What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-05-07 compared with 2024-11-07 · 285 added, 490 removed, 600 unchanged (56% of the section changed)

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You should read the following discussion of our financial condition and results of operations in conjunction with our historical condensed consolidated financial statements and notes thereto.

The Company announces material information to the public about the Company, its products and services and other matters through a variety of means, including filings with the SEC, press releases, public conference calls, the Company’s website ( www.delekus.com ), the investor relations section of its website ( ir.delekus.com ), the news section of its website ( www.delekus.com/news ), and/or social media, including its X (previously known as Twitter) account ( @DelekUSHoldings ).

The Company encourages investors and others to review the information it makes public in these locations, as such information could be deemed to be material information.

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

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

Forward-looking statements include, among other things, statements that refer to the acquisition of 3 Bear Delaware Holding – NM, LLC ("Delaware Gathering") (the "Delaware Gathering Acquisition"), the acquisition of H2O Midstream Intermediate, LLC, H2O Midstream Permian LLC, and H2O Midstream LLC ("H2O Midstream") (the "H2O Midstream Acquisition") and the acquisition of Gravity Water Intermediate Holdings LLC ("Gravity") (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 any ongoing military conflict, such as the war between Russia and Ukraine ("the Russia-Ukraine War") and the conflict between Israel and Hamas (the "Israel-Hamas 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 fuel and convenience stores (the "Retail Stores") to a subsidiary of Fomento Económico Mexicano, S.A.B.

(“FEMSA”), 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 and dispositions such as the sale of our Retail Stores, 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;

• 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 H2O 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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• unanticipated increases in cost or scope of, or significant delays in the completion of, our capital improvement safety initiative and periodic turnaround projects;

Management's Discussion and Analysis

• risks and uncertainties with respect to the quantities and costs of refined petroleum products supplied to our pipelines and/or held in our terminals;

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• changes in our ability to pay dividends;

Management's Discussion and Analysis

• seasonality;

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• societal, legislative and regulatory measures to address climate change and greenhouse gases emissions ("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;

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

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

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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, prior to July 2024, convenience store retailing.

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

refining, logistics, and retail.

However, in July 2024, we entered into a definitive equity purchase agreement (the "Retail Purchase Agreement") with a subsidiary of Fomento Económico Mexicano, S.A.B.

Under the terms of the Retail Purchase Agreement, Delek agreed to sell, and FEMSA has agreed to purchase, 100% of the equity interests in four of Delek’s wholly-owned subsidiaries that own and operate 249 retail fuel and convenience stores (the "Retail Stores") under the Delek US Retail brand ("Retail Transaction").

On September 20, 2024, the Retail Transaction closed.

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

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.

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, disposal and recycling.

Business and Economic Environment Overview

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

During the third quarter of 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 is an important step in our value creation journey.

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

This acquisition diversifies our logistics customer base to include more third-party customers.

While the impact on the third quarter is not significant (as a result of the acquisition closing in September 2024), we expect that the acquisition itself 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.

We had another safe and reliable quarter from an operational perspective;

however, the current refining margin environment is challenging as crack spreads narrowed and followed atypical seasonal patterns during the third quarter of 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 the quarter and compared to the third quarter of 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, and 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 have 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.

During the first quarter of 2025, we continued to make progress on our "sum of the parts" efforts.

Our logistics segment (or "Logistics") 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.

This acquisition represents 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 the Gravity Acquisition will be immediately accretive, delivering incremental contribution margin and cash flows.

Subsequent to March 31, 2025, we entered into additional agreements with Delek Logistics which put additional midstream commercial activities in Delek Logistics and bring refining related activities and assets back to the Refining Segment.

Additionally, these transactions increase consolidated financial availability by approximately $250 million.

During the first quarter of 2025, the Refining segment continued to navigate a complex landscape including volatile crude oil prices and economic uncertainty.

While crack spreads declined compared to the first quarter of 2024, they increased from the 2024 lows experienced toward the end of the year.

Our disciplined approach to cost control, coupled with a focus on our enterprise optimization plan ("EOP") margin enhancements, supported EBITDA growth, while our capital deployment remained aligned with our strategic priorities.

The domestic West Texas Intermediate ("WTI") differentials compared to Brent continued to be favorable, and the WTI Midland to Cushing differential widened unfavorably during 2025.

Though refining margins softened compared to the first quarter of 2024, demand for refined products continues to be strong.

Logistics continued to contribute strong results driven by incremental contributions from H2O Midstream and Gravity.

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 uncertainty with the introduction of widespread tariffs by the U.S., geopolitical instability and commodity market volatility.

The uncertainty surrounding trade negotiations and the potential for further expansion of tariffs have contributed to increased market and commodity volatility and potential economic downturns.

As a result, we continue to progress our business transformation focused on enterprise-wide opportunities to improve the efficiency of our cost structure.

We continued to advance our strategic initiatives aimed at long-term value creation.

This includes the progress made on our EOP.

During 2024, we announced a new 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.

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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.

Management's Discussion and Analysis

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

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

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

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, Texas 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.

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.

We want to reward our shareholders with a disciplined and balanced capital allocation framework.

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

In 2024 to date, we have returned $68.1 million of capital to shareholders through dividends and share buybacks.

As of March 31, 2025, we returned $47.4 million of capital in 2025 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.

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

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

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

These Delek Logistics transactions will enhance Delek Logistics position as a full service (crude, natural gas and water) provider in the most prolific areas of 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 2025, in the ‘Market Trends’ section below.

Other 2024 Developments

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 10 of the condensed consolidated financial statements in Item 1.

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

On October 10, 2024, Delek Logistics completed a public offering of its common units in which it sold 3,846,153 common units (including an overallotment option of 576,922 common units) to the underwriters of the offering at a price to the public of $39.00 per unit.

The proceeds received from this offering (net of underwriting discounts, commissions and expenses) were $165.3 million and were used to redeem Delek Logistics’ preferred units outstanding and repay a portion of the outstanding borrowings under the Delek Logistics Revolving Facility (as defined in Note 10 of the condensed consolidated financial statements in Item 1.

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

Delek Logistics Debt Agreements

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

Net proceeds were used to redeem the Delek Logistics 2025 Notes including accrued interest, pay off the Delek Logistics Term Loan Facility (as defined in Note 10 of the condensed consolidated financial statements in Item 1.

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

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

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.

Management's Discussion and Analysis

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 nine months ended months ended September 30, 2024.

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

Property Settlement

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

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

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

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

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

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

Refer to Note 13 of the condensed consolidated financial statements in Item 1.

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

Delek Logistics Gas Plant Expansion

In 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 (as defined below) and aims to meet the rising demand for natural gas in the region.

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

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

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

Retail Divestiture

On September 30, 2024, Delek US closed the previously announced transaction to sell 100% of the equity interests in four of Delek US' wholly-owned subsidiaries that own and operate 249 retail fuel and convenience stores (the "Retail 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 4 of the condensed consolidated financial statements in Item 1.

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

Acquisition of H2O Midstream

On September 11, 2024, Delek Logistics completed the previously announced acquisition of 100% of the limited liability company interests in H2O Midstream Intermediate, LLC, H2O Midstream Permian LLC, and H2O Midstream LLC (the “Purchased Interests” or "H2O Midstream") from H2O Midstream Holdings, LLC (the “Seller”) related to the Seller’s water disposal and recycling operations, in the Midland Basin in Texas (the “H2O Purchase Agreement”) for total consideration of $229.5 million, subject to customary adjustments under the H2O Purchase Agreement for net working capital and indebtedness (the "H2O Transaction").

