Delek US Holdings, Inc. 10-Q

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Management’s Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") is management’s analysis of our financial performance and of significant trends that may affect our future performance. The MD&A should be read in conjunction with our condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q and in the Annual Report on Form 10-K filed with the Securities and Exchange Commission ("SEC") on February 26, 2025 (the "Annual Report on Form 10-K"). Those statements in the MD&A that are not historical in nature should be deemed forward-looking statements that are inherently uncertain. Delek US Holdings, Inc. is a registrant pursuant to the Securities Act of 1933, as amended ("Securities Act") and is listed on the New York Stock Exchange ("NYSE") under the ticker symbol "DK". Unless otherwise noted or the context requires otherwise, the terms "we," "our," "us," "Delek" and the "Company" are used in this report to refer to Delek US Holdings, Inc. and its consolidated subsidiaries for all periods presented. You should read the following discussion of our financial condition and results of operations in conjunction with our historically 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 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. Please note that this list may be updated from time to time. Forward-Looking Statements This Quarterly Report on Form 10-Q contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934 ("Exchange Act"). These forward-looking statements reflect our current estimates, expectations and projections about our future results, performance, prospects and opportunities. Forward-looking statements include, among other things, statements that refer to the acquisition of 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"), the conflict between Israel and Hamas (the "Israel-Hamas War"), and the conflict between Israel and Iran (the "Israel-Iran 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. de C.V. (“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. Forward-looking statements should not be read as a guarantee of future performance or results, and will not necessarily be accurate indications of the times at, or by, which such performance or results will be achieved. Forward-looking information is based on information available at the time and/or management’s good faith belief with respect to future events, and is subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in the statements. Important factors that, individually or in the aggregate, could cause such differences include, but are not limited to: • volatility in our refining margins or fuel gross profit as a result of changes in the prices of crude oil, other feedstocks and refined petroleum products; • reliability of our operating assets; • actions of our competitors and customers; • 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 Gravity Acquisition, the H2O Midstream 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; • the impact on commercial activity and other economic effects of any widespread public health crisis, including uncertainty regarding the timing, pace and extent of economic recovery following any such crisis; • general economic and business conditions affecting the southern, southwestern and western United States ("U.S."), particularly levels of spending related to travel and tourism; • volatility under our derivative instruments; • deterioration of creditworthiness or overall financial condition of a material counterparty (or counterparties); • unanticipated increases in cost or scope of, or significant delays in the completion of, our capital improvement safety initiative and periodic turnaround projects; • risks and uncertainties with respect to the quantities and costs of refined petroleum products supplied to our pipelines and/or held in our terminals; • operating hazards, natural disasters, weather related disruptions, casualty losses and other matters beyond our control; • increases in our debt levels or costs; 36 | Management's Discussion and Analysis • possibility of accelerated repayment on a portion of our Inventory Intermediation Agreement obligation if the purchase price adjustment feature triggers a change on the re-pricing dates; • changes in our ability to continue to access the credit markets; • compliance, or failure to comply, with restrictive and financial covenants in our various debt agreements; • changes in our ability to pay dividends; • seasonality; • the decline in margins impacting current results and forecasts could result in impairments in certain of our long-lived or indefinite-lived assets, including goodwill, or have other financial statement impacts that cannot currently be anticipated; • earthquakes, hurricanes, tornadoes, and other weather events, which can unforeseeably affect the price or availability of electricity, natural gas, crude oil, and other feedstocks, critical supplies, refined petroleum products and ethanol; • increases in costs of compliance with, or liability for violation of, existing or future laws, regulations and other requirements; • societal, legislative and regulatory measures to address climate change and greenhouse gases emissions ("GHG"); • 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 Israel-Iran War, 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; • disruption, failure, or cybersecurity breaches affecting or targeting our i nformation technology ("IT"), systems and controls, our infrastructure, or the infrastructure of our cloud-based IT service providers; • changes in the cost or availability of transportation for feedstocks and refined products; and • other factors discussed under Item 1A. Risk Factors and Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations and in our other filings with the SEC. In light of these risks, uncertainties and assumptions, our actual results of operations and execution of our business strategy could differ materially from those expressed in, or implied by, the forward-looking statements, and you should not place undue reliance upon them. In addition, past financial and/or operating performance is not necessarily a reliable indicator of future performance, and you should not use our historical performance to anticipate future results or period trends. We can give no assurances that any of the events anticipated by any forward-looking statements will occur or, if any of them do, what impact they will have on our results of operations and financial condition. All forward-looking statements included in this report are based on information available to us on the date of this report. We undertake no obligation to revise or update any forward-looking statements as a result of new information, future events or otherwise. 37 | Management's Discussion and Analysis Executive Summary: Management's View of Our Business and Strategic Overview Management's View of Our Business 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 Our focus on safe and reliable operations is a pillar which underlines all of our business activities. We continue to identify opportunities to mitigate market risk and focus on efforts that improve our overall cost structure while not compromising operational excellence. During the first half 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. The Gravity Acquisition has become immediately accretive, delivering incremental contribution margin and cash flows. During the second quarter of 2025, we entered into additional agreements with Delek Logistics which put additional midstream commercial activities in Delek Logistics and will bring refining related activities and assets back to our refining segment (or "Refining"). Additionally, these transactions increased consolidated financial availability by approximately $250 million. Delek Logistics also sold $700.0 million of 7.325% Senior Notes due 2033, at par during the second quarter of 2025. Net proceeds were used to repay a portion of the outstanding borrowings under the Delek Logistics Revolving Facility providing Delek Logistics with $1.1 billion of availability on the facility providing further financial flexibility. During the second quarter of 2025, the Refining segment provided higher margins than the first quarter of 2025 and the prior year second quarter due to increased crack spreads. Crack spreads were higher during the second quarter of 2025 than the prior twelve months. Our disciplined approach to cost control, coupled with a focus on our enterprise optimization plan ("EOP") margin enhancements, supported earnings before interest, taxes, depreciation and amortization ("EBITDA") growth and improved cash flow, 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 contracted favorably during the second quarter of 2025. The increased refining margins compared to the second quarter of 2024 continues to demonstrate that 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. At the El Dorado Refinery our EOP is focused on margin improvement through enhanced logistics, reduced costs, higher quality product slate, and new products producing higher yields. The EOP also includes stronger margins including accretive minimal capital projects in our Refining segment and commercial improvements including market optionality, improved product slate and optimization. By executing on our initiatives to optimize our cost structure, we are positioning the Company in the event of lower crack spreads and volatility in the commodity markets. 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. As of June 30, 2025, we returned $75.8 million of capital in 2025 to shareholders through dividends and share buybacks and returned another $7.9 million through share buybacks in July of 2025. Our near-term focus is centered around the following: (1) operations excellence, (2) financial strength and flexibility and (3) strategic initiatives which includes unlocking the "sum of the parts" value of our existing business while identifying growth opportunities to enhance the Company's scale and diversify revenue streams. See further discussion in the "Strategic Objectives" section below. See further discussion on macroeconomic factors and market trends, including the impact on 2025, in the ‘Market Trends’ section below. 38 | Management's Discussion and Analysis 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 activities 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 cancellation of $58.8 million in payables owed to Delek Logistics. On May 1, 2025, we entered into a termination agreement with Delek Logistics to terminate, in its entirety, the East Texas Marketing Agreement effective as of January 1, 2026. 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. We also entered into an amended and restated Omnibus Agreement with Delek Logistics that provides for an increase in the Administrative Fee (as defined therein) which will be phased in over two years beginning July 1, 2025 and a binding obligation for both parties to enter into transition services agreements in the event of a change in control. These transactions with Delek Logistics will be eliminated in consolidation. Delek Logistics Debt Agreement On June 30, 2025, Delek Logistics sold $700.0 million in aggregate principal amount of 7.325% Senior Notes due 2033 (the “Delek Logistics 2033 Notes”), at par. Net proceeds were used to repay a portion of the outstanding borrowings under the Delek Logistics Revolving Facility. 