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Item 7. Management’s Discussion and Analysis

2025-02-26 compared with 2024-02-28 · 483 added, 332 removed, 731 unchanged (53% of the section changed)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward-Looking Statements

This Annual Report on Form 10-K contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934.

This Annual Report on Form 10-K contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act.

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

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

Forward-looking statements include, among other things, statements that refer to the Delaware Gathering Acquisition, the H2O Midstream Acquisition and the Gravity Acquisition, including any statements regarding the expected benefits, synergies, growth opportunities, impact on liquidity and prospects, and other financial and operating benefits thereof, statements regarding the effect, impact, potential duration or other implications of, or expectations expressed with respect to, the outbreak of a pandemic and its impact on oil production and pricing, and statements regarding our efforts and plans in response to such events, the information concerning possible future results of operations, business and growth strategies, including as the same may be impacted by the Russia-Ukraine War, financing plans, expectations that regulatory developments or other matters will or will not have a material adverse effect on our business or financial condition, our competitive position and the effects of competition, the projected growth of the industry in which we operate, and the benefits and synergies to be obtained from our completed and any future acquisitions or dispositions, including the sale of our Retail Stores, statements of management’s goals and objectives, and other similar expressions concerning matters that are not historical facts.

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

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

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

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

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

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• seasonality;

• the decline in margins impacting current results and forecasts could result in impairments in certain of our long-lived or indefinite-lived assets, including goodwill, or have other financial statement impacts that cannot currently be anticipated;

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

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• societal, legislative and regulatory measures to address climate change and GHG;

• our ability to execute our sustainability improvement plans, including greenhouse gas reduction targets;

• our ability to execute our sustainability improvement plans, including GHG reduction targets;

• acts of terrorism (including cyber-terrorism) aimed at either our facilities or other facilities;

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

• future decisions by OPEC and OPEC + regarding production and pricing and disputes between OPEC+ members regarding the same;

• future decisions by OPEC regarding production and pricing and disputes between OPEC+ members regarding the same;

• disruption, failure, or cybersecurity breaches affecting or targeting our IT systems and controls, our infrastructure, or the infrastructure of our cloud-based IT service providers;

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In light of these risks, uncertainties and assumptions, our actual results of operations and execution of our business strategy could differ materially from those expressed in, or implied by, the forward-looking statements, and you should not place undue reliance upon them.

In addition, past financial and/or operating performance is not necessarily a reliable indicator of future performance, and you should not use our historical performance to anticipate future results or period trends.

In addition, past financial and/or operating performance is not necessarily a reliable indicator of future performance, and you should not use our

Management's Discussion and Analysis

historical performance to anticipate future results or period trends.

We can give no assurances that any of the events anticipated by any forward-looking statements will occur or, if any of them do, what impact they will have on our results of operations and financial condition.

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Management's View of Our Business

We are an integrated downstream energy business focused on petroleum refining, the transportation, storage and wholesale distribution of crude oil, intermediate and refined products and convenience store retailing.

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

We are an integrated downstream energy business focused on petroleum refining and the transportation, storage and wholesale distribution of crude oil, intermediate and refined products as well as wastewater processing and disposal.

Business and Economic Environment Overview

As we reflect on the macro environment in 2023, the economy continued to be impacted by higher rates of inflation and geopolitical uncertainty, both globally and domestically.

In order to temper inflation, the Federal Reserve continued to increase interest rates through mid-2023, which drove down inflation throughout the year.

If inflation continues to drop, the Federal Reserve may be open to rate cuts sometime in 2024.

economy remained resilient during 2023 and performed better than expected.

Demand for transportation fuels continues to be reshaped after the recovery from the COVID-19 pandemic as gasoline inventories continue to be higher, while distillate inventories were constrained during most of 2023.

Our focus on safe and reliable operations is a pillar which underlines all of our business activities.

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

Our focus on safe and reliable operations allowed us to achieve record throughput during 2023.

Although average crack spreads were lower than historic highs in 2022, refining margins remained strong until the fourth quarter and demand for refined products was robust during 2023 driven by the continued constrained supply in the markets we serve.

Given the strong refining margins during most of 2023, we made a strategic decision to optimize our inventory levels to reduce carrying costs and improve working capital efficiency.

Further impacting our current quarter results were consistent refinery throughput and production rates compared to 2022 driven by safe and reliable operations.

We will continue to identify opportunities for operational efficiency improvements.

The domestic West Texas Intermediate ("WTI") differentials compared to Brent continued to be favorable during 2023, and the WTI Midland to Cushing premium remained relatively consistent compared to 2022.

Our logistics segment again contributed strong results while completing the successful integration of the Delaware Gathering operations which further diversifies our logistics customer base to include significantly more third-party customers and allow us to provide comprehensive logistics services in the Delaware Basin.

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

Retail stores continue to perform well and we are realizing the benefit of store optimization activities as margins have increased in 2023, and we expect to begin seeing benefits from successful re-branding.

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

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

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

During 2024, we made steady progress on our "sum of the parts" efforts.

We completed the sale of our Retail Stores during the third quarter 2024 for proceeds of $390.2 million and also entered into a 10 year fuel supply agreement whereby Delek will sell to FEMSA certain motor fuel products for use at the Retail Stores.

The completion of the Retail Transaction was an important step in our value creation journey and strengthened our balance sheet.

Our logistics segment (or "Logistics") successfully closed the H2O Midstream Acquisition which expands our gathering footprint in the Midland sub-basin of the Permian, and extended our product offering of wastewater processing and disposal.

In addition, in January 2025, the Logistics segment successfully closed the Gravity Acquisition which includes integrated full-cycle water systems in the Permian Basin, in addition to produced water gathering, and transportation assets in the Bakken, and along with the H2O Midstream Acquisition, provide a strong opportunity for integrated crude and water services to Delek Logistics customers.

These acquisitions represent another significant step in Delek Logistics' commitment of being a full suite crude, gas and water midstream services provider in the Permian Basin in addition to diversifying our logistics customer base to include more third-party customers.

We expect that these acquisitions will be immediately accretive, delivering incremental contribution margin and cash flows.

We also completed strategic transactions with Delek Logistics including the dropdown of W2W Holdings LLC ("HoldCo") which includes our 15.6% indirect interest in the Wink to Webster Pipeline LLC joint venture as well as amended and extended certain commercial agreements.

These transactions are expected to make both Delek and Delek Logistics stronger companies.

During 2024, the Refining segment navigated a complex landscape characterized by strong U.S.

utilization, volatile crude oil prices, resilient demand and fluctuating inventories.

We had a safe and reliable 2024 from an operational perspective;

however, the current refining margin environment is challenging as crack spreads narrowed in 2024.

The domestic West Texas Intermediate ("WTI") differentials compared to Brent continued to be favorable, and the WTI Midland to Cushing differential narrowed favorably during 2023.

Though refining margins softened, demand for refined products continues to be strong.

Logistics continued to contribute strong results driven by increased volumes from the Delaware Basin and rate increases.

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

We will continue to execute on our priorities of running safe and reliable operations, making further progress on our "sum of the parts" efforts, and delivering shareholder value while maintaining our financial strength and flexibility.

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

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

We completed our zero based budget action plans and announced a new enterprise optimization plan ("EOP") which includes initiatives that are focused on improving our financial health and ability to generate cash flows.

The EOP includes leaner costs including lower general and administrative expenses, lower operating expenses specifically at the Big Spring Refinery and Krotz Springs Refinery and lowering interest expense.

The EOP also includes stronger margins including accretive minimal capital projects in our Refining segment and commercial improvements including market optionality, improved product slate and optimization.

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

Our focus on reduction of GHG is a key objective as we strive to be a leader in the transition to a carbon neutral future.

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

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

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

Following the enactment of the Inflation Reduction Act ("IRA"), Delek is investing in carbon capture technology.

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

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

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

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

Carbon dioxide is expected to be transported by existing pipelines for permanent storage or utilization.

Our focus on reduction of GHG is a key objective as we strive to be a leader in the transition to a carbon neutral future.

Delek's Sustainable Operations Team ("SOT") which is led by our Executive Vice President, Operations coordinates execution of our sustainability objectives including ensuring enterprise strategies, business unit operations, capital spending plans, supply chain and personnel pipeline are in alignment and operating as needed to meet established goals.

Delek prioritizes stewardship of the environment, and we focus on how to positively impact our shareholders, employees, customers, and the communities where we operate.

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

In 2023, we reduced our long-term obligations by approximately $463.2 million and we returned $145.7 million of capital to shareholders in 2023, including $85.4 million of share repurchases and $60.3 million in dividends.

In 2024, we returned $105.7 million of capital to shareholders through dividends and share buybacks.

Our near-term focus is centered around the following:

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

See further discussion in the "Strategic Objectives" section below.

See further discussion on macroeconomic factors and market trends, including the impact on 2023 and the outlook for 2024, in the ‘Market Trends’ section below.

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

Delek Logistics also completed two public equity offerings of its common units in March and October 2024.

These steps allowed

Management's Discussion and Analysis

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

These Delek Logistics transactions will enhance Delek Logistics position as a full service (crude, natural gas and water) provider in the most prolific areas of the Permian basin while increasing third party revenue.

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

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

See further discussion in the "Strategic Objectives" section below.

See further discussion on macroeconomic factors and market trends, including the impact on 2024, in the ‘Market Trends’ section below.

Other 2024 Developments

On November 6, 2023, Delek Logistics entered into a First Amendment, a Second Amendment and a Third Amendment to the Delek Logistics Credit Facility (together, the “Amendments”) which among other things:

extended the maturity of the Delek Logistics Term Loan Facility to April 15, 2025, (ii) added a maturity acceleration clause which will accelerate the maturity of the Delek Logistics Term Loan Facility to 180 days prior to the stated maturity date of the Delek Logistics 2025 Notes if any of the Delek Logistics 2025 Notes remain outstanding on that date, (iii) increased the U.S.

Revolving Credit Commitments (as defined in the Delek Logistics Credit Facility) by an amount equal to $150.0 million, resulting in aggregate lender commitments under the Delek Logistics Revolving Credit Facility of $1.050 billion and (iv) increased the limit allowed for general unsecured debt (as defined in the Delek Logistics Credit Facility) by an amount equal to $95.0 million, resulting in an unsecured general debt limit of $150.0 million.

On December 21, 2023, we amended the Inventory Intermediation Agreement with Citigroup Energy Inc.

(“Citi”) (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.

We continue to progress our multi-year cost optimization initiative focused on identifying and implementing opportunities to improve our cost structure, improve efficiencies and align our workforce with strategic activities and operations.

We are executing on our initiatives to achieve a sustainable run-rate cost reduction of $100.0 million per year.

In 2023, we incurred total restructuring costs of $37.8 million (including a $23.1 million right-of-use asset impairment) as part of this cost optimization initiative.

During the fourth quarter of 2023, Delek determined that leased crude oil tanks in Canada were not needed to support the future growth of its business.

The exit of these leased crude oil tanks are intended to align with our continued operational and cost optimization efforts.

We have the ability and intent to sublease these crude oil tanks for the remainder of the respective lease terms, however, the expected sublease has a lower rate than the head lease, resulting in a right-of-use asset impairment of $23.1 million.

Delek Logistics Equity Offerings

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

The proceeds received from this offering (net of underwriting discounts, commissions and expenses) were $132.2 million and were used to repay a portion of the outstanding borrowings under the Delek Logistics Revolving Facility (as defined in Note 11 of the consolidated financial statements included in Item 8.

Financial Statements and Supplementary Data, of this Annual Report on Form 10-K).

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 $165.6 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 (as defined in Note 11 of the consolidated financial statements included in Item 8.

Financial Statements and Supplementary Data, of this Annual Report on Form 10-K).

Delek Logistics Debt Agreements

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

Net proceeds were used to redeem the Delek Logistics 2025 Notes including accrued interest, pay off the Delek Logistics Term Loan Facility (as defined in Note 11 of the consolidated financial statements included in Item 8.