The purchase price is comprised of approximately $159.5 million in cash and $70.0 million of preferred equity.

Refer to Note 2 of the condensed consolidated financial statements in Item 1.

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

Other 2025 Developments

Acquisition of Gravity

On January 2, 2025, Delek Logistics acquired 100% of the limited liability company interests in Gravity Water Intermediate Holdings LLC from Gravity Water Holdings LLC (the "Gravity Purchase Agreement") related to water disposal and recycling operations in the Permian Basin and the Bakken for total consideration of $300.8 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.

Inventory Intermediation Agreement Amendment

On February 21, 2025, DK Trading & Supply, LLC ("DKTS") amended the inventory intermediation agreement ("Inventory Intermediation Agreement") with Citigroup Energy Inc.

("Citi") 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.

Delek Logistics

On May 1, 2025, we transferred the Delek Permian Gathering purchasing and blending business to Delek Logistics (the "DPG Dropdown”).

In connection with the DPG Dropdown, Delek Logistics will assume all of the rights and obligations to purchase crude oil under certain contracts associated with Delek Logistics’ existing Midland Gathering System.

Total consideration included the execution of the Termination Agreement (as defined below), the execution of the Throughput Agreement (as defined below), the execution of the El Dorado Purchase Agreement” (as defined below) and cancellation of $58.8 million in payables owed to Delek Logistics.

On May 1, 2025, in connection with the DPG Dropdown, we amended and restated a throughput agreement with Delek Logistics for the El Dorado rail facility (the “Throughput Agreement”), which includes a minimum volume commitment for refined products until the termination of the Throughput Agreement, which will occur at the closing of the El Dorado Purchase (as defined below).

Additionally, on May 1, 2025, in connection with the DPG Dropdown, we entered into an asset purchase agreement with Delek Logistics (the “El Dorado Purchase Agreement”), where we will purchase the related El Dorado rail facility assets from Delek Logistics for cash consideration of $25.0 million (the “El Dorado Purchase”).

The El Dorado Purchase is currently set to close January 1, 2026, subject to certain closing conditions as set forth in the El Dorado Purchase Agreement.

These transactions with Delek Logistics will be eliminated in consolidation.

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 a definitive equity purchase agreement (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;

the Retail Stores (the "Retail Transaction").

On September 30, 2024, the Retail Transaction closed.

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

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.

Management's Discussion and Analysis

Wink to Webster Pipeline

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

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

Total consideration was comprised of $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 deconsolidation, for four years following closing.

Refining Overview

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

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

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 March 31, 2025.

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

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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 West Texas Intermediate ("WTI") Cushing/ West Texas Sour ("WTS") price differential, taking into account differences in production yield, is an important measure for helping us make strategic, market-respondent production decisions.

(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.

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

See Note 17 of the condensed consolidated financial statements in Item 1.

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

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

Management's Discussion and Analysis

Logistics Overview

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markets, distributes, transports and stores refined products;

and disposes and recycles water in select regions of the southeastern United States, West Texas and New Mexico for our refining segment and third parties.

and disposes and recycles water in select regions of the southeastern United States, West Texas, New Mexico and North Dakota for our refining segment and third parties.

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

DKL), where we owned a 70.4% interest at September 30, 2024.

DKL), where we owned a 63.4% interest at March 31, 2025.

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

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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.

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 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, the Midland Basin of Texas and the Bakken.

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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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 Environmental, Social and Governance ("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 2025, we are focused on the following:

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

• 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.

• 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.

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• 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 are focused on the following:

Management's Discussion and Analysis

• 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 Delek Logistics units without diluting overall Delek Logistics market capitalization.

• 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.

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 Delek's ownership in Delek Logistics 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

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Operational Excellence Financial Strength & Flexibility Strategic Initiatives

Investing in Energy Transition:

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.

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 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, the Co-issuers 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 borrowings under the Delek Logistics Revolving Facility.

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.

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 (as defined below) and aims to meet the rising demand for natural gas in the region.

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

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

Monetizing Our Retail Operations:

On September 30, 2024, Delek US closed the previously announced transaction to sell 100% of the equity interests in four of Delek US' wholly-owned subsidiaries that own and operate 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.

Executing Strategic Midstream Acquisition:

On September 11, 2024, Delek Logistics completed the previously announced acquisition of 100% of the limited liability company interests in H2O Midstream from H2O Midstream Holdings, LLC related to the Seller’s water disposal and recycling operations, in the Midland Basin in Texas for total consideration of $229.5 million, subject to customary adjustments under the H2O Purchase Agreement for net working capital and indebtedness.

The purchase price is comprised of approximately $159.5 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%.

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.

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

Management's Discussion and Analysis

On January 2, 2025, Delek Logistics acquired 100% of Gravity from Gravity Water Holdings LLC related to water disposal and recycling operations in the Permian Basin and the Bakken for total consideration of $300.8 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.

This transaction further enhances Delek Logistics' position as full service (crude, natural gas and water) provider in the Permian basin.

The acquisition is synergistic to Delek Logistics' recent acquisition of H2O Midstream and supplements Delek Logistics' integrated crude and produced water gathering and disposal offering in the Midland Basin.

Adding Flexibility to the Inventory Intermediation Agreement:

On February 21, 2025, 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.

This amendment reduces interest expense and other associated fees while increasing our flexibility on liquidity and inventory financing options.

Increasing Shareholder Value by Executing Buybacks:

During the three months ended March 31, 2025, 2,009,420 shares of our common stock were repurchased and cancelled at the time of the transaction for a total of $31.5 million.

As of March 31, 2025, there was $512.1 million of authorization remaining under Delek's aggregate stock repurchase program.

Monetizing Our Investment in Delek Logistics:

On February 24, 2025, we entered into a Common Unit Purchase Agreement with Delek Logistics (the “Common Unit Purchase Agreement”) whereby Delek Logistics may repurchase common units from time to time from us in one or more transactions for an aggregate purchase price of up to $150.0 million through December 31, 2026.

During the three months ended March 31, 2025, 243,075 common units were repurchased from us and cancelled at the time of the transaction for a total of $10.0 million.

No common units were repurchased for the three months ended March 31, 2024.

As of March 31, 2025, there was $140.0 million of authorization remaining under the Common Unit Repurchase Agreement.

Expanding Delek Logistics' Natural Gas Processing Capability:

In April 2025, Delek Logistics' began commissioning its new natural gas processing plant adjacent to its plant in the Permian Basin.

The new plant has capacity of approximately 110 MMcf/d and aims to meet the rising demand for natural gas in the region.

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.

Executing Strategic Transactions with Delek Logistics:

On May 1, 2025, we entered into additional agreements with Delek Logistics, which among other things, transfers the Delek Permian Gathering purchasing and blending business to Delek Logistics including all of our rights and obligations to purchase crude oil under certain contracts associated with Delek Logistics’ existing Midland Gathering System and brings back the El Dorado rail facility assets to the Refining Segment on January 1, 2026, subject to certain closing conditions as set forth in the El Dorado Purchase Agreement.

These transactions put additional midstream commercial activities in Delek Logistics and bring refining related activities and assets back to the Refining Segment.

Additionally, these transactions increase consolidated financial availability by approximately $250 million.

Market Trends

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Additionally, our refining margin profitability is impacted by regulatory factors, including the cost of renewable identification numbers ("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 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.

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.

However, escalating conflicts in the Middle East could potentially result in supply disruptions or further volatility in crude oil prices.

