,194.1

Inter-segment fees and revenues (1)

629.3 414.4 ( 712.7 ) 331.0

Total revenues $ 12,471.5 $ 766.3 $ ( 712.7 ) $ 12,525.1

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Income tax expense ( 38.3 )

Income from discontinued operations, net of tax 23.9

Net income attributable to Delek $ 184.7

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$ 197.3 $ 68.6 $ 19.7 $ 285.6

(1) Intercompany fees and sales for the refining segment include revenues of $ 90.6 million and $ 287.0 million during the three and nine months ended September 30, 2024, respectively, and $ 116.9 million and $ 331.0 million during the three and nine months ended September 30, 2023, respectively, to the Retail Stores, the operations of which are reported in discontinued operations.

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

Capital spending excludes capital spending associated with the Retail Stores of $ 3.4 million and $ 14.0 million during the three and nine months ended September 30, 2024, respectively, and $ 8.0 million and $ 16.0 million during the three and nine months ended September 30, 2023, respectively.

(3) The corporate, other and eliminations segment operating results for the three and nine months ended September 30, 2023 have been restated to reflect the reclassification of the Retail Stores to discontinued operations.

Notes to Consolidated Financial Statements

Discontinued Operations

On July 31, 2024, a wholly owned subsidiary of Delek, entered into the Retail Purchase Agreement with a subsidiary of FEMSA.

As a result of the Retail Purchase Agreement, we met the requirements of ASC 205-20, Presentation of Financial Statements - Discontinued Operations and ASC 360, Property, Plant and Equipment, to report the results of the Retail Stores as discontinued operations and to classify the Retail Stores as a group of discontinued operations assets.

The fair value assessment of the Retail Stores as of July 31, 2024 did not result in an impairment.

We ceased depreciation of these assets as of July 31, 2024.

The Retail Transaction closed on September 30, 2024 and we received cash consideration $ 390.2 million.

The Retail Transaction resulted in a gain on sale of the Retail Stores, before income tax, of $ 98.4 million.

The proceeds and related Retail Transaction sale gain may be adjusted in future periods based on provisions of the Retail Purchase Agreement that allow for adjustments of working capital amounts and other miscellaneous items subsequent to transaction closing date of September 30, 2024.

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

Pursuant to such agreement, FEMSA is provided with a cost sharing arrangement.

The cost sharing arrangement results in a $ 36.0 million obligation.

The associated obligation bears interest and must be fully exhausted after six years from the close of the sale.

The carrying amount of the major classes of assets and liabilities of the Retail Stores included in assets and liabilities of discontinued operations are as follows (in millions):

December 31, 2023

Assets of discontinued operations:

Cash and cash equivalents $ 0.4

Inventories 40.7

Other current assets 0.4

Property, plant and equipment, net 148.9

Operating lease right-of-use assets 26.7

Goodwill 41.9

Other intangibles, net 8.5

Other non-current assets 2.1

Assets of discontinued operations $ 269.6

Liabilities of discontinued operations:

Accrued expenses and other current liabilities $ 6.9

Current portion of operating lease liabilities 4.6

Asset retirement obligations 6.9

Operating lease liabilities, net of current portion 25.5

Other non-current liabilities 1.9

Liabilities of discontinued operations $ 45.8

Once the Retail Stores were identified as assets held for sale, the operations associated with these properties qualified for reporting as discontinued operations.

Accordingly, the operating results, net of tax, from discontinued operations are presented separately in Delek’s condensed consolidated statements of income and the notes to the condensed consolidated financial statements have been adjusted to exclude the discontinued operations.

Components of amounts reflected in income from discontinued operations for the three and nine months ended September 30, 2024 and 2023 are as follows (in millions):

Notes to Consolidated Financial Statements

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

Net revenues $ 202.4 $ 236.5 $ 612.0 $ 674.2

Cost of material and other ( 164.0 ) ( 189.6 ) ( 498.7 ) ( 548.1 )

Operating expenses ( 30.6 ) ( 26.4 ) ( 80.7 ) ( 76.9 )

General and administrative expenses ( 8.8 ) ( 4.3 ) ( 15.1 ) ( 11.3 )

Depreciation and amortization ( 1.8 ) ( 3.6 ) ( 9.0 ) ( 8.9 )

Other operating (expense) income, net ( 0.2 ) — 0.9 —

Interest income (expense), net — 0.1 ( 0.1 ) ( 0.1 )