Financial Statements and Supplementary Data, of this Annual Report on Form 10-K) including accrued interest and to repay a portion of the outstanding borrowings under the Delek Logistics Revolving Facility.

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

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

On April 17, 2024, Delek Logistics sold $200 million in aggregate principal amount of additional 8.625% senior notes due 2029 at 101.25% and on August 16, 2024, Delek Logistics 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.

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

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

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

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

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

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

In addition, $0.4 million of severance and benefit expenses were recognized in the year ended December 31, 2024.

Property Settlement

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

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

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

As a result of the termination of the License Agreement, we are no longer obligated to remove equipment from the property for certain development activities and as a result we reversed the $17.9 million asset retirement obligation since we intend to operate the property as an asphalt and marine fuel terminal.

Additionally, as a result of the settlement, we reduced the non-contingent guarantee and environmental liability

Management's Discussion and Analysis

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 consolidated statements of income.

Refer to Note 14 of the consolidated financial statements included in Item 8.

Financial Statements and Supplementary Data, of this Annual Report on Form 10-K for further information.

Delek Logistics Gas Plant Expansion

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

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

Total estimated cost is between $160.0 and $165.0 million with an anticipated start-up in the first half 2025.

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

Expected annual earnings before interest, taxes, depreciation and amortization ("EBITDA") is estimated to be approximately $40.0 million attributable to Delek Logistics.

Additionally, in December 2024, Delek Logistics announced the development of permitted acid gas injection ("AGI") capabilities at the new plant with an anticipated start-up in the first half 2025.

The sour natural gas treating and acid gas injection capability is enabled by Delek Logistics' two existing AGI well permits and amine unit currently under construction.

Retail Divestiture

On September 30, 2024, Delek US sold 100% of the equity interests in four of Delek US' wholly-owned subsidiaries that owned and operated 249 retail fuel and convenience stores under the Delek US Retail brand to a subsidiary of FEMSA.

Net cash proceeds before taxes related to this transaction were approximately $390.2 million.

As a result, we met the requirements of ASC 205-20 and 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.

The operating results for the Retail Stores, in all periods presented, have been reclassified to discontinued operations.

Refer to Note 5 of the consolidated financial statements included in Item 8.

Financial Statements and Supplementary Data, of this Annual Report on Form 10-K for further information.

Acquisition of H2O Midstream

On September 11, 2024, Delek Logistics acquired 100% of the limited liability company interests in H2O Midstream Intermediate, LLC, H2O Midstream Permian LLC, and H2O Midstream LLC from H2O Midstream Holdings, LLC (the “Seller”) related to the Seller’s water disposal and recycling operations in the Midland Basin in Texas for total consideration of $229.7 million (the "H2O Transaction").

The purchase price is comprised of approximately $159.7 million in cash and $70.0 million of preferred equity.

Refer to Note 3 of the consolidated financial statements included in Item 8.

Financial Statements and Supplementary Data, of this Annual Report on Form 10-K for further information.

Wink to Webster Pipeline

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

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

Total consideration was comprised of $83.9 million in cash, forgiveness of a $60.0 million payable to Delek Logistics and 2,300,000 of Delek Logistics common units.

Delek Logistics Commercial Agreements

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

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

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

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

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

Management's Discussion and Analysis

Other 2025 Developments

Acquisition of Gravity

On December 11, 2024, Delek Logistics entered into an agreement to acquire 100% of the limited liability company interests in Gravity Water Intermediate Holdings LLC ("Gravity") from Gravity Water Holdings LLC (the "Gravity Purchase Agreement") related to water disposal and recycling operations in the Permian Basin and the Bakken (the “Gravity Acquisition”) for total consideration of $301.2 million, subject to customary adjustments for net working capital.

The purchase price was comprised of $209.3 million in cash and 2,175,209 of Delek Logistics’ common units.

Upon execution of the Gravity Purchase Agreement, we made a cash deposit of $22.8 million, recorded in other current assets on the consolidated balance sheets, which was credited to the sale upon closing.

The Gravity Acquisition closed on January 2, 2025.

Inventory Intermediation Agreement Amendment

On February 21, 2025, DK Trading & Supply, LLC ("DKTS") amended the Inventory Intermediation Agreement to among other things, (i) extend the term of the Inventory Intermediation Agreement from January 31, 2026 to January 31, 2027 and (ii) include a mechanism for DKTS to nominate each month whether to include volumes related to the Krotz Springs refinery for funding under the Inventory Intermediation Agreement.

Information About Our Segments

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

refining, logistics, and retail.

However, in July 2024, we entered into the Retail Purchase Agreement with 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 owned and operated 249 retail fuel and convenience stores.

On September 30, 2024, the Retail Transaction closed.

As a result of the Retail Purchase Agreement, we met the requirements of ASC 205-20 and 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.

During the second quarter 2024, we realigned our reportable segments for financial reporting purposes to reflect changes in the manner in which our chief operating decision maker, or CODM, assesses financial information for decision-making purposes.

The change represents reporting the operating results of our 50% interest in a joint venture that owns asphalt terminals located in the southwestern region of the U.S.

within the refining segment.

Prior to this change, these operating results were reported as part of corporate, other and eliminations.

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

Refining Overview

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

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

The refining segment has a combined nameplate capacity of 302,000 bpd as of December 31, 2024.

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

Tyler Refinery El Dorado Refinery Big Spring Refinery Krotz Springs Refinery

Tyler, Texas refinery El Dorado, Arkansas refinery Big Spring, Texas refinery Krotz Springs, Louisiana refinery

Total Nameplate Capacity (bpd) 75,000 80,000 73,000 74,000

Primary Products Gasoline, jet fuel, ultra-low-sulfur diesel, liquefied petroleum gases, propylene, petroleum coke and sulfur Gasoline, ultra-low-sulfur diesel, liquefied petroleum gases, propylene, asphalt and sulfur Gasoline, jet fuel, ultra-low-sulfur diesel, liquefied petroleum gases, propylene, aromatics and sulfur Gasoline, jet fuel, high-sulfur diesel, light cycle oil, liquefied petroleum gases, propylene and ammonium thiosulfate

Primary Products Gasoline, jet fuel, ultra-low-sulfur diesel, liquefied petroleum gases, propylene, petroleum coke and sulfur Gasoline, jet fuel, ultra-low-sulfur diesel, liquefied petroleum gases, propylene, asphalt and sulfur Gasoline, jet fuel, ultra-low-sulfur diesel, liquefied petroleum gases, propylene, aromatics and sulfur Gasoline, jet fuel, high-sulfur diesel, light cycle oil, liquefied petroleum gases, propylene and ammonium thiosulfate

Relevant Crack Spread Benchmark Gulf Coast 5-3-2

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Marketing and Distribution The refining segment's petroleum-based products are marketed primarily in the south central and southwestern regions of the United States, and the refining segment also ships and sells gasoline into wholesale markets in the southern and eastern United States.

Motor fuels are sold under the Alon or Delek brand through various terminals to supply Alon or Delek branded retail sites.

In addition, we sell motor fuels through our wholesale distribution network on an unbranded basis.

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

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

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

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

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

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

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

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

See Note 20 of the consolidated financial statements included in Item 8.

Management's Discussion and Analysis

Statements and Supplementary Data, of this Annual Report on Form 10-K for further information.

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

Logistics Overview

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

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

markets, distributes, transports and stores refined products;

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

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

Majority of Delek Logistics' assets are currently integral to our refining and marketing operations.

The logistics segment's gathering and processing business owns or leases capacity on approximately 398 miles of crude oil transportation pipelines, approximately 406 miles of refined product pipelines, and an approximately 1,400-mile crude oil gathering system of which 489 miles is decommissioned.

The storage and transportation business owns or leases associated crude oil storage tanks with an aggregate of approximately 10.0 million barrels of active shell capacity.

In addition, this segment also includes water disposal and recycling operations, located in the Delaware Basin of New Mexico and the Midland Basin of Texas.

The storage and transportation business owns or leases associated crude oil storage tanks.

The logistics segment has an aggregate of approximately 11.2 million barrels of active shell capacity.

It also owns and operates nine light product terminals and markets light products using third-party terminals.

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The logistics segment owns or leases approximately 161 tractors and 306 trailers used to haul primarily crude oil and other products for related and third parties.

Retail Overview

Our retail segment (or "Retail") at December 31, 2023 includes the operations of 250 owned and leased convenience store sites located primarily in West Texas and New Mexico.

Our convenience stores typically offer various grades of gasoline and diesel under the DK or Alon brand name and food products, food service, tobacco products, non-alcoholic and alcoholic beverages, general merchandise as well as money orders to the public, primarily under the DK or Alon brand names pursuant to a license agreement with 7-Eleven, Inc.

In November 2018, we terminated the license agreement with 7-Eleven, Inc.

and the terms of such termination and subsequent amendments required the removal of all 7-Eleven branding on a store-by-store basis by December 31, 2023.

As of December 31, 2023, we have removed the 7-Eleven brand name from all of our store locations.

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.

Corporate and Other Overview

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More consolidation in our industry is expected from increased cost pressures due in part to the regulatory environment continuing to move towards reducing carbon emissions and transitioning to renewable energy in the long-term.

However, we believe we are uniquely positioned as a leader in operating and excelling in niche markets and could continue capitalizing on and growing our integrated business model.

To compete under historic environmental and regulatory changes, companies in our industry will need to be adaptive, forward-thinking and strategic in their approach to long-term sustainability.

The emphasis on environmental responsibility and long-term economic and environmental sustainability has increased.

Demand for additional transparency continues to evolve.

As we evaluate our current sustainability and ESG positioning in the market, we also must integrate a broader sustainability view into all of our activities, both operational and strategic.

We have developed overarching key objectives that guide us when we formulate our strategic plans.

However, we believe we are uniquely positioned as a leader in operating and excelling in niche markets and could continue capitalizing on our niche position by being the supplier of choice in our markets.

Key Objectives

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Delek prioritizes stewardship of the environment, and we focus on how to positively impact our shareholders, employees, customers, and the communities where we operate.

We understand that if our assets run reliably and safely, it is better for the safety of our employees, communities, and environment.

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

For 2024, we will be focused on the following:

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

• Focus on operational excellence by building out our operations centric area business teams, frontline supervisor training as well as other key competency training.

• Execute a major turnaround at the Krotz Springs refinery, focusing on outage spend and optimizing downtime and implementing margin enhancement .

• Identify and evaluate organic growth projects that improve yield and increase utilization.

• Continue our progression of digital system implementations that will improve our ability to understand all aspects of our business as well as our ability to make real-time and forward-looking operational decisions.

For 2025, we are focused on the following:

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

• Focus on operational excellence by building out our operations centric area business teams, as well as other key competency training.

• Identify and execute on low-capital organic growth projects that improve yield and increase utilization.

• Continue our progression of digital system implementations that will do the following:

◦ improve our ability to understand all aspects of our business as well as our ability to make real-time and forward-looking operational decisions;

◦ automate processes and shift operational roles to higher value-added activities.

Financial Strength and Flexibility

In our industry, as with many volatile businesses, it is very important to make capital investments with accretive returns and maintain a debt balance at a comfortable leverage ratio.

In our industry, as with many volatile businesses, it is very important to make capital investments with accretive returns and maintain a strong balance sheet.

We want to reward our shareholders and investors with a disciplined and balanced capital allocation framework, which we believe will strengthen shareholder value by, among other things, a stable dividend complemented by opportunistic share repurchases.

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

For 2024, we will be focused on the following:

For 2025, we are focused on the following:

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

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

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

• Build on the “zero-based budget” cost saving plan completed in 2024, with a comprehensive margin enhancement plan included within the EOP.

The EOP initiatives are focused on improving our financial health and ability to generate free cash flow.

The EOP includes leaner costs including lower general and administrative expenses, lower operating expenses specifically at our refineries and lowering interest expense.

The EOP also includes margin initiatives including accretive, minimal capital projects in our Refining segment and commercial improvements through market optionality, improved Delek Logistics and product slate optimization.