We have positioned the Company to continue to run safely, reliably and environmentally responsibly while leveraging our Delek Logistics business.

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 rationalization to 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

Management's Discussion and Analysis

market over the next 6 to 12 months.

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.

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 quarterly average prices of WTI Midland and WTI Cushing crude oil for each of the quarterly periods in 2023 and for the three quarterly periods in 2024.

The table below reflects the quarterly average prices of WTI Midland and WTI Cushing crude oil for each of the quarterly periods in 2024 and for the first quarterly period in 2025.

Crude Pricing Differentials

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

The chart below illustrates the key differentials impacting our refining operations, including WTI Cushing to Brent, WTI Midland to WTI Cushing, and Louisiana Light Sweet crude oil ("LLS") to WTI Cushing for each of the quarterly periods in 2024 and for the first quarterly period in 2025.

Management's Discussion and Analysis

Refined Product Prices

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Tyler Refinery El Dorado Refinery Big Spring Refinery Krotz Springs Refinery

Management's Discussion and Analysis

The charts below illustrate the quarterly average prices of Gulf Coast Gasoline ("CBOB"), U.S.

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

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

Management's Discussion and Analysis

Ultra Low Sulfur Diesel ("ULSD") for each of the quarterly periods in 2024 and for the first quarterly period in 2025.

Crack Spreads

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

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

The table below reflects the quarterly average Gulf Coast 5-3-2 ULSD, 3-2-1 ULSD and 2-1-1 HSD/LLS crack spreads for each of the quarterly periods in 2024 and for the first quarterly period in 2025.

Management's Discussion and Analysis

RIN Volatility

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

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

Management's Discussion and Analysis

Energy costs are a significant element of our Refining Earnings before interest, taxes, depreciation and amortization ("EBITDA") and can significantly impact our ability to capture crack spreads, with natural gas representing the largest component.

The chart below illustrates the volatility in RINs for each of the quarterly periods in 2024 and for the first quarterly period in 2025.

Energy costs are a significant element of our refining segment's earnings before interest, taxes, depreciation and amortization ("EBITDA") ("Refining EBITDA") and can significantly impact our ability to capture crack spreads, with natural gas representing the largest component.

Natural gas prices are driven by supply-side factors such as amount of natural gas production, level of natural gas in storage and import and export activity, while demand-side factors include variability of weather, economic growth and the availability and price of other fuels.

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

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

The chart below illustrates the quarterly average prices of Waha (Permian Basin) and Henry Hub (Gulf Coast) per million British Thermal Units ("MMBtu") for each of the quarterly periods in 2024 and for the first quarterly period in 2025.

Management's Discussion and Analysis

Non-GAAP Measures

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

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

2024 2023 2024 2023

Three Months Ended March 31,

Refining segment EBITDA $ (16.2) $ 105.1

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Interest expense, net 84.1 87.7

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

Income tax benefit (36.8) (7.6)

Depreciation and amortization 101.3 91.7

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

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

Loss (income) from discontinued operations, net of tax 0.3 (3.2)

Net loss attributable to Delek $ (172.7) $ (32.6)

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

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Refining Segment

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

2024 2023 2024 2023

Three Months Ended March 31,

Total revenues $ 2,608.3 $ 3,108.3

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Summary Statement of Operations Data (1)

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

Three Months Ended March 31,

Net revenues $ 2,641.9 $ 3,128.0

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Depreciation and amortization 6.3 5.3

Asset impairment 9.2 — 31.3 —

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

Other operating income, net (7.0) (1.7)

Total operating costs and expenses 2,767.7 3,098.8

Operating income (121.9) 212.1 (88.1) 388.6

Operating (loss) income (125.8) 29.2

Interest expense, net 84.1 87.7

Income from equity method investments (13.3) (21.9)

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

Other income, net (1.6) (0.6)

Total non-operating expenses, net 69.2 65.2

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

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

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

Loss from continuing operations before income tax benefit (195.0) (36.0)

Income tax benefit (36.8) (7.6)

Loss from continuing operations, net of tax (158.2) (28.4)

Discontinued operations:

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

Income tax expense 28.1 2.4 29.6 5.2

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

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

Net income attributable to:

Non-controlling interests 9.3 7.4 27.8 22.1

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

(Loss) income from discontinued operations (0.4) 3.6

Income tax (benefit) expense (0.1) 0.4

(Loss) income from discontinued operations, net of tax (0.3) 3.2

Net loss (158.5) (25.2)

Net income attributed to non-controlling interests 14.2 7.4

Net loss attributable to Delek $ (172.7) $ (32.6)

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

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Results of Operations

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

Net (Loss) Income

Consolidated net loss for the third quarter of 2024 was $67.5 million compared to net income of $136.1 million for the third quarter of 2023.

Consolidated net loss attributable to Delek for the third quarter of September 30, 2024 was $76.8 million, or $(1.20) per basic share, compared to a net income of $128.7 million, or $1.98 per basic share, for the third quarter 2023.

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

Consolidated net loss for the nine months ended September 30, 2024 was $118.8 million compared to a net income of $206.8 million for the nine months ended September 30, 2023.

Consolidated net loss attributable to Delek for the nine months ended September 30, 2024 was $146.6 million, or $(2.29) per basic share, compared to income of $184.7 million, or $2.80 per basic share, for the nine months ended September 30, 2023.

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

In the third quarter of 2024 and 2023, we generated net revenues of $3,042.4 million and $4,628.8 million, respectively, a decrease of $1,586.4 million, or 34.3%.

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

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

Gulf Coast gasoline of 18.2% and ULSD of 24.6% and decreases in wholesale activity, decreased sales volume (including purchased products), partially offset by increases in the average price of U.S.

Gulf Coast HSD of 2.0%;

• in our logistics segment, decreases in our West Texas marketing operations and decreases 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.

We generated net revenues of $9,478.5 million and $12,525.1 million during the nine months ended September 30, 2024 and 2023, respectively, a decrease of $3,046.6 million, or 24.3%.

Consolidated Results of Operations — Comparison of the Three Months Ended March 31, 2025 versus the Three Months Ended March 31, 2024

Consolidated net loss for the three months ended March 31, 2025 was $158.5 million compared to a net loss of $25.2 million for the three months ended March 31, 2024.

Consolidated net loss attributable to Delek for the three months ended March 31, 2025 was $172.7 million, or $(2.78) per basic share, compared to a loss of $32.6 million, or $(0.51) per basic share, for the three months ended March 31, 2024.

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

We generated net revenues of $2,641.9 million and $3,128.0 million during the three months ended March 31, 2025 and 2024, respectively, a decrease of $486.1 million, or 15.5%.

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 9.4% and ULSD of 11.3% and decreases in wholesale activity, partially offset by increased sales volume (including purchased products) and an increase in the average price of U.S.

Gulf Coast gasoline of 10.8% and ULSD of 12.6% and decreased sales volumes (including purchased products), partially offset by an increase in the average price of U.S.

Gulf Coast HSD of 8.7%;

• in our logistics segment, decreased revenue of $2.7 million in our West Texas marketing operations primarily driven by a decrease in average sales prices per gallon, partially offset by an increase in gallons sold and incremental revenue associated with the H2O Midstream Acquisition and Gravity Acquisition of $16.5 million and $22.9 million, respectively.

Total Operating Costs and Expenses

Cost of Materials and Other

Cost of materials and other was $2,788.7 million for the third quarter of 2024 compared to $4,049.4 million for the third quarter of 2023, a decrease of $1,260.7 million, or 31.1%.