Other income, net — 0.2 0.1 0.2

Gain on sale of Retail Stores 98.4 — 98.4 —

Income from discontinued operations before taxes 95.4 12.9 107.8 29.1

Income tax expense 28.1 2.4 29.6 5.2

Income from discontinued operations, net of tax $ 67.3 $ 10.5 $ 78.2 $ 23.9

Earnings Per Share

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

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

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

2024 2023 2024 2023

Numerator for EPS

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

Income attributed to non-controlling interests 11.1 6.8 18.5 14.7

Numerator for basic and diluted EPS attributable to Delek $ ( 37.2 ) $ ( 8.3 ) $ ( 69.8 ) $ 56.0

Numerator for EPS - continuing operations

Net (loss) income from continuing operations $ ( 134.8 ) $ 125.6 $ ( 197.0 ) $ 182.9

Income from continuing operations attributed to non-controlling interests 9.3 7.4 27.8 22.1

Numerator for basic and diluted EPS from continuing operations attributable to Delek $ ( 144.1 ) $ 118.2 $ ( 224.8 ) $ 160.8

Numerator for EPS - discontinued operations

Income from discontinued operations, including gain on sale of discontinued operations $ 95.4 $ 12.9 $ 107.8 $ 29.1

Income tax expense 28.1 2.4 29.6 5.2

Income from discontinued operations, net of tax $ 67.3 $ 10.5 $ 78.2 $ 23.9

Weighted average common shares outstanding (denominator for basic EPS) 64,063,609 64,889,504 64,099,700 65,864,141

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Basic (loss) income per share:

(Loss) income from continuing operations $ ( 2.25 ) $ 1.82 $ ( 3.51 ) $ 2.44

Income from discontinued operations 1.05 0.16 1.22 0.36

Total basic (loss) income per share $ ( 1.20 ) $ 1.98 $ ( 2.29 ) $ 2.80

Diluted (loss) income per share:

(Loss) income from continuing operations $ ( 2.25 ) $ 1.81 $ ( 3.51 ) $ 2.42

Income from discontinued operations 1.05 0.16 1.22 0.36

Total diluted (loss) income per share $ ( 1.20 ) $ 1.97 $ ( 2.29 ) $ 2.78

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

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

As of June 30, 2024, we owned a 72.6 % interest in Delek Logistics, consisting of 34,311,278 common limited partner units and the non-economic general partner interest.

As of September 30, 2024, we owned a 70.4 % interest in Delek Logistics (on an as-converted basis), consisting of 34,111,278 common limited partner units and the non-economic general partner interest.

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

We also record a redeemable non-controlling interest related to Delek Logistics’ preferred units.

The Delek Logistics' preferred units were redeemed in October 2024.

Notes to Consolidated Financial Statements

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.

These transactions are eliminated in consolidation but are reflected as inter-segment transactions between our Refining and Logistics segments.

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.

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

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

Wink to Webster Dropdown

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 $ 83.9 million (including post-close adjustments) in cash, forgiveness of a $ 60.0 million payable to Delek Logistics and 2,300,000 of Delek Logistics common units.

Prior periods have not been recast in our Segment Data in Note 3, as this asset did not constitute a business in accordance with ASC 805, Business Combinations , and the transaction was accounted for as an acquisition of assets between entities under common control and we did not record a gain or loss.

See Note 7 for further information.

Common Unit 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.

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

On October 10, 2024, Delek Logistics completed a public offering of its common units in which it sold 4,423,075 common units (including an overallotment option of 576,922 common units) to the underwriters of the offering at a price to the public of $ 39.00 per unit.

The proceeds received from this offering (net of underwriting discounts, commissions and expenses) were $ 165.3 million and were used to redeem Delek Logistics’ preferred units outstanding and repay a portion of the outstanding borrowings under the Delek Logistics Revolving Facility (defined below).

Underwriting discounts totaled $ 6.6 million.

Consolidated VIE

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

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

Exclusive of intercompany balances and the marketing agreement intangible asset between Delek Logistics and Delek which are eliminated in consolidation, the Delek Logistics condensed consolidated balance sheets are included in the condensed consolidated balance sheets of Delek.

Exclusive of intercompany balances, and prior to August 5, 2024, the marketing agreement intangible asset between Delek Logistics and Delek which are eliminated in consolidation, the Delek Logistics condensed consolidated balance sheets are included in the condensed consolidated balance sheets of Delek.

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

Notes to Consolidated Financial Statements

As of June 30, 2024

As of September 30, 2024

As of December 31, 2023

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Accounts receivable from related parties — 28.4

Lease receivable - affiliate 23.9 —

Inventory 4.6 2.3

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Intangible assets, net 287.2 343.0

Net lease investment - affiliate 186.4 —

Other non-current assets 11.1 14.2

Total assets $ 1,960.7 $ 1,642.2

LIABILITIES AND DEFICIT

LIABILITIES, PREFERRED UNITS AND DEFICIT

Accounts payable $ 35.7 $ 26.3

Accounts payable to related parties 0.4 —

Current portion of long-term debt — 30.0

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Other non-current liabilities 20.7 21.4

Preferred units 70.0 —

Deficit ( 115.1 ) ( 161.9 )

Total liabilities and deficit $ 1,623.3 $ 1,642.2

Total liabilities, preferred units and deficit $ 1,960.7 $ 1,642.2

Equity Method Investments

Wink to Webster Pipeline

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

The Company had previously determined that HoldCo is a VIE.

Delek Logistics Investments

On August 1, 2024, Delek purchased an additional 0.6 % indirect investment in Wink to Webster Pipeline LLC ("WWP") 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 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 $ 83.9 million in cash, forgiveness of a $ 60.0 million payable to Delek Logistics and 2,300,000 of Delek Logistics common units.

The transaction was accounted for as an acquisition of assets between entities under common control.

The operating results of HoldCo are now reported in our Logistics segment.

Previously, they were reported as part of Corporate, Other and Eliminations.

HoldCo was formed by us and MPLX Operations LLC ("MPLX") to obtain financing and fund capital calls associated with our collective and contributed interests in the WWP joint venture.

We had previously determined that HoldCo is a VIE.

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

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

As of June 30, 2024, except for the guarantee of member obligations under the joint venture, we do not have other guarantees with or to HoldCo, nor any third-party associated with HoldCo contracted work.

As of September 30, 2024, except for the guarantee of member obligations under the joint venture, we do not have other guarantees with or to HoldCo, nor any third-party associated with HoldCo contracted work.

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

As of June 30, 2024 and December 31, 2023, Delek's HoldCo investment balance totaled $ 70.3 million and $ 51.4 million, respectively.

Delek Logistics Investments

As of September 30, 2024 and December 31, 2023, Delek's HoldCo investment balance totaled $ 87.5 million and $ 51.4 million, respectively.

Delek Logistics has a 33 % membership interest in Red River Pipeline Company LLC (“Red River”), which owns a 16-inch crude oil pipeline running from Cushing, Oklahoma to Longview, Texas.

As of June 30, 2024 and December 31, 2023, Delek's investment balance in Red River totaled $ 139.1 million and $ 141.1 million, respectively.

In addition to Red River, Delek Logistics has two other pipeline joint ventures in which we own a 50 % membership interest in the entity formed with an affiliate of Plains All American Pipeline, L.P.

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

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

As of September 30, 2024 and December 31, 2023, Delek's investment balance in Red River totaled $ 139.0 million and $ 141.1 million, respectively.

Notes to Consolidated Financial Statements

In addition, Delek Logistics has two other pipeline joint ventures in which we own a 50 % membership interest in the entity formed with an affiliate of Plains All American Pipeline, L.P.

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

As of September 30, 2024 and December 31, 2023, Delek Logistics' investment balance in these joint ventures was $ 96.2 million and $ 100.3 million, respectively.

Other Investments

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

As of June 30, 2024 and December 31, 2023, Delek's investment balance in these joint ventures was $ 80.7 million and $ 67.9 million, respectively.

Crude oil feedstocks, refined products, blendstocks and asphalt inventory for all of our operations, excluding merchandise inventory in our retail segment, are stated at the lower of cost determined using the first-in, first-out ("FIFO") basis or net realizable value.

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

As of September 30, 2024 and December 31, 2023, Delek's investment balance in these joint ventures was $ 86.0 million and $ 67.9 million, respectively.

Crude oil feedstocks, refined products, blendstocks and asphalt inventory for all of our operations are stated at the lower of cost determined using the first-in, first-out ("FIFO") basis or net realizable value.

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

Titled Inventory Inventory Intermediation Agreement (1)

June 30, 2024

September 30, 2024

Feedstocks, raw materials and supplies $ 253.4 $ 140.2 $ 393.6

Refined products and blendstock 247.7 273.7 521.4

Merchandise inventory and other 35.0 — 35.0

Total $ 501.1 $ 413.9 $ 915.0

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Refined products and blendstock 269.3 304.8 574.1

Merchandise inventory and other 31.4 — 31.4

Total $ 519.5 $ 421.7 $ 941.2

(1) Refer to Note 9 - Inventory Intermediation Obligations for further information.

At June 30, 2024, we recorded a pre-tax inventory valuation reserve of $ 0.9 million due to a market price decline below our cost of certain inventory products.

At September 30, 2024, we recorded a pre-tax inventory valuation reserve of $ 1.1 million due to a market price decline below our cost of certain inventory products.

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

We recognized a net reduction in cost of materials and other in the accompanying condensed consolidated statements of income related to the change in pre-tax inventory valuation of $ 1.9 million and $ 10.7 million for the three and six months ended June 30, 2024, respectively, and $ 7.9 million and $ 9.6 million for the three and six months ended June 30, 2023, respectively.

We recognized a net reduction (increase) in cost of materials and other in the accompanying condensed consolidated statements of income related to the change in pre-tax inventory valuation of $( 0.1 ) million and $ 10.5 million for the three and nine months ended September 30, 2024, respectively, and $( 3.4 ) million and $ 6.2 million for the three and nine months ended September 30, 2023, respectively.

Notes to Consolidated Financial Statements

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

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

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

Obligations under Inventory Intermediation Agreement

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Total obligations under Inventory Intermediation Agreement $ 388.9 $ 407.6

Other (receivable) payable for monthly activity true-up $ ( 0.6 ) $ ( 9.3 )

Other payable (receivable) for monthly activity true-up $ 10.6 $ ( 9.3 )

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

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The following table summarizes these fees:

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

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

2024 2023 2024 2023

Net fees and (income) expenses:

Net fees and expenses:

Inventory intermediation fees $ 9.1 $ 58.3 $ 13.6 $ 71.8

Interest expense, net $ 14.7 $ 16.5 $ 46.2 $ 46.1

Inventory Intermediation Agreement

On December 22, 2022, Delek entered into an inventory intermediation agreement ("Inventory Intermediation Agreement") with Citigroup Energy Inc.

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On December 21, 2023, DKTS amended the Inventory Intermediation Agreement to among other things, (i) extend the term of the Inventory Intermediation Agreement from December 30, 2024 to January 31, 2026, (ii) reduce Citi’s unilateral term extension option from a twelve month extension period to a six month extension period and (iii) increase the amount of the payment deferral mechanism from $ 70 million to $ 250 million.

As of June 30, 2024 and December 31, 2023, we had letters of credit outstanding of $ 195.0 million and $ 230.0 million, respectively, supporting the Inventory Intermediation Agreement.

As of September 30, 2024 and December 31, 2023, we had letters of credit outstanding of $ 190.0 million and $ 230.0 million, respectively, supporting the Inventory Intermediation Agreement.

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

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

As of June 30, 2024 and December 31, 2023, the volumes subject to the Inventory Intermediation Agreement totaled 5.4 million barrels and 5.4 million barrels, including Base Layer Volumes associated with our non-current inventory intermediation obligation of 5.5 million barrels.

As of September 30, 2024 and December 31, 2023, the volumes subject to the Inventory Intermediation Agreement totaled 5.6 million barrels and 5.4 million barrels, including Base Layer Volumes associated with our non-current inventory intermediation obligation of 5.5 million barrels.

The Inventory Intermediation Agreement is accounted for as an inventory financing arrangement under the fair value election provided by Accounting Standards Codification ("ASC") 815 Derivatives and Hedging ("ASC 815") and ASC 825, Financial Instruments ("ASC 825").

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

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

With respect to the repurchase obligation, we recognized gains (losses) attributable to changes in fair value due to commodity-index price totaling $ 76.3 million and $ 13.8 million during the three and nine months ended September 30, 2024, respectively, and totaling $( 83.5 ) million and $( 44.5 ) million during the three and nine months ended September 30, 2023, respectively.

Notes to Consolidated Financial Statements

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

June 30, 2024 December 31, 2023

September 30, 2024 December 31, 2023

Delek Term Loan Credit Facility 933.4 940.5

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

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

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

At September 30, 2024 and December 31, 2023, the weighted average borrowing rate was approximately 7.67 % and 8.96 %, respectively.

The effective interest rate was 8.90 % as of September 30, 2024.

Delek Logistics Term Loan Facility

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

dollar primate rate borrowings.

dollar prime rate borrowings.

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

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Revolving Credit Facilities

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

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

Total Capacity

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

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

As of September 30, 2024 and December 31, 2023, the weighted average interest rate was 7.70 % and 8.46 %, respectively.

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

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

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

The weighted average borrowing rate as of September 30, 2024 and December 31, 2023 was 7.50 % and 7.75 %, respectively.

Notes to Consolidated Financial Statements

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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 a portion of the outstanding borrowings under the Delek Logistics Revolving Facility.

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

On April 17, 2024, the Co-issuers sold $ 200.0 million in aggregate principal amount of additional 8.625 % senior notes due 2029 at 101.25 % and on August 16, 2024, the Co-issuers sold $ 200.0 million in aggregate principal amount of additional 8.625 % senior notes due 2029, at 103.25 % (collectively, the "Additional 2029 Notes").

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

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

As of September 30, 2024, the effective interest rate was 8.90 %.

Delek Logistics 2028 Notes

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

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

As of September 30, 2024, the effective interest rate was 7.38 %.

Delek Logistics 2025 Notes

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

As of June 30, 2024, we were in compliance with covenants on all of our debt instruments.

As of September 30, 2024, we were in compliance with covenants on all of our debt instruments.

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

As of June 30, 2024, we had no subsidiaries with restricted net assets which would prohibit earnings from being transferred to the parent company for its use.

As of September 30, 2024, we had no subsidiaries with restricted net assets which would prohibit earnings from being transferred to the parent company for its use.

Derivative Instruments

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Because these derivatives are entered into to achieve objectives specifically related to our inventory and production risks, such gains and losses (to the extent not designated as accounting hedges and recognized on an unrealized basis in other comprehensive income) are recognized in cost of materials and other.

On August 20, 2024, we entered into an interest rate swap agreement to hedge floating rate debt by exchanging interest rate cash flows, based on a notional amount from a floating rate to a fixed rate, which effectively fixed the variable SOFR interest component of the Delek Term Loan Credit Facility.

The aggregate notional amount under this agreement covers $ 500.0 million of the outstanding principal throughout the duration of the interest rate swap.

Because this swap was entered into to achieve objectives specifically related to our interest expense, such gains and losses are recognized in interest expense, net on the condensed consolidated statements of income.

Forward contracts are agreements to buy or sell a commodity at a predetermined price at a specified future date, and for our transactions, generally require physical delivery.

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

Additionally, as of and for the three and six months ended June 30, 2024, other forward contracts accounted for as derivatives that are specific to managing crude costs rather than for trading purposes are recognized in cost of materials and other on the condensed consolidated statements of income in our refining segment, and are included in our disclosures of commodity derivatives in the tables below.

Additionally, as of and for the three and nine months ended September 30, 2024, other forward contracts accounted for as derivatives that are specific to managing crude costs rather than for trading purposes are recognized in cost of materials and other on the condensed consolidated statements of income in our refining segment, and are included in our disclosures of commodity derivatives in the tables below.

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

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

As of June 30, 2024, we do not believe there is any material credit risk with respect to the counterparties to any of our derivative contracts.

The following table presents the fair value of our derivative instruments as of June 30, 2024 and December 31, 2023.

As of September 30, 2024, we do not believe there is any material credit risk with respect to the counterparties to any of our derivative contracts.

The following table presents the fair value of our derivative instruments as of September 30, 2024 and December 31, 2023.

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

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See Note 12 for further information regarding the fair value of derivative instruments (in millions).

June 30, 2024 December 31, 2023

September 30, 2024 December 31, 2023

Derivative Type Balance Sheet Location Assets Liabilities Assets Liabilities

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Other current liabilities — ( 3.7 ) — ( 3.1 )

Interest rate swap derivatives Other current assets 1.2 — — —

Interest rate swap derivatives Other long-term liabilities — ( 6.4 ) — —

Total gross fair value of derivatives 40.8 ( 49.6 ) 6.6 ( 11.0 )

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Total net fair value of derivatives $ 4.7 $ ( 10.3 ) $ 1.3 $ ( 3.9 )

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

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

(1) As of September 30, 2024 and December 31, 2023, we had open derivative positions representing 28,004,500 and 55,336,870 barrels, respectively, of crude oil and refined petroleum products.

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

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

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

(3) As of June 30, 2024 and December 31, 2023, $ 8.0 million and $ 1.8 million, respectively, of cash collateral held by counterparties has been netted with the derivatives with each counterparty.

(2) As of September 30, 2024 and December 31, 2023, we had open RINs commitment contracts representing 43,593,000 and 41,636,461 RINs, respectively.

(3) As of September 30, 2024 and December 31, 2023, $ 3.2 million and $ 1.8 million, respectively, of cash collateral held by counterparties has been netted with the derivatives with each counterparty.

Total gains (losses) on our non-trading commodity derivatives and RINs commitment contracts recorded in the condensed consolidated statements of income are as follows (in millions) (3) :

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

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

2024 2023 2024 2023

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

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

$ 34.3 $ ( 97.1 ) $ 5.1 $ ( 86.4 )

Losses on interest rate derivatives not designated as hedging instruments recognized in interest expense, net (2)

( 4.1 ) — ( 4.1 ) —

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

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

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

Total gains (losses) $ 30.2 ( 97.1 ) $ 1.0 $ ( 88.8 )

(1) Gains (losses) on commodity derivatives that are economic hedges but not designated as hedging instruments include unrealized (losses) gains of $ 8.0 million and $( 1.3 ) million for the three and nine months ended September 30, 2024, respectively, and $( 78.8 ) million and $( 55.5 ) million for the three and nine months ended September 30, 2023, respectively.

(2) Losses on interest rate derivatives that are economic hedges but not designated as hedging instruments include unrealized (losses) gains of $( 5.2 ) million for the three and nine months ended September 30, 2024.

There were no unrealized (losses) gains for the three and nine months ended September 30, 2023.

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

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

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

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

2024 2023 2024 2023

Trading Physical Forward Contract Commodity Derivatives

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

Realized gains (losses) $ — $ 0.8 $ ( 0.1 ) $ 8.0

Unrealized gains — — — 0.1

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These RINs commitment contracts (which are forward contracts accounted for as derivatives – see Note 11) are categorized as Level 2, and are measured at fair value based on quoted prices from an independent pricing service.

Our interest rate swap is valued based on discounted cash flow models that incorporate the cash flows of the derivatives, as well as the current SOFR rate and a forward SOFR curve, along with other observable market inputs and are, therefore, classified as Level 2.

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

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

With respect to our Consolidated Net RINs Obligation, we recognized gains (losses) of $ 0.3 million on changes in fair value for the three and six months ended June 30, 2024, and totaling $( 2.1 ) million and $( 1.8 ) million for the three and six months ended June 30, 2023, respectively, primarily attributable to changes in the market prices of the underlying credits that occurred at the end of each quarter.

With respect to our Consolidated Net RINs Obligation, we recognized losses of $( 0.6 ) million and $( 0.3 ) million on changes in fair value for the three and nine months ended September 30, 2024, respectively, and gains totaling $ 3.6 million and $ 1.8 million for the three and nine months ended September 30, 2023, respectively, primarily attributable to changes in the market prices of the underlying credits that occurred at the end of each quarter.

Notes to Consolidated Financial Statements

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

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See Note 9 for discussion of gains and losses recognized from changes in fair value.

Notes to Consolidated Financial Statements

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

The carrying value (excluding unamortized debt issuance costs) and estimated fair value of these notes was $ 400.0 million and $ 394.9 million, respectively, as of June 30, 2024, and $ 400.0 million and $ 380.4 million, respectively, at December 31, 2023.

The carrying value (excluding unamortized debt issuance costs) and estimated fair value of these notes was $ 400.0 million and $ 401.8 million, respectively, as of September 30, 2024, and $ 400.0 million and $ 380.4 million, respectively, at December 31, 2023.

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

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

The carrying value (excluding unamortized debt issuance costs) and estimated fair value of these notes was $ 1,050.0 million and $ 1,105.3 million, respectively, as of September 30, 2024.

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

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

As of June 30, 2024

As of September 30, 2024

Level 1 Level 2 Level 3 Total

Commodity derivatives $ — $ 37.0 $ — $ 37.0

Interest rate swap derivatives — 1.2 — 1.2

RINs commitment contracts — 2.6 — 2.6

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Commodity derivatives — ( 39.5 ) — ( 39.5 )

Interest rate swap derivatives — ( 6.4 ) — ( 6.4 )

RINs commitment contracts — ( 3.7 ) — ( 3.7 )

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Commodity derivatives $ — $ 6.6 $ — $ 6.6

RINs commitment contracts — — — —

Total assets — 6.6 — 6.6

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Net liabilities $ — $ ( 451.6 ) $ — $ ( 451.6 )

Notes to Consolidated Financial Statements

The derivative values above are based on analysis of each contract as the fundamental unit of account as required by ASC 820.

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

As of June 30, 2024 and December 31, 2023, $ 8.0 million and $ 1.8 million, respectively, of cash collateral was held by counterparty brokerage firms and has been netted with the net derivative positions with each counterparty.

As of September 30, 2024 and December 31, 2023, $ 3.2 million and $ 1.8 million, respectively, of cash collateral was held by counterparty brokerage firms and has been netted with the net derivative positions with each counterparty.

See Note 11 for further information regarding derivative instruments.

Non-Recurring Fair Value Measurements

The H2O Midstream Acquisition was accounted for as a business combination using the acquisition method of accounting, with the assets acquired and liabilities assumed at their respective acquisition date fair values at the closing date.

The fair value measurements were based on a combination of valuation methods including discounted cash flows, the market approach and obsolescence adjusted replacement costs, all of which are Level 3 inputs.

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

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See Note 17 for further information regarding the asset impairment recorded.

Notes to Consolidated Financial Statements

Commitments and Contingencies

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

As of June 30, 2024, we have recorded an environmental liability of approximately $ 35.5 million, primarily related to the estimated probable costs of remediating or otherwise addressing certain environmental issues of a non-capital nature at our refineries, as well as terminals, some of which we no longer own.

As of September 30, 2024, we have recorded an environmental liability of approximately $ 37.7 million, primarily related to the estimated probable costs of remediating or otherwise addressing certain environmental issues of a non-capital nature at our refineries, as well as terminals, some of which we no longer own.

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

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

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

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

Notes to Consolidated Financial Statements

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

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

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

Notes to Consolidated Financial Statements

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

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

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

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

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

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

An additional $ 1.1 million and $ 11.6 million of insurance proceeds and other recoveries was recognized as a gain, in excess of property damage losses, during the three and nine months ended September 30, 2024.

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

No business interruption claims were recorded during the three months ended September 30, 2024.

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

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

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

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

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

Our effective tax rate was 22.8 % and 22.5 % for the three and six months ended June 30, 2024, respectively, and 71.7 % and 14.5 % for the three and six months ended June 30, 2023, respectively.

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

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

Our effective tax rate for continuing operations was 23.0 % and 22.3 % for the three and nine months ended September 30, 2024, respectively, and 18.8 % and 17.3 % for the three and nine months ended September 30, 2023, respectively.

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

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

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

Notes to Consolidated Financial Statements

Related Party Transactions

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

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

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

2024 2023 2024 2023

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

Notes to Consolidated Financial Statements

Other Current Assets and Liabilities

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

Other Current Assets June 30, 2024 December 31, 2023

Other Current Assets September 30, 2024 December 31, 2023

Prepaid expenses $ 42.2 $ 47.4

Income and other tax receivables 7.9 15.5

Short-term derivative assets (see Note 11)

Income and other tax receivables 2.3 15.5

Investment commodities — 4.0

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

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

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

Crude purchase liabilities $ 181.6 $ 190.7

Income and other taxes payable 136.2 166.9

Product financing agreements 163.9 224.2

Consolidated Net RINs Obligation deficit (see Note 10)

Income and other taxes payable 146.3 163.2

Employee costs 53.7 64.7

Short-term derivative liabilities (see Note 9)

Consolidated Net RINs Obligation deficit (see Note 12)

Deferred revenue 11.9 15.7

Short-term derivative liabilities (see Note 11)

Other 83.3 62.3

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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.

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

No severance and benefit expenses were recognized in the three months ended September 30, 2024.

During the third quarter 2024, we made a strategic decision to abandon certain capital projects included in construction in progress that no longer fit our core objectives.

As a result, we recognized a loss of $ 14.1 million in the three and nine months ended September 30, 2024 which is recorded in other operating (income) loss, net in the condensed consolidated statements of income.

In addition, we recognized impairment charges totaling $ 9.2 million related to certain pipeline assets because it's long longer probable these assets will be utilized.

During the three and nine months ended September 30, 2024, we recorded a bonus accrual for certain employees, including executives, determined to be key to our planned go-forward operations and achievement of certain corporate and strategic milestones provided that they remain through various requisite service periods for a total of $ 10.4 million of which $ 6.6 million is recorded in general and administrative expenses and $ 3.8 million is recorded in operating expenses in the condensed consolidated statements of income.

Notes to Consolidated Financial Statements

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

Three Months Ended June 30, 2024

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

Three Months Ended September 30, 2024

Type of Costs Statement of Income Location Refining Logistics Corporate,

Other and Eliminations Consolidated

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

Severance costs Operating expenses 0.4 — — — 0.4

Bonus expense General and administrative expenses $ — $ — $ 6.6 $ 6.6

Severance costs and bonus expense Operating expenses — — 3.8 3.8

Impairment Asset impairment — — 9.2 9.2

Asset write-off Other operating (income) loss, net 14.1 — — 14.1

Total $ 14.1 $ — $ 19.6 $ 33.7

Three Months Ended June 30, 2023

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

Three Months Ended September 30, 2023

Type of Costs Statement of Income Location Refining Logistics Corporate,

Other and Eliminations Consolidated

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Total $ — $ — $ 3.5 $ 3.5

Notes to Consolidated Financial Statements

Six Months Ended June 30, 2024

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

Nine Months Ended September 30, 2024

Type of Costs Statement of Income Location Refining Logistics Corporate,

Other and Eliminations Consolidated

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

Severance costs Operating expenses 0.4 — — — 0.4

Consulting fees, severance costs and bonus expense General and administrative expenses $ — $ — $ 9.9 $ 9.9

Severance costs and bonus expense Operating expenses 0.4 — 3.8 4.2

Impairment Asset impairment 22.1 — 9.2 31.3

Asset write-off Other operating (income) loss, net 14.1 — — 14.1

Total $ 36.6 $ — $ 22.9 $ 59.5

Six Months Ended June 30, 2023

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

Nine Months Ended September 30, 2023

Type of Costs Statement of Income Location Refining Logistics Corporate,

Other and Eliminations Consolidated

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

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

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

As of June 30, 2024, there was $ 54.4 million of total unrecognized compensation cost related to non-vested share-based compensation arrangements, which is expected to be recognized over a weighted-average period of 1.8 years.

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

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

Compensation expense related to equity-based awards granted under the Incentive Plans amounted to $ 7.8 million and $ 20.4 million for the three and nine months ended September 30, 2024, respectively, and $ 7.1 million and $ 17.9 million for the three and nine months ended September 30, 2023, respectively, and are included in general and administrative expenses and operating expenses in the accompanying condensed consolidated statements of income.

These amounts exclude amounts related to discontinued operations of $ 1.4 million and $ 1.6 million for the three and nine months ended September 30, 2024, respectively, and $ 0.1 million and $ 0.1 million for the three and nine months ended September 30, 2023, respectively.

As of September 30, 2024, there was $ 44.2 million of total unrecognized compensation cost related to non-vested share-based compensation arrangements, which is expected to be recognized over a weighted-average period of 1.6 years.

Notes to Consolidated Financial Statements

We issued net shares of common stock of 59,485 and 506,524 as a result of exercised or vested equity-based awards during the three and nine months ended September 30, 2024, respectively, and 48,154 and 409,993 for the three and nine months ended September 30, 2023, respectively.

These amounts are net of 21,881 and 224,973 shares withheld to satisfy employee tax obligations related to the exercises and vesting during the three and nine months ended September 30, 2024, respectively, and 59,836 and 205,944 shares during the three and nine months ended September 30, 2023, respectively.

Shareholders' Equity

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

October 30, 2024 $ 0.255 November 12, 2024 November 18, 2024

Stock Repurchase Program

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

On September 3, 2024, the Board of Directors approved a $ 400.0 million increase in the share repurchase authorization.

The authorization has no expiration date.

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

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

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

Notes to Consolidated Financial Statements

During the three and nine months ended September 30, 2024, 942,329 shares of our common stock were repurchased and cancelled at the time of the transaction for a total of $ 20.0 million.

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

As of September 30, 2024, there was $ 565.1 million of authorization remaining under Delek's aggregate stock repurchase program.

Subsequent Events

Planned Sale of Retail

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

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

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

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

Planned H2O Midstream Acquisition

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

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

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

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

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

Wink to Webster Pipeline

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

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

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.

Subsequent to September 30, 2024, we made repurchases of 548,275 shares of our common stock that were cancelled at the time of transaction for approximately $ 10.0 million.

Management's Discussion and Analysis

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

What changed 10-Q

Item 1. Financial Statements