Strategic Initiatives

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

For 2024, we will be focused on the following:

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

The goal being, to help unlock value embedded in the Delek valuation, while also improving liquidity in the market for DKL units without diluting overall DKL market capitalization.

For 2025, we will continue to focus on furthering our sum of the parts efforts focusing on the following:

• Execute on our strategic initiatives, which may include opportunities to monetize our investment in Delek Logistics.

The goal being, to help unlock value embedded in the Delek valuation, along with deconsolidating Delek Logistics by bringing DK's ownership below 50%.

• Identify and evaluate investment opportunities that fit our sustainability view and integrate into our current asset footprint, including strategic investments or joint ventures in renewables or carbon capture and incubator investments in new technologies.

Management's Discussion and Analysis

• Identify and evaluate investment opportunities that fit our sustainability view and integrate into our current asset footprint, including strategic investments or joint ventures in renewables, incubator investments in new technologies, and other core-business investments that could improve our scalability and agility.

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

2024 Strategic Developments

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2024 Strategic Developments

Safe & Reliable Operations Financial Flexibility & Shareholder Returns Long Term Sustainable Business Model

Improving Discipline Around Outage Spend and Optimizing Downtime:

Successfully completed the Tyler refinery turnaround in the first quarter of 2023 with zero process or safety incidents.

The turnaround was completed substantially on time and on budget and positions us to capture market opportunities.

Implementing Phase 1 of Our Zero-Based Budget:

We have taken steps to improve the efficiency of our cost structure and to align with our strategic priorities to drive cost efficiencies, which include cost reductions in general and administrative expenses.

We are targeting $100 million annual run-rate cost reduction.

Reducing Debt to Provide Shareholder Value:

During the year ended December 31, 2023, we reduced our long-term obligations by approximately $463.2 million.

Executing Safe and Reliable Operations:

Our focus on safe and reliable operations allowed us to achieve record throughput during 2023.

Focus on Leadership:

In March 2023, Joseph Israel was named EVP, Operations and is responsible for refining operations at Delek.

Israel has 25 years of energy experience and a proven track record of driving operational excellence.

Also in March 2023, Patrick Reilly was appointed EVP and Chief Commercial Officer.

Reilly will work closely with Delek's management team to lead the Company's strategies to achieve its short and long-term objectives.

Reilly has over 20 years of energy oil refining and trading experience.

In April 2023, Tommy Chavez who has over three decades of refining experience was named SVP, Refining Operations.

Improving Safety Through a Safety Action Plan:

As part of an ongoing review of safety practices across our refining system, we have developed a Safety Action Plan which will require previously un-budgeted capital expenditures and additional labor resources and subject matter experts.

The execution of the Safety Action Plan will address a broad range of items, some of which were delayed in implementation due to the pandemic, or for other reasons.

This plan resulted in record Tier 1 process safety event performance company-wide in 2023.

Increasing Shareholder Value through Payment of Dividends:

We increased our quarterly cash dividend to $0.245 per share of our common stock which was declared by our Board of Directors on February 20, 2024 and payable on March 8, 2024.

In addition, a cash dividend of $0.230 per share of our common stock was paid on May 22, 2023, a cash dividend of $0.235 per share of our common stock was paid on August 21, 2023, and a cash dividend of $0.240 per share of common stock was paid on November 20, 2023.

Increasing Shareholder Value through Share Repurchases:

During the year ended December 31, 2023, 3,562,767 shares of our common stock were repurchased for a total of $85.4 million.

Executing Retail Growth Plans:

In September 2023, we opened a new-to-industry retail location in Tyler, TX.

Our first store in this market, which features expanded food serviced and leading digital technology.

Pursuing Zero Incidents:

Our “Drive Zero” effort kicked off in 2023 aimed at building a stronger safety culture and improving operational excellence.

We’re committed to both personal safety (mitigating risks that cause smaller scale, local incidents and injuries), and process safety (managing the integrity of our operating systems and process equipment).

Operational Excellence Financial Strength & Flexibility Strategic Initiatives

Investing in Energy Transition:

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

Extending Long Term Debt Maturities:

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

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

On April 17, 2024, Delek Logistics sold $200 million in aggregate principal amount of additional 8.625% senior notes due 2029 at 101.25% and on August 16, 2024 sold $200.0 million in aggregate principal amount of additional 8.625% senior notes due 2029 at 103.25%.

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

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

Strengthening the Balance Sheet:

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

Executing Safe and Reliable Operations:

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

Enhancing Environmental Standards with Capital Expenditures:

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

Expanding Delek Logistics' Natural Gas Processing:

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

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

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

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

Additionally, in December 2024, Delek Logistics announced the development of permitted AGI capabilities at the new plant with an anticipated start-up in the first half 2025.

Monetizing Our Retail Operations:

Net cash proceeds before taxes related to this transaction were approximately $390.2 million.

Executing Strategic Midstream Acquisition:

On September 11, 2024, Delek Logistics acquired H2O Midstream related to water disposal and recycling operations, in the Midland Basin in Texas for total consideration of $229.7 million.

The purchase price was comprised of approximately $159.7 million in cash and $70.0 million of preferred equity.

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

Maximizing Shareholder Value:

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

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

Total consideration was comprised of $83.9 million in cash, forgiveness of a $60.0 million payable to Delek Logistics and 2,300,000 of Delek Logistics common units.

Management's Discussion and Analysis

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Management's Discussion and Analysis

The SEC is currently considering its requirements for ESG reporting in the near term, which may include requirements that independent assurance be obtained and reported for ESG disclosures, similar to financial statement audit reports.

Delek's Response to Significant Uncertainties Associated with Climate Change

We remain committed to complying with all regulations, laws and government policies designed to curb the growing climate-change crisis.

In 2021, the Company announced goals to reduce Scope 1 & 2 emissions by 34% through emission reductions and carbon offsets.

This goal is aligned with both the IEA’s SDS and the Paris Accord’s goal of limiting warming to less than 2°C above pre-industrial levels.

Using 2012 as our baseline, we plan to pursue the reductions via a combination of steps including, but not limited to:

energy-efficient operational improvements;

transitioning some refinery production away from transportation fuels and towards chemicals;

renewable power purchases, when feasible, and offsets, when necessary;

and previously executed facility shutdowns that were later divested.

In 2024, Delek updated its GHG reduction target to include application of a 2022 “baseline” year that is more reflective of the current operational boundaries and application of a 25% Scope 1 and 2 emission reduction target, measured on an intensity basis, by 2030.

We plan to pursue the reductions via a combination of steps including, but not limited to:

innovative technology investment, carbon capture, operational energy efficiencies, increased application of renewable power and refinery fuel gas optimization.

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

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

Our pledge is the first step towards a long-term roadmap which we are seeking to align with the Science Based Target initiatives (SBTi), to move Delek firmly in the direction of the carbon-neutral operating environment as envisioned by the Paris Accords.

We also continue to monitor the activities of the SEC as it works towards issuing reporting compliance rules around ESG and climate change, which includes consideration of framework and/or standards introduced by the Task Force on Climate-related Financial Disclosures ("TCFD") Sustainability Accounting Standards Board ("SASB"), so that we may ensure timely compliance with requirements as well as meaningful disclosure for our investors and stakeholders.

Market Trends

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Additionally, our refining margin profitability is impacted by regulatory factors, including the cost of RINs.

We have positioned the Company to continue to run safely, reliably and environmentally responsibly at near or above nameplate capacity while leveraging our Delek Logistics and retail lines of business with an eye towards the One Delek vision.

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

The demand for gasoline and diesel continue to be reshaped after the COVID-19 pandemic.

Work from home policies and increased electric vehicle usage have caused increased gasoline inventories which has weakened the gasoline crack spread.

Diesel inventories have recently increased and started to normalize.

We do expect gasoline and diesel demand to continue to follow typical seasonal patterns.

We anticipate additional global refinery capacity to come online in 2024 which will further increase gasoline and diesel inventories and put additional downward pressure on crack spreads.

Additionally, if inflation continues to soften, the Federal Reserve may implement rate cuts in 2024 however the cuts are expected to be slow and gradual.

We have positioned the Company to continue to run safely, reliably and environmentally responsibly while leveraging our Delek Logistics business with an eye towards the One Delek vision.

Many uncertainties remain in 2025 with respect to the global supply and demand of the crude oil and refined products markets and it is difficult to predict the ultimate economic impacts this may have on our operations.

We expect refining capacity to shut down, lower refined products inventory and crude oil demand to continue to rise.

These factors will help absorb the recent additions in global supply and balance the market over the next 6 to 12 months.

We expect crack spreads to be relatively consistent with 2024.

However, U.S.

policy changes and escalating conflicts in the Middle East could potentially result in supply disruptions or further volatility in crude oil prices.

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

Management's Discussion and Analysis

WTI crude oil represents the largest component of our crude slate at all of our refineries, and can be sourced through our gathering channels or optimization efforts from Midland, Texas or Cushing, Oklahoma or other locations.

We manage our supply chain risk to ensure that we have the barrels to meet our crude slate consumption plan for each month through gathering supply contracts and throughput agreements on various strategic pipelines, some of which include those where we hold equity method investments.

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

The table below reflects the average quarterly prices of WTI Midland and WTI Cushing over the past three years.

The chart below illustrates the average quarterly price of WTI Midland and WTI Cushing over the past three years.

Crude Pricing Differentials

Management's Discussion and Analysis

Historically, domestic refiners have benefited from the discount for WTI Cushing compared to Brent, a global benchmark crude.

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The chart below illustrates the key differentials impacting our refining operations, including WTI Cushing to Brent, WTI Midland to WTI Cushing, and LLS to WTI Cushing over the past three years.

Management's Discussion and Analysis

Refined Product Prices

We are impacted by refined product prices in two ways:

(1) in terms of the prices we are able to sell our refined product for in our refining segment, and (2) in terms of the cost to acquire the refined products to meet Refining production shortfalls (e.g., when we have outages), or to acquire refined fuel products we sell to our wholesale customers in our logistics segment and at our convenience stores in our retail segment.

These prices largely depends on numerous factors beyond our control, including the supply of, and demand for, crude oil, gasoline and other refined petroleum products which, in turn, depend on, among other factors, changes in domestic and foreign economies, weather conditions, domestic and foreign political affairs, production levels, the availability of imports, the marketing of competitive fuels and government regulation.

These prices largely depend on numerous factors beyond our control, including the supply of, and demand for, crude oil, gasoline and other refined petroleum products which, in turn, depend on, among other factors, changes in domestic and foreign economies, weather conditions, domestic and foreign political affairs, production levels, the availability of imports, the marketing of competitive fuels and government regulation.

Our refineries produce the following products:

Tyler Refinery El Dorado Refinery Big Spring Refinery Krotz Springs Refinery

The charts below illustrate the quarterly average prices of CBOB, HSD and ULSD over the past three years.

Management's Discussion and Analysis

The charts below illustrate the quarterly average prices of CBOB, HSD and ULSD over the past three years.

Crack Spreads

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Environmental regulations and the political environment continue to affect our refining margins in the form of volatility in the price of RINs .

We enter into future commitments to purchase or sell RINs at fixed prices and quantities, which are used to manage our RINs Obligation.

We enter into future commitments to purchase or sell RINs at fixed prices and quantities, which are used to manage our RINs Obligations.

On a consolidated basis, we work to balance our RINs Obligation in order to minimize the effect of RINs prices on our results.

While we obtain RINs in our refining and logistics segments through our ethanol and biodiesel blending and generate RINs through biodiesel production, our refining segment still must purchase additional RINs to satisfy its obligations.

While we obtain RINs in our refining and logistics segments through our ethanol blending, our refining segment still must purchase additional RINs to satisfy its obligations.

Prior to the idling of the biodiesel facilities in 2024, we obtained RINs through biodiesel blending and generated RINs through biodiesel production.

Additionally, our ability to obtain RINs through blending is limited by our refined product slate, blending capabilities and market constraints.

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The chart below illustrates the volatility in RINs over the past three years.

Management's Discussion and Analysis

Energy costs are a significant element of our Refining EBITDA and can significantly impact our ability to capture crack spreads, with natural gas representing the largest component.