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

• decreases in cost of crude oil feedstocks at the refineries, including an 8.8% decrease in the average cost of WTI Cushing crude oil and a 9.4% decrease in the average cost of WTI Midland crude oil, decreased wholesale activity decreased RINs pricing, decreased sales volume (including purchased products), 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;

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

Management's Discussion and Analysis

Cost of materials and other was $8,547.1 million for the nine months ended September 30, 2024, compared to $11,111.2 million for nine months ended September 30, 2023, a decrease of $2,564.1 million, or 23.1%.

Cost of materials and other was $2,399.5 million for the three months ended March 31, 2025, compared to $2,732.9 million for three months ended March 31, 2024, a decrease of $333.4 million, or 12.2%.

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

• decreased wholesale activity, decreased RINs pricing and decreased sales volume (including purchased products) 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;

• 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.

• a decrease in the cost of crude oil feedstocks at the refineries, including a 7.2% decrease in the average cost of WTI Cushing crude oil and a 7.7% decrease in the average cost of WTI Midland crude oil and decreased sales volume (including purchased products).

These decreases were partially offset by the following:

• incremental costs associated with the H2O Midstream Acquisition and Gravity Acquisition.

Operating Expenses

Operating expenses (included in both cost of sales and other operating expenses) were $185.1 million for the third quarter of 2024 compared to $214.0 million for the third quarter of 2023, a decrease of $28.9 million, or 13.5%.

Operating expenses (included in both cost of sales and other operating expenses) were $212.4 million for the three months ended March 31, 2025 compared to $214.9 million in three months ended March 31, 2024, a decrease of $2.5 million, or 1.2%.

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

• a decrease in natural gas costs;

• a decrease in outside services;

• a decrease in insurance costs.

Operating expenses (included in both cost of sales and other operating expenses) were $586.0 million for the nine months ended September 30, 2024 compared to $581.1 million in nine months ended September 30, 2023, an increase of $4.9 million, or 0.8%.

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

• a decrease in employee costs.

This decrease was partially offset by the following:

• incremental expenses associated with the H2O Midstream Acquisition and Gravity Acquisition;

• an increase in maintenance costs.

• an increase in employee costs.

These increases were partially offset by the following:

• lower natural gas prices;

• a decrease in insurance costs.

General and Administrative Expenses

General and administrative expenses were $70.4 million for the third quarter of 2024 compared to $67.7 million for the third quarter of 2023, an increase of $2.7 million, or 4.0%.

The increase was primarily driven by transaction costs associated with the H20 Transaction, transaction costs associated with the amended and new agreements with Delek Logistics and restructuring costs, partially offset by lower employee expenses incentive compensation costs.

General and administrative expenses were $191.6 million for the nine months ended September 30, 2024 compared to $208.0 million in nine months ended September 30, 2023, a decrease of $16.4 million, or 7.9%.

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

General and administrative expenses were $61.5 million for the three months ended March 31, 2025 compared to $61.0 million in three months ended March 31, 2024, an increase of $0.5 million, or 0.8%.

Depreciation and Amortization

Depreciation and amortization (included in both cost of sales and other operating expenses) was $98.1 million for the third quarter of 2024 compared to $87.7 million for the third quarter of 2023, an increase of $10.4 million, or 11.9%.

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

Depreciation and amortization (included in both cost of sales and other operating expenses) was $278.2 million and $255.2 million for the nine months ended September 30, 2024 and 2023, respectively, an increase of $23.0 million, or 9.0%.

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

Depreciation and amortization (included in both cost of sales and other operating expenses) was $101.3 million for the three months ended March 31, 2025 compared to $91.7 million in 2024, an increase of $9.6 million, or 10.5%.

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 H2O Midstream Acquisition and Gravity Acquisition.

Management's Discussion and Analysis

Asset Impairment

Asset impairment was $9.2 million for the three months ended September 30, 2024.

We recorded $9.2 million asset impairment because it's no longer probable certain pipeline assets will be utilized.

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

Asset impairment was $31.3 million for the nine months ended September 30, 2024.

We recorded $22.1 million asset impairment as a result of our second quarter 2024 decision to idle the biodiesel facilities, while exploring viable and sustainable alternatives and recorded $9.2 million asset impairment because it's no longer probable certain pipeline assets will be utilized.

There was no asset impairment in the nine months ended September 30, 2023.

Refer to Note 17 condensed consolidated financial statements in Item 1.

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

Other Operating Expense (Income), Net

Other operating expense (income), net decreased by $14.9 million in the third quarter of 2024 to expense of $12.8 million compared to income of $2.1 million in the third quarter of 2023.

During the three months ended September 30, 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.

Other operating income, net was $67.6 million and $19.0 million for the nine months ended September 30, 2024 and 2023, respectively, an increase of $48.6 million.

Other Operating Income, Net

Other operating income, net was $7.0 million and $1.7 million for the three months ended March 31, 2025 and 2024, respectively, an increase of $5.3 million.

The increase was primarily driven by the following:

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

• for the nine months ended September 30, 2024, we recorded a gain of $30.1 million related to insurance proceeds and other third party recoveries related to the 2021 El Dorado refinery fire, the 2021 freeze events and the 2022 Big Spring refinery fire related to property damage and business interruption claims, compared to $13.3 million of business interruption and property damage insurance recoveries in the 2023 period related to the fire and freeze events that occurred in 2021 and 2022 Big Spring refinery fire;

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

• for the nine months ended September 30, 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 13 of the condensed consolidated financial statements in Item 1.

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

• a gain recorded in the three months ended March 31, 2025 related to Delek Logistics' sale of storage tanks in Texas due to an eminent domain settlement.

Non-Operating Expenses, Net

Interest Expense, Net

Interest expense, net decreased by $3.6 million, or 4.4%, to $78.8 million in the third quarter of 2024 compared to $82.4 million in the third quarter of 2023, primarily driven by the following:

• a decrease in net average borrowings outstanding (including the obligations under the inventory intermediation agreements which have an associated interest charge) of approximately $146.2 million in the third quarter of 2024 (calculated as a simple average of beginning borrowings/obligations and ending borrowings/obligations for the period) compared to the third quarter of 2023.

The decrease was partially offset by the following:

• an increase in the average effective interest rate of 22 basis points in the third quarter of 2024 compared to the third quarter of 2023 (where effective interest rate is calculated as interest expense divided by the net average borrowings/obligations outstanding);

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

Management's Discussion and Analysis

Interest expense, net was $244.1 million in the nine months ended September 30, 2024, compared to $239.1 million for nine months ended September 30, 2023, an increase of $5.0 million, or 2.1% primarily due to the following:

• an increase in the average effective interest rate of 110 basis points during the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023 (where effective interest rate is calculated as interest expense divided by the net average borrowings/obligations outstanding);

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

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

The increase was partially offset by the following:

• a decrease in net average borrowings outstanding (including the obligations under the inventory intermediation agreements which have an associated interest charge) of approximately $275.0 million during the nine months ended September 30, 2024 (calculated as a simple average of beginning borrowings/obligations and ending borrowings/obligations for the period) compared to the nine months ended September 30, 2023;

Interest expense, net was $84.1 million in the three months ended March 31, 2025, compared to $87.7 million for three months ended March 31, 2024, a decrease of $3.6 million, or 4.1% primarily due to the following:

• a decrease in the average effective interest rate of 170 basis points during the three months ended March 31, 2025 compared to the three months ended March 31, 2024 (where effective interest rate is calculated as interest expense divided by the net average borrowings/obligations outstanding).