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. During the second quarter of 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. 39 | Management's Discussion and Analysis Operations that are not specifically included in the reportable segments are included in Corporate, Other and Eliminations, which consist of our corporate activities, results of certain immaterial operating segments, including our Canadian crude trading operations and intercompany eliminations. Refining Overview 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 June 30, 2025. A high-level summary of the refinery activities is presented below: Tyler, Texas refinery (the "Tyler refinery") El Dorado, Arkansas refinery (the "El Dorado refinery") Big Spring, Texas refinery (the "Big Spring refinery") Krotz Springs, Louisiana refinery (the "Krotz Springs refinery") Total Nameplate Capacity (bpd) 75,000 80,000 73,000 74,000 Primary Products Gasoline, jet fuel, ultra-low-sulfur diesel, liquefied petroleum gases, propylene, petroleum coke and sulfur Gasoline, 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 Gulf Coast 5-3-2 (1) Gulf Coast 3-2-1 (2) Gulf Coast 2-1-1 (3) 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. In addition, we sell motor fuels through our wholesale distribution network on an unbranded basis. (1) While there is variability in the crude slate and the product output at the El Dorado refinery, we compare our per barrel refined product margin to the U.S. 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. (3) The Krotz Springs refinery has the capability to process substantial volumes of light sweet crude oil to produce a high percentage of refined light products. Our refining segment also owns three biodiesel facilities involved in the production of biodiesel fuels and related activities, located in Crossett, Arkansas, Cleburne, Texas, and New Albany, Mississippi. During the second quarter of 2024, we made the decision to idle the biodiesel facilities, while exploring viable and sustainable alternatives. In addition, the refining segment includes our wholesale crude operations and our 50% interest in a joint venture that owns asphalt terminals located in the southwestern region of the U.S. Logistics Overview Our logistics segment gathers, transports and stores crude oil and natural gas; markets, distributes, transports and stores refined products; 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 63.3% interest at June 30, 2025. Delek Logistics was formed by Delek in 2012 to own, operate, acquire and construct crude oil and refined products logistics and marketing assets. Majority of Delek Logistics' assets are currently integral to our refining and marketing operations. The logistics segment's gathering and processing business owns or leases capacity on approximately 398 miles of crude oil transportation pipelines, approximately 406 miles of refined product pipelines, and an approximately 1,400-mile crude oil gathering system of which 489 miles is decommissioned. 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 Basin of North Dakota. 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. Logistics has strategic investments in pipeline joint ventures that provide access to pipeline capacity as well as the potential for earnings from joint venture operations. The logistics segment owns or leases approximately 161 tractors and 306 trailers used to haul primarily crude oil and other products for related and third parties. 40 | Management's Discussion and Analysis Strategic Objectives It is vitally important that our strategic objectives, especially in view of the evolutionary direction of our macroeconomic and geopolitical environment, involve a process of continuous evaluation of our business model in terms of cost structure, as well as long-term economic and operational sustainability. 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 our niche position by being the supplier of choice in our markets. Key Objectives Certain fundamental principles are foundational to our long-term strategy and direct us as we develop our strategic objectives. With that in mind, we have identified the following overarching key objectives: I. Operational Excellence II. Financial Strength and Flexibility III. Strategic Initiatives Operational Excellence We are committed to operational excellence which includes maintaining safe, reliable, and environmentally responsible operations. It also encompasses the dedication and drive for constant improvement across our operations in reliability, safety, and efficiency. 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 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 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; and ◦ 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 strong balance sheet. We want to reward our shareholders and investors with a disciplined and balanced capital allocation framework, which we believe will strengthen shareholder value by, among other things, a stable dividend complemented by opportunistic share repurchases. We are also committed to lowering costs and improving the efficiency of our cost structure in all aspects of our business. For 2025, we are focused on the following: • Reward our shareholders and investors with a disciplined and balanced capital allocation framework, including opportunities to strengthen our balance sheet by reducing debt or opportunistically repurchasing shares with excess cash. • 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 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 reducing Delek's ownership in Delek Logistics. • 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. 41 | Management's Discussion and Analysis 2025 Strategic Developments The following table highlights our 2025 Strategic Developments: 2025 Key Initiatives 2025 Strategic Developments Operational Excellence Financial Strength & Flexibility Strategic Initiatives Executing Strategic Midstream Acquisition: 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. ü 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. ü Increasing Shareholder Value by Executing Buybacks: During the six months ended June 30, 2025, 2,694,470 shares of our common stock were repurchased and cancelled at the time of the transaction for a total of $44.4 million. As of June 30, 2025, there was $499.1 million of authorization remaining under Delek's aggregate stock repurchase program. ü 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 six months ended June 30, 2025, 243,075 common units were repurchased from us and cancelled at the time of the transaction for a total of $10.0 million. As of June 30, 2025, there was $140.0 million of authorization remaining under the Common Unit Repurchase Agreement. ü ü 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 a 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 EBITDA is estimated to be approximately $40.0 million attributable to Delek Logistics. ü 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 activities 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. ü ü Extending Long Term Debt Maturities: On June 30, 2025, Delek Logistics and its wholly owned subsidiary Delek Logistics Finance Corp. (“Finance Corp.” and together with Delek Logistics, the “Co-issuers”), sold $700.0 million in aggregate principal amount of the Co-issuers 7.325% Senior Notes due 2033, at par. Net proceeds were used to repay a portion of the outstanding borrowings under the Delek Logistics Revolving Facility providing Delek Logistics with $1.1 billion of availability on the facility as of June 30, 2025. ü 42 | Management's Discussion and Analysis Market Trends Our results of operations are significantly affected by fluctuations in the prices of certain commodities, including, but not limited to, crude oil, gasoline, distillate fuel, biofuels, natural gas and electricity, among others. Historically, the impact of commodity price volatility on our refining margins (as defined in our "Non-GAAP Measures" in MD&A Item 2), specifically as it relates to the price of crude oil as compared to the price of refined products and timing differences in the movements of those prices (subject to our inventory costing methodology), as well as location differentials, may be favorable or unfavorable compared to peers. 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 while leveraging our Delek Logistics business. Crack spreads have increased two consecutive quarters since Q4 2024 providing the highest crack spreads since the first quarter of 2024. 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 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. Crude Prices 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, 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 2024 and for the two quarterly periods in 2025. Crude Pricing Differentials Historically, domestic refiners have benefited from the discount for WTI Cushing compared to Brent, a global benchmark crude. This generally leads to higher margins in our refineries, as refined product prices are influenced by Brent crude prices and the majority of our crude supply is WTI-linked. Because of our positioning in the Permian basin, including our access to significant sources of WTI Midland crude through our gathering system, we are even further benefited by discounts for WTI Midland/WTI Cushing differentials. When these discounts shrink or become premiums, our reliance on WTI-linked crude pricing, and specifically WTI Midland crude, can negatively impact our refining margins. 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. 43 | Management's Discussion and Analysis 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 two quarterly periods in 2025. Refined Product Prices We are impacted by refined product prices in two ways: (1) in terms of the prices we are able to sell our refined product for in our refining segment, and (2) in terms of the cost to acquire the refined products to meet refining production shortfalls (e.g., when we have outages), or to acquire refined fuel products we sell to our wholesale customers in our logistics segment. These prices largely depend on numerous factors beyond our control, including the supply of, and demand for, crude oil, gasoline and other refined petroleum products which, in turn, depend on, among other factors, changes in domestic and foreign economies, weather conditions, domestic and foreign political affairs, production levels, the availability of imports, the marketing of competitive fuels and government regulation. Our refineries produce the following products: Tyler Refinery El Dorado Refinery Big Spring Refinery Krotz Springs Refinery 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 44 | 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 2024 and for the two quarterly periods in 2025. Crack Spreads Crack spreads are used as benchmarks for predicting and evaluating a refinery's product margins by measuring the difference between the market price of feedstocks/crude oil and the resultant refined products. 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 2024 and for the two quarterly periods in 2025. 