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The charts below illustrate the quarterly average prices of Waha (Permian Basin) and Henry Hub (Gulf Coast) over the past three years.

Management's Discussion and Analysis

Non-GAAP Measures

Our management uses certain “non-GAAP” operational measures to evaluate our operating segment performance and non-GAAP financial measures to evaluate past performance and prospects for the future to supplement our GAAP financial information presented in accordance with U.S.

Our management uses certain non-Generally Accepted Accounting Principles (“non-GAAP”) operational measures to evaluate our operating segment performance and non-GAAP financial measures to evaluate past performance and prospects for the future to supplement our GAAP financial information presented in accordance with U.S.

These financial and operational non-GAAP measures are important factors in assessing our operating results and profitability and include:

• Earnings before interest, taxes, depreciation and amortization ("EBITDA") - calculated as net income (loss) attributable to Delek adjusted to add back interest expense, income tax expense, depreciation and amortization;

• EBITDA - calculated as net income (loss) attributable to Delek adjusted to add back interest expense, income tax expense, depreciation and amortization;

• Refining margin - calculated as gross margin (which we define as sales minus cost of sales) adjusted for operating expenses and depreciation and amortization included in cost of sales.

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The following table provides a reconciliation of segment EBITDA to the most directly comparable U.S.

GAAP measure, net income attributable to Delek:

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

GAAP measure, net (loss) income attributable to Delek:

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

Year Ended December 31,

2024 2023 2022

Refining segment EBITDA $ (158.0) $ 560.7 $ 736.6

Logistics segment EBITDA 342.7 363.0 304.8

Retail segment EBITDA 46.9 44.1

Corporate, Other and Eliminations EBITDA (242.7) (276.5) (282.2)

(244.6) (264.7)

EBITDA attributable to Delek $ (58.0) $ 647.2 $ 759.2

Interest expense, net 313.0 318.0 195.8

Income tax expense (5.1) (63.9)

Income tax (benefit) expense (107.9) (3.0) 56.4

Depreciation and amortization 374.5 339.5 275.0

Net income attributable to Delek $ 19.8 $ 257.1

(1) Includes a $14.8 million goodwill impairment charge for the year ended December 31, 2023.

Refer to Note 16 - Goodwill and Intangible Assets to our accompanying consolidated financial statements included in Item 8.

Financial Statements and Supplementary Data, of this Annual Report on Form 10-K for further information.

(2) Includes a $23.1 million right-of-use asset impairment charge for the year ended December 31, 2023.

Refer to Note 19 - Restructuring to our accompanying consolidated financial statements included in Item 8.

Financial Statements and Supplementary Data, of this Annual Report on Form 10-K for further information.

Income from discontinued operations, net of tax (77.2) (27.1) (25.1)

Net (loss) income attributable to Delek $ (560.4) $ 19.8 $ 257.1

The following table provides a reconciliation of refining margin to the most directly comparable U.S.

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Year Ended December 31,

2024 2023 2022

Total revenues $ 11,783.0 $ 16,406.9 $ 19,763.0

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Insurance proceeds (20.6) (20.3) (31.2)

Operating expenses related to retail and wholesale business (excluding depreciation and amortization presented below) 106.5 106.8

Operating expenses related to wholesale business (excluding depreciation and amortization presented below) 3.4 4.4 8.6

General and administrative expenses 252.8 272.0 313.7

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Total operating costs and expenses 12,343.7 16,222.5 19,343.5

Operating income 279.9 489.5

Operating (loss) income (491.5) 244.7 457.5

Interest expense, net 313.0 318.0 195.8

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Total non-operating expenses, net 214.5 228.1 135.7

Income before income tax expense 51.8 354.4

(Loss) income from continuing operations before income tax (benefit) expense (706.0) 16.6 321.8

Income tax (benefit) expense (107.9) (3.0) 56.4

(Loss) income from continuing operations, net of tax (598.1) 19.6 265.4

Discontinued operations:

Income from discontinued operations, including gain on sale of discontinued operations 105.9 35.2 32.6

Income tax expense 28.7 8.1 7.5

Net income 46.7 290.5

Net income attributed to non-controlling interests 26.9 33.4

Net income attributable to Delek $ 19.8 $ 257.1

Income from discontinued operations, net of tax 77.2 27.1 25.1

Net (loss) income (520.9) 46.7 290.5

Non-controlling interests 39.5 26.9 33.4

Net (loss) income attributable to Delek $ (560.4) $ 19.8 $ 257.1

(1) This information is presented at a summary level for your reference.

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Financial Statements and Supplementary Data, of this Annual Report on Form 10-K for more detail regarding our results of operations and net income per share.

(2) In the first quarter 2023, we reassessed the classification of certain expenses and made certain reclassification adjustments to better represent the nature of those expenses.

Accordingly, we have made reclassifications to the prior period in order to conform to this revised current period classification, which resulted in a decrease in the prior period general and administrative expenses and an increase in the prior period operating expenses of approximately $16.3 million for the year ended December 31, 2022.

We report operating results in three reportable segments:

We report operating results in two reportable segments:

Decisions concerning the allocation of resources and assessment of operating performance are made based on this segmentation.

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Results of Operations

Consolidated Results of Operations — Comparison of the Year Ended December 31, 2023 versus the Year Ended December 31, 2022

Consolidated net income for the year ended December 31, 2023 was $46.7 million compared to a net income of $290.5 million for the year ended December 31, 2022.

Consolidated net income attributable to Delek for the year ended December 31, 2023 was $19.8 million, or $0.30 per basic share, compared to income of $257.1 million, or $3.63 per basic share, for the year ended December 31, 2022.

Consolidated Results of Operations — Comparison of the Year Ended December 31, 2024 versus the Year Ended December 31, 2023 and the Year Ended December 31, 2023 versus the Year Ended December 31, 2022

Net (Loss) Income

Consolidated net loss for the year ended December 31, 2024 was $520.9 million compared to a net income of $46.7 million for the year ended December 31, 2023.

Consolidated net loss attributable to Delek for the year ended December 31, 2024 was $560.4 million, or $(8.77) per basic share, compared to income of $19.8 million, or $0.30 per basic share, for the year ended December 31, 2023.

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

Consolidated net income for the year ended December 31, 2023 was $46.7 million compared to $290.5 million for the year ended December 31, 2022.

Consolidated net income attributable to Delek for the year ended December 31, 2023 was $19.8 million, or $0.30 per basic share, compared to $257.1 million, or $3.63 per basic share, for the year ended December 31, 2022.

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

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

Gulf Coast gasoline of 9.0% and ULSD of 13.2%, decreases in wholesale activity and decreased sales volumes (including purchased products), partially offset by an increase in the average price of U.S.

Gulf Coast HSD of 7.0%;

• in our logistics segment, decreases in the average sales price per gallon of diesel and gasoline sold in our West Texas marketing operations, partially offset by an increase in revenue associated with the H20 Midstream operations which was acquired in September 2024.

We generated net revenues of $16,467.2 million and $19,801.0 million during the years ended December 31, 2023 and 2022, respectively, a decrease of $3,333.8 million, or 16.8%.

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

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

Gulf Coast gasoline of 15.5%, ULSD of 21.4%, and HSD of 36.2% and decreases in wholesale activity, partially offset by an increase in sales volume (including purchased product);

• in our logistics segment, increased volumes from the Midland Gathering operations and incremental revenues from the Delaware Gathering Acquisition, partially offset by decreases in the average volumes of diesel sold and in the average sales price per gallon of diesel and gasoline sold in our West Texas marketing operations.

• in our retail segment, a decrease in total fuel sales primarily attributable to a $0.47 decrease in average price charged per gallon sold, partially offset by an increase in merchandise sales primarily driven by the same-store sales increase of 0.6% and an increase in total retail fuel gallons sold.

Management's Discussion and Analysis

Total Operating Costs and Expenses

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

• a decrease in the cost of crude oil feedstocks at the refineries, including a 17.9% decrease in the average cost of WTI Cushing crude oil and a 17.8% decrease in the average cost of WTI Midland crude oil and decreased wholesale activity;

• decreases in the average diesel volumes sold and average cost per gallon of gasoline and diesel sold, partially offset by incremental cost of materials and other from the Delaware Gathering Acquisition in our logistics segment;

• a decrease in retail cost of materials and other due to 14.0% decrease in average cost per gallon sold applied to higher fuel sales volumes.

• a decrease in the cost of crude oil feedstocks at the refineries, including a 2.3% decrease in the average cost of WTI Cushing crude oil and a 2.6% decrease in the average cost of WTI Midland crude oil, decreased wholesale activity and decreased sales volume (including purchased products);

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

Cost of materials and other was $14,825.3 million for the year ended December 31, 2023, compared to $18,071.4 million for 2022, a decrease of $3,246.1 million, or 18.0%.

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

• decreases in the average cost per gallon of gasoline and diesel sold, partially offset by incremental cost of materials and other from the Delaware Gathering Acquisition in our logistics segment.

Insurance Proceeds

Insurance proceeds were $20.3 million for the year ended December 31, 2023 compared to $31.2 million in year ended December 31, 2022, a decrease of $10.9 million, or 34.9%.

The decrease in insurance proceeds was due to following:

• For the year ended December 31, 2023, we recognized $10.0 million of business interruption and property damage insurance recoveries compared to $31.2 million of business interruption insurance recoveries in the 2022 period related to the fire and freeze events that occurred during the first quarter 2021;

• For the year ended December 31, 2023, we recognized $10.3 million of insurance recoveries related to property damage with no comparable activity in the 2022 period related to the fire events that occurred during the fourth quarter 2022.

Insurance proceeds were $20.6 million for the year ended December 31, 2024 compared to $20.3 million in 2023, an increase of $0.3 million, or 1.5%.

The increase was primarily driven by the following:

• for the year ended December 31, 2024, we recognized a gain of $20.6 million for insurance proceeds related to property damage from the 2021 El Dorado refinery fire, the 2021 freeze events and the 2022 Big Spring refinery fire, compared to $10.3 million of property damage insurance proceeds in the 2023 period related to the 2022 Big Spring refinery fire and the 2021 freeze events;

• for the year ended December 31, 2023, we recognized $10.0 million of business interruption claims related to the 2021 El Dorado refinery fire and the 2021 freeze events with no comparable claims for the year ended December 31, 2024.

Refer to Note 14 of our consolidated financial statements included in Item 8.

Financial Statements and Supplementary Data, of this Annual Report on Form 10-K for further information.

Insurance proceeds were $20.3 million for the year ended December 31, 2023 compared to $31.2 million in 2022, a decrease of $10.9 million, or 34.9%.

The decrease was primarily driven by the following:

• for the year ended December 31, 2023, we recognized a gain of $10.3 million for insurance proceeds related to property damage from the 2022 Big Spring refinery fire and the 2021 freeze events, compared to $0.1 million of property damage insurance proceeds in the 2022 period related to the freeze events that occurred in 2021;

• for the year ended December 31, 2023, we recognized $10.0 million of business interruption claims related to the 2021 El Dorado refinery fire and the 2021 freeze events, compared to $31.1 million of business interruption claims in the 2022 period related to the 2021 El Dorado refinery fire and the 2021 freeze events.

Refer to Note 14 of our consolidated financial statements included in Item 8.

Financial Statements and Supplementary Data, of this Annual Report on Form 10-K for further information.

Management's Discussion and Analysis

Operating Expenses

Operating expenses (included in both cost of sales and other operating expenses) were $877.1 million for the year ended December 31, 2023 compared to $824.9 million in year ended December 31, 2022, an increase of $52.2 million, or 6.3%.

Operating expenses (included in both cost of sales and other operating expenses) were $767.2 million for the year ended December 31, 2024 compared to $775.0 million in year ended December 31, 2023, a decrease of $7.8 million, or 1.0%.

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

• lower natural gas prices;

• lower outside services;

• a decrease in insurance costs.

These decreases were partially offset by the following:

• an increase in employee costs.