This decrease was partially offset by the following:

• an increase in net average borrowings outstanding (including the obligations under the inventory intermediation agreement which has an associated interest charge) of approximately $322.9 million during the three months ended March 31, 2025 (calculated as a simple average of beginning borrowings/obligation and ending borrowings/obligation for the period) compared to the three months ended March 31, 2024;

• hedge losses associated with our interest rate swap.

Results from Equity Method Investments

We recognized income of $25.1 million from equity method investments during the third quarter of 2024, compared to $27.0 million for the third quarter of 2023, a decrease of $1.9 million.

We recognized income from equity method investments of $77.4 million for the nine months ended September 30, 2024, compared to $67.1 million for the nine months ended September 30, 2023, an increase of $10.3 million.

This increase was primarily driven by the following:

• an increase in income from our investment in W2W Holdings LLC to $26.0 million during the nine months ended September 30, 2024 from $18.2 million in the nine months ended September 30, 2023.

For the third quarter of 2024, we recorded an income tax benefit of $40.3 million compared to income tax expense of $29.1 million for the third quarter of 2023, primarily driven by the following:

• a decrease in pre-tax net income of $329.8 million;

• our effective tax rates were 23.0% and 18.8% for the three months ended September 30, 2024 and 2023, respectively, due to the impact of fixed dollar permanent differences on the tax rate and changes to valuation allowances on certain attributes.

For the nine months ended September 30, 2024, we recorded an income tax benefit of $56.7 million compared to income tax expense of $38.3 million for the nine months ended September 30, 2023, primarily driven by the following:

• a decrease in pre-tax net income of $474.9 million, and

• our effective tax rates were 22.3% and 17.3% for the nine months ended September 30, 2024 and 2023, respectively, due to the impact of fixed dollar favorable permanent differences on the tax rate and changes in valuation allowance on certain attributes.

We recognized income from equity method investments of $13.3 million for the three months ended March 31, 2025, compared to $21.9 million for the three months ended March 31, 2024, a decrease of $8.6 million.

This decrease was primarily driven by the following:

• a decrease in income from our investment in W2W Holdings LLC to $5.4 million during the three months ended March 31, 2025 from $9.4 million in the three months ended March 31, 2024;

• a decrease in income from our investment in Red River Pipeline Company LLC to $2.3 million during the three months ended March 31, 2025 from $5.2 million in the three months ended March 31, 2024.

For the three months ended March 31, 2025, we recorded an income tax benefit of $36.8 million from continuing operations compared to an income tax benefit of $7.6 million from continuing operations for the three months ended March 31, 2024, primarily driven by the following:

• an increase in pre-tax net loss of $159.0 million, and

• our effective tax rates were 18.9% and 21.1% for the three months ended March 31, 2025 and 2024, respectively, due to the impact of fixed dollar favorable permanent differences and changes in valuation allowance on certain attributes when calculating an estimated annual effective tax rate.

Refer to Note 14 of our condensed consolidated financial statements in Item 1.

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

Management's Discussion and Analysis

2 unchanged sentences

Selected Refining Financial Information

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

2024 2023 2024 2023

Three Months Ended March 31,

Revenues $ 2,608.3 $ 3,108.3

40 unchanged sentences

Refinery Statistics

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

2024 2023 2024 2023

Three Months Ended March 31,

Total Refining Segment

15 unchanged sentences

Refinery Statistics (continued)

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

2024 2023 2024 2023

Three Months Ended March 31,

Tyler, TX Refinery

20 unchanged sentences

Gasoline 37,350 41,542

Diesel 29,854 31,927 30,587 29,211

Diesel/Jet 27,941 30,035

Petrochemicals, LPG, NGLs 941 1,583

14 unchanged sentences

Refinery Statistics (continued)

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

2024 2023 2024 2023

Three Months Ended March 31,

Big Spring, TX Refinery

10 unchanged sentences

Other feedstocks

3,817 3,865 4,638 3,834

Total throughput 59,415 64,853

11 unchanged sentences

32,321 28,244

1,559 5,461 1,773 4,239

Petrochemicals, LPG, NGLs

6,332 6,079 5,665 6,510

602 902 1,919 446

Total production

3 unchanged sentences

Other feedstocks

4,141 3,628 5,948 4,686

Total throughput

12 unchanged sentences

Refinery Sales to Other Segments

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

Three Months Ended March 31,

(in barrels per day) 2025 2024

1 unchanged sentence

Pricing Statistics (average for the period presented)

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

2024 2023 2024 2023

Three Months Ended March 31,

WTI — Cushing crude oil (per barrel) $ 71.47 $ 77.01

15 unchanged sentences

(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.

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.

Gulf Coast Pipeline No.

2 heating oil (high sulfur diesel) and 50% of (Platts pricing) U.S.

Gulf Coast Pipeline No.

2 heating oil (high sulfur diesel).

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.

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.

5 unchanged sentences

Management's Discussion and Analysis

Refining Segment Operational Comparison of the Three and Nine Months Ended September 30, 2024 versus the Three and Nine Months Ended September 30, 2023

Revenues for the refining segment decreased by $1,596.7 million, or 34.5%, in the third quarter of 2024 compared to the third quarter of 2023.

Refining Segment Operational Comparison of the Three Months Ended March 31, 2025 versus the Three Months Ended March 31, 2024

Revenues for the refining segment decreased $500.0 million, or 16.1%, in the three months ended March 31, 2025 compared to the three months ended March 31, 2024.

The decrease was primarily driven by the following:

1 unchanged sentence

Gulf Coast gasoline of 10.8% and ULSD of 12.6%;

• a decrease in wholesale activity;

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

2 unchanged sentences

Gulf Coast HSD of 8.7%.

Net revenues included sales to our logistics segment of $84.6 million and $115.1 million for the three months ended September 30, 2024 and September 30, 2023, respectively.

We eliminate this intercompany revenue in consolidation.

Revenues for the refining segment decreased $3,028.2 million, or 24.3%, in the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023.

The decrease was primarily driven by the following:

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

Gulf Coast gasoline of 9.4% and ULSD of 11.3%;

• a decrease in wholesale activity.

These decreases were partially offset by the following:

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

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

Gulf Coast HSD of 9.4%.

Revenues included sales to our logistics segment of $284.2 million and $298.3 million for the nine months ended September 30, 2024 and 2023, respectively.

Revenues included sales to our logistics segment of $90.0 million and $92.9 million for the three months ended March 31, 2025 and 2024, respectively.

We eliminate this intercompany revenue in consolidation.

Cost of Materials and Other

Cost of materials and other decreased by $1,305.5 million, or 31.3%, in the third quarter of 2024 compared to the third quarter of 2023.

The decrease was primarily driven by the following:

• decreases in the cost of WTI Cushing crude oil, from an average of $82.51 per barrel to an average of $75.28, or 8.8%, and decreases in the cost of WTI Midland crude oil, from an average of $83.85 per barrel to an average of $75.96, or 9.4%;

• a decrease in wholesale activity;

• a decrease in RINs pricing;

• a decrease in sales volume (including purchased products):

• 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.

Cost of materials and other decreased $2,557.3 million, or 22.4%, in the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023.

Cost of materials and other decreased $369.0 million, or 13.0%, in the three months ended March 31, 2025 compared to the three months ended March 31, 2024.

This decrease was primarily driven by the following:

• a decrease in wholesale activity;

• a decrease in RINs pricing;

• decreases in the cost of WTI Cushing crude oil, from an average of $77.01 per barrel to an average of $71.47, or 7.2%;

and decreases in the cost of WTI Midland crude oil, from an average of $78.55 per barrel to an average of $72.52, or 7.7%;

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

• 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.