45 | Management's Discussion and Analysis RIN Volatility Environmental regulations and the political environment continue to affect our refining margins in the form of volatility in the price of RINs . We enter into future commitments to purchase or sell RINs at fixed prices and quantities, which are used to manage the costs of our credits for commitments required by the U.S. Environmental Protection Agency (“EPA”) to blend biofuels into fuel products ("RINs Obligation"). 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 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. The cost to purchase these additional RINs is a significant cash outflow for our business. Increases in the market prices of RINs generally adversely affect our results of operations through changes in fair value to our existing RINs Obligation, to the extent we do not have offsetting RINs inventory on hand or effective economic hedges through net forward purchase commitments. RINs prices are highly sensitive to regulatory and political influence and conditions, and therefore often do not correlate to movements in crude oil prices, refined product prices or crack spreads. 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 2024 and for the two quarterly periods in 2025. Energy Costs Energy costs are a significant element of our refining segment's earnings before interest, taxes, depreciation and amortization ("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 the 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. Refiners and other large-volume fuel consumers may be more or less susceptible to volatility in natural gas prices depending on their consumption levels as well as their capabilities to switch to more economical sources of fuel/energy. Additionally, geographic location of facilities makes consumers vulnerable to price differentials of natural gas available at different supply hubs. Within Delek’s geographic footprint, we source the majority of our natural gas from the Gulf Coast, and secondarily from the Permian, coinciding with the physical locations of our refineries. 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") for each of the quarterly periods in 2024 and for the two quarterly periods in 2025. 46 | Management's Discussion and Analysis Non-GAAP Measures Our management uses certain non-Generally Accepted Accounting Principles (“non-GAAP”) operational measures to evaluate our operating segment performance and non-GAAP financial measures to evaluate past performance and prospects for the future to supplement our GAAP financial information presented in accordance with U.S. GAAP. These financial and operational non-GAAP measures are important factors in assessing our operating results and profitability and include: • EBITDA - calculated as net income (loss) attributable to Delek adjusted to add back interest expense, income tax expense, depreciation and amortization; and • Refining margin - calculated as gross margin (which we define as sales minus cost of sales) adjusted for operating expenses and depreciation and amortization included in cost of sales. We believe these non-GAAP operational and financial measures are useful to investors, lenders, ratings agencies and analysts to assess our ongoing performance because, when reconciled to their most comparable GAAP financial measure, they provide improved comparability between periods through the exclusion of certain items that we believe are not indicative of our core operating performance and they may obscure our underlying results and trends. Non-GAAP measures have important limitations as analytical tools, because they exclude some, but not all, items that affect net earnings and operating income. These measures should not be considered substitutes for their most directly comparable U.S. GAAP financial measures. 47 | Management's Discussion and Analysis Non-GAAP Reconciliations The following table provides a reconciliation of segment EBITDA to the most directly comparable U.S. GAAP measure, net (loss) income attributable to Delek: Reconciliation of segment EBITDA to net loss attributable to Delek (in millions) Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 Refining segment EBITDA $ 95.1 $ 17.3 $ 78.9 $ 122.4 Logistics segment EBITDA 90.1 100.6 175.6 200.3 Segment EBITDA attributable to Delek $ 185.2 $ 117.9 $ 254.5 $ 322.7 Corporate expenses, eliminations and other 124.9 5.6 218.0 74.4 Interest expense, net 85.9 77.6 170.0 165.3 Income tax benefit (14.1) (8.8) (50.9) (16.4) Depreciation and amortization 94.1 88.4 195.4 180.1 (Income) loss from discontinued operations, net of tax 0.8 (7.7) 1.1 (10.9) Net loss attributable to Delek $ (106.4) $ (37.2) $ (279.1) $ (69.8) The following table provides a reconciliation of refining margin to the most directly comparable U.S. GAAP measure, gross margin: Reconciliation of refining margin to gross margin (in millions) Refining Segment Three Months Ended June 30, Six Months Ended June 30, 2025 2023 2025 2024 Total revenues $ 2,716.8 $ 3,307.2 $ 5,325.1 $ 6,415.5 Cost of sales 2,695.5 3,356.4 5,396.4 6,423.5 Gross margin $ 21.3 $ (49.2) $ (71.3) $ (8.0) Add back (items included in cost of sales): Operating expenses (excluding depreciation and amortization) 150.5 148.6 308.6 314.4 Depreciation and amortization 66.5 57.4 138.4 118.8 Refining margin $ 238.3 $ 156.8 $ 375.7 $ 425.2 48 | Management's Discussion and Analysis Summary Financial and Other Information The following table provides summary financial data for Delek (in millions): Summary Statement of Operations Data (1) Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 Net revenues $ 2,764.6 $ 3,308.1 $ 5,406.5 $ 6,436.1 Cost of sales: Cost of materials and other 2,415.0 3,025.5 4,814.5 5,758.4 Operating expenses (excluding depreciation and amortization presented below) 209.8 185.1 420.9 398.9 Depreciation and amortization 87.6 80.7 182.6 167.1 Total cost of sales 2,712.4 3,291.3 5,418.0 6,324.4 Operating expenses related to wholesale business (excluding depreciation and amortization presented below) 2.2 0.9 3.5 2.0 General and administrative expenses 76.6 60.2 138.1 121.2 Depreciation and amortization 6.5 7.7 12.8 13.0 Asset impairment — 22.1 — 22.1 Other operating expense (income), net 0.4 (78.7) (6.6) (80.4) Total operating costs and expenses 2,798.1 3,303.5 5,565.8 6,402.3 Operating (loss) income (33.5) 4.6 (159.3) 33.8 Interest expense, net 85.9 77.6 170.0 165.3 Income from equity method investments (22.2) (30.4) (35.5) (52.3) Other expense (income), net 6.2 — 4.6 (0.6) Total non-operating expenses, net 69.9 47.2 139.1 112.4 Loss from continuing operations before income tax benefit (103.4) (42.6) (298.4) (78.6) Income tax benefit (14.1) (8.8) (50.9) (16.4) Loss from continuing operations, net of tax (89.3) (33.8) (247.5) (62.2) Discontinued operations: (Loss) income from discontinued operations (1.0) 8.8 (1.4) 12.4 Income tax (benefit) expense (0.2) 1.1 (0.3) 1.5 (Loss) income from discontinued operations, net of tax (0.8) 7.7 (1.1) 10.9 Net loss (90.1) (26.1) (248.6) (51.3) Net income attributed to non-controlling interests 16.3 11.1 30.5 18.5 Net loss attributable to Delek $ (106.4) $ (37.2) $ (279.1) $ (69.8) (1) This information is presented at a summary level for your reference. See the Condensed Consolidated Statements of Income in Item 1. to this Quarterly Report on Form 10-Q for more detail regarding our results of operations and net income per share. We report operating results in two reportable segments: • Refining • Logistics Decisions concerning the allocation of resources and assessment of operating performance are made based on this segmentation. Management measures the operating performance of each of its reportable segments based on the segment EBITDA. 49 | Management's Discussion and Analysis Results of Operations Consolidated Results of Operations — Comparison of the Three and Six Months Ended June 30, 2025 versus the Three and Six Months Ended June 30, 2024 Net Loss Q2 2025 vs. Q2 2024 Consolidated net loss for the second quarter of 2025 was $90.1 million compared to net loss of $26.1 million for the second quarter of 2024. Consolidated net loss attributable to Delek for the second quarter of June 30, 2025 was $106.4 million, or $(1.76) per basic share, compared to a net loss of $37.2 million, or $(0.58) per basic share, for the second quarter 2024. Explanations for significant drivers impacting net income as compared to the comparable period of the prior year are discussed in the sections below. YTD 2025 vs. YTD 2024 Consolidated net loss for the six months ended June 30, 2025 was $248.6 million compared to a net loss of $51.3 million for the six months ended June 30, 2024. Consolidated net loss attributable to Delek for the six months ended June 30, 2025 was $279.1 million, or $(4.55) per basic share, compared to a loss of $69.8 million, or $(1.09) per basic share, for the six months ended June 30, 2024. Explanations for significant drivers impacting net loss as compared to the comparable period of the prior year are discussed in the sections below. Net Revenues Q2 2025 vs. Q2 2024 In the second quarter of 2025 and 2024, we generated net revenues of $2,764.6 million and $3,308.1 million, respectively, a decrease of $543.5 million, or 16.4%. The decrease in net revenues was primarily driven by the following factors: • in our refining segment, decreases in the average price of U.S. Gulf Coast gasoline of 15.2%, ULSD of 14.8% and U.S. Gulf Coast HSD of 2.1% and decreased sales volume (including purchased products); and • in our logistics segment, decreased revenue of $18.4 million in our West Texas marketing operations. These decreases were partially offset by the following: • incremental revenue associated with the H2O Midstream Acquisition and Gravity Acquisition of $15.3 million and $24.0 million, respectively. YTD 2025 vs. YTD 2024 We generated net revenues of $5,406.5 million and $6,436.1 million during the six months ended June 30, 2025 and 2024, respectively, a decrease of $1,029.6 million, or 16.0%. 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 13.3% and ULSD of 13.4% and decreased sales volumes (including purchased products), partially offset by an increase in the average price of U.S. Gulf Coast HSD of 3.1%; and • in our logistics segment, decreased revenue of $21.1 million in our West Texas marketing operations. These decreases were partially offset by the following: • incremental revenue associated with the H2O Midstream Acquisition and Gravity Acquisition of $31.8 million and $46.8 million, respectively. Total Operating Costs and Expenses Cost of Materials and Other Q2 2025 vs. Q2 2024 Cost of materials and other was $2,415.0 million for the second quarter of 2025 compared to $3,025.5 million for the second quarter of 2024, a decrease of $610.5 million, or 20.2%. 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 a 21.1% decrease in the average cost of WTI Cushing crude oil and a 21.2% decrease in the average cost of WTI Midland crude oil and a decrease in sales volume (including purchased products). These decreases were partially offset by the following: • incremental costs associated with the H2O Midstream Acquisition and Gravity Acquisition; and • an increase in RINs pricing. 