Operating expenses (included in both cost of sales and other operating expenses) were $775.0 million for the year ended December 31, 2023 compared to $726.7 million in 2022, an increase of $48.3 million, or 6.6%.

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

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These increases were partially offset by the following:

• lower natural gas prices in 2023.

• lower natural gas prices.

General and Administrative Expenses

General and administrative expenses were $252.8 million for the year ended December 31, 2024 compared to $272.0 million in year ended December 31, 2023, a decrease of $19.2 million, or 7.1%.

The decrease was primarily driven by a decrease in employee costs including incentive compensation costs, partially offset by transaction costs associated with the H20 Midstream Acquisition and Gravity Acquisition, transaction costs associated with the amended and new agreements with Delek Logistics.

General and administrative expenses were $272.0 million for the year ended December 31, 2023 compared to $313.7 million in 2022, a decrease of $41.7 million, or 13.3%.

The decrease was primarily driven by a decrease in employee costs including incentive compensation costs and no transaction costs related to the Delaware Gathering Acquisition in the 2023 period.

Depreciation and Amortization

Depreciation and amortization (included in both cost of sales and other operating expenses) was $351.6 million and $287.0 million for the years ended December 31, 2023 and 2022, respectively, an increase of $64.6 million, or 22.5%.

The increase was a result of a general increase in our fixed asset base due to capital projects and turnarounds completed since the first quarter of 2022 and depreciation and amortization attributable to the Delaware Gathering Acquisition.

Depreciation and amortization (included in both cost of sales and other operating expenses) was $374.5 million for the year ended December 31, 2024 compared to $339.5 million in 2023, an increase of $35.0 million, or 10.3%.

The increase was a result of a general increase in our fixed asset base due to capital projects and turnarounds completed and depreciation and amortization attributable to the H2O Midstream Acquisition.

Depreciation and amortization expenses were $339.5 million for the year ended December 31, 2023 compared to $275.0 million in 2022, an increase of $64.5 million, or 23.5%.

The increase was a result of a general increase in our fixed asset base due to capital projects and turnarounds completed and depreciation and amortization attributable to the Delaware Gathering Acquisition.

Management's Discussion and Analysis

Asset Impairment

Asset impairment was $243.5 million for the year ended December 31, 2024 compared to $37.9 million for the year ended December 31, 2023.

• For the year ended December 31, 2024, we recorded a $22.1 million asset impairment as a result of our second quarter 2024 decision to idle the biodiesel facilities, while exploring viable and sustainable alternatives, recorded a $9.2 million asset impairment for pipeline assets because utilization is no longer probable and recorded a $212.2 million goodwill impairment.

The goodwill impairment is related to our Krotz Springs reporting unit driven by depressed crack spread pricing in the near term combined with an increased discount rate.

• For the year ended December 31, 2023, we recorded a $14.8 million goodwill impairment and a $23.1 million of right-of-use asset impairment.

The goodwill impairment is related to our Delaware Gathering reporting unit due to significant increases in interest rates and timing of system connections with our producer customers.

The right-of-use asset impairment related to leased crude oil tanks in Canada that were not needed to support the future growth of our business.

Refer to Note 17 and Note 20 to our accompanying consolidated financial statements included in Item 8.

Financial Statements and Supplementary Data, of this Annual Report on Form 10-K for further information.

Asset impairment was $37.9 million for the year ended December 31, 2023.

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The right-of-use asset impairment related to leased crude oil tanks in Canada that were not needed to support the future growth of our business.

There was no asset impairment in the year ended December 31, 2022.

Refer to Note 17 and Note 20 to our accompanying consolidated financial statements included in Item 8.

Financial Statements and Supplementary Data, of this Annual Report on Form 10-K for further information.

There was no asset impairment in the year ended December 31, 2022.

Other Operating Income, Net

Other operating income, net was $55.5 million and $6.9 million for the years ended December 31, 2024 and 2023, respectively, an increase of $48.6 million.

The increase was primarily driven by the following:

• for the year ended December 31, 2024, we recorded a net gain of $53.4 million related to a property settlement;

• for the year ended December 31, 2024, we recorded a gain of $8.3 million related to Delek Logistics' sale of storage tanks in Texas due to an eminent domain settlement;

• for the year ended December 31, 2024, we made a strategic decision to abandon certain capital projects included in construction in progress that no longer fit our core objectives and as a result we recognized a loss of $14.1 million;

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

Refer to Note 14 and Note 20 to our accompanying consolidated financial statements included in Item 8.

Financial Statements and Supplementary Data, of this Annual Report on Form 10-K for further information.

Other operating income, net was $6.9 million and $12.1 million for the years ended December 31, 2023 and 2022, respectively, a decrease of $5.2 million, primarily due to decreased hedge gains in 2023 compared to 2022 associated with our derivatives.

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Interest Expense, Net

Interest expense, net was $318.2 million in the year ended December 31, 2023, compared to $195.3 million for year ended December 31, 2022, an increase of $122.9 million, or 62.9% primarily due to the following:

Interest expense, net was $313.0 million in the year ended December 31, 2024, compared to $318.0 million for year ended December 31, 2023, a decrease of $5.0 million, or 1.6% primarily due to the following:

• a decrease in net average borrowings outstanding (including the obligations under the inventory intermediation agreements which have an associated interest charge) of approximately $210.8 million during the year ended December 31, 2024 (calculated as a simple average of beginning borrowings/obligations and ending borrowings/obligations for the period) compared to the year ended December 31, 2023;

• an increase in hedge gains associated with our interest rate swap.

The decrease was partially offset by the following:

• an increase in the average effective interest rate of 79 basis points during the year ended December 31, 2024 compared to the year ended December 31, 2023 (where effective interest rate is calculated as interest expense divided by the net average borrowings/obligations outstanding);

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

Interest expense, net was $318.0 million for the year ended December 31, 2023 compared to $195.8 million in 2022, an increase of $122.2 million, or 62.4% primarily due to the following:

• an increase in the average effective interest rate of 390 basis points during the year ended December 31, 2023 compared to the year ended December 31, 2022 (where effective interest rate is calculated as interest expense divided by the net average borrowings/obligations outstanding);

• an increase in net average borrowings outstanding (including the obligations under the supply and offtake agreements which have an associated interest charge) of approximately $151.0 million during the year ended December 31, 2023 (calculated as a simple average of beginning borrowings/obligations and ending borrowings/obligations for the period) compared to the year ended December 31, 2022.

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This increase was primarily driven by the following:

• an increase in income from our investment in W2W Holdings LLC to $28.9 million during the year ended December 31, 2024 from $22.9 million in the year ended December 31, 2023.

We recognized income from equity method investments of $86.2 million for the year ended December 31, 2023, compared to $57.7 million for the year ended December 31, 2022, an increase of $28.5 million.

This increase was primarily driven by the following:

• an increase in income from our asphalt terminal equity method investment due to higher volumes and resulting revenue increases;

• an increase in income from our investment in W2W Holdings LLC to $22.9 million during the year ended December 31, 2023 from $7.6 million in the year ended December 31, 2022.

For the year ended December 31, 2023, we recorded income tax expense of $5.1 million compared to $63.9 million for the year ended December 31, 2022, primarily driven by the following:

For the year ended December 31, 2024, we recorded an income tax benefit of $107.9 million from continuing operations compared to an income tax benefit of $3.0 million from continuing operations for the year ended December 31, 2023, primarily driven by the following:

• a decrease in pre-tax net income of $722.6 million, and

• Our effective tax rates were 9.8% and 18.0% for the year ended December 31, 2023 and 2022, respectively, due to the impact of fixed dollar favorable permanent differences on the tax rate and changes in valuation allowance on state attributes.

• our effective tax rates were 15.3% and (18.1)% for the year ended December 31, 2024 and 2023, respectively, due to the impact of fixed dollar favorable permanent differences on the tax rate, exclusion of goodwill impairment expense from taxable income and changes in valuation allowance on certain state attributes.

Management's Discussion and Analysis

For the year ended December 31, 2023, we recorded an income tax benefit of $3.0 million from continuing operations compared to income tax expense of $56.4 million from continuing operations for the year ended December 31, 2022, primarily driven by the following:

• a decrease in pre-tax net income of $305.2 million, and

• our effective tax rates were (18.1)% and 17.5% for the year ended December 31, 2023 and 2022, respectively, due to the impact of fixed dollar favorable permanent differences on the tax rate and changes in valuation allowance on certain attributes.

Refer to Note 15 of our consolidated financial statements included in Item 8.

Financial Statements and Supplementary Data, of this Annual Report on Form 10-K for further information.

Management's Discussion and Analysis

Refining Segment

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Year Ended December 31,

2024 2023 2022

Revenues $ 11,783.0 $ 16,406.9 $ 19,763.0

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Operating expenses (excluding depreciation and amortization) $ 596.6 $ 619.2 $ 622.5

$ 619.2 $ 622.5

Refining segment EBITDA (1)

(1) Reflects the prior period conforming reclassification adjustment between operating expenses and general and administrative expenses.

$ (158.0) $ 560.7 $ 736.6

(1) Includes a $212.2 million goodwill impairment charge for the year ended December 31, 2024.

Refer to Note 17 - Goodwill and Intangible Assets to our accompanying consolidated financial statements included in Item 8.

Financial Statements and Supplementary Data, of this Annual Report on Form 10-K for further information.

Factors Impacting Refining Profitability

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Management's Discussion and Analysis

The cost to acquire the refined fuel products we sell to our wholesale customers in our logistics segment and at our convenience stores in our retail segment largely depends on numerous factors beyond our control, including the supply of, and demand for, crude oil, gasoline and other refined petroleum products which, in turn, depend on, among other factors, changes in domestic and foreign economies, weather conditions, domestic and foreign political affairs, production levels, the availability of imports, the marketing of competitive fuels and government regulation.

The cost to acquire the refined fuel products we sell to our wholesale customers in our logistics segment largely depends on numerous factors beyond our control, including the supply of, and demand for, crude oil, gasoline and other refined petroleum products which, in turn, depend on, among other factors, changes in domestic and foreign economies, weather conditions, domestic and foreign political affairs, production levels, the availability of imports, the marketing of competitive fuels and government regulation.

In addition to the above, it continues to be a strategic and operational objective to manage price and supply risk related to crude oil that is used in refinery production, and to develop strategic sourcing relationships.

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Year Ended December 31,

2024 2023 2022

Total Refining Segment

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Year Ended December 31,

2024 2023 2022

Tyler, TX Refinery

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Diesel/Jet 31,755 28,670 31,419

Petrochemicals, LPG, natural gas liquids ("NGLs") 2,341 2,114

Petrochemicals, LPG, NGLs 2,319 2,341 2,114

Other 849 1,691 1,825

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Operating expenses $ 5.04 $ 5.08 $ 5.24

$ 5.08 $ 5.24

(% based on amount received in period)

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Operating expenses $ 4.65 $ 4.59 $ 4.61

$ 4.59 $ 4.61

(% based on amount received in period)

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Year Ended December 31,

2024 2023 2022

Big Spring, TX Refinery

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Other feedstocks

4,975 4,223 191

Total throughput 71,098 64,459 59,667

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Operating expenses $ 6.66 $ 7.92 $ 7.48

$ 7.92 $ 7.48

(% based on amount received in period)

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28,125 31,589 31,576

3,641 3,785 2,418

Petrochemicals, LPG, NGLs

4,942 6,525 6,749

1,544 460 4,458

Total production

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Other feedstocks

5,220 4,896 4,118

Total throughput

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Operating expenses $ 5.23 $ 4.96 $ 5.25

$ 4.96 $ 5.25

(% based on amount received in period)

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See tables below.

(2) Reflects the prior period conforming reclassification adjustment between operating expenses and general and administrative expenses.

Management's Discussion and Analysis

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(in barrels per day) 2024 2023 2022

El Dorado refined product sales to other Delek segments — 4

Big Spring refined product sales to other Delek segments 18,053 21,165 19,828

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Year Ended December 31,

2024 2023 2022

WTI — Cushing crude oil (per barrel) $ 75.88 $ 77.69 $ 94.62

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Natural gas (per MMBTU)

$ 2.42 $ 2.66 $ 6.54

(1) For our Tyler and El Dorado refineries, we compare our per barrel refining product margin to the Gulf Coast 5-3-2 crack spread consisting of (Argus pricing) WTI Cushing crude, U.S.

Gulf Coast CBOB gasoline and U.S.

Gulf Coast Pipeline No.

2 heating oil (ultra-low sulfur diesel).

Gulf Coast CBOB gasoline and Gulf Coast ultra-low sulfur diesel.

For our Big Spring refinery, we compare our per barrel refining margin to the Gulf Coast 3-2-1 crack spread consisting of (Argus pricing) WTI Cushing crude, U.S.

Gulf Coast CBOB gasoline and Gulf Coast ultra-low sulfur diesel.

Starting in Q1 2023, for our Krotz Springs refinery, we compare our per barrel refining margin to the Gulf Coast 2-1-1 crack spread consisting of (Argus pricing) LLS crude oil, (Argus pricing) U.S.

For 2023, for our Krotz Springs refinery, we compare our per barrel refining margin to the Gulf Coast 2-1-1 crack spread consisting of (Argus pricing) LLS crude oil, (Argus pricing) U.S.

Gulf Coast CBOB gasoline and 50% of (Argus pricing) U.S.

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2 heating oil (high sulfur diesel).

Historical Gulf Coast 2-1-1 crack spread measures have been revised to conform to current period presentation.

For 2024, for our Krotz Springs refinery, we compare our per barrel refining margin to the Gulf Coast 2-1-1 crack spread consisting of (Argus pricing) LLS crude oil, (Argus pricing) U.S.

Gulf Coast CBOB gasoline and (Platts pricing) U.S.

Gulf Coast Pipeline No.

2 heating oil (high sulfur diesel).

The Tyler refinery's crude oil input is primarily WTI Midland and East Texas, while the El Dorado refinery's crude input is primarily a combination of WTI Midland, local Arkansas and other domestic inland crude oil.

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Management's Discussion and Analysis

Refining Segment Operational Comparison of the Year Ended December 31, 2023 versus the Year Ended December 31, 2022

Refining Segment Operational Comparison of the Year Ended December 31, 2024 versus the Year Ended December 31, 2023 and the Year Ended December 31, 2023 versus the Year Ended December 31, 2022

Revenues for the refining segment decreased $4,623.9 million, or 28.2%, in the year ended December 31, 2024 compared to the year ended December 31, 2023.

1 unchanged sentence

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

Gulf Coast gasoline of 15.5%, ULSD of 21.4%, and HSD of 36.2%;

Gulf Coast gasoline of 9.0% and ULSD of 13.2%;

• a decrease in wholesale activity;

• a decrease in sales volumes (including purchased products).

These decreases were partially offset by the following:

• an increase in sales volumes (including purchased products).

Revenues included sales to our retail segment of $432.5 million and $511.7 million, sales to our logistics segment of $396.3 million and $496.6 million and sales to the other segment of $0.0 million and $23.8 million for the year ended December 31, 2023 and 2022, respectively.

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

Gulf Coast HSD of 7.0%.

Revenues included sales to our logistics segment of $353.5 million and $396.3 million for the year ended December 31, 2024 and 2023, respectively.

We eliminate this intercompany revenue in consolidation.

Revenues for the refining segment decreased $3,356.1 million, or 17.0%, in the year ended December 31, 2023 compared to the year ended December 31, 2022.

The decrease was primarily driven by the following:

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

Gulf Coast gasoline of 15.5%, ULSD of 21.4%, and HSD of 36.2%;

• a decrease in wholesale activity;

• a decrease in sales volumes (including purchased products).

Revenues included sales to our logistics segment of $396.3 million and $496.6 million and sales to our other segment of $0.0 million and $23.8 million for the years ended December 31, 2023 and 2022, respectively.

We eliminate this intercompany revenue in consolidation.

Cost of Materials and Other

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This decrease was primarily driven by the following:

• decreases in the cost of WTI Cushing crude oil, from an average of $94.62 per barrel to an average of $77.69, or 17.9%, and decreases in the cost of WTI Midland crude oil, from an average of $95.93 per barrel to an average of $78.90, or 17.8%;

• decreases in the cost of WTI Cushing crude oil, from an average of $77.69 per barrel to an average of $75.88, or 2.3%;

and decreases in the cost of WTI Midland crude oil, from an average of $78.90 per barrel to an average of $76.85, or 2.6%;

• a decrease in wholesale activity;

These decreases were partially offset by the following:

• an increase in sales volumes (including purchased products).

• a decrease in sales volumes (including purchased products)

• a decrease in RINs pricing;

• a decrease in lease expense as a result of reclassification of certain fees with Delek Logistics from lease expense to interest expense under finance lease accounting.

These finance leases have no impact to the Delek US consolidated results as these amounts eliminate in consolidation.

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

1 unchanged sentence

We eliminate these intercompany fees in consolidation.

Refining Margin

Refining margin decreased by $185.6 million, or 13.7%, for the year ended December 31, 2023 compared to the year ended December 31, 2022, with a refining margin percentage of 7.1% as compared to 6.8% for the years ended December 31, 2023 and 2022, respectively, primarily driven by the following:

• a 19.0% decrease in the 5-3-2 crack spread (the primary measure for the Tyler refinery and El Dorado refinery), a 17.4% decrease in the average Gulf Coast 3-2-1 crack spread (the primary measure for the Big Spring refinery) and a 42.9% decrease in the average Gulf Coast 2-1-1 crack spread (the primary measure for the Krotz Springs refinery).

Cost of materials and other decreased $3,170.5 million, or 17.2%, in the year ended December 31, 2023 compared to the year ended December 31, 2022.

This decrease was primarily driven by the following:

• decreases in the cost of WTI Cushing crude oil, from an average of $94.62 per barrel to an average of $77.69, or 17.9%;

and decreases in the cost of WTI Midland crude oil, from an average of $95.93 per barrel to an average of $78.90, or 17.8%;

• a decrease in wholesale activity.

These decreases were partially offset by the following:

• lower natural gas prices.

Management's Discussion and Analysis

• an increase in sales volumes (including purchased products).

These costs and fees were $562.2 million and $477.1 million during the years ended December 31, 2023 and 2022, respectively.

We eliminate these intercompany fees in consolidation.

Operating Expenses

Operating expenses decreased by $3.3 million, or 0.5%, in the year ended December 31, 2023, compared to year ended December 31, 2022.

Operating expenses decreased $22.6 million, or 3.6%, in the year ended December 31, 2024, compared to year ended December 31, 2023.

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

• lower outside services;

• lower natural gas costs.

These decreases were partially offset by the following:

• increased repairs and maintenance.

Operating expenses decreased $3.3 million, or 0.5%, in the year ended December 31, 2023, compared to year ended December 31, 2022.

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

• lower natural gas in 2023.

1 unchanged sentence

• higher employee, outside service and maintenance costs including costs related to our Safety Action Plan.

Refining Margin

Refining margin decreased by $529.0 million, or 45.4%, for the year ended December 31, 2024 compared to the year ended December 31, 2023, with a refining margin percentage of 5.4% as compared to 7.1% for the years ended December 31, 2024 and 2023, respectively, primarily driven by the following:

• a 34.9% decrease in the 5-3-2 crack spread (the primary measure for the Tyler refinery and El Dorado refinery), a 34.7% decrease in the average Gulf Coast 3-2-1 crack spread (the primary measure for the Big Spring refinery) and an 8.8% decrease in the average Gulf Coast 2-1-1 crack spread (the primary measure for the Krotz Springs refinery);

• a decrease in sales volumes (including purchased products).

These decreases were partially offset by the following:

• lower RINs pricing;

• a decrease in lease expense as a result of reclassification of certain fees with Delek Logistics from lease expense to interest expense under finance lease accounting.

These finance leases have no impact to the Delek US consolidated results as these amounts eliminate in consolidation.

• a 19.0% decrease in the 5-3-2 crack spread (the primary measure for the Tyler refinery and El Dorado refinery), a 17.4% decrease in the average Gulf Coast 3-2-1 crack spread (the primary measure for the Big Spring refinery), and a 42.9% decrease in the average Gulf Coast 2-1-1 crack spread (the primary measure for the Krotz Springs refinery).

These decreases were partially offset by the following:

• lower natural gas prices.

Management's Discussion and Analysis

EBITDA decreased by $189.7 million, for the year ended December 31, 2023 compared to the year ended December 31, 2022, primarily due to a decrease in refining margin driven by decreased crack spreads.

EBITDA decreased by $718.7 million, for the year ended December 31, 2024 compared to the year ended December 31, 2023, primarily due to a decrease in refining margin driven by decreased crack spreads, a $212.2 million goodwill impairment and decreased sales volumes (including purchased products), partially offset by an increase in insurance and third party proceeds related to the fires in 2021 and 2022 and a decrease in lease expense as a result of reclassification of certain fees with Delek Logistics from lease expense to interest expense under finance lease accounting.

These finance leases have no impact to the Delek US consolidated results as these amounts eliminate in consolidation.

EBITDA decreased by $175.9 million for the year ended December 31, 2023 compared to the year ended December 31, 2022, primarily due to a decrease in refining margin primarily driven by decreased crack spreads.

Management's Discussion and Analysis

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Year Ended December 31,

2024 2023 2022

Revenues $ 940.6 $ 1,020.4 $ 1,036.4

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Midland Gathering Assets 217,847 230,471 128,725

230,471 128,725

Plains Connection System 333,405 250,140 183,827

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Water disposal and recycling (average bpd) 128,539 108,907 72,056

Midland Water Gathering System:

Water disposal and recycling (average bpd) 280,955 — —

Wholesale Marketing & Terminalling:

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Financial Statements and Supplementary Data, of this Annual Report on Form 10-K for further information.

(2) Formerly known as the Permian Gathering System.

(3) Formally known as 3 Bear, which was acquired June 1, 2022.

(4) Mcfd - average thousand cubic feet per day.

(2) 2022 volumes include volumes from June 1, 2022 through December 31, 2022.

(3) 2024 volumes include volumes from September 11, 2024 through December 31, 2024.

(4) Excludes jet fuel and petroleum coke.

(5) Consists of terminalling throughputs at our Tyler, Big Spring, Big Sandy and Mount Pleasant, Texas terminals, El Dorado and North Little Rock, Arkansas terminals and Memphis and Nashville, Tennessee terminals.

Logistics revenue is largely based on fixed-fee or tariff rates charged for throughput volumes running through our logistics network, where many of those volumes are contractually protected by MVCs.

Logistics revenue is largely based on fixed-fee or tariff rates charged for throughput volumes running through our logistics network, where many of those volumes are contractually protected by minimum volume commitments MVCs.

To the extent that our logistics volumes are not subject to MVCs, our Logistics revenue may be negatively impacted in periods where our customers are experiencing economic pressures or reductions in demand for their products.

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Management's Discussion and Analysis

Logistics Segment Operational Comparison of the Year Ended December 31, 2023 versus the Year Ended December 31, 2022

Logistics Segment Operational Comparison of the Year Ended December 31, 2024 versus the Year Ended December 31, 2023 and the Year Ended December 31, 2023 versus the Year Ended December 31, 2022

Net revenues decreased by $79.8 million, or 7.8%, in the year ended December 31, 2024 compared to the year ended December 31, 2023 primarily driven by the following:

• decreased revenue of $47.3 million in our West Texas marketing operations primarily driven by a decrease in average sales prices per gallon:

◦ the average sales prices per gallon of gasoline and diesel sold decreased by $0.19 and $0.40 per gallon, respectively;

• decreased revenue due to recording certain throughput and storage fees as interest income under sales-type lease accounting that were previously recorded as revenue in the prior year period.

These sales-type leases have no impact to the Delek US consolidated results as these amounts eliminate in consolidation.

These decreases were partially offset by the following:

• an increase in revenue associated with the H20 Midstream operations of $19.5 million which was acquired in September 2024.

Revenues included sales to our refining segment of $516.3 million and $562.2 million for the years ended December 31, 2024 and 2023, respectively, and sales to our other segment of $1.5 million and $1.6 million for the years ended December 31, 2024 and 2023, respectively.

We eliminate this intercompany revenue in consolidation.

Net revenues decreased by $16.0 million, or 1.5%, in the year ended December 31, 2023 compared to the year ended December 31, 2022 primarily driven by the following:

• decreased revenue of $99.6 million in our West Texas marketing operations primarily driven by decreases in the average sales prices per gallon and the average volumes of diesel sold in our West Texas marketing operations:

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These decreases were partially offset by the following:

• increase in revenue as a result of our Delaware Gathering operations, which began in June 2022;

• increase in revenue as a result of our Delaware Gathering operations, which acquired in June 2022;

• increase in volumes associated with Midland Gathering operations primarily due to new connections finalized during 2022.

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This decrease was primarily driven by the following:

• decreased costs of materials and other of $40.1 million in our West Texas marketing operations primarily driven by decreased costs per gallon:

◦ the average cost per gallon of gasoline and diesel sold decreased by $0.20 per gallon and $0.36 per gallon, respectively.

Our logistics segment purchased product from our refining segment of $353.5 million and $396.3 million for the years ended December 31, 2024 and 2023, respectively.

We eliminate these intercompany costs in consolidation.

Cost of materials and other for the logistics segment decreased by $108.8 million, or 17.0%, in the year ended December 31, 2023 compared to the year ended December 31, 2022.

This decrease was primarily driven by the following:

• decrease in costs of materials and other in our West Texas marketing operations primarily driven by decreases in the average cost per gallon and the average volumes of diesel sold in our West Texas marketing operations:

Management's Discussion and Analysis

◦ the average cost per gallon of gasoline and diesel sold decreased by $0.49 per gallon and $0.74 per gallon, respectively;

◦ the volumes of diesel sold decreased by 3.6 million gallons, partially offset by a 0.6 million increase in gallons of gasoline sold.

These increases were partially offset by the following:

These decreases were partially offset by the following:

• increase in cost of materials and other as a result of our Delaware Gathering operations, which began in June 2022.

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We eliminate these intercompany costs in consolidation.

Management's Discussion and Analysis

Operating Expenses

Operating expenses increased by $4.6 million, or 3.9%, in the year ended December 31, 2024 compared to the year ended December 31, 2023, primarily driven by incremental costs associated with H20 Midstream Acquisition, partially offset by a decrease in repairs and maintenance expenses.

Operating expenses increased by $29.8 million, or 33.7%, in the year ended December 31, 2023 compared to the year ended December 31, 2022, primarily driven by incremental expenses associated with Delaware Gathering Acquisition.

EBITDA increased by $58.2 million, or 19.1%, in the year ended December 31, 2023 compared to the year ended December 31, 2022, primarily driven by the following:

• higher throughput volumes;

• incremental EBITDA from the Delaware Gathering Acquisition.

These increases were partially offset by the following:

• A $14.8 million goodwill impairment related to our Delaware Gathering reporting unit due to significant increases in interest rates and timing of system connections with our producer customers.

Management's Discussion and Analysis

Retail Segment

The tables below set forth certain information concerning our retail segment operations ($ in millions):

Selected Retail Financial and Operating Information

Year Ended December 31,

Revenues $ 882.7 $ 956.9

Cost of materials and other $ 719.2 $ 796.3

Operating expenses (excluding depreciation and amortization) $ 102.1 $ 97.8

EBITDA $ 46.9 $ 44.1

Operating Information

Year Ended December 31,

Number of stores (end of period) 250 249

Average number of stores 250 249

Average number of fuel stores 245 244

Retail fuel sales $ 566.6 $ 642.2

Retail fuel sales (thousands of gallons) 172,452 170,668

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

Average retail sales price per gallon sold $ 3.29 $ 3.76

Retail fuel margin ($ per gallon) (1)

$ 0.331 $ 0.327

Merchandise sales (in millions) $ 316.1 $ 314.7

Merchandise sales per average number of stores (in millions) $ 1.3 $ 1.3

Merchandise margin % 33.7 % 33.3 %

Same-Store Comparison (2)

Year Ended December 31,

Change in same-store retail fuel gallons sold 0.7 % 2.5 %

Change in same-store merchandise sales 0.6 % 0.3 %

(1) Retail fuel margin represents gross margin on fuel sales in the retail segment, and is calculated as retail fuel sales revenue less retail fuel cost of sales.

The retail fuel margin per gallon calculation is derived by dividing retail fuel margin by the total retail fuel gallons sold for the period.

(2) Same-store comparisons include year-over-year changes in specified metrics for stores that were in service at both the beginning of the year and the end of the most recent year used in the comparison.

Our retail merchandise sales are driven by convenience, customer service, competitive pricing and branding.

Motor fuel margin is sales less the delivered cost of fuel and motor fuel taxes, measured on a cents per gallon basis.

Our motor fuel margins are impacted by local supply, demand, weather, competitor pricing and product brand.

Management's Discussion and Analysis

Retail Segment Operational Comparison of the Year Ended December 31, 2023 versus the Year Ended December 31, 2022

Revenues for the retail segment decreased by $74.2 million, or 7.8%, for the year ended December 31, 2023 compared to the year ended December 31, 2022, primarily driven by the following:

• a decrease in total fuel sales which were $566.6 million for the year ended December 31, 2023 compared to $642.2 million for the year ended December 31, 2022, primarily attributable to a $0.47 decrease in average price charged per gallon sold.

These decreases were partially offset by the following:

• an increase in total retail fuel gallons sold of 172,452 thousand gallons during 2023 compared to 170,668 thousand gallons in 2022, primarily attributable to a same-store increase in fuel volumes of 0.7%

• an increase in merchandise sales to $316.1 million for the year ended December 31, 2023 compared to $314.7 million for the year ended December 31, 2022, primarily driven by the same-store sales increase of 0.6%.

Cost of Materials and Other

Cost of materials and other for the retail segment decreased by $77.1 million, or 9.7%, for the year ended December 31, 2023 compared to the year ended December 31, 2022, primarily driven by the following:

• a decrease in average cost per gallon of $0.48, or 14.0%.

Our retail segment purchased finished product from our refining segment of $432.5 million and $511.7 million for the years ended December 31, 2023 and 2022, respectively.

We eliminate this intercompany cost in consolidation.

Operating Expenses

Operating expenses for the retail segment increased by $4.3 million, or 4.4%, for the year ended December 31, 2023 compared to the year ended December 31, 2022 primarily driven by higher employee cost in 2023.

EBITDA for the retail segment increased by $2.8 million, or 6.3%, for the year ended December 31, 2023 compared to the year ended December 31, 2022, primarily driven by the following:

• an increase in average fuel margin of $0.004 per gallon and an increase in fuel sales volume;

• a 0.4% increase in merchandise sales.

These increases were partially offset by the following:

• an increase in operating expenses due to higher employee costs.

A detailed discussion of the fiscal year 2022 compared to year-over-year changes from fiscal year 2021 can be found in Part II, Item 7.

Management's Discussion and Analysis, "Results of Operations", of our 2022 Annual Report on Form 10-K, filed on March 1, 2023.

EBITDA decreased by $20.3 million, or 5.6%, in the year ended December 31, 2024 compared to the year ended December 31, 2023, primarily driven by recording certain throughput and storage fees in interest income due to sales-type lease accounting that were previously recorded as revenue in prior year period, partially offset by higher terminalling and marketing fees due to rate increases as well as higher throughput volumes.

These sales-type leases have no impact to the Delek US consolidated results as these amounts eliminate in consolidation.

EBITDA increased by $58.2 million, or 19.1%, in the year ended December 31, 2023 compared to the year ended December 31, 2022, primarily driven by higher throughput volumes and incremental EBITDA from the Delaware Gathering Acquisition, partially offset by a $14.8 million goodwill impairment related to our Delaware Gathering reporting unit due to significant increases in interest rates and timing of system connections with our producer customers.

Management's Discussion and Analysis

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• potential issuances of additional equity and debt securities.

At December 31, 2023 our total liquidity amounted to $1.9 billion comprised primarily of $1,084.0 million in unused credit commitments under our revolving credit facilities (as discussed in Note 10 of our consolidated financial statements included in Item 8.

At December 31, 2024 our total liquidity amounted to $2,244.7 million comprised primarily of $1,509.1 million in unused credit commitments under our revolving credit facilities (as discussed in Note 11 of our consolidated financial statements included in Item 8.

Financial Statements and Supplementary Data, of this Annual Report on Form 10-K) and $735.6 million in cash and cash equivalents.

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Cash Flow Data:

Operating activities $ 1,013.6 $ 425.3

Investing activities (408.0) (931.6)

Financing activities (624.7) 491.1

Operating activities - continuing operations $ (83.7) $ 979.0

Operating activities - discontinued operations 16.9 34.6

Total Operating activities (66.8) 1,013.6

Investing activities - continuing operations (603.2) (381.6)

Investing activities - discontinued operations 361.7 (26.4)

Total Investing activities (241.5) (408.0)

Financing activities - continuing operations 221.7 (624.7)

Financing activities - continuing operations — —

Total Financing activities 221.7 (624.7)

Net decrease $ (86.6) $ (19.1)

Cash Flows from Operating Activities

Net cash provided by operating activities was $1,013.6 million for the year ended December 31, 2023, compared to $425.3 million for the comparable period of 2022.

Increases were a result of cash receipts from customers and cash payments to suppliers and for salaries resulting in a net $679.6 million increase in cash provided by operating activities and an increase in dividends received of $28.7 million, partially offset by an increase in cash paid for debt interest of $136.8 million.

Management's Discussion and Analysis

Cash Flows from Operating Activities

Continuing Operations

Net cash used by operating activities from continuing operations was $83.7 million for the year ended December 31, 2024, compared to net cash provided by of $979.0 million for the comparable period of 2023.

Decreases were a result of cash receipts from customers and cash payments to suppliers and for salaries resulting in a net $1,106.2 million decrease in cash provided by operating activities, partially offset by a decrease in cash paid for debt interest of $23.4 million and a decrease in cash paid for taxes of $7.0 million.

Discontinued Operations

Net cash provided by operating activities from discontinued operations include the Retail Stores business income.

Cash Flows from Investing Activities

Net cash used in investing activities was $408.0 million for the year ended December 31, 2023, compared to $931.6 million in the comparable period of 2022.

The decrease in cash flows used in investing activities was primarily due to the $625.6 million Delaware Gathering Acquisition in 2022, $10.3 million of insurance proceeds in 2023 and a $5.0 million increase in distributions from equity method investments, partially offset by a $108.2 million increase in purchases of property, plant and equipment, substantially driven by maintenance projects associated with the Tyler turnaround, other refinery additions and various interconnects associated with Delek Logistics assets, and payments of $11.9 million for equity interests investments.

Continuing Operations

Net cash used in investing activities from continuing operations was $603.2 million for the year ended December 31, 2024, compared to $381.6 million in the comparable period of 2023.

The increase in cash flows used in investing activities was primarily due to $229.7 million acquisition of H2O Midstream of which $159.7 million was paid in cash, purchase of an additional 0.6% indirect investment in Wink to Webster Pipeline LLC for $18.6 million, a $35.2 million increase in purchases of property, plant and equipment, and a $22.8 million deposit paid for the Gravity Acquisition, partially offset by a $11.5 million decrease in purchases of equity securities.

Discontinued Operations

Net cash provided by investing activities from discontinued operations in 2024 primarily includes the $381.6 million net proceeds from the sale of the Retail Stores, partially offset by cash used for Retail Stores capital expenditures of $19.9 million.

Net cash provided by investing activities from discontinued operations in 2023 primarily includes cash used for Retail Stores capital expenditures of $26.4 million.

Cash Flows from Financing Activities

Net cash used in financing activities was $624.7 million for the year ended December 31, 2023, compared to cash provided of $491.1 million in the comparable 2022 period.

The decrease in cash provided was primarily due to net payments on long-term revolvers and term debt of $467.8 million during the year ended December 31, 2023, compared to net proceeds of $810.9 million in the comparable 2022 period, an increase in net payments from product and other financing arrangements of $13.1 million for the year ended December 31, 2023 compared to the comparable 2022 period, an increase in dividend payments of $17.5 million and proceeds received of $16.4 million in the comparable 2022 period for the sale of Delek Logistics common limited partner units.

These decreases in cash flows were partially offset by a decrease in share repurchases of $108.2 million and the receipt of settlement proceeds of $58.0 million during the first quarter of 2023 associated with the termination of the J.

Aron Supply & Offtake Agreements and origination of the Citi Inventory Intermediation Agreement, compared to net payment of settlements of $48.1 million in the comparable 2022 period (as defined in Note 9 of the consolidated financial statements included in Item 8.

Financial Statements and Supplementary Data, of this Annual Report on Form 10-K).

Continuing Operations

Net cash provided by financing activities from continuing operations was $221.7 million for the year ended December 31, 2024, compared to cash used of $624.7 million in the comparable 2023 period.

The decrease in cash used was primarily due to the receipt of net proceeds of $297.9 million from the Delek Logistics' public offerings of common units in the year ended December 31, 2024, net proceeds from term debt of $518.2 million for the year ended December 31, 2024 compared to net payments on term debt of $28.2 million in the comparable 2023 period, primarily related to the issuance of the Delek Logistics 2029 Notes and the related repayment of the Delek Logistics Term Loan Facility and Delek Logistics 2025 Notes, a decrease in net payments from product and other financing arrangements of $39.4 million, a decrease in net payments on long-term revolvers of $84.9 million, a decrease of $43.9 million in share buybacks and a $18.2 million increase in distributions to non-controlling interests.

These decreases in cash flows were partially offset by the $70.8 million redemption of the Delek Logistics preferred units, the receipt of settlement proceeds of $58.0 million during the first quarter of 2023 associated with the termination of the J.

Aron Supply & Offtake Agreements and origination of the Citi Inventory Intermediation Agreement (as defined in Note 10 of the consolidated financial statements included in Item 8.

Financial Statements and Supplementary Data, of this Annual Report on Form 10-K) and an increase of $13.6 million related to the payment of deferred financing costs primarily related to the issuance of the Delek Logistics 2029 Notes.

Cash Position and Indebtedness

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Total unused credit commitments or borrowing base availability, as applicable, under our revolving credit facilities was approximately $1,509.1 million.

The decrease of $463.2 million in total long-term indebtedness as of December 31, 2023 compared to December 31, 2022 resulted primarily from a decrease in net borrowings under the Delek Revolving Credit Facility and the United Community Bank Revolver, partially offset by an increase in net borrowings under the Delek Logistics Revolving Facility.

The increase of $159.1 million in total long-term principal indebtedness as of December 31, 2024 compared to December 31, 2023 resulted primarily from issuance of the Delek Logistics 2029 Notes, partially offset by a decrease in net borrowings under the Delek Logistics Revolving Facility, payment of the outstanding balance of the Delek Logistics Term Loan Facility, and extinguishment of the Delek Logistics 2028 Notes.

As of December 31, 2024, our total long-term indebtedness (as defined in Note 11 of the consolidated financial statements included in Item 8.

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• aggregate principal of $931.0 million under the Delek Term Loan Credit Facility (maturity of November 19, 2029 and effective interest of 8.64%);

• aggregate principal of $780.5 million under the Delek Logistics Revolving Facility (maturity of October 13, 2027 (which will accelerate to 180 days prior to the stated maturity date of the Delek Logistics 2025 Notes if any of the Delek Logistics 2025 Notes remain outstanding on that date) and average borrowing rate of 8.46%);

• aggregate principal of $281.3 million under the Delek Logistics Term Loan Facility (maturity of April 15, 2025 (which will accelerate to 180 days prior to the stated maturity date of the Delek Logistics 2025 Notes if any of the Delek Logistics 2025 Notes remain outstanding on that date) and average borrowing rate of 9.46%);

• aggregate principal of $435.4 million under the Delek Logistics Revolving Facility (maturity of October 13, 2027 and average borrowing rate of 7.27%);

• aggregate principal of $400.0 million under the Delek Logistics 2028 Notes (due in 2028, with effective interest rate of 7.38%);

• aggregate principal of $1,050.0 million under the Delek Logistics 2029 Notes (due in 2029, with effective interest rate of 8.82%);

• aggregate principal of $5.0 million under the United Community Bank Revolver (maturity of June 30, 2024 and average borrowing rate of 7.75%).

As of December 31, 2023, the Delek Logistics Revolving Facility and Delek Logistics Term Loan Credit Facility were classified as long-term in the accompanying consolidated balance sheets in Item 8, Financial Statements and Supplementary Data, of this Annual Report on Form 10-K as we currently have the ability and intent to refinance the 2025 Notes on a long-term basis through available capacity under the Delek Logistics Revolving Facility and other or new funding sources.

Management's Discussion and Analysis

• the United Community Bank Revolver with no outstanding borrowings (maturity of June 30, 2026).

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

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

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

See Note 11 to our accompanying consolidated financial statements included in Item 8.

Financial Statements and Supplementary Data, of this Annual Report on Form 10-K for additional information about our separate debt and credit facilities.

Management's Discussion and Analysis

Additionally, we utilize other financing arrangements to finance operating assets and/or, from time to time, to monetize other assets that may not be needed in the near term, when internal cost of capital and other criteria are met.

Such arrangements include our inventory intermediation arrangement, which finances a significant portion of our first-in, first-out inventory at the refineries and, from time to time, RINs or other non-inventory product financing liabilities and funded letters of credit.

Our inventory intermediation obligation with Citi was $407.6 million at December 31, 2023, $0.4 million of which was current.

Our inventory intermediation obligation with Citigroup Energy Inc.

("Citi") was $408.7 million at December 31, 2024.

See Note 10 of the accompanying consolidated financial statements included in Item 8.

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Logistics segment total 235 44.5

Regulatory — —

Sustaining maintenance 5 25.3

Growth projects 10 4.5

Retail segment total 15 29.8

Corporate and Other

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Total capital spending $ 405 $ 337.2

We received insurance proceeds and customer reimbursements of approximately $17.0 million in 2023 that are not reflected in the full year actual amounts.

Excluding these amounts, 2023 capital expenditures were $372.1 million.

(1) Excludes $95.5 million related to the new Delek Logistics natural gas processing plant.

Refer to 'Other 2024 Developments' section of Item 7.

Management's Discussion and Analysis of this Annual Report on Form 10-K for further information.

Management's Discussion and Analysis

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

Refer to Note 14 of the consolidated financial statements included in Item 8.

Financial Statements and Supplementary Data, of this Annual Report on Form 10-K for further information.

The amount of our capital expenditure forecast is subject to change due to unanticipated increases in the cost, scope and completion time for our capital projects and subject to the changes and uncertainties discussed under the 'Forward-Looking Statements' section of Item 7.

Management Discussion and Analysis, of this Annual Report on Form 10-K.

Management's Discussion and Analysis of this Annual Report on Form 10-K.

For further information, please refer to our discussion in Item 1A.

Risk Factors, of this Annual Report on Form 10-K.

Management's Discussion and Analysis

Cash Requirements

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35.1 411.7 — — 446.8

Retail Stores obligations (7)

10.5 17.2 17.5 8.5 53.7

Total $ 5,251.6 $ 1,661.9 $ 2,939.2 $ 211.9 $ 10,064.6

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Financial Statements and Supplementary Data, of this Annual Report on Form 10-K.

(7) Amounts reflect a rebate arrangement included in the long-term agreement with FEMSA entered into in conjunction with the Retail Transaction as well as certain underground storage tank cleanup obligations.

For additional information, see Note 5 to the consolidated financial statements included in Item 8.

Financial Statements and Supplementary Data, of this Annual Report on Form 10-K.

Other Cash Requirements

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

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

Cash outlays in 2025 are planned to include incentive compensation payments that were earned and accrued in 2024.

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

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Alternatively, if a company concludes based on the qualitative assessment that it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, it has completed its goodwill impairment test and does not need to perform the quantitative impairment test.

For the 2024 annual impairment assessment, we performed a qualitative assessment on the reporting units in our logistics segment, which did not result in an impairment charge nor did our analysis reflect any reporting units at risk.

For the 2023 annual impairment assessment, we performed a qualitative assessment on the reporting units in our logistics segment except for the Delaware Gathering reporting unit, as we determined it was more likely than not that the fair value of the reporting unit exceeded the carrying value.

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The impairment was primarily driven by the significant increases in interest rates and timing effect of system connections with our producer customers.

For the 2023 and 2022 annual impairment assessment, we performed a qualitative assessment on the reporting units in our refining and retail segments, as we determined it was more likely than not that the fair value of the reporting units exceeded the carrying value.

For the 2024 annual impairment assessment, we performed a quantitative assessment of goodwill on the reporting units in our refining segment during the fourth quarter of 2024, which resulted in an impairment of $212.2 million during the year ended December 31, 2024 related to our Krotz Springs refinery reporting unit.

The impairment was predominantly driven by depressed crack spread pricing in the near term combined with an increased discount rate.

As part of our assessment, the aggregate fair value of all reporting units have been reconciled to our market capitalization for reasonableness.

For the 2023 annual impairment assessment, we performed a qualitative assessment on the reporting units in our refining segment, as we determined it was more likely than not that the fair value of the reporting units exceeded the carrying value.

The 2023 annual assessment for the refining segment did not result in an impairment charge nor did our analysis reflect any reporting units at risk.

Details of remaining goodwill balances by segment are included in Note 17 to the consolidated financial statements in Item 8.

Financial Statements and Supplementary Data, of this Annual Report on Form 10-K.

Evaluation of Variable Interest Entities ("VIEs")

Our consolidated financial statements include the financial statements of our subsidiaries and VIEs, of which we are the primary beneficiary.

We evaluate all legal entities in which we hold an ownership or other pecuniary interest to determine if the entity is a VIE.

Variable interests can be contractual, ownership or other pecuniary interests in an entity that change with changes in the fair value of the VIE’s assets.

If we are not the primary beneficiary, the general partner or another limited partner may consolidate the VIE, and we record the investment as an equity method investment.

Significant judgment is exercised in determining that a legal entity is a VIE and in evaluating whether we are the primary beneficiary in a VIE.

Generally, the primary beneficiary is the party that has both the power to direct the activities that most significantly impact the VIE’s economic performance and the right to receive benefits or obligation to absorb losses that could be potentially significant to the VIE.

We evaluate the entity’s need for continuing financial support;

the equity holder’s lack of a controlling financial interest;

and/or if an equity holder’s voting interests are disproportionate to its obligation to absorb expected losses or receive residual returns.

We evaluate our interests in a VIE to

Management's Discussion and Analysis

determine whether we are the primary beneficiary.

We use a primarily qualitative analysis to determine if we are deemed to have a controlling financial interest in the VIE, either on a standalone basis or as part of a related party group.

We continually monitor our interests in legal entities for changes in the design or activities of an entity and changes in our interests, including our status as the primary beneficiary to determine if the changes require us to revise our previous conclusions.

Business Combinations

We recognize and measure the assets acquired and liabilities assumed in a business combination based on their estimated fair values at the acquisition date in accordance with the provisions of Accounting Standards Codification ("ASC") 805, Business Combinations ("ASC 805").

Any excess or surplus of the purchase consideration when compared to the fair value of the net tangible assets acquired, if any, is recorded as goodwill or gain from a bargain purchase.

Any excess or deficiency of the purchase consideration when compared to the fair value of the net tangible assets acquired, if any, is recorded as goodwill or gain from a bargain purchase.

The fair value of assets and liabilities as of the acquisition date are often estimated using a combination of approaches, including the income approach, which requires us to project future cash flows and apply an appropriate discount rate;

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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-K

Item 7. Management’s Discussion and Analysis