These decreases were partially offset by the following:

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

Management's Discussion and Analysis

• an increase in RINs pricing.

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

These costs and fees were $111.3 million and $156.0 million during the three months ended September 30, 2024 and 2023, respectively.

These costs and fees were $410.2 million and $413.2 million during the nine months ended September 30, 2024 and 2023, respectively.

These costs and fees were $125.9 million and $139.2 million during the three months ended March 31, 2025 and 2024, respectively.

We eliminate these intercompany fees in consolidation.

Operating Expenses

Operating expenses decreased $7.7 million, or 4.6%, in the three months ended March 31, 2025, compared to three months ended March 31, 2024.

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

• lower employee costs.

Refining Margin

Refining segment margin decreased by $291.2 million, or 63.8%, in the third quarter of 2024 compared to the third quarter of 2023, with a refining margin percentage of 5.5% as compared to 9.9% for the third quarter of 2024 and 2023, respectively, primarily driven by the following:

• a 51.7% decrease in the 5-3-2 crack spread (the primary measure for the Tyler refinery and El Dorado refinery), a 51.2% decrease in the average Gulf Coast 3-2-1 crack spread (the primary measure for the Big Spring refinery) and a 41.4% decrease in the average Gulf Coast 2-1-1 crack spread (the primary measure for the Krotz Springs refinery);

• a decrease in sales volume (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.

Refining margin decreased by $470.9 million, or 44.4%, for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023, with a refining margin percentage of 6.3% as compared to 8.5% for the nine months ended September 30, 2024 and 2023, respectively, primarily driven by the following:

Refining margin decreased by $131.0 million, or 48.8%, for the three months ended March 31, 2025 compared to the three months ended March 31, 2024, with a refining margin percentage of 5.3% as compared to 8.6% for the three months ended March 31, 2025 and 2024, respectively, primarily driven by the following:

• a 26.5% decrease in the 5-3-2 crack spread (the primary measure for the Tyler refinery and El Dorado refinery), a 26.7% decrease in the average Gulf Coast 3-2-1 crack spread (the primary measure for the Big Spring refinery) and a 37.1% 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);

• higher RINs pricing.

These decreases were partially offset by the following:

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

• 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.

Operating Expenses

Operating expenses decreased by $21.5 million, or 12.9%, in the third quarter of 2024 compared to the third quarter of 2023.

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

• lower natural gas costs, outside services and insurance costs.

Operating expenses were flat in the nine months ended September 30, 2024, compared to nine months ended September 30, 2023.

EBITDA decreased by $282.9 million, or 95.7%, in the three months ended September 30, 2024 compared to the three months ended September 30, 2023, primarily due to a decrease in refining margin driven by decreased crack spreads and decreased sales volume (including purchased products), partially offset by 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.

Management's Discussion and Analysis

EBITDA decreased by $477.8 million, for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023, primarily due to a decrease in refining margin driven by decreased crack spreads, partially offset by an increase in sales volume, 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.

EBITDA decreased by $121.3 million, for the three months ended March 31, 2025 compared to the three months ended March 31, 2024, primarily due to a decrease in refining margin driven by decreased crack spreads.

Management's Discussion and Analysis

2 unchanged sentences

Selected Logistics Financial and Operating Information

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

2024 2023 2024 2023

Three Months Ended March 31,

Revenues $ 249.9 $ 252.1

28 unchanged sentences

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

(2) 2024 volumes include volumes from September 11, 2024 through September 30, 2024.

(2) Excludes jet fuel and petroleum coke.

13 unchanged sentences

Management's Discussion and Analysis

Logistics Segment Operational Comparison of the Three and Nine Months Ended September 30, 2024 versus the Three and Nine Months Ended September 30, 2023

Net revenues decreased by $61.8 million, or 22.4%, in the third quarter of 2024 compared to the third quarter of 2023, primarily driven by:

• decreased revenue of $36.2 million in our West Texas marketing operations driven by decreases in volumes sold, a decrease in average sales prices per gallon and decrease in RINs revenue:

◦ the volumes of gasoline and diesel sold decreased by 4.7 million and 0.5 million gallons, respectively;

◦ the average sales prices per gallon of gasoline and diesel sold decreased by $0.42 and $0.71 per gallon, respectively;

◦ RINs revenue decreased from $3.5 million in the third quarter of 2023 to $1.3 million in the third quarter of 2024, due to decrease in RINs prices;

• decreased revenue of $13.3 million and $8.3 million in gathering and processing and storage and transportation operations, respectively, 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.

Net revenues included sales to our refining segment of $111.3 million and $156.0 million for the three months ended September 30, 2024 and September 30, 2023, respectively, and sales to our other segment of $0.4 million and $0.4 million for the three months September 30, 2024 and 2023, respectively.

We eliminate this intercompany revenue in consolidation.

Net revenues decreased by $35.5 million, or 4.6%, in the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023 primarily driven by the following:

• decreased revenue of $28.7 million in our West Texas marketing operations primarily driven by a decrease in average sales prices per gallon and decrease in RINs revenue, partially offset by increases in volumes sold:

Logistics Segment Operational Comparison of the Three Months Ended March 31, 2025 versus the Three Months Ended March 31, 2024

Net revenues decreased by $2.2 million, or 0.9%, in the three months ended March 31, 2025 compared to the three months ended March 31, 2024 primarily driven by the following:

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

• decrease of $6.0 million due to the assignment of the Big Spring Refinery marketing agreement to refining segment in the third quarter of 2024;

• decreased revenue of $2.7 million in our West Texas marketing operations primarily driven by a decrease in average sales prices per gallon, partially offset by an increase in gallons sold:

◦ the average sales prices per gallon of gasoline and diesel sold decreased by $0.20 and $0.32 per gallon, respectively;

◦ RINs revenue decreased from $9.1 million in the nine months ended September 30, 2023 to $3.7 million in the nine months ended September 30, 2024, due to decrease in RINs prices;

◦ the volumes of gasoline and diesel sold increased by 2.9 million and 3.4 million gallons, respectively.

• decreased revenue of $10.4 million and $8.6 million in gathering and processing and storage and transportation operations, respectively, 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;

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

Revenues included sales to our refining segment of $410.2 million and $413.2 million for the nine months ended September 30, 2024 and 2023, respectively, and sales to our other segment of $1.2 million and $1.2 million for the nine months ended September 30, 2024 and 2023, respectively.

◦ the average volumes of gasoline and diesel sold increased by 1.1 million and 1.7 million gallons, respectively.

These decreases were partially offset by the following:

• incremental revenue associated with the H2O Midstream Acquisition and Gravity Acquisition of $16.5 million and $22.9 million, respectively.

Revenues included sales to our refining segment of $125.9 million and $139.2 million for the three months ended March 31, 2025 and 2024, respectively, and sales to our other segment of $0.4 million and $0.4 million for the three months ended March 31, 2025 and 2024, respectively.

We eliminate this intercompany revenue in consolidation.

Cost of Materials and Other

Cost of materials and other for the logistics segment decreased by $33.1 million, or 22.0%, in the third quarter of 2024 compared to the third quarter of 2023.

The decrease was primarily driven by the following:

• decreased costs of materials and other of $29.4 million in our West Texas marketing operations primarily driven by decreases in the volumes and average cost per gallon of gasoline and diesel sold:

◦ the volumes of gasoline and diesel sold decreased by 4.7 million and 0.5 million gallons, respectively;

Cost of materials and other for the logistics segment increased by $5.4 million, or 4.4%, in the three months ended March 31, 2025 compared to the three months ended March 31, 2024.