50 | Management's Discussion and Analysis YTD 2025 vs. YTD 2024 Cost of materials and other was $4,814.5 million for the six months ended June 30, 2025, compared to $5,758.4 million for six months ended June 30, 2024, a decrease of $943.9 million, or 16.4%. The net decrease in cost of materials and other primarily related to the following: • a decrease in the cost of crude oil feedstocks at the refineries, including a 14.4% decrease in the average cost of WTI Cushing crude oil and a 14.6% 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; and • an increase in RINs pricing. Operating Expenses Q2 2025 vs. Q2 2024 Operating expenses (included in both cost of sales and other operating expenses) were $212.0 million for the second quarter of 2025 compared to $186.0 million for the second quarter of 2024, an increase of $26.0 million, or 14.0%. The increase in operating expenses was primarily driven by the following: • an increase in natural gas costs; • an increase in employee costs; • an increase in maintenance costs; and • incremental expenses associated with the H2O Midstream Acquisition and Gravity Acquisition. These increases were partially offset by the following: • a decrease in insurance costs; and • a decrease in lease and rental costs. YTD 2025 vs. YTD 2024 Operating expenses (included in both cost of sales and other operating expenses) were $424.4 million for the six months ended June 30, 2025 compared to $400.9 million in six months ended June 30, 2024, an increase of $23.5 million, or 5.9%. The increase in operating expenses was primarily driven by the following: • an increase in natural gas costs; • an increase in employee costs; • an increase in maintenance costs; and • incremental expenses associated with the H2O Midstream Acquisition and Gravity Acquisition. These increases were partially offset by the following: • a decrease in insurance costs; and • a decrease in lease and rental costs. General and Administrative Expenses Q2 2025 vs. Q2 2024 General and administrative expenses were $76.6 million for the second quarter of 2025 compared to $60.2 million for the second quarter of 2024, an increase of $16.4 million, or 27.2%. The increase was primarily driven by increased restructuring costs and incentive compensation offset by decreases in employee costs. YTD 2025 vs. YTD 2024 General and administrative expenses were $138.1 million for the six months ended June 30, 2025 compared to $121.2 million in six months ended June 30, 2024, an increase of $16.9 million, or 13.9%. The increase was primarily driven by increased restructuring costs and incentive compensation offset by decreases in employee costs. 51 | Management's Discussion and Analysis Depreciation and Amortization Q2 2025 vs. Q2 2024 Depreciation and amortization (included in both cost of sales and other operating expenses) was $94.1 million for the second quarter of 2025 compared to $88.4 million for the second quarter of 2024, an increase of $5.7 million, or 6.4%. 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. YTD 2025 vs. YTD 2024 Depreciation and amortization (included in both cost of sales and other operating expenses) was $195.4 million for the six months ended June 30, 2025 compared to $180.1 million in 2024, an increase of $15.3 million, or 8.5%. 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. Asset Impairment Q2 2024 vs. Q2 2023 Asset impairment was $22.1 million for the three months ended June 30, 2024. We recorded $22.1 million asset impairment as a result of our second quarter 2024 decision to idle three biodiesel facilities, while exploring viable and sustainable alternatives. There was no asset impairment for the three months ended June 30, 2025. YTD 2024 vs. YTD 2023 Asset impairment was $22.1 million for the six months ended June 30, 2024. We recorded $22.1 million asset impairment as a result of our second quarter 2024 decision to idle the biodiesel facilities, while exploring viable and sustainable alternatives. There was no asset impairment for the six months ended June 30, 2025. 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 Q2 2025 vs. Q2 2024 Other operating expense (income), net decreased by $79.1 million in the second quarter of 2025 to an expense of $0.4 million compared to income of $78.7 million in the second quarter of 2024. The decrease was primarily due to the following: • for the three months ended June 30, 2024, we recorded a net gain of $53.4 million in the 2024 period related to a property settlement; • for the three months ended June 30, 2024, we recorded a gain of $25.1 million related to insurance proceeds and other third party recoveries related to the 2021 El Dorado refinery fire and the 2022 Big Spring refinery fire related to property damage and business interruption claims related to the fire and freeze events that occurred in 2021; and • for the three months ended June 30, 2024, we recorded a gain of $8.3 million related to Delek Logistics' eminent domain settlement while for the six months ended June 30, 2025, we recorded a gain of $4.3 related to Delek Logistics' eminent domain settlement. These decreases were partially offset by the following: • a decrease in hedge losses in the second quarter of 2025 compared to the second quarter of 2024 associated with our derivatives. YTD 2025 vs. YTD 2024 Other operating income, net was $6.6 million and $80.4 million for the six months ended June 30, 2025 and 2024, respectively, a decrease of $73.8 million. The decrease was primarily driven by the following: • for the six months ended June 30, 2024, we recorded a net gain of $53.4 million in the 2024 period related to a property settlement; • for the six months ended June 30, 2024, we recorded a gain of $28.7 million related to insurance proceeds and other third party recoveries related to the 2021 El Dorado refinery fire, the 2021 freeze events and the 2022 Big Spring refinery fire related to property damage and business interruption claims, related to the fire and freeze events that occurred in 2021; and • for the six months ended June 30, 2024, we recorded a gain of $8.3 million related to Delek Logistics' eminent domain settlement while for the six months ended June 30, 2025, we recorded a gain of $4.3 related to Delek Logistics' eminent domain settlement. 52 | Management's Discussion and Analysis Non-Operating Expenses, Net Interest Expense, Net Q2 2025 vs. Q2 2024 Interest expense, net increased by $8.3 million, or 10.7%, to $85.9 million in the second quarter of 2025 compared to $77.6 million in the second quarter of 2024, primarily driven by the following: • an increase in net average borrowings outstanding (including the obligations under the inventory intermediation agreements which have an associated interest charge) of approximately $517.3 million in the second quarter of 2025 (calculated as a simple average of beginning borrowings/obligations and ending borrowings/obligations for the period) compared to the second quarter of 2024; and • hedge losses associated with our interest rate swap. The increase was partially offset by the following: • a decrease in the average effective interest rate of 126 basis points in the second quarter of 2025 compared to the second quarter of 2024 (where effective interest rate is calculated as interest expense divided by the net average borrowings/obligations outstanding). YTD 2025 vs. YTD 2024 Interest expense, net was $170.0 million in the six months ended June 30, 2025, compared to $165.3 million for six months ended June 30, 2024, an increase of $4.7 million, or 2.8% primarily due to 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 $360.9 million during the six months ended June 30, 2025 (calculated as a simple average of beginning borrowings/obligation and ending borrowings/obligation for the period) compared to the six months ended June 30, 2024; and • hedge losses associated with our interest rate swap. This increase was partially offset by the following: • a decrease in the average effective interest rate of 131 basis points during the six months ended June 30, 2025 compared to the six months ended June 30, 2024 (where effective interest rate is calculated as interest expense divided by the net average borrowings/obligations outstanding). Results from Equity Method Investments Q2 2025 vs. Q2 2024 We recognized income of $22.2 million from equity method investments during the second quarter of 2025, compared to $30.4 million for the second quarter of 2024, a decrease of $8.2 million. This decrease was primarily driven by the following: • a decrease in income from our investment in W2W Holdings LLC to $5.9 million during the three months ended June 30, 2025 from $10.6 million in the three months ended June 30, 2024; and • a decrease in income from our investment in Red River Pipeline Company LLC to $2.8 million during the three months ended June 30, 2025 from $5.5 million in the three months ended June 30, 2024. YTD 2025 vs. YTD 2024 We recognized income from equity method investments of $35.5 million for the six months ended June 30, 2025, compared to $52.3 million for the six months ended June 30, 2024, a decrease of $16.8 million. This decrease was primarily driven by the following: • a decrease in income from our investment in W2W Holdings LLC to $11.2 million during the six months ended June 30, 2025 from $20.0 million in the six months ended June 30, 2024; and • a decrease in income from our investment in Red River Pipeline Company LLC to $5.0 million during the six months ended June 30, 2025 from $10.7 million in the six months ended June 30, 2024. Other Expense (Income), net Q2 2025 vs. Q2 2024 Other expense (income), net increase by $6.2 million, or 100.0%, to $6.2 million in the second quarter of 2025 compared to $0.0 million in the second quarter of 2024, primarily driven by the following: • an impairment recognized on two investments held at cost within other non-current assets for $8.6 million. Refer to Note 12 condensed consolidated financial statements in Item 1. Financial Statements, of this Quarterly Report on Form 10-Q for further information. 53 | Management's Discussion and Analysis YTD 2025 vs. YTD 2024 Other expense (income), net was $4.6 million of expense in the six months ended June 30, 2025, compared to $0.6 million of income for six months ended June 30, 2024, an increase of $5.2 million, or 866.7% primarily due to the following: • an impairment recognized on two investments held at cost within other non-current assets for $8.6 million. Refer to Note 12 condensed consolidated financial statements in Item 1. Financial Statements, of this Quarterly Report on Form 10-Q for further information. Income Taxes Q2 2025 vs. Q2 2024 For the second quarter of 2025, we recorded an income tax benefit of $14.1 million from continuing operations compared to an income tax benefit of $8.8 million from continuing operations for the second quarter of 2024, primarily driven by the following: • an increase in pre-tax net loss of $60.8 million; and • our effective tax rates were 13.6% and 20.7% for the three months ended June 30, 2025 and 2024, respectively, due to the impact of fixed dollar permanent differences on the tax rate and changes to valuation allowances on certain attributes. YTD 2025 vs. YTD 2024 For the six months ended June 30, 2025, we recorded an income tax benefit of $50.9 million from continuing operations compared to an income tax benefit of $16.4 million from continuing operations for the six months ended June 30, 2024, primarily driven by the following: • an increase in pre-tax net loss of $219.8 million; and • our effective tax rates were 17.1% and 20.9% for the six months ended June 30, 2025 and 2024, respectively, due to the impact of fixed dollar favorable permanent differences and changes in valuation allowance on certain attributes when calculating an estimated annual effective tax rate. Refer to Note 14 of our condensed consolidated financial statements in Item 1. Financial Statements, of this Quarterly Report on Form 10-Q for further information. 54 | Management's Discussion and Analysis Refining Segment The tables and charts below set forth selected information concerning our refining segment operations ($ in millions, except per barrel amounts): Selected Refining Financial Information Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 Revenues $ 2,716.8 $ 3,307.2 $ 5,325.1 $ 6,415.5 Cost of materials and other 2,478.5 3,150.4 4,949.4 5,990.3 Refining Margin $ 238.3 $ 156.8 $ 375.7 $ 425.2 Operating expenses (excluding depreciation and amortization) $ 150.5 $ 148.6 $ 308.6 $ 314.4 Refining segment EBITDA $ 95.1 $ 17.3 $ 78.9 $ 122.4 Factors Impacting Refining Profitability Our profitability in the refining segment is substantially determined by the difference between the cost of the crude oil feedstocks we purchase and the price of the refined products we sell, referred to as the "crack spread", "refining margin" or "refined product margin". Refining margin is used as a metric to assess a refinery's product margins against market crack spread trends, where "crack spread" is a measure of the difference between market prices for crude oil and refined products and is a commonly used proxy within the industry to estimate or identify trends in refining margins. The cost to acquire feedstocks and the price of the refined petroleum products we ultimately sell from our refineries depend on numerous factors beyond our control, including the supply of, and demand for, crude oil, gasoline and other refined petroleum products which, in turn, depend on, among other factors, changes in domestic and foreign economies, weather conditions such as hurricanes or tornadoes, local, domestic and foreign political affairs, global conflict, production levels, the availability of imports, the marketing of competitive fuels and government regulation. Other significant factors that influence our results in the refining segment include operating costs (particularly the cost of natural gas used for fuel and the cost of electricity), seasonal factors, refinery utilization rates and planned or unplanned maintenance activities or turnarounds. Moreover, while the fluctuations in the cost of crude oil are typically reflected in the prices of light refined products, such as gasoline and diesel fuel, the price of other residual products, such as asphalt, coke, carbon black oil and liquefied petroleum gas ("LPG") are less likely to move in parallel with crude cost. This could cause additional pressure on our realized margin during periods of rising or falling crude oil prices. Additionally, our margins are impacted by the pricing differentials of the various types and sources of crude oil we use at our refineries and their relation to product pricing. Our crude slate is predominantly comprised of WTI crude oil. Therefore, favorable differentials of WTI compared to other crude will favorably impact our operating results, and vice versa. Additionally, because of our gathering system presence in the Midland area and the significant source of crude specifically from that region into our network, a widening of the WTI Cushing less WTI Midland spread will favorably influence the operating margin for our refineries. Alternatively, a narrowing of this differential will have an adverse effect on our operating margins. Global product prices are influenced by the price of Brent, which is a global benchmark crude. Global product prices influence product prices in the U.S. As a result, our refineries are influenced by the spread between Brent and WTI Midland. The Brent less WTI Midland spread represents the differential between the average per barrel price of Brent crude oil and the average per barrel price of WTI Midland crude oil. A widening of the spread between Brent and WTI Midland will favorably influence our refineries' operating margins. Also, the Krotz Springs refinery is influenced by the spread between Brent and LLS. The Brent less LLS spread represents the differential between the average per barrel price of Brent and the average per barrel price of LLS crude oil. A discount in LLS relative to Brent will favorably influence the Krotz Springs refinery operating margin. Finally, Refining EBITDA is impacted by regulatory costs associated with the cost of RINs as well as energy costs, including the cost of natural gas. In periods of unfavorable regulatory sentiment, RINs prices can increase at higher rates than crack spreads, or even when crack spreads are declining. This can be particularly impactful on smaller refineries, where the operating cost structure does not have as much scalability as larger refineries. Additionally, volatility in energy costs, which are captured in our operating expenses and impact our Refining EBITDA, can significantly impact our ability to capture crack spreads, with natural gas representing the most significant component. Within Delek’s geographic footprint, we source the majority of our natural gas from the Gulf Coast, and secondarily from the Permian, and we do not currently have the capability at our refineries to switch our energy consumption to utilize alternative sources of fuel. For this reason, unfavorable Gulf Coast (Henry Hub) differentials can impact our crack spread capture. 55 | Management's Discussion and Analysis The cost to acquire the refined fuel products we sell to our wholesale customers in our logistics segment largely depends on numerous factors beyond our control, including the supply of, and demand for, crude oil, gasoline and other refined petroleum products which, in turn, depend on, among other factors, changes in domestic and foreign economies, weather conditions, domestic and foreign political affairs, production levels, the availability of imports, the marketing of competitive fuels and government regulation. In addition to the above, it continues to be a strategic and operational objective to manage price and supply risk related to crude oil that is used in refinery production, and to develop strategic sourcing relationships. For that purpose, from a pricing perspective, we enter into commodity derivative contracts to manage our price exposure to our inventory positions, future purchases of crude oil and ethanol, future sales of refined products or to fix margins on future production. We also enter into future commitments to purchase or sell RINs at fixed prices and quantities, which are used to manage our RINs Obligation. Additionally, from a sourcing perspective, we often enter into purchase and sale contracts with vendors and customers or take physical or financial commodity positions for crude oil that may not be used immediately in production, but that may be used to manage the overall supply and availability of crude expected to ultimately be needed for production and/or to meet minimum requirements under strategic pipeline arrangements, and also to optimize and hedge availability risks associated with crude that we ultimately expect to use in production. Such transactions are inherently based on certain assumptions and judgments made about the current and possible future availability of crude. Therefore, when we take physical or financial positions for optimization purposes, our intent is generally to take offsetting positions in quantities and at prices that will advance these objectives while minimizing our positional and financial statement risk. However, because of the volatility of the market in terms of pricing and availability, it is possible that we may have material positions with timing differences or, more rarely, that we are unable to cover a position with an offsetting position as intended. Such differences could have a material impact on the classification of resulting gains/losses, assets or liabilities, and could also significantly impact Refining EBITDA. Refinery Statistics Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 Total Refining Segment Days in period 91 91 181 182 Total sales volume - refined product (average bpd) (1) 315,259 320,514 305,132 313,541 Total production (average bpd) 311,298 311,957 298,505 302,340 Crude oil 304,831 303,177 288,597 288,865 Other feedstocks 11,494 12,877 14,241 17,487 Total throughput (average bpd): 316,325 316,054 302,838 306,352 Crude Slate: (% based on amount received in period) WTI crude oil 77.5 % 72.0 % 72.2 % 71.7 % Gulf Coast Sweet Crude 6.5 % 7.5 % 7.5 % 6.9 % Local Arkansas crude oil 3.3 % 3.2 % 3.5 % 3.3 % Other 12.7 % 17.3 % 16.8 % 18.1 % Crude utilization (% based on nameplate capacity) 100.9 % 100.4 % 95.6 % 95.7 % 56 | Management's Discussion and Analysis Refinery Statistics (continued) Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 Tyler, TX Refinery Days in period 91 91 181 182 Products manufactured (average bpd): Gasoline 36,369 36,539 35,297 36,953 Diesel/Jet 33,370 33,705 31,901 31,905 Petrochemicals, LPG, natural gas liquids ("NGLs") 2,044 1,873 1,953 1,928 Other 662 1,674 1,031 1,445 Total production 72,445 73,791 70,182 72,231 Throughput (average bpd): Crude Oil 73,249 73,818 70,868 70,805 Other feedstocks 1,177 1,849 974 3,161 Total throughput 74,426 75,667 71,842 73,966 Per barrel of throughput: Operating expenses $ 4.58 $ 4.83 $ 5.11 $ 5.05 Crude Slate: (% based on amount received in period) WTI crude oil 74.1 % 80.1 % 73.9 % 81.3 % East Texas crude oil 22.8 % 19.9 % 23.9 % 18.7 % Other 3.1 % 2.2 % — % El Dorado, AR Refinery Days in period 91 91 181 182 Products manufactured (average bpd): Gasoline 38,263 38,659 37,809 40,100 Diesel/Jet 30,987 31,880 29,472 30,958 Petrochemicals, LPG, NGLs 1,018 1,003 980 1,293 Asphalt 7,871 9,193 7,360 8,749 Other 1,266 2,089 1,417 1,442 Total production 79,405 82,824 77,038 82,542 Throughput (average bpd): Crude Oil 78,592 83,312 75,275 81,747 Other feedstocks 2,829 1,421 3,331 2,412 Total throughput 81,421 84,733 78,606 84,159 Per barrel of throughput: Operating expenses $ 4.38 $ 4.12 $ 4.75 $ 4.41 Crude Slate: (% based on amount received in period) WTI crude oil 83.1 % 66.5 % 76.3 % 66.5 % Local Arkansas crude oil 12.9 % 11.7 % 13.6 % 11.6 % Other 4.0 % 21.8 % 10.1 % 21.9 % 57 | Management's Discussion and Analysis Refinery Statistics (continued) Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 Big Spring, TX Refinery Days in period 91 91 181 182 Products manufactured (average bpd): Gasoline 35,506 34,271 32,469 32,123 Diesel/Jet 27,884 27,086 23,478 24,766 Petrochemicals, LPG, NGLs 4,901 3,287 4,027 4,362 Asphalt 2,009 2,841 2,274 2,464 Other 4,003 5,928 3,941 4,795 Total production 74,303 73,413 66,189 68,510 Throughput (average bpd): Crude oil 71,449 69,342 62,435 64,395 Other feedstocks 4,210 4,701 5,147 5,053 Total throughput 75,659 74,043 67,582 69,448 Per barrel of refined throughput: Operating expenses $ 6.67 $ 6.35 $ 7.41 $ 7.15 Crude Slate: (% based on amount received in period) WTI crude oil 77.8 % 70.2 % 71.3 % 71.4 % WTS crude oil 22.2 % 29.8 % 28.7 % 28.6 % Krotz Springs, LA Refinery Days in period 91 91 181 182 Products manufactured (average bpd): Gasoline 40,983 39,037 42,067 38,907 Diesel/Jet 32,908 32,468 32,616 30,356 Heavy Oils 4,596 1,033 3,917 1,882 Petrochemicals, LPG, NGLs 6,660 4,924 6,496 5,328 Other — 4,467 — 2,584 Total production 85,147 81,929 85,096 79,057 Throughput (average bpd): Crude Oil 81,541 76,705 80,019 71,918 Other feedstocks 3,278 4,906 4,789 6,861 Total throughput 84,819 81,611 84,808 78,779 Per barrel of throughput: Operating expenses $ 5.13 $ 4.95 $ 5.24 $ 5.43 Crude Slate: (% based on amount received in period) WTI Crude 74.8 % 72.1 % 67.6 % 68.6 % Gulf Coast Sweet Crude 25.2 % 27.2 % 27.7 % 26.2 % Other — % 0.7 % 4.7 % 5.2 % (1) Includes inter-refinery sales and sales to other segments which are eliminated in consolidation. See tables below. 58 | Management's Discussion and Analysis Included in the refinery statistics above are the following sales to other segments: Refinery Sales to Other Segments Three Months Ended June 30, Six Months Ended June 30, (in barrels per day) 2025 2024 2025 2024 Big Spring refined product sales to other Delek segments 10,712 23,157 10,789 21,742 Pricing Statistics (average for the period presented) Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 WTI — Cushing crude oil (per barrel) $ 63.81 $ 80.83 $ 67.61 $ 78.95 WTI — Midland crude oil (per barrel) $ 64.42 $ 81.73 $ 68.44 $ 80.17 WTS — Midland crude oil (per barrel) $ 63.72 $ 80.99 $ 67.80 $ 79.26 LLS (per barrel) $ 66.15 $ 83.69 $ 70.21 $ 81.73 Brent (per barrel) $ 66.71 $ 85.06 $ 70.81 $ 83.42 U.S. Gulf Coast 5-3-2 crack spread (per barrel) (1) $ 20.19 $ 18.12 $ 18.60 $ 20.55 U.S. Gulf Coast 3-2-1 crack spread (per barrel) (1) $ 19.81 $ 17.72 $ 17.97 $ 19.80 U.S. Gulf Coast 2-1-1 crack spread (per barrel) (1) $ 14.72 $ 13.29 $ 13.47 $ 16.29 U.S. Gulf Coast unleaded gasoline (per gallon) $ 1.95 $ 2.30 $ 1.96 $ 2.26 Gulf Coast ultra-low sulfur diesel (per gallon) $ 2.08 $ 2.44 $ 2.19 $ 2.53 U.S. Gulf Coast high sulfur diesel (per gallon) $ 1.85 $ 1.89 $ 1.98 $ 1.92 Natural gas (per MMBTU) $ 3.51 $ 2.37 $ 3.69 $ 2.24 (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 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 our Krotz Springs refinery, we compare our per barrel refining margin to the Gulf Coast 2-1-1 crack spread consisting of (Argus pricing) LLS crude oil, (Argus pricing) U.S. Gulf Coast CBOB gasoline and (Platts pricing) U.S. Gulf Coast Pipeline No. 2 heating oil (high sulfur diesel). The Tyler refinery's crude oil input is primarily WTI Midland and East Texas, while the El Dorado refinery's crude input is primarily a combination of WTI Midland, local Arkansas and other domestic inland crude oil. The Big Spring refinery’s crude oil input is primarily comprised of WTS and WTI Midland. The Krotz Springs refinery’s crude oil input is primarily comprised of LLS and WTI Midland. 59 | Management's Discussion and Analysis Refining Segment Operational Comparison of the Three and Six Months Ended June 30, 2025 versus the Three and Six Months Ended June 30, 2024 Revenues Q2 2025 vs. Q2 2024 Revenues for the refining segment decreased by $590.4 million, or 17.9%, in the second quarter of 2025 compared to the second quarter of 2024. The decrease was primarily driven by the following: • a decrease in the average price of U.S. Gulf Coast gasoline of 15.2%, ULSD of 14.8% and U.S. Gulf Coast HSD of 2.1%; and • a decrease in sales volumes (including purchased products). Net revenues included sales to our logistics segment of $84.4 million and $106.7 million for the three months ended June 30, 2025 and June 30, 2024, respectively. We eliminate this intercompany revenue in consolidation. YTD 2025 vs. YTD 2024 Revenues for the refining segment decreased $1,090.4 million, or 17.0%, in the six months ended June 30, 2025 compared to the six months ended June 30, 2024. The decrease was primarily driven by the following: • a decrease in the average price of U.S. Gulf Coast gasoline of 13.3% and ULSD of 13.4%; and • a decrease in sales volumes (including purchased products). These decreases were partially offset by the following: • an increase in the average price of U.S. Gulf Coast HSD of 3.1%. Revenues included sales to our logistics segment of $174.4 million and $199.6 million for the six months ended June 30, 2025 and 2024, respectively. We eliminate this intercompany revenue in consolidation. Cost of Materials and Other Q2 2025 vs. Q2 2024 Cost of materials and other decreased by $671.9 million, or 21.3%, in the second quarter of 2025 compared to the second quarter of 2024. The decrease was primarily driven by the following: • decreases in the cost of WTI Cushing crude oil, from an average of $80.83 per barrel to an average of $63.81, or 21.1%, and decreases in the cost of WTI Midland crude oil, from an average of $81.73 per barrel to an average of $64.42, or 21.2%; • a decrease in 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. 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 RINs pricing. YTD 2025 vs. YTD 2024 Cost of materials and other decreased $1,040.9 million, or 17.4%, in the six months ended June 30, 2025 compared to the six months ended June 30, 2024. This decrease was primarily driven by the following: • decreases in the cost of WTI Cushing crude oil, from an average of $78.95 per barrel to an average of $67.61, or 14.4%; and decreases in the cost of WTI Midland crude oil, from an average of $80.17 per barrel to an average of $68.44, or 14.6%; • a decrease in sales volumes (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. 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 RINs pricing. 60 | Management's Discussion and Analysis Our refining segment purchases finished product from our logistics segment and has multiple service agreements with our logistics segment which, among other things, require the refining segment to pay terminalling and storage fees based on the throughput volume of crude and finished product in the logistics segment pipelines and the volume of crude and finished product stored in the logistics segment storage tanks, subject to minimum volume commitments. These costs and fees were $114.0 million and $156.5 million during the three months ended June 30, 2025 and 2024, respectively. These costs and fees were $239.9 million and $295.7 million during the six months ended June 30, 2025 and 2024, respectively. We eliminate these intercompany fees in consolidation. Operating Expenses Q2 2025 vs. Q2 2024 Operating expenses increased by $1.9 million, or 1.3%, in the second quarter of 2025 compared to the second quarter of 2024, driven by the following: • higher natural gas prices in 2025; and • an increased outside services. These increases were partially offset by the following: • a decrease in insurance costs and lease and rental costs. YTD 2025 vs. YTD 2024 Operating expenses decreased $5.8 million, or 1.8%, in the six months ended June 30, 2025, compared to the six months ended June 30, 2024. The decrease in operating expenses was primarily driven by the following: • a decrease in employee costs, insurance costs, and lease and rental costs. These decreases were partially offset by the following: • higher natural gas prices; and • an increase in outside services. Refining Margin Q2 2025 vs. Q2 2024 Refining segment margin increased by $81.5 million, or 52.0%, in the second quarter of 2025 compared to the second quarter of 2024, with a refining margin percentage of 8.8% as compared to 4.7% for the second quarter of 2025 and 2024, respectively, primarily driven by the following: • a 11.4% increase in the 5-3-2 crack spread (the primary measure for the Tyler refinery and El Dorado refinery), a 11.8% increase in the average Gulf Coast 3-2-1 crack spread (the primary measure for the Big Spring refinery) and a 10.8% increase in the average Gulf Coast 2-1-1 crack spread (the primary measure for the Krotz Springs refinery); and • a decrease in lease expense as a result of reclassification of certain fees with Delek Logistics from lease expense to interest expense under finance lease accounting. These finance leases have no impact to the Delek US consolidated results as these amounts eliminate in consolidation. These increases were partially offset by the following: • a decrease in sales volume; and • an increase in RINs pricing. YTD 2025 vs. YTD 2024 Refining margin decreased by $49.5 million, or 11.6%, for the six months ended June 30, 2025 compared to the six months ended June 30, 2024, with a refining margin percentage of 7.1% as compared to 6.6% for the six months ended June 30, 2025 and 2024, respectively, primarily driven by the following: • a 9.5% decrease in the 5-3-2 crack spread (the primary measure for the Tyler refinery and El Dorado refinery), a 9.2% decrease in the average Gulf Coast 3-2-1 crack spread (the primary measure for the Big Spring refinery) and a 17.3% 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); and • an increase in RINs pricing. 61 | Management's Discussion and Analysis These decreases were partially offset by the following: • a decrease in lease expense as a result of reclassification of certain fees with Delek Logistics from lease expense to interest expense under finance lease accounting. These finance leases have no impact to the Delek US consolidated results as these amounts eliminate in consolidation. EBITDA Q2 2025 vs. Q2 2024 EBITDA increased by $77.8 million, or 449.7%, in the three months ended June 30, 2025 compared to the three months ended June 30, 2024, primarily due to an increase in refining margin driven by increased crack spreads partially offset by a decrease in sales volume and insurance and third party proceeds received in 2024 related to the fires in 2021 and 2022. YTD 2025 vs. YTD 2024 EBITDA decreased by $43.5 million, or 35.5% for the six months ended June 30, 2025 compared to the six months ended June 30, 2024, primarily due to a decrease in refining margin driven by decreased crack spreads, decreased sales volumes, and insurance and third party proceeds received in 2024 related to the fires in 2021 and 2022. 62 | Management's Discussion and Analysis Logistics Segment The table below sets forth certain information concerning our logistics segment operations ($ in millions, except per barrel amounts): Selected Logistics Financial and Operating Information Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 Revenues $ 246.4 $ 264.6 $ 496.3 $ 516.7 Cost of materials and other $ 119.3 $ 138.1 $ 248.4 $ 261.8 Operating expenses (excluding depreciation and amortization) $ 38.2 $ 29.6 $ 79.1 $ 61.5 EBITDA $ 90.1 $ 100.6 $ 175.6 $ 200.3 Operating Information: Gathering & Processing: (average bpd) Lion Pipeline System: Crude pipelines (non-gathered) 71,220 73,320 66,580 73,166 Refined products pipelines 53,597 60,575 54,797 61,904 SALA Gathering System 9,983 13,024 10,151 13,005 East Texas Crude Logistics System 33,101 23,259 30,027 21,481 Midland Gathering Assets 207,183 206,933 209,059 210,196 Plains Connection System 158,881 210,033 169,004 233,438 Delaware Gathering Assets: Natural gas gathering and processing (Mcfd) (1) 60,940 76,237 60,378 76,280 Crude oil gathering (average bpd) 137,167 123,927 129,737 123,718 Water disposal and recycling (average bpd) 116,504 116,499 122,468 122,881 Midland Water Gathering System: Water disposal and recycling (average bpd) 600,891 — 613,817 — Wholesale Marketing & Terminalling: East Texas - Tyler refinery sales volumes (average bpd) (2) 67,516 71,082 67,695 68,779 Big Spring wholesale marketing throughputs (average bpd) — 81,422 — 79,019 West Texas wholesale marketing throughputs (average bpd) 10,757 11,381 10,791 10,678 West Texas wholesale marketing margin per barrel $ 4.12 $ 2.99 $ 2.88 $ 2.60 Terminalling throughputs (average bpd) (3) 150,971 159,260 144,030 147,937 (1) Mcfd - average thousand cubic feet per day. (2) Excludes jet fuel and petroleum coke. (3) Consists of terminalling throughputs at our Tyler, Big Spring, Big Sandy and Mount Pleasant, Texas terminals, El Dorado and North Little Rock, Arkansas terminals and Memphis and Nashville, Tennessee terminals. Logistics revenue is largely based on fixed-fee or tariff rates charged for throughput volumes running through our logistics network, where many of those volumes are contractually protected by minimum volume commitments ("MVCs"). To the extent that our logistics volumes are not subject to MVCs, our Logistics revenue may be negatively impacted in periods where our customers are experiencing economic pressures or reductions in demand for their products. Additionally, certain of our throughput arrangements contain deficiency credit provisions that may require us to defer excess MVC fees collected over actual throughputs to apply toward MVC deficiencies in future periods. With respect to our equity method investments in pipeline joint ventures, our earnings from those investments (which is based on our pro rata ownership percentage of the joint venture's recognized net income or loss) are directly impacted by the operations of those joint ventures. Items impacting the joint venture net income (loss) may include (but are not limited to) the following: long-term throughput contractual arrangements and related MVCs and, in some cases, deficiency credit provisions; the demand for walk-up nominations; applicable rates or tariffs; long-lived asset or other impairments assessed at the joint venture level; and pipeline releases or other contingent liabilities. With respect to our West Texas marketing activities, our profitability is dependent upon the cost of landed product versus the rack price of refined product sold. Our logistics segment is generally protected from commodity price risk because inventory is purchased and then immediately sold at the rack. 63 | Management's Discussion and Analysis Logistics Segment Operational Comparison of the Three and Six Months Ended June 30, 2025 versus the Three and Six Months Ended June 30, 2024 Revenues Q2 2025 vs. Q2 2024 Net revenues decreased by $18.2 million, or 6.9%, in the second quarter of 2025 compared to the second quarter of 2024, primarily driven by: • decreased revenue of $18.4 million in our West Texas marketing operations driven by decreases in average sales prices per gallon, a net decrease in volumes sold, partially offset by an increase in RINs revenue: ◦ the average sales prices per gallon of gasoline and diesel sold decreased by $0.34 and $0.33 per gallon, respectively; ◦ the volumes of gasoline sold decreased by 2.7 million and the volumes of diesel sold increased by 0.3 million gallons; ◦ RINs revenue increased from $1.3 million in the second quarter of 2024 to $2.2 million in the second quarter of 2025, due to increases in RINs prices; and • decrease of $7.4 million due to the assignment of the Big Spring refinery marketing agreement to Delek Holdings in the third quarter of 2024; • 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; and • partially offset by incremental revenue associated with Gravity and H2O Midstream acquisitions of $15.3 million and $24.0 million, respectively. Net revenues included sales to our refining segment of $114.0 million and $156.5 million for the three months ended June 30, 2025 and June 30, 2024, respectively, and sales to corporate and other of $0.1 million and $0.4 million for the three months June 30, 2025 and 2024, respectively. We eliminate this intercompany revenue in consolidation. YTD 2025 vs. YTD 2024 Net revenues decreased by $20.4 million, or 3.9%, in the six months ended June 30, 2025 compared to the six months ended June 30, 2024 primarily driven by the following: • decreased revenue of $21.1 million in our West Texas marketing operations primarily driven by decreases in average sales prices per gallon, partially offset by net increases in volumes sold and an increase in RINs revenue: ◦ the average sales prices per gallon of gasoline and diesel sold decreased by $0.28 and $0.32 per gallon, respectively; ◦ the volumes of diesel sold increased by 2.0 million and the average volumes of gasoline sold decreased by 1.6 million gallons; and ◦ RINs revenue increased from $2.4 million in the second quarter of 2024 to $3.9 million in the second quarter of 2025, due to increased RINs prices. • 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 $14.2 million due to the assignment of the Big Spring Refinery marketing agreement to Delek Holdings in the third quarter of 2024; and • partially offset by incremental revenue associated with the Gravity and H2O Midstream Acquisitions of $46.8 million and $31.8 million, respectively. Revenues included sales to our refining segment of $239.9 million and $295.7 million for the six months ended June 30, 2025 and 2024, respectively, and sales to corporate and other of $0.5 million and $0.8 million for the six months ended June 30, 2025 and 2024, respectively. We eliminate this intercompany revenue in consolidation. Cost of Materials and Other Q2 2025 vs. Q2 2024 Cost of materials and other for the logistics segment decreased by $18.8 million, or 13.6%, in the second quarter of 2025 compared to the second quarter of 2024. The decrease was primarily driven by the following: • decreased costs of materials and other of $19.3 million in our West Texas marketing operations primarily driven by decreases in average cost per gallon of gasoline and diesel sold and net decrease in volumes sold: ◦ the average cost per gallon of gasoline and diesel sold decreased by $0.31 per gallon and $0.36 per gallon, respectively; and 64 | Management's Discussion and Analysis ◦ the volumes of gasoline sold decreased by 2.7 million and the volumes of diesel sold increased by 0.3 million gallons. • incremental costs associated with the H2O Midstream and Gravity Acquisitions of $0.9 million and $2.7 million, respectively. Our logistics segment purchased product from our refining segment of $84.4 million and $106.7 million for the three months ended June 30, 2025 and June 30, 2024, respectively. We eliminate these intercompany costs in consolidation. YTD 2025 vs. YTD 2024 Cost of materials and other for the logistics segment decreased by $13.4 million, or 5.1%, in the six months ended June 30, 2025 compared to the six months ended June 30, 2024. This decrease was primarily driven by the following: • decreased costs of materials and other of $21.7 million in our West Texas marketing operations was primarily driven by decrease in average cost per gallon, partially offset by net increase in volumes sold: ◦ the average cost per gallon of gasoline and diesel sold decreased by $0.24 per gallon and $0.33 per gallon, respectively; ◦ the volumes of diesel sold increased by 2.0 million gallons, and the volumes of gasoline sold decreased by 1.6 million; and • incremental costs associated with the H2O Midstream and Gravity Acquisitions of $1.7 million and $4.7 million, respectively. 65 | Management's Discussion and Analysis Operating Expenses Q2 2025 vs. Q2 2024 Operating expenses increased by $8.6 million, or 29.1%, in the second quarter of 2025 compared to the second quarter of 2024, primarily driven by the following: • incremental expenses associated with the H2O Midstream and Gravity Acquisitions of $4.8 million and $11.0 million, respectively; and This increase was partially offset by the following: • a decrease in outside services. YTD 2025 vs. YTD 2024 Operating expenses increased by $17.6 million, or 28.6%, in the six months ended June 30, 2025 compared to the six months ended June 30, 2024, primarily driven by the following: • incremental expenses associated with the H2O Midstream and Gravity Acquisitions of $10.2 million and $17.8 million, respectively. This increase was partially offset by the following: • a decrease in outside services. EBITDA Q2 2025 vs. Q2 2024 EBITDA decreased by $10.5 million, or 10.4%, in the three months ended June 30, 2025 compared to the three months ended June 30, 2024, primarily driven by the following: • lower revenue related to sales-type lease accounting; • lower revenue due to the assignment of the Big Spring refinery marketing agreement to Delek Holdings; These increase were partially offset by the following: • incremental EBITDA of $9.4 million and $10.3 million associated with H2O Midstream and Gravity Acquisitions, respectively; and • a $1.13 per barrel increase in wholesale margins. YTD 2025 vs. YTD 2024 EBITDA decreased by $24.7 million, or 12.3%, in the six months ended June 30, 2025 compared to the six months ended June 30, 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; and • lower revenue due to the assignment of the Big Spring refinery marketing agreement to Delek Holdings; These decreases were partially offset by the following: • incremental EBITDA of $19.6 million and $24.2 million associated with H2O Midstream and Gravity Acquisitions, respectively; and • a $0.29 per barrel increase in wholesale margins. 66 | Management's Discussion and Analysis Liquidity and Capital Resources Sources of Capital Our primary sources of liquidity and capital resources are • cash generated from our operating activities; • borrowings under our debt facilities; and • potential issuances of additional equity and debt securities. At June 30, 2025, our total liquidity amounted to $2,385.2 million comprised primarily of $1,769.7 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 $615.5 million in cash and cash equivalents. 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 July 30, 2025, our Board of Directors approved a quarterly cash dividend of $0.255 per share of our common stock. During the three and six months ended June 30, 2025, 685,050 and 2,694,470, respectively, shares of our common stock were repurchased and cancelled at the time of the transaction for a total of $12.9 million and $44.4 million, respectively. As of June 30, 2025, there was $499.1 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. In addition, we have historically been able to source funding at terms that reflect market conditions, our financial position and our credit ratings and expect future funding sources to be at terms that are sustainable and profitable for the Company. However, there can be no assurances regarding the availability of future debt or equity financings or whether such financings can be made available on terms that are acceptable to us; any execution of such financing activities will be dependent on the contemporaneous availability of functioning debt or equity markets. Additionally, new debt financing activities will be subject to the satisfaction of any debt incurrence limitation covenants in our existing financing agreements. 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, 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 June 30, 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 June 30, 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). Such restrictions would generally remain in place until such a quarter that we return to compliance under the applicable incurrence based covenants. In the event that we are subject to these incremental restrictions, we believe that we have sufficient current and alternative sources of liquidity, including (but not limited to): available borrowings under our existing Delek Revolving Credit Facility, and for Delek Logistics, under its Delek Logistics Revolving Facility; the allowance to incur an additional $400.0 million of secured debt under the Delek Term Loan Credit Facility (see further discussion of these facilities in Note 10 of our condensed consolidated financial statements in Item 1. Financial Statements, of this Quarterly Report on Form 10-Q); 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. 67 | Management's Discussion and Analysis Cash Flows The following table sets forth a summary of our consolidated cash flows (in millions): Consolidated Six Months Ended June 30, 2025 2024 Cash Flow Data: Operating activities - continuing operations $ (9.9) $ 101.0 Operating activities - discontinued operations (1.1) 17.3 Total Operating activities (11.0) 118.3 Investing activities - continuing operations (477.6) (89.0) Investing activities - discontinued operations — (15.1) Total Investing activities (477.6) (104.1) Financing activities - continuing operations 368.5 (178.5) Total Financing activities 368.5 (178.5) Net decrease $ (120.1) $ (164.3) Cash Flows from Operating Activities Continuing Operations Net cash used by operating activities from continuing operations was $9.9 million for the six months ended June 30, 2025, compared to net cash provided by of $101.0 million for the comparable period of 2024. The decreases were a result of cash receipts from customers and cash payments to suppliers and for salaries resulting in a net $90.2 million decrease in cash provided by operating activities and an increase in cash paid for debt interest of $18.4 million. Cash Flows from Investing Activities Continuing Operations Net cash used in investing activities from continuing operations was $477.6 million for the six months ended June 30, 2025, compared to $89.0 million in the comparable period of 2024. The increase in cash flows used in investing activities was primarily due to the $300.8 million acquisition of Gravity of which $186.5 million was paid in cash, $183.3 million increase in purchases of property, plant and equipment and a reduction in insurance and settlement proceeds of $11.8 million. Cash Flows from Financing Activities Continuing Operations Net cash provided by financing activities from continuing operations was $368.5 million for the six months ended June 30, 2025, compared to cash used of $178.5 million in the comparable 2024 period. The decrease in cash used was primarily due to net payments on long-term revolvers of $354.6 million for the six months ended June 30, 2025 compared to net payments of $450.3 million in the comparable 2024 period, net proceeds on product and other financing arrangements of $162.1 million for the six months ended June 30, 2025 compared to net payments of $102.1 million in the comparable 2024 period and net proceeds of term debt of $695.2 million for the six months ended June 30, 2025 compared to net proceeds on term debt of $316.4 million in the comparable 2024 period, primarily related to the issuance of the Delek Logistics 2033 Notes and the related repayment on the Delek Logistics Revolving Facility. These increases in cash flows were partially offset by the receipt of net proceeds of $132.2 million from the Delek Logistics' public offerings of common units in the six months ended June 30, 2024, an increase of $44.4 million in share buybacks and a $19.7 million increase in distributions to non-controlling interests. Cash Position and Indebtedness As of June 30, 2025, our total cash and cash equivalents were $615.5 million, and we had total long-term indebtedness of approximately $3,100.7 million. The total long-term indebtedness is net of deferred financing costs and debt discount of $56.4 million. Additionally, we had letters of credit issued of approximately $424.4 million. Total unused credit commitments or borrowing base availability, as applicable, under our revolving credit facilities was approximately $1,769.7 million. The increase of $340.7 million in total long-term principal indebtedness as of June 30, 2025 compared to December 31, 2024 resulted primarily from the issuance of the Delek Logistics 2033 Notes and a decrease in net borrowings under the Delek Logistics Revolving Facility. As of June 30, 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: • the Delek Revolving Credit Facility with no outstanding borrowings (maturity of October 26, 2027); • aggregate principal of $926.2 million under the Delek Term Loan Credit Facility (maturity of November 19, 2029 and effective interest of 8.43%); 68 | Management's Discussion and Analysis • aggregate principal of $80.9 million under the Delek Logistics Revolving Facility (maturity of October 13, 2027 and average borrowing rate of 7.72%); • aggregate principal of $400.0 million under the Delek Logistics 2028 Notes (due in 2028, with effective interest rate of 7.38%); • aggregate principal of $1,050.0 million under the Delek Logistics 2029 Notes (due in 2029, with effective interest rate of 8.80%); • aggregate principal of $700.0 million under the Delek Logistics 2033 Notes (due in 2033, with effective interest rate of 7.64%);and • 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 Citi was $388.4 million at June 30, 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 June 30, 2025, and totaled $335.0 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. Financial Statements and Supplementary Data, of our December 31, 2024 Annual Report on Form 10-K. For both arrangements and the related commitments, see also our "Cash Requirements" section below. Debt Ratings We receive debt ratings from the major ratings agencies in the U.S. In determining our debt ratings, the agencies consider a number of qualitative and quantitative items including, but not limited to, commodity pricing levels, our liquidity, asset quality, reserve mix, debt levels and seniorities, cost structure, planned asset sales and production growth opportunities. There are no "rating triggers" in any of our contractual debt obligations that would accelerate scheduled maturities should our debt rating fall below a specified level. However, a downgrade could adversely impact our interest rate on new credit facility borrowings and the ability to economically access debt markets in the future. Additionally, any rating downgrades may increase the likelihood of us having to post additional letters of credit or cash collateral under certain contractual arrangements. 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 six months ended June 30, 2025, by operating segment and major category (in millions): 2025 Forecast Six Months Ended June 30, 2025 Actual Refining Regulatory $ 28 $ 3.4 Sustaining maintenance, including turnaround activities 113 92.0 Growth projects — 1.1 Refining segment total 141 96.5 Logistics Regulatory 7 1.0 Sustaining maintenance 12 4.2 Growth projects 216 185.9 Logistics segment total 235 191.1 Corporate and Other Regulatory 2 1.9 Sustaining maintenance 14 5.7 Growth projects 13 1.4 Other total 29 9.0 Total capital spending $ 405 $ 296.6 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. Management's Discussion and Analysis, of this Quarterly Report on Form 10-Q. For further information, please refer to our discussion in Item 1A. Risk Factors, of our December 31, 2024 Annual Report on Form 10-K. 69 | 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 June 30, 2025, is set forth in the following table (in millions): Payments Due by Period < 1 Year 1-3 Years 3-5 Years >5 Years Total Long-term debt and notes payable obligations $ 9.5 $ 499.9 $ 1,947.7 $ 700.0 $ 3,157.1 Interest (1) 244.6 482.8 284.8 154.9 1,167.1 Operating lease commitments (2) 39.4 43.5 6.5 9.6 99.0 Purchase commitments (3) 2,864.0 — — — 2,864.0 Product financing agreements (4) 335.0 — — — 335.0 Transportation agreements (5) 173.2 272.9 199.8 155.5 801.4 Inventory intermediation obligation (6) 31.5 407.0 — — 438.5 Retail Stores obligations (7) 10.5 17.2 17.5 4.6 49.8 Total $ 3,707.7 $ 1,723.3 $ 2,456.3 $ 1,024.6 $ 8,911.9 (1) Expected interest payments on debt outstanding at June 30, 2025. Floating interest rate debt is calculated using June 30, 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-cancellable terms in excess of one year as of June 30, 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. We have estimated future payments under the market-based agreements using current market rates. Excludes purchase commitments in buy-sell transactions which have matching notional amounts with the same counterparty and are generally net settled in exchanges. (4) Balances consist of obligations under RINs product financing arrangements, as described in Note 13 to the condensed consolidated financial statements in Item 1. Financial Statements, of this Quarterly Report on Form 10-Q and further discussed in the ''Environmental Credits and Related Regulatory Obligations" accounting policy included in Note 2 to our consolidated financial statements in Item 8. Financial Statements and Supplementary Data, of our December 31, 2024 Annual Report on Form 10-K. (5) Balances consist of contractual obligations under agreements with third parties (not including Delek Logistics) for the transportation of crude oil to our refineries. (6) Balances consist of contractual obligations under the Citi Inventory Intermediation Agreement, including principal obligation for the Baseline Volume Step-Out Liability and other recurring fees. For additional information, see Note 9 to the condensed consolidated financial statements in Item 1. Financial Statements, of this Quarterly Report on Form 10-Q. (7) Amounts reflect a rebate arrangement included in the long-term agreement with FEMSA entered into in conjunction with the Retail Transaction as well as certain underground storage tank cleanup obligations. For additional information, see our consolidated financial statements in Item 8. Financial Statements and Supplementary Data, of our December 31, 2024 Annual Report on Form 10-K. Other Cash Requirements Our material short-term cash requirements under contractual obligations are presented above, and we expect to fund the majority of those requirements with cash flows from operations. Our other cash requirements consisted of operating activities and capital expenditures. Operating activities include cash outflows related to payments to suppliers for crude and other inventories (which are largely reflected in our contractual purchase commitments in the table above) and payments for salaries and other employee related costs. Cash outlays in 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, Environmental, Social and Governance initiatives and sum of the parts initiatives. Refer to the cash flow section for our operating activities spend during the six months ended June 30, 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 six months ended June 30, 2025 and our anticipated cash requirements for planned capital expenditures for the full year 2025.