This increase was primarily driven by the following:

• incremental costs associated with the H2O Midstream Acquisition and Gravity Acquisition.

This increase was partially offset by the following:

• decreased costs of materials and other of $2.3 million in our West Texas marketing operations primarily driven by decreased costs per gallon, partially offset by an increase in gallons sold:

◦ the average cost per gallon of gasoline and diesel sold decreased by $0.16 per gallon and $0.31 per gallon, respectively.

Our logistics segment purchased product from our refining segment of $84.6 million and $115.1 million for the three months ended September 30, 2024 and September 30, 2023, respectively.

◦ the average volumes of gasoline and diesel sold increased by 1.1 million and 1.7 million gallons, respectively.

Our logistics segment purchased product from our refining segment of $90.0 million and $92.9 million for the three months ended March 31, 2025 and 2024, respectively.

We eliminate these intercompany costs in consolidation.

Management's Discussion and Analysis

Cost of materials and other for the logistics segment decreased by $25.5 million, or 6.3%, in the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023.

This decrease was primarily driven by the following:

• decreased costs of materials and other of $13.2 million 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:

◦ the average cost per gallon of gasoline and diesel sold decreased by $0.20 per gallon and $0.31 per gallon, respectively;

◦ the volumes of gasoline and diesel sold increased by 2.9 million and 3.4 million gallons, respectively;

• decrease of $8.0 million in our gathering and processing segment driven primarily by lower natural gas costs.

Our logistics segment purchased product from our refining segment of $284.2 million and $298.3 million for the nine months ended September 30, 2024 and 2023, respectively.

We eliminate these intercompany costs in consolidation.

Operating Expenses

Operating expenses decreased by $5.0 million, or 15.2%, in the third quarter of 2024 compared to the third quarter of 2023, primarily driven by a decrease in outside services.

Operating expenses increased by $2.8 million, or 3.2%, in the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023, primarily driven by an increase in contract services.

Management's Discussion and Analysis

EBITDA decreased by $27.9 million, or 28.9%, in the three months ended September 30, 2024 compared to the three months ended September 30, 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.

EBITDA decreased by $9.9 million, or 3.6%, in the nine months ended September 30, 2024 compared to the nine months ended September 30, 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 primarily associated with the Tyler Refinery operations which were negatively impacted in the prior year as a result of turnaround activities.

Operating expenses increased by $9.0 million, or 28.2%, in the three months ended March 31, 2025 compared to the three months ended March 31, 2024, primarily driven by the following:

• incremental costs associated with H2O Midstream Acquisition and Gravity Acquisition.

This increase was partially offset by the following:

• a decrease in outside services.

EBITDA decreased by $14.2 million, or 14.2%, in the three months ended March 31, 2025 compared to the three months ended March 31, 2024, primarily driven by the following:

• 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;

• decreased wholesale margins.

These decreases were partially offset by the following:

• incremental EBITDA associated with H2O Midstream Acquisition and Gravity Acquisition.

Management's Discussion and Analysis

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• potential issuances of additional equity and debt securities.

At September 30, 2024 our total liquidity amounted to $2,582.2 million comprised primarily of $1,544.6 million in unused credit commitments under our revolving credit facilities (as discussed in Note 10 of our condensed consolidated financial statements in Item 1.

At March 31, 2025 our total liquidity amounted to $1,810.7 million comprised primarily of $1,186.9 million in unused credit commitments under our revolving credit facilities (as discussed in Note 10 of our condensed consolidated financial statements in Item 1.

Financial Statements, of this Quarterly Report on Form 10-Q) and $623.8 million in cash and cash equivalents.

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

On October 30, 2024, our Board of Directors approved a quarterly cash dividend of $0.255 per share of our common stock.

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

On April 29, 2025, our Board of Directors approved a quarterly cash dividend of $0.255 per share of our common stock.

During the three months ended March 31, 2025, 2,009,420 shares of our common stock were repurchased and cancelled at the time of the transaction for a total of $31.5 million.

As of March 31, 2025, there was $512.1 million of authorization remaining under Delek's aggregate stock repurchase program.

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

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Our debt limitation covenants in our existing financing documents are usual and customary for credit agreements of our type and reflective of market conditions at the time of their execution.

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

As of September 30, 2024, we believe we were in compliance with all of our debt maintenance covenants, where the most significant long-term obligation subject to such covenants was the Delek Term Loan Credit Facility (see further discussion in Note 10 of our condensed consolidated financial statements in Item 1.

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

As of March 31, 2025, we believe we were in compliance with all of our debt maintenance covenants, where the most significant long-term obligation subject to such covenants was the Delek Term Loan Credit Facility (see further discussion in Note 10 of our condensed consolidated financial statements in Item 1.

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

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

Additionally, we were in compliance with covenants during the quarter ended March 31, 2025.

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

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as well as the possibility of obtaining other secured and unsecured debt, raising capital through equity issuance, or taking advantage of transactional financing opportunities such as sale-leasebacks or joint ventures, as otherwise contemplated and allowed under our incurrence covenants.

Management's Discussion and Analysis

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

Three Months Ended March 31,

Cash Flow Data:

Operating activities - continuing operations $ (62.1) $ 160.9

Operating activities - discontinued operations (0.3) 5.8

Total Operating activities (62.4) 166.7

Investing activities - continuing operations (314.6) (32.6)

Investing activities - discontinued operations — (9.0)

Total Investing activities (314.6) (41.6)

Financing activities - continuing operations 265.2 (193.9)

Financing activities - continuing operations — —

Total Financing activities 265.2 (193.9)

Net decrease $ (111.8) $ (68.8)

Cash Flows from Operating Activities

Continuing Operations

Net cash used by operating activities from continuing operations was $62.1 million for the three months ended March 31, 2025, compared to net cash provided by of $160.9 million for the comparable period of 2024.

Decreases were a result of cash receipts from customers and cash payments to suppliers and for salaries resulting in a net $198.1 million decrease in cash provided by operating activities and an increase in cash paid for debt interest of $19.1 million.

Cash Flows from Investing Activities

Continuing Operations

Net cash used in investing activities from continuing operations was $314.6 million for the three months ended March 31, 2025, compared to $32.6 million in the comparable period of 2024.

The increase in cash flows used in investing activities was primarily due to $300.8 million acquisition of Gravity of which $209.3 million was paid in cash and a $97.4 million increase in purchases of property, plant and equipment.

Cash Flows from Financing Activities

Continuing Operations

Net cash provided by financing activities from continuing operations was $265.2 million for the three months ended March 31, 2025, compared to cash used of $193.9 million in the comparable 2024 period.

The decrease in cash used was primarily due to net proceeds on long-term revolvers of $269.7 million for the three months ended March 31, 2025 compared to net payments of $215.3 million in the comparable 2024 period, and net proceeds on product and other financing arrangements of $67.6 million for the three months ended March 31, 2025 compared to net payments of $189.7 million in the comparable 2024 period.

These decreases in cash flows were partially offset by net payments of term debt of $2.4 million for the three months ended March 31, 2025 compared to net proceeds on term debt of $116.3 million in the comparable 2024 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, the receipt of net proceeds of $132.3 million from the Delek Logistics' public offerings of common units in the three months ended March 31, 2024, an increase of $31.5 million in share buybacks and a $11.8 million increase in distributions to non-controlling interests.

Cash Position and Indebtedness

As of September 30, 2024, our total cash and cash equivalents were $1,037.6 million and we had total long-term indebtedness of approximately $2,789.4 million.

As of March 31, 2025, our total cash and cash equivalents were $623.8 million and we had total long-term indebtedness of approximately $3,035.3 million.

The total long-term indebtedness is net of deferred financing costs and debt discount of $48.4 million.

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Total unused credit commitments or borrowing base availability, as applicable, under our revolving credit facilities was approximately $1,186.9 million.

The increase of $186.0 million in total long-term principle indebtedness as of September 30, 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 September 30, 2024, our total long-term indebtedness (as defined in Note 10 of the condensed consolidated financial statements in Item 1.

The increase of $267.3 million in total long-term principal indebtedness as of March 31, 2025 compared to December 31, 2024 resulted primarily from an increase in net borrowings under the Delek Logistics Revolving Facility.

As of March 31, 2025, our total long-term indebtedness (as defined in Note 10 of the condensed consolidated financial statements in Item 1.

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

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• aggregate principal of $928.6 million under the Delek Term Loan Credit Facility (maturity of November 19, 2029 and effective interest of 8.62%);

Management's Discussion and Analysis

• aggregate principal of $705.1 million under the Delek Logistics Revolving Facility (maturity of October 13, 2027 and average borrowing rate of 7.19%);

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• aggregate principal of $1,050.0 million under the Delek Logistics 2029 Notes (due in 2029, with effective interest rate of 8.81%);

• aggregate principal of $5.0 million under the United Community Bank Revolver (maturity of June 30, 2026 and average borrowing rate of 7.50%).

Management's Discussion and Analysis

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.

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

See Note 10 to our accompanying condensed consolidated financial statements in Item 1.

Financial Statements, of this Quarterly Report on Form 10-Q for additional information about our separate debt and credit facilities.

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

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 Citigroup Energy Inc.

("Citi") was $388.9 million at September 30, 2024.

Our inventory intermediation obligation with Citi was $433.6 million at March 31, 2025.

See Note 9 of the accompanying condensed consolidated financial statements in Item 1.

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

Our product financing liabilities consisted primarily of RIN financings as of September 30, 2024, and totaled $163.9 million, all of which is due in the next 12 months.

Our product financing liabilities consisted primarily of RIN financings as of March 31, 2025, and totaled $237.2 million, all of which is due in the next 12 months.

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

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Additionally, any rating downgrades may increase the likelihood of us having to post additional letters of credit or cash collateral under certain contractual arrangements.

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

Nine Months Ended September 30,

Cash Flow Data:

Operating activities - continuing operations $ 78.9 $ 891.7

Operating activities - discontinued operations 17.8 31.1

Total Operating activities 96.7 922.8

Investing activities - continuing operations (387.4) (320.6)

Investing activities - discontinued operations 361.7 (18.0)

Total Investing activities (25.7) (338.6)

Financing activities - continuing operations 144.4 (523.8)

Financing activities - continuing operations — —

Total Financing activities 144.4 (523.8)

Net (decrease) increase $ 215.4 $ 60.4

Cash Flows from Operating Activities

Continuing Operations

Net cash provided by operating activities from continuing operations was $78.9 million for the nine months ended September 30, 2024, compared to $891.7 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 $824.5 million decrease in cash provided by operating activities, an increase in cash paid for debt interest of $1.2 million, partially offset by a decrease in cash paid for taxes of $4.8 million.

Management's Discussion and Analysis

Discontinued Operations

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

Cash Flows from Investing Activities

Continuing Operations

Net cash used in investing activities from continuing operations was $387.4 million for the nine months ended September 30, 2024, compared to $320.6 million in the comparable period of 2023.

The increase in cash flows used in investing activities was primarily due to $229.5 million acquisition of H2O Midstream of which $159.5 million was paid in cash, purchase of an additional 0.6% indirect investment in Wink to Webster Pipeline LLC for $18.6 million, partially offset by an $83.1 million decrease in purchases of property, plant and equipment, substantially driven by maintenance projects associated with the Tyler turnaround in 2023 and a $14.0 million increase in insurance proceeds in 2024.

Discontinued Operations

Net cash provided by investing activities from discontinued operations in 2024 primarily includes the $381.7 million net proceeds from the sale of the Retail Stores, partially offset by cash used for Retail Stores capital expenditures of $19.8 million.

Cash Flows from Financing Activities

Continuing Operations

Net cash provided by financing activities from continuing operations was $144.4 million for the nine months ended September 30, 2024, compared to cash used of $523.8 million in the comparable 2023 period.

The decrease in cash used was primarily due to the receipt of net proceeds of $132.2 million from the Delek Logistics' public offering of common units in the nine months ended September 30, 2024, net proceeds from term debt of $520.6 million for the nine months ended September 30, 2024 compared to net payments on term debt of $18.4 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, a decrease in net payments on long-term revolvers of $78.4 million and Delek Logistics 2025 Notes and a decrease of $45.4 million in share buybacks.

These decreases in cash flows were partially offset by an increase in net payments from product and other financing arrangements of $38.5 million, the receipt of settlement proceeds of $58.0 million during the first quarter of 2023 associated with the termination of the J.

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

8 Financial Statements and Supplementary Data, of our December 31, 2023 Annual Report on Form 10-K) and origination of the Citi Inventory Intermediation Agreement (as defined in Note 9 of the condensed consolidated financial statements in Item 1.

Financial Statements, of this Quarterly Report on Form 10-Q) and an increase of $16.8 million related to the payment of deferred financing costs primarily related to the issuance of the Delek Logistics 2029 Notes.

Capital Spending

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

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

2024 Forecast (1)

Nine Months Ended September 30, 2024 Actual (1) (2)

The following table summarizes our actual capital expenditures for the three months ended March 31, 2025, by operating segment and major category (in millions):

2025 Forecast Three Months Ended March 31, 2025 Actual

Regulatory $ 28 $ 0.9

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Total capital spending $ 405 $ 132.6

Management's Discussion and Analysis

(1) Excludes estimated 2024 costs of $90.0 million to $100.0 million and actual 2024 costs of $53.4 million related to the new Delek Logistics natural gas processing plant .

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

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

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

Refer to Note 13 of the condensed consolidated financial statements in Item 1.

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

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

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Risk Factors, of our December 31, 2024 Annual Report on Form 10-K.

Management's Discussion and Analysis

Cash Requirements

Long-Term Cash Requirements Under Contractual Obligations

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

Information regarding our known cash requirements under contractual obligations of the types described below as of March 31, 2025, is set forth in the following table (in millions):

Payments Due by Period

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Total $ 3,822.8 $ 1,991.2 $ 2,913.8 $ 195.4 $ 8,923.2

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

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

(1) Expected interest payments on debt outstanding at March 31, 2025.

Floating interest rate debt is calculated using March 31, 2025 rates.

For additional information, see Note 10 to the condensed consolidated financial statements in Item 1.

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

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

(2) Amounts reflect future estimated lease payments under operating leases having remaining non-cancelable terms in excess of one year as of March 31, 2025.

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

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Cash outlays in 2026 are planned to include incentive compensation payments that were earned and accrued in 2025.

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.

Management's Discussion and Analysis

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

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

Refer to the cash flow section for our operating activities spend during the three months ended March 31, 2025.

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

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

Refer to the 'Capital Spending' section for our capital expenditures for the three months ended March 31, 2025 and our anticipated cash requirements for planned capital expenditures for the full year 2025.

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis