- Net income of $128.7 million
or $1.97 per share
- Adjusted net income of $131.9
million or $2.02 per
share
- Adjusted EBITDA of $345.1
million
- Delivered record total throughput in Refining and quarterly
earnings in Logistics
- Returned $40.2 million to
shareholders through dividends and share buy backs and in addition
repurchased $20.0 million in shares
subsequent to quarter end
- Paid down $175.6 million in
debt
- Increased quarterly dividend to $0.24 per share in November
BRENTWOOD, Tenn., Nov. 7, 2023
/PRNewswire/ -- Delek US Holdings, Inc. (NYSE: DK) ("Delek
US", "Company") today announced financial results for its third
quarter ended September 30, 2023.
"We achieved strong financial results in the third quarter by
capturing favorable margins across our refining, logistics and
retail businesses," said Avigal Soreq, President and Chief
Executive Officer of Delek US. "Operating safely, reliably
and in an environmentally responsible manner is our top
priority. In the third quarter, we continued to build upon
our solid foundation and drive results. In Refining, we ran well
and achieved record total throughput. In Logistics, we are
benefiting from our Permian location and investing in the continued
growth of our business, which delivered record quarterly earnings
once again. Our Retail business contributed the highest quarterly
earnings since COVID."
"Financial strength and flexibility, as well as returning value
to shareholders, remain key components of our strategy. During the
quarter, we reduced debt by $175.6
million, we paid an increased dividend, and repurchased
$25.0 million of stock. In the 4th
quarter, the board of directors increased the quarterly dividend
for the fifth consecutive quarter to $0.24 per share, and we repurchased an additional
$20.0 million of stock. Year-to-date,
we have paid down $415.7 million in
debt and returned $130.3 million of
capital to shareholders through dividends and share repurchases,"
Soreq continued.
"We remain focused on our long-term strategic objectives. We
continued efforts to unlock value from our business and advanced
our cost efficiency measures. In our operations, we have made
progress at each refinery streamlining processes and improving
reliability. We are well positioned to operate under
mid-cycle market conditions," Soreq concluded.
Delek US Holdings Results
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
($ in millions,
except per share data)
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
Net income attributable
to Delek
|
|
$
128.7
|
|
$
7.4
|
|
$
184.7
|
|
$
375.8
|
|
Diluted income per
share
|
|
$
1.97
|
|
$
0.10
|
|
$
2.78
|
|
$
5.21
|
|
Adjusted net
income
|
|
$
131.9
|
|
$
214.8
|
|
$
289.8
|
|
$
461.4
|
|
Adjusted net
income per share
|
|
$
2.02
|
|
$
3.02
|
|
$
4.37
|
|
$
6.38
|
|
Adjusted
EBITDA
|
|
$
345.1
|
|
$
414.0
|
|
$
889.1
|
|
$
960.0
|
1 |
Refining Segment
The refining segment Adjusted EBITDA was $285.5 million in the third quarter 2023 compared
with $355.7 million in the same
quarter last year, which reflects other inventory impacts of
$(28.2) million and $279.5 million for third quarter 2023 and 2022,
respectively. The decrease over 2022 is primarily due to lower
refining crack spreads, partially offset by higher sales volume
(including purchased product). During the third quarter 2023, Delek
US's benchmark crack spreads were down an average of 8.2% from
prior-year levels.
Logistics Segment
The logistics segment Adjusted EBITDA in the third quarter 2023
was $96.5 million compared with
$91.5 million in the prior year
quarter. The increase over last year's third quarter was driven by
strong contributions from the Midland Gathering system and Delaware
Gathering system in addition to annual rate increases.
Retail Segment
For the third quarter 2023, Adjusted EBITDA for the retail
segment was $16.2 million compared
with $13.5 million in the prior-year
period. The increase was primarily driven by increased average fuel
margins and increased inside store margins.
Corporate and Other Activity
Adjusted EBITDA from Corporate, Other and Eliminations was a
loss of $(53.1) million in the third
quarter 2023 compared with a loss of $(46.7)
million in the prior-year period. The higher losses
are driven by general and administrative costs, primarily related
to employee benefit expenses.
Shareholder Distributions
On November 1, 2023, the Board of Directors approved the
regular quarterly dividend of $0.240
per share that will be paid on November 20, 2023 to
shareholders of record on November 13, 2023.
Liquidity
As of September 30, 2023, Delek US
had a cash balance of $901.7 million
and total consolidated long-term debt of $2,638.0 million, resulting in net debt of
$1,736.3 million. As of September 30, 2023, Delek Logistics Partners, LP
(NYSE: DKL) ("Delek Logistics") had $4.2
million of cash and $1,741.4
million of total long-term debt, which are included in the
consolidated amounts on Delek US' balance sheet. Excluding Delek
Logistics, Delek US had $897.5
million in cash and $896.6
million of long-term debt, or a $0.9
million net cash position.
Third Quarter 2023 Results | Conference Call
Information
Delek US will hold a conference call to discuss its third
quarter 2023 results on Tuesday, November 7,
2023 at 10:00 a.m. Central
Time. Investors will have the opportunity to listen to the
conference call live by going to www.DelekUS.com and clicking on
the Investor Relations tab. Participants are encouraged to register
at least 15 minutes early to download and install any necessary
software. Presentation materials accompanying the call will be
available on the investor relations tab of the Delek US website
approximately ten minutes prior to the start of the call. For those
who cannot listen to the live broadcast, the online replay will be
available on the website for 90 days.
Investors may also wish to listen to Delek Logistics' (NYSE:
DKL) third quarter 2023 earnings conference call that will be held
on Tuesday November 7, 2023 at
11:30 a.m. Central Time and review
Delek Logistics' earnings press release. Market trends and
information disclosed by Delek Logistics may be relevant to the
logistics segment reported by Delek US. Both a replay of the
conference call and press release for Delek Logistics will be
available online at www.deleklogistics.com.
About Delek US Holdings, Inc.
Delek US Holdings, Inc. is a diversified downstream energy
company with assets in petroleum refining, logistics, pipelines,
renewable fuels and convenience store retailing. The refining
assets consist primarily of refineries operated in Tyler and Big
Spring, Texas, El Dorado,
Arkansas and Krotz Springs,
Louisiana with a combined nameplate crude throughput
capacity of 302,000 barrels per day. Pipeline assets include an
ownership interest in the 650-mile Wink to Webster long-haul crude oil pipeline. The
convenience store retail segment operates approximately 250
convenience stores in West Texas
and New Mexico.
The logistics operations include Delek Logistics Partners, LP
(NYSE: DKL). Delek Logistics Partners, LP is a growth-oriented
master limited partnership focused on owning and operating
midstream energy infrastructure assets. Delek US Holdings, Inc. and
its subsidiaries owned approximately 78.7% (including the general
partner interest) of Delek Logistics Partners, LP at September 30, 2023.
Safe Harbor Provisions Regarding Forward-Looking
Statements
This press release contains forward-looking statements that are
based upon current expectations and involve a number of risks and
uncertainties. Statements concerning current estimates,
expectations and projections about future results, performance,
prospects, opportunities, plans, actions and events and other
statements, concerns, or matters that are not historical facts are
"forward-looking statements," as that term is defined under the
federal securities laws. These statements contain words such as
"possible," "believe," "should," "could," "would," "predict,"
"plan," "estimate," "intend," "may," "anticipate," "will," "if",
"potential," "expect" or similar expressions, as well as statements
in the future tense. These forward-looking statements include,
but are not limited to, statements regarding throughput at the
Company's refineries; crude oil prices, discounts and quality and
our ability to benefit therefrom; cost reductions; growth;
scheduled turnaround activity; investments into our business; the
performance and execution of our midstream growth initiatives,
including the Permian Gathering System, the Red River joint venture
and the Wink to Webster long-haul crude oil pipeline, and the
flexibility, benefits and the expected returns therefrom; projected
benefits of the Delaware Gathering Acquisition, renewable
identification numbers ("RINs") waivers and tax credits and the
value and benefit therefrom; cash and liquidity; emissions
reductions; opportunities and anticipated performance and financial
position.
2 |
Investors are cautioned that the following important factors,
among others, may affect these forward-looking statements. These
factors include, but are not limited to: uncertainty related to
timing and amount of future share repurchases and dividend
payments; risks and uncertainties with respect to the quantities
and costs of crude oil we are able to obtain and the price of the
refined petroleum products we ultimately sell, uncertainties
regarding future decisions by the Organization of Petroleum
Exporting Countries ("OPEC") regarding production and pricing
disputes between OPEC members and Russia; risks and uncertainties related to the
integration by Delek Logistics of the Delaware Gathering business
following its acquisition; Delek US' ability to realize cost
reductions; risks related to Delek US' exposure to Permian Basin
crude oil, such as supply, pricing, gathering, production and
transportation capacity; gains and losses from derivative
instruments; risks associated with acquisitions and dispositions;
acquired assets may suffer a diminishment in fair value as a result
of which we may need to record a write-down or impairment in
carrying value of the asset; the possibility of litigation
challenging renewable fuel standard waivers; changes in the scope,
costs, and/or timing of capital and maintenance projects; the
ability to grow the Permian Gathering System; the ability of the
Red River joint venture to complete the expansion project to
increase the Red River pipeline capacity; the ability of the joint
venture to construct the Wink to
Webster long haul crude oil
pipeline; operating hazards inherent in transporting, storing and
processing crude oil and intermediate and finished petroleum
products; our competitive position and the effects of competition;
the projected growth of the industries in which we operate; general
economic and business conditions affecting the geographic areas in
which we operate; and other risks described in Delek US' filings
with the United States Securities and Exchange Commission (the
"SEC"), including risks disclosed in our Annual Report on Form
10-K, Quarterly Reports on Form 10-Q and other filings and reports
with the SEC.
Forward-looking statements should not be read as a guarantee of
future performance or results and will not 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. Delek US undertakes
no obligation to update or revise any such forward-looking
statements to reflect events or circumstances that occur, or which
Delek US becomes aware of, after the date hereof, except as
required by applicable law or regulation.
3 |
Non-GAAP Disclosures:
Our management uses certain "non-GAAP" operational measures to
evaluate our operating segment performance and non-GAAP financial
measures to evaluate past performance and prospects for the future
to supplement our financial information presented in accordance
with United States ("U.S.")
Generally Accepted Accounting Principles ("GAAP"). These
financial and operational non-GAAP measures are important factors
in assessing our operating results and profitability and
include:
- Adjusting items - certain identified infrequently occurring
items, non-cash items, and items that are not attributable to or
indicative of our on-going operations or that may obscure our
underlying results and trends;
- Adjusted net income (loss) - calculated as net income (loss)
attributable to Delek US adjusted for relevant Adjusting items
recorded during the period;
- Adjusted net income (loss) per share - calculated as Adjusted
net income (loss) divided by weighted average shares outstanding,
assuming dilution, as adjusted for any anti-dilutive instruments
that may not be permitted for consideration in GAAP earnings per
share calculations but that nonetheless favorably impact
dilution;
- Earnings before interest, taxes, depreciation and amortization
("EBITDA") - calculated as net income (loss) attributable to Delek
adjusted to add back interest expense, income tax expense,
depreciation and amortization;
- Adjusted EBITDA - calculated as EBITDA adjusted for the
relevant identified Adjusting items in Adjusted net income (loss)
that do not relate to interest expense, income tax expense,
depreciation or amortization, and adjusted to include income (loss)
attributable to non-controlling interests;
- 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;
- Adjusted refining margin - calculated as refining margin
adjusted for other inventory impacts, net inventory LCM valuation
loss (benefit) and unrealized hedging (gain) loss;
- Refining production margin - calculated based on the regional
market sales price of refined products produced, less allocated
transportation, Renewable Fuel Standard volume obligation and
associated feedstock costs. This measure reflects the economics of
each refinery exclusive of the financial impact of inventory price
risk mitigation programs and marketing uplift strategies;
- Refining production margin per throughput barrel - calculated
as refining production margin divided by our average refining
throughput in barrels per day (excluding purchased barrels)
multiplied by 1,000 and multiplied by the number of days in the
period; and
- Net debt - calculated as long-term debt including both current
and non-current portions (the most comparable GAAP measure) less
cash and cash equivalents as of a specific balance sheet date.
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
relevant comparability between periods, to peers or to market
metrics through the inclusion of retroactive regulatory or other
adjustments as if they had occurred in the prior periods they
relate to, or through the exclusion of certain items that we
believe are not indicative of our core operating performance and
that may obscure our underlying results and trends. "Net debt,"
also a non-GAAP financial measure, is an important measure to
monitor leverage and evaluate the balance sheet.
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. Additionally, because Adjusted net income
or loss, Adjusted net income or loss per share, EBITDA and adjusted
EBITDA, Adjusted Refining Margin and Refining Production Margin or
any of our other identified non-GAAP measures may be defined
differently by other companies in its industry, Delek US'
definition may not be comparable to similarly titled measures of
other companies. See the accompanying tables in this earnings
release for a reconciliation of these non-GAAP measures to the most
directly comparable GAAP measures.
4 |
|
Delek US Holdings,
Inc.
|
|
Condensed
Consolidated Balance Sheets (Unaudited)
|
|
($ in millions,
except share and per share data)
|
|
|
September 30,
2023
|
|
December 31,
2022
|
|
ASSETS
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
901.7
|
|
$
841.3
|
|
Accounts receivable,
net
|
|
1,166.9
|
|
1,234.4
|
|
Inventories, net of
inventory valuation reserves
|
|
1,179.2
|
|
1,518.5
|
|
Other current
assets
|
|
85.6
|
|
122.7
|
|
Total current
assets
|
|
3,333.4
|
|
3,716.9
|
|
Property, plant and
equipment:
|
|
|
|
|
|
Property, plant and
equipment
|
|
4,603.1
|
|
4,349.0
|
|
Less: accumulated
depreciation
|
|
(1,768.3)
|
|
(1,572.6)
|
|
Property,
plant and equipment, net
|
|
2,834.8
|
|
2,776.4
|
|
Operating lease
right-of-use assets
|
|
160.3
|
|
179.5
|
|
Goodwill
|
|
744.3
|
|
744.3
|
|
Other intangibles,
net
|
|
300.4
|
|
315.6
|
|
Equity method
investments
|
|
371.2
|
|
359.7
|
|
Other non-current
assets
|
|
124.6
|
|
100.4
|
|
Total
assets
|
|
$
7,869.0
|
|
$
8,192.8
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
Accounts
payable
|
|
$
2,006.8
|
|
$
1,745.6
|
|
Current portion of
long-term debt
|
|
29.5
|
|
74.5
|
|
Current portion of
obligation under Inventory Intermediation Agreement
|
|
—
|
|
49.9
|
|
Current portion of
operating lease liabilities
|
|
49.9
|
|
49.6
|
|
Accrued expenses and
other current liabilities
|
|
916.5
|
|
1,166.8
|
|
Total
current liabilities
|
|
3,002.7
|
|
3,086.4
|
|
Non-current
liabilities:
|
|
|
|
|
|
Long-term debt, net of
current portion
|
|
2,608.5
|
|
2,979.2
|
|
Obligation under
Inventory Intermediation Agreement
|
|
502.2
|
|
491.8
|
|
Environmental
liabilities, net of current portion
|
|
111.6
|
|
111.5
|
|
Asset retirement
obligations
|
|
42.9
|
|
41.8
|
|
Deferred tax
liabilities
|
|
304.2
|
|
266.5
|
|
Operating lease
liabilities, net of current portion
|
|
106.8
|
|
122.4
|
|
Other non-current
liabilities
|
|
33.1
|
|
23.7
|
|
Total
non-current liabilities
|
|
3,709.3
|
|
4,036.9
|
|
Stockholders'
equity:
|
|
|
|
|
|
Preferred stock, $0.01
par value, 10,000,000 shares authorized, no shares issued and
outstanding
|
|
—
|
|
—
|
|
Common stock, $0.01
par value, 110,000,000 shares authorized, 82,241,519 shares and
84,509,517 shares issued at September 30, 2023 and December 31,
2022, respectively
|
|
0.8
|
|
0.9
|
|
Additional paid-in
capital
|
|
1,116.4
|
|
1,134.1
|
|
Accumulated other
comprehensive loss
|
|
(5.3)
|
|
(5.2)
|
|
Treasury stock,
17,575,527 shares, at cost, at September 30, 2023 and December 31,
2022,
respectively
|
|
(694.1)
|
|
(694.1)
|
|
Retained
earnings
|
|
619.9
|
|
507.9
|
|
Non-controlling
interests in subsidiaries
|
|
119.3
|
|
125.9
|
|
Total stockholders'
equity
|
|
1,157.0
|
|
1,069.5
|
|
Total liabilities and
stockholders' equity
|
|
$
7,869.0
|
|
$
8,192.8
|
5 |
|
Delek US Holdings,
Inc.
|
|
Condensed
Consolidated Statements of Income (Unaudited)
|
|
($ in millions,
except share and per share data)
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
|
2023
|
|
2022 (1)
|
|
2023
|
|
2022 (1)
|
|
Net revenues
|
|
$
4,748.4
|
|
$
5,324.9
|
|
$
12,868.3
|
|
$
15,766.6
|
|
Cost of
sales:
|
|
|
|
|
|
|
|
|
|
Cost of materials and
other
|
|
4,122.1
|
|
4,916.0
|
|
11,328.3
|
|
14,151.1
|
|
Operating expenses
(excluding depreciation and amortization
presented below)
|
|
217.7
|
|
201.3
|
|
577.2
|
|
536.4
|
|
Depreciation and
amortization
|
|
83.7
|
|
66.5
|
|
243.1
|
|
192.0
|
|
Total cost of
sales
|
|
4,423.5
|
|
5,183.8
|
|
12,148.6
|
|
14,879.5
|
|
Operating expenses
related to retail and wholesale business
(excluding depreciation and amortization presented
below)
|
|
22.7
|
|
28.2
|
|
80.8
|
|
89.6
|
|
General and
administrative expenses
|
|
72.0
|
|
59.3
|
|
219.3
|
|
231.8
|
|
Depreciation and
amortization
|
|
7.6
|
|
6.4
|
|
21.0
|
|
17.2
|
|
Other operating income,
net
|
|
(2.1)
|
|
(5.8)
|
|
(19.0)
|
|
(44.5)
|
|
Total operating costs
and expenses
|
|
4,523.7
|
|
5,271.9
|
|
12,450.7
|
|
15,173.6
|
|
Operating
income
|
|
224.7
|
|
53.0
|
|
417.6
|
|
593.0
|
|
Interest expense,
net
|
|
82.3
|
|
50.7
|
|
239.2
|
|
132.7
|
|
Income from equity
method investments
|
|
(27.0)
|
|
(17.8)
|
|
(67.1)
|
|
(44.4)
|
|
Other expense (income),
net
|
|
1.8
|
|
(0.7)
|
|
(4.8)
|
|
(3.0)
|
|
Total non-operating
expense, net
|
|
57.1
|
|
32.2
|
|
167.3
|
|
85.3
|
|
Income before income
tax expense
|
|
167.6
|
|
20.8
|
|
250.3
|
|
507.7
|
|
Income tax
expense
|
|
31.5
|
|
4.0
|
|
43.5
|
|
107.5
|
|
Net income
|
|
136.1
|
|
16.8
|
|
206.8
|
|
400.2
|
|
Net income attributed
to non-controlling interests
|
|
7.4
|
|
9.4
|
|
22.1
|
|
24.4
|
|
Net income attributable
to Delek
|
|
$
128.7
|
|
$
7.4
|
|
$
184.7
|
|
$
375.8
|
|
Basic income per
share
|
|
$
1.98
|
|
$
0.11
|
|
$
2.80
|
|
$
5.26
|
|
Diluted income per
share
|
|
$
1.97
|
|
$
0.10
|
|
$
2.78
|
|
$
5.21
|
|
Weighted average common
shares outstanding:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
64,889,504
|
|
70,471,645
|
|
65,864,141
|
|
71,494,332
|
|
Diluted
|
|
65,464,970
|
|
71,109,364
|
|
66,372,335
|
|
72,148,638
|
|
|
(1) In
the first quarter 2023, we reassessed the classification of certain
expenses and made certain reclassification adjustments to better
represent the nature of those
expenses. Accordingly, we have made
reclassifications to the prior period in order to conform to this
revised current period classification, which resulted in a
decrease
in the prior period general and administrative
expenses and an increase in the prior period operating expenses of
approximately $3.1 million and $10.2 million for the
three and nine months ended September 30,
2022.
|
|
|
Condensed Cash Flow
Data (Unaudited)
|
|
($ in
millions)
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
|
|
Net cash provided by
operating activities
|
|
$
432.6
|
|
$
130.2
|
|
$
922.8
|
|
$
716.1
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
|
|
Net cash used in
investing activities
|
|
(58.7)
|
|
(99.0)
|
|
(338.6)
|
|
(819.9)
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
|
|
Net cash (used in)
provided by financing activities
|
|
(293.8)
|
|
(122.0)
|
|
(523.8)
|
|
401.1
|
|
Net increase
(decrease) in cash and cash equivalents
|
|
80.1
|
|
(90.8)
|
|
60.4
|
|
297.3
|
|
Cash and cash
equivalents at the beginning of the period
|
|
821.6
|
|
1,244.6
|
|
841.3
|
|
856.5
|
|
Cash and cash
equivalents at the end of the period
|
|
$
901.7
|
|
$
1,153.8
|
|
$
901.7
|
|
$
1,153.8
|
|
6 |
Significant Transactions During the Quarter Impacting
Results:
Restructuring Costs
In 2022, we announced that we are progressing a business
transformation focused on enterprise-wide opportunities to improve
the efficiency of our cost structure. For the third quarter 2023,
we recorded restructuring costs totaling $3.5 million ($2.8
million after-tax) associated with our business
transformation. These costs are recorded in general and
administrative expenses in our consolidated statements of income
and are reported in our Corporate segment.
Other Inventory Impact
"Other inventory impact" is primarily calculated by multiplying
the number of barrels sold during the period by the difference
between current period weighted average purchase cost per barrel
directly related to our refineries and per barrel cost of materials
and other for the period recognized on a FIFO basis directly
related to our refineries. It assumes no beginning or ending
inventory, so that the current period average purchase cost per
barrel is a reasonable estimate of our market purchase cost for the
current period, without giving effect to any build or draw on
beginning inventory. These amounts are based on management
estimates using a methodology including these assumptions. However,
this analysis provides management with a means to compare
hypothetical refining margins to current period average crack
spreads, as well as provides a means to better compare our results
to peers.
El Dorado Fire
Losses
For the third quarter 2023, we recognized an additional
$8.0 million ($6.2 million after-tax) for uncovered litigation,
claims and assessments associated with the 2021 fire at the
El Dorado refinery, which are
included in operating expenses in the consolidated statements of
income.
7 |
|
Reconciliation of
Net Income (Loss) Attributable to Delek to Adjusted Net Income
(Loss)
|
|
|
|
|
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
$ in millions
(unaudited)
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
|
|
|
|
|
Reported net income
(loss) attributable to Delek
|
|
$
128.7
|
|
$
7.4
|
|
$
184.7
|
|
$
375.8
|
|
Adjusting
items (1)
|
|
|
|
|
|
|
|
|
|
Inventory LCM valuation
(benefit) loss
|
|
3.4
|
|
20.3
|
|
(6.2)
|
|
19.1
|
|
Tax effect
|
|
(0.8)
|
|
(4.7)
|
|
1.4
|
|
(4.4)
|
|
Inventory LCM valuation
(benefit) loss, net
|
|
2.6
|
|
15.6
|
|
(4.8)
|
|
14.7
|
|
Other inventory
impact
|
|
(28.2)
|
|
279.5
|
|
145.4
|
|
137.5
|
|
Tax effect
|
|
6.4
|
|
(64.7)
|
|
(32.7)
|
|
(31.1)
|
|
Other inventory impact,
net (2) (3)
|
|
(21.8)
|
|
214.8
|
|
112.7
|
|
106.4
|
|
Business interruption
insurance recoveries
|
|
(0.2)
|
|
(7.3)
|
|
(10.0)
|
|
(25.9)
|
|
Tax effect
|
|
0.1
|
|
1.6
|
|
2.3
|
|
5.8
|
|
Business interruption
insurance recoveries, net
|
|
(0.1)
|
|
(5.7)
|
|
(7.7)
|
|
(20.1)
|
|
Unrealized
inventory/commodity hedging (gain) loss where the
hedged item is not yet recognized in the financial statements
(4)
|
|
17.4
|
|
(27.1)
|
|
(8.1)
|
|
(30.9)
|
|
Tax effect
|
|
(3.9)
|
|
6.6
|
|
1.8
|
|
7.5
|
|
Unrealized hedging
(gain) loss where the hedged item is not yet
recognized in the financial statements, net
|
|
13.5
|
|
(20.5)
|
|
(6.3)
|
|
(23.4)
|
|
Transaction related
expenses
|
|
—
|
|
4.2
|
|
—
|
|
10.6
|
|
Tax effect
|
|
—
|
|
(1.0)
|
|
—
|
|
(2.6)
|
|
Transaction related
expenses, net
|
|
—
|
|
3.2
|
|
—
|
|
8.0
|
|
Restructuring
costs
|
|
3.5
|
|
—
|
|
6.4
|
|
—
|
|
Tax effect
|
|
(0.7)
|
|
—
|
|
(1.4)
|
|
—
|
|
Restructuring costs,
net (2)
|
|
2.8
|
|
—
|
|
5.0
|
|
—
|
|
El Dorado refinery fire
losses
|
|
8.0
|
|
—
|
|
8.0
|
|
—
|
|
Tax effect
|
|
(1.8)
|
|
—
|
|
(1.8)
|
|
—
|
|
El Dorado refinery fire
losses, net (2)
|
|
6.2
|
|
—
|
|
6.2
|
|
—
|
|
Total adjusting
items (1)
|
|
3.2
|
|
207.4
|
|
105.1
|
|
85.6
|
|
Adjusted net
income
|
|
$
131.9
|
|
$
214.8
|
|
$
289.8
|
|
$
461.4
|
|
|
(1) All
adjustments have been tax effected using the estimated marginal
income tax rate, as applicable.
|
|
(2) See
further discussion in the "Significant Transactions During the
Quarter Impacting Results" section.
|
|
(3) Starting
with the quarter ended September 30, 2023, we updated our other
inventory impact calculation to exclude the impact of certain
pipeline inventories not used
in our refinery operations. The impact to
historical non-GAAP financial measures is
immaterial.
|
|
(4) Starting
with the quarter ended March 31, 2023, we no longer adjust non-GAAP
financial measures for unrealized gains and losses related
to RINs where the
hedged item is not yet recognized in the
financial statements. Historical non-GAAP financial measures have
been revised to conform to current period
presentation.
|
|
8 |
|
Reconciliation of
U.S. GAAP Income (Loss) per share to Adjusted Net Income (Loss) per
share
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
$ per share
(unaudited)
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
|
|
|
|
|
Reported diluted
income per share
|
|
$
1.97
|
|
$
0.10
|
|
$
2.78
|
|
$
5.21
|
|
Adjusting items,
after tax (per share) (1) (2)
|
|
|
|
|
|
|
|
|
|
Net inventory LCM
valuation (benefit) loss
|
|
0.04
|
|
0.22
|
|
(0.07)
|
|
0.20
|
|
Other inventory impact
(3) (4)
|
|
(0.33)
|
|
3.02
|
|
1.70
|
|
1.47
|
|
Business interruption
insurance recoveries
|
|
—
|
|
(0.08)
|
|
(0.12)
|
|
(0.28)
|
|
Total unrealized
hedging (gain) loss where the hedged item is
not yet recognized in the financial statements
(5)
|
|
0.21
|
|
(0.29)
|
|
(0.09)
|
|
(0.32)
|
|
Transaction related
expenses
|
|
—
|
|
0.05
|
|
—
|
|
0.11
|
|
Restructuring costs
(3)
|
|
0.04
|
|
—
|
|
0.08
|
|
—
|
|
El Dorado refinery
fire losses (3)
|
|
0.09
|
|
—
|
|
0.09
|
|
—
|
|
Total adjusting
items (1)
|
|
0.05
|
|
2.92
|
|
1.59
|
|
1.18
|
|
Adjusted net
income per share
|
|
$
2.02
|
|
$
3.02
|
|
$
4.37
|
|
$
6.39
|
|
|
(1) The
adjustments have been tax effected using the estimated marginal tax
rate, as applicable.
|
|
(2) For
periods of Adjusted net loss, Adjustments (Adjusting items) and
Adjusted net loss per share are presented using basic weighted
average shares outstanding.
|
|
(3) See
further discussion in the "Significant Transactions During the
Quarter Impacting Results" section.
|
|
(4) Starting with the quarter ended
September 30, 2023, we updated our other inventory impact
calculation to exclude the impact of certain pipeline inventories
not used in
our refinery operations. The impact to
historical non-GAAP financial measures is
immaterial.
|
|
(5) Starting with the quarter ended
March 31, 2023, we no longer adjust non-GAAP financial measures for
unrealized gains and losses related to RINs where the
hedged
item is not yet recognized in the financial
statements. Historical non-GAAP financial measures have been
revised to conform to current period presentation.
|
|
9 |
|
Reconciliation of
Net Income (Loss) attributable to Delek to Adjusted
EBITDA
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
$ in millions
(unaudited)
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
Reported net (loss)
income attributable to Delek
|
|
$
128.7
|
|
$
7.4
|
|
$
184.7
|
|
$
375.8
|
|
Add:
|
|
|
|
|
|
|
|
|
|
Interest expense,
net
|
|
82.3
|
|
50.7
|
|
239.2
|
|
132.7
|
|
Income tax expense
(benefit)
|
|
31.5
|
|
4.0
|
|
43.5
|
|
107.5
|
|
Depreciation and
amortization
|
|
91.3
|
|
72.9
|
|
264.1
|
|
209.2
|
|
EBITDA attributable to
Delek
|
|
333.8
|
|
135.0
|
|
731.5
|
|
825.2
|
|
Adjusting
items
|
|
|
|
|
|
|
|
|
|
Net inventory LCM
valuation (benefit) loss
|
|
3.4
|
|
20.3
|
|
(6.2)
|
|
19.1
|
|
Other inventory impact
(1) (2)
|
|
(28.2)
|
|
279.5
|
|
145.4
|
|
137.5
|
|
Business interruption
insurance recoveries
|
|
(0.2)
|
|
(7.3)
|
|
(10.0)
|
|
(25.9)
|
|
Unrealized
inventory/commodity hedging (gain) loss where the
hedged item is not yet recognized in the financial statements
(3)
|
|
17.4
|
|
(27.1)
|
|
(8.1)
|
|
(30.9)
|
|
Transaction related
expenses
|
|
—
|
|
4.2
|
|
—
|
|
10.6
|
|
Restructuring costs
(1)
|
|
3.5
|
|
—
|
|
6.4
|
|
—
|
|
El Dorado refinery fire
losses (1)
|
|
8.0
|
|
—
|
|
8.0
|
|
—
|
|
Net income attributable
to non-controlling interest
|
|
7.4
|
|
9.4
|
|
22.1
|
|
24.4
|
|
Total Adjusting
items
|
|
11.3
|
|
279.0
|
|
157.6
|
|
134.8
|
|
Adjusted
EBITDA
|
|
$
345.1
|
|
$
414.0
|
|
$
889.1
|
|
$
960.0
|
|
|
(1) See
further discussion in the "Significant Transactions During the
Quarter Impacting Results" section.
|
|
(2) Starting with the quarter ended
September 30, 2023, we updated our other inventory impact
calculation to exclude the impact of certain pipeline inventories
not used in
our refinery operations. The impact to
historical non-GAAP financial measures is
immaterial.
|
|
(3) Starting with the quarter ended
March 31, 2023, we no longer adjust non-GAAP financial measures for
unrealized gains and losses related to RINs where the
hedged
item is not yet recognized in the financial
statements. Historical non-GAAP financial measures have been
revised to conform to current period presentation.
|
|
10 |
|
Reconciliation of
Segment EBITDA Attributable to Delek to Adjusted Segment
EBITDA
|
|
|
Three Months Ended
September 30, 2023
|
|
$ in millions
(unaudited)
|
|
Refining
|
|
Logistics
|
|
Retail
|
|
Corporate,
Other and
Eliminations
|
|
Consolidated
|
|
Segment EBITDA
Attributable to Delek
|
|
$
285.1
|
|
$
96.5
|
|
$
16.2
|
|
$
(64.0)
|
|
$
333.8
|
|
Adjusting
items
|
|
|
|
|
|
|
|
|
|
|
|
Net inventory LCM
valuation (benefit) loss
|
|
3.4
|
|
—
|
|
—
|
|
—
|
|
3.4
|
|
Other inventory impact
(1) (2)
|
|
(28.2)
|
|
—
|
|
—
|
|
—
|
|
(28.2)
|
|
Unrealized
inventory/commodity hedging (gain) loss where
the hedged item is not yet recognized in the financial
statements (3)
|
|
17.4
|
|
—
|
|
—
|
|
—
|
|
17.4
|
|
Restructuring costs
(1)
|
|
—
|
|
—
|
|
—
|
|
3.5
|
|
3.5
|
|
Business Interruption
insurance recoveries
|
|
(0.2)
|
|
—
|
|
—
|
|
—
|
|
(0.2)
|
|
El Dorado refinery fire
losses (1)
|
|
8.0
|
|
—
|
|
—
|
|
—
|
|
8.0
|
|
Net income attributable
to non-controlling interest
|
|
—
|
|
—
|
|
—
|
|
7.4
|
|
7.4
|
|
Total Adjusting
items
|
|
0.4
|
|
—
|
|
—
|
|
10.9
|
|
11.3
|
|
Adjusted Segment
EBITDA
|
|
$
285.5
|
|
$
96.5
|
|
$
16.2
|
|
$
(53.1)
|
|
$
345.1
|
|
|
|
Three Months Ended
September 30, 2022
|
|
$ in millions
(unaudited)
|
|
Refining
|
|
Logistics
|
|
Retail
|
|
Corporate,
Other and Eliminations
|
|
Consolidated
|
|
Segment EBITDA
Attributable to Delek
|
|
$
90.3
|
|
$
87.3
|
|
$
13.5
|
|
$
(56.1)
|
|
$
135.0
|
|
Adjusting
items
|
|
|
|
|
|
|
|
|
|
|
|
Net inventory LCM
valuation (benefit) loss
|
|
20.3
|
|
—
|
|
—
|
|
—
|
|
20.3
|
|
Other inventory impact
(1) (2)
|
|
279.5
|
|
—
|
|
—
|
|
—
|
|
279.5
|
|
Unrealized
inventory/commodity hedging (gain) loss
where the hedged item is not yet recognized in the
financial statements (3)
|
|
(27.1)
|
|
—
|
|
—
|
|
—
|
|
(27.1)
|
|
Transaction related
expenses
|
|
—
|
|
4.2
|
|
—
|
|
—
|
|
4.2
|
|
Business Interruption
insurance recoveries
|
|
(7.3)
|
|
—
|
|
—
|
|
—
|
|
(7.3)
|
|
Net income attributable
to non-controlling interest
|
|
—
|
|
—
|
|
—
|
|
9.4
|
|
9.4
|
|
Total Adjusting
items
|
|
265.4
|
|
4.2
|
|
—
|
|
9.4
|
|
279.0
|
|
Adjusted Segment
EBITDA
|
|
$
355.7
|
|
$
91.5
|
|
$
13.5
|
|
$
(46.7)
|
|
$
414.0
|
11 |
|
Reconciliation of
Segment EBITDA Attributable to Delek to Adjusted Segment
EBITDA
|
|
|
Nine Months Ended
September 30, 2023
|
|
$ in millions
(unaudited)
|
|
Refining
|
|
Logistics
|
|
Retail
|
|
Corporate,
Other and
Eliminations
|
|
Consolidated
|
|
Segment EBITDA
Attributable to Delek
|
|
$
587.7
|
|
$
278.8
|
|
$
37.6
|
|
$
(172.6)
|
|
$
731.5
|
|
Adjusting
items
|
|
|
|
|
|
|
|
|
|
|
|
Net inventory LCM
valuation (benefit) loss
|
|
(6.2)
|
|
—
|
|
—
|
|
—
|
|
(6.2)
|
|
Other inventory impact
(1) (2)
|
|
145.4
|
|
—
|
|
—
|
|
—
|
|
145.4
|
|
Unrealized
inventory/commodity hedging (gain) loss
where the hedged item is not yet recognized in the
financial statements (3)
|
|
(8.1)
|
|
—
|
|
—
|
|
—
|
|
(8.1)
|
|
Restructuring
costs
|
|
—
|
|
—
|
|
—
|
|
6.4
|
|
6.4
|
|
Business Interruption
insurance recoveries
|
|
(10.0)
|
|
—
|
|
—
|
|
—
|
|
(10.0)
|
|
El Dorado refinery fire
losses
|
|
8.0
|
|
—
|
|
—
|
|
—
|
|
8.0
|
|
Net income attributable
to non-controlling interest
|
|
—
|
|
—
|
|
—
|
|
22.1
|
|
22.1
|
|
Total Adjusting
items
|
|
129.1
|
|
—
|
|
—
|
|
28.5
|
|
157.6
|
|
Adjusted Segment
EBITDA
|
|
$
716.8
|
|
$
278.8
|
|
$
37.6
|
|
$
(144.1)
|
|
$
889.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended
September 30, 2022
|
|
$ in millions
(unaudited)
|
|
Refining
|
|
Logistics
|
|
Retail
|
|
Corporate,
Other and
Eliminations
|
|
Consolidated
|
|
Segment EBITDA
Attributable to Delek
|
|
$
758.2
|
|
$
214.1
|
|
$
36.3
|
|
$
(183.4)
|
|
$
825.2
|
|
Adjusting
items
|
|
|
|
|
|
|
|
|
|
|
|
Net inventory LCM
valuation (benefit) loss
|
|
19.1
|
|
—
|
|
—
|
|
—
|
|
19.1
|
|
Other inventory impact
(1) (2)
|
|
137.5
|
|
—
|
|
—
|
|
—
|
|
137.5
|
|
Unrealized
inventory/commodity hedging (gain) loss where
the hedged item is not yet recognized in the financial
statements (3)
|
|
(30.9)
|
|
—
|
|
—
|
|
—
|
|
(30.9)
|
|
Transaction related
expenses
|
|
—
|
|
10.6
|
|
—
|
|
—
|
|
10.6
|
|
Business Interruption
insurance recoveries
|
|
(25.9)
|
|
—
|
|
—
|
|
—
|
|
(25.9)
|
|
Net income attributable
to non-controlling interest
|
|
—
|
|
—
|
|
—
|
|
24.4
|
|
24.4
|
|
Total Adjusting
items
|
|
99.8
|
|
10.6
|
|
—
|
|
24.4
|
|
134.8
|
|
Adjusted Segment
EBITDA
|
|
$
858.0
|
|
$
224.7
|
|
$
36.3
|
|
$
(159.0)
|
|
$
960.0
|
|
|
(1) See
further discussion in the "Significant Transactions During the
Quarter Impacting Results" section.
|
|
(2) Starting with the quarter ended
September 30, 2023, we updated our other inventory impact
calculation to exclude the impact of certain pipeline inventories
not used in
our refinery operations. The impact to
historical non-GAAP financial measures is
immaterial.
|
|
(3) Starting with the quarter ended
March 31, 2023, we no longer adjust non-GAAP financial measures for
unrealized gains and losses related to RINs where the
hedged
item is not yet recognized in the financial
statements. Historical non-GAAP financial measures have been
revised to conform to current period presentation.
|
|
12 |
|
Refining Segment
Selected Financial Information
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
Total Refining
Segment
|
|
(Unaudited)
|
|
(Unaudited)
|
|
Days in
period
|
|
92
|
|
92
|
|
273
|
|
273
|
|
Total sales volume -
refined product (average barrels per day ("bpd"))
(1)
|
|
307,626
|
|
312,877
|
|
295,141
|
|
307,380
|
|
Total production
(average bpd)
|
|
303,399
|
|
300,235
|
|
287,375
|
|
293,970
|
|
|
|
|
|
|
|
|
|
|
Crude oil
|
|
294,726
|
|
299,973
|
|
275,310
|
|
289,046
|
|
Other
feedstocks
|
|
11,222
|
|
2,276
|
|
14,815
|
|
6,537
|
|
Total throughput
(average bpd)
|
|
305,948
|
|
302,249
|
|
290,125
|
|
295,583
|
|
|
|
|
|
|
|
|
|
|
Total refining
production margin per bbl total throughput
|
|
$
16.01
|
|
$
17.07
|
|
$
13.86
|
|
$
19.03
|
|
Total refining
operating expenses per bbl total throughput
|
|
$
5.47
|
|
$
6.22
|
|
$
5.50
|
|
$
5.71
|
|
|
|
|
|
|
|
|
|
|
Total refining
production margin ($ in millions)
|
|
$
450.5
|
|
$
474.7
|
|
$
1,097.7
|
|
$
1,535.5
|
|
Supply, marketing and
other ($ millions) (2)
|
|
(1.2)
|
|
51.7
|
|
95.0
|
|
(175.6)
|
|
Total adjusted refining
margin ($ in millions)
|
|
$
449.3
|
|
$
526.4
|
|
$
1,192.7
|
|
$
1,359.9
|
|
|
|
|
|
|
|
|
|
|
Total crude slate
details
|
|
|
|
|
|
|
|
|
|
Total crude slate: (%
based on amount received in period)
|
|
|
|
|
|
|
|
|
|
WTI crude
oil
|
|
73.4 %
|
|
75.2 %
|
|
73.3 %
|
|
67.1 %
|
|
Gulf Coast Sweet
crude
|
|
3.3 %
|
|
5.3 %
|
|
4.0 %
|
|
8.4 %
|
|
Local Arkansas crude
oil
|
|
4.0 %
|
|
3.5 %
|
|
4.1 %
|
|
4.1 %
|
|
Other
|
|
19.3 %
|
|
16.0 %
|
|
18.6 %
|
|
20.4 %
|
|
|
|
|
|
|
|
|
|
|
Crude utilization (%
based on nameplate capacity) (5)
|
|
97.6 %
|
|
99.3 %
|
|
91.2 %
|
|
95.7 %
|
|
|
|
|
|
|
|
|
|
|
Tyler, TX
Refinery
|
|
|
|
|
|
|
|
|
|
Days in
period
|
|
92
|
|
92
|
|
273
|
|
273
|
|
Products manufactured
(average bpd):
|
|
|
|
|
|
|
|
|
|
Gasoline
|
|
35,615
|
|
35,210
|
|
30,750
|
|
35,021
|
|
Diesel/Jet
|
|
34,620
|
|
33,844
|
|
26,976
|
|
31,060
|
|
Petrochemicals, LPG,
NGLs
|
|
3,429
|
|
2,246
|
|
2,409
|
|
2,160
|
|
Other
|
|
1,959
|
|
2,032
|
|
1,856
|
|
1,844
|
|
Total
production
|
|
75,623
|
|
73,332
|
|
61,991
|
|
70,085
|
|
Throughput (average
bpd):
|
|
|
|
|
|
|
|
|
|
Crude
oil
|
|
74,877
|
|
74,796
|
|
59,379
|
|
69,335
|
|
Other
feedstocks
|
|
1,118
|
|
(1,123)
|
|
3,243
|
|
1,032
|
|
Total
throughput
|
|
75,995
|
|
73,673
|
|
62,622
|
|
70,367
|
|
|
|
|
|
|
|
|
|
|
Tyler refining
production margin ($ in millions)
|
|
$
165.4
|
|
$
151.5
|
|
$
329.7
|
|
$
441.8
|
|
Per barrel of
throughput:
|
|
|
|
|
|
|
|
|
|
Tyler refining
production margin
|
|
$
23.66
|
|
$
22.35
|
|
$
19.29
|
|
$
23.00
|
|
Operating expenses
(3)
|
|
$
4.74
|
|
$
7.06
|
|
$
5.06
|
|
$
5.99
|
|
Crude Slate: (% based
on amount received in period)
|
|
|
|
|
|
|
|
|
|
WTI crude
oil
|
|
76.8 %
|
|
86.4 %
|
|
78.1 %
|
|
85.9 %
|
|
East Texas crude
oil
|
|
23.2 %
|
|
13.6 %
|
|
21.9 %
|
|
14.1 %
|
|
|
|
|
|
|
|
|
|
|
Capture rate
(4)
|
|
73.0 %
|
|
66.4 %
|
|
64.0 %
|
|
68.2 %
|
|
El Dorado, AR
Refinery
|
|
|
|
|
|
|
|
|
|
Days in
period
|
|
92
|
|
92
|
|
273
|
|
273
|
|
Products manufactured
(average bpd):
|
|
|
|
|
|
|
|
|
|
Gasoline
|
|
39,361
|
|
40,577
|
|
37,213
|
|
38,946
|
|
Diesel
|
|
31,927
|
|
31,372
|
|
29,211
|
|
31,143
|
|
Petrochemicals, LPG,
NGLs
|
|
1,875
|
|
1,347
|
|
1,564
|
|
1,306
|
|
Asphalt
|
|
7,893
|
|
8,503
|
|
7,418
|
|
7,941
|
|
Other
|
|
1,168
|
|
848
|
|
1,034
|
|
813
|
|
Total
production
|
|
82,224
|
|
82,647
|
|
76,440
|
|
80,149
|
|
Throughput (average
bpd):
|
|
|
|
|
|
|
|
|
|
Crude oil
|
|
81,671
|
|
80,711
|
|
75,286
|
|
78,136
|
|
Other
feedstocks
|
|
2,611
|
|
3,301
|
|
3,053
|
|
3,154
|
|
Total
throughput
|
|
84,282
|
|
84,012
|
|
78,339
|
|
81,290
|
13 |
|
Refining Segment
Selected Financial Information
(continued)
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
El Dorado refining
production margin ($ in millions)
|
|
$
97.5
|
|
$
106.0
|
|
$
231.0
|
|
$
350.8
|
|
Per barrel of
throughput:
|
|
|
|
|
|
|
|
|
|
El Dorado refining
production margin
|
|
$
12.57
|
|
$
13.72
|
|
$
10.80
|
|
$
15.81
|
|
Operating expenses
(3)
|
|
$
4.36
|
|
$
4.83
|
|
$
4.60
|
|
$
4.70
|
|
Crude Slate: (% based
on amount received in period)
|
|
|
|
|
|
|
|
|
|
WTI crude
oil
|
|
71.9 %
|
|
68.4 %
|
|
67.6 %
|
|
52.1 %
|
|
Local Arkansas crude
oil
|
|
13.4 %
|
|
14.0 %
|
|
14.8 %
|
|
15.5 %
|
|
Other
|
|
14.7 %
|
|
17.6 %
|
|
17.6 %
|
|
32.4 %
|
|
|
|
|
|
|
|
|
|
|
Capture rate
(4)
|
|
38.8 %
|
|
40.8 %
|
|
35.8 %
|
|
46.9 %
|
|
Big Spring, TX
Refinery
|
|
|
|
|
|
|
|
|
|
Days in
period
|
|
92
|
|
92
|
|
273
|
|
273
|
|
Products manufactured
(average bpd):
|
|
|
|
|
|
|
|
|
|
Gasoline
|
|
29,274
|
|
34,431
|
|
33,755
|
|
34,087
|
|
Diesel/Jet
|
|
23,607
|
|
26,020
|
|
23,333
|
|
25,262
|
|
Petrochemicals, LPG,
NGLs
|
|
3,723
|
|
3,524
|
|
3,299
|
|
3,466
|
|
Asphalt
|
|
2,220
|
|
1,701
|
|
1,833
|
|
1,662
|
|
Other
|
|
5,272
|
|
1,342
|
|
3,283
|
|
1,344
|
|
Total
production
|
|
64,096
|
|
67,018
|
|
65,503
|
|
65,821
|
|
Throughput (average
bpd):
|
|
|
|
|
|
|
|
|
|
Crude oil
|
|
61,046
|
|
70,955
|
|
62,733
|
|
67,455
|
|
Other
feedstocks
|
|
3,865
|
|
(3,189)
|
|
3,834
|
|
(866)
|
|
Total
throughput
|
|
64,911
|
|
67,766
|
|
66,567
|
|
66,589
|
|
|
|
|
|
|
|
|
|
|
Big Spring refining
production margin ($ in millions)
|
|
$
95.1
|
|
$
116.8
|
|
$
280.3
|
|
$
370.4
|
|
Per barrel of
throughput:
|
|
|
|
|
|
|
|
|
|
Big Spring refining
production margin
|
|
$
15.92
|
|
$
18.74
|
|
$
15.43
|
|
$
20.37
|
|
Operating expenses
(3)
|
|
$
8.37
|
|
$
7.32
|
|
$
7.61
|
|
$
7.02
|
|
Crude Slate: (% based
on amount received in period)
|
|
|
|
|
|
|
|
|
|
WTI crude
oil
|
|
64.3 %
|
|
72.7 %
|
|
68.8 %
|
|
69.3 %
|
|
WTS crude
oil
|
|
35.7 %
|
|
27.3 %
|
|
31.2 %
|
|
30.7 %
|
|
|
|
|
|
|
|
|
|
|
Capture rate
(4)
|
|
50.9 %
|
|
59.9 %
|
|
52.6 %
|
|
63.4 %
|
|
Krotz Springs, LA
Refinery
|
|
|
|
|
|
|
|
|
|
Days in
period
|
|
92
|
|
92
|
|
273
|
|
273
|
|
Products manufactured
(average bpd):
|
|
|
|
|
|
|
|
|
|
Gasoline
|
|
38,361
|
|
32,371
|
|
40,454
|
|
32,111
|
|
Diesel/Jet
|
|
30,653
|
|
31,195
|
|
31,794
|
|
31,537
|
|
Heavy oils
|
|
5,461
|
|
944
|
|
4,239
|
|
1,439
|
|
Petrochemicals, LPG,
NGLs
|
|
6,079
|
|
6,768
|
|
6,510
|
|
6,948
|
|
Other
|
|
902
|
|
5,960
|
|
446
|
|
5,881
|
|
Total
production
|
|
81,456
|
|
77,238
|
|
83,443
|
|
77,916
|
|
Throughput (average
bpd):
|
|
|
|
|
|
|
|
|
|
Crude oil
|
|
77,132
|
|
73,510
|
|
77,912
|
|
74,120
|
|
Other
feedstocks
|
|
3,628
|
|
3,287
|
|
4,686
|
|
3,216
|
|
Total
throughput
|
|
80,760
|
|
76,797
|
|
82,598
|
|
77,336
|
|
|
|
|
|
|
|
|
|
|
Krotz Springs refining
production margin ($ in millions)
|
|
$
92.5
|
|
$
100.4
|
|
$
256.6
|
|
$
372.5
|
|
Per barrel of
throughput:
|
|
|
|
|
|
|
|
|
|
Krotz Springs refining
production margin
|
|
$
12.45
|
|
$
14.21
|
|
$
11.38
|
|
$
17.64
|
|
Operating expenses
(3)
|
|
$
5.00
|
|
$
5.97
|
|
$
5.00
|
|
$
5.41
|
|
Crude Slate: (% based
on amount received in period)
|
|
|
|
|
|
|
|
|
|
WTI Crude
|
|
79.8 %
|
|
70.1 %
|
|
79.0 %
|
|
61.0 %
|
|
Gulf Coast Sweet
Crude
|
|
11.2 %
|
|
23.2 %
|
|
13.5 %
|
|
33.3 %
|
|
Other
|
|
9.0 %
|
|
6.7 %
|
|
7.5 %
|
|
5.7 %
|
|
|
|
|
|
|
|
|
|
|
Capture rate
(4)
|
|
63.9 %
|
|
55.4 %
|
|
68.4 %
|
|
67.0 %
|
|
|
(1) Includes sales to other segments
which are eliminated in consolidation.
|
|
(2) Supply,
marketing and other activities include refined product wholesale
and related marketing activities, asphalt and intermediates
marketing activities, optimization of inventory
and the execution of risk management programs
to capture the physical and financial opportunities that extend
from our refining operations. Formally known as Trading &
Supply.
|
|
(3) Reflects
the prior period conforming reclassification adjustment between
operating expenses and general and administrative
expenses.
|
|
(4) Defined
as refining production margin divided by the respective crack
spread. See page 17 for crack spread
information.
|
|
(5) Crude
throughput as % of total nameplate capacity of
302,000 bpd.
|
14 |
|
|
Logistics Segment
Selected Information
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
|
(Unaudited)
|
|
(Unaudited)
|
|
Gathering &
Processing: (average bpd)
|
|
|
|
|
|
|
|
|
|
Lion Pipeline
System:
|
|
|
|
|
|
|
|
|
|
Crude pipelines
(non-gathered)
|
|
70,153
|
|
87,653
|
|
64,835
|
|
81,795
|
|
Refined products
pipelines
|
|
63,991
|
|
65,761
|
|
54,686
|
|
63,391
|
|
SALA Gathering
System
|
|
14,774
|
|
14,354
|
|
13,935
|
|
16,150
|
|
East Texas Crude
Logistics System
|
|
36,298
|
|
23,960
|
|
29,928
|
|
20,015
|
|
Midland Gathering
Assets (1)
|
|
248,443
|
|
121,304
|
|
230,907
|
|
107,699
|
|
Plains Connection
System
|
|
250,550
|
|
184,254
|
|
248,763
|
|
166,864
|
|
Delaware Gathering
Assets: (2)
|
|
|
|
|
|
|
|
|
|
Natural gas gathering
and processing (Mcfd) (3)
|
|
69,737
|
|
64,429
|
|
72,569
|
|
61,198
|
|
Crude oil gathering
(average bpd)
|
|
111,973
|
|
86,483
|
|
110,935
|
|
84,497
|
|
Water disposal and
recycling (average bpd)
|
|
99,158
|
|
69,411
|
|
104,920
|
|
66,043
|
|
|
|
|
|
|
|
|
|
|
Wholesale Marketing
& Terminalling:
|
|
|
|
|
|
|
|
|
|
East Texas - Tyler
Refinery sales volumes (average bpd) (4)
|
|
69,178
|
|
65,396
|
|
57,894
|
|
66,473
|
|
Big Spring wholesale
marketing throughputs (average bpd)
|
|
81,617
|
|
74,238
|
|
78,399
|
|
76,135
|
|
West Texas wholesale
marketing throughputs (average bpd)
|
|
10,692
|
|
10,082
|
|
9,871
|
|
10,023
|
|
West Texas wholesale
marketing margin per barrel
|
|
$
4.56
|
|
$
4.23
|
|
$
5.43
|
|
$
3.84
|
|
Terminalling
throughputs (average bpd) (5)
|
|
121,430
|
|
142,003
|
|
116,455
|
|
138,558
|
|
|
(1) Formerly
known as the Permian Gathering System. Excludes volumes that are
being temporarily transported via trucks while connectors are under
construction.
|
|
(2) Formally known as 3 Bear,
which was acquired June 1, 2022.
|
|
(3)
Mcfd - average thousand cubic feet per day.
|
|
(4) Excludes
jet fuel and petroleum coke.
|
|
(5) Consists
of terminalling throughputs at our Tyler, Big Spring, Big
Sandy and Mount Pleasant, Texas terminals, El Dorado and North
Little Rock, Arkansas terminals and Memphis
and Nashville, Tennessee
terminals.
|
|
|
Retail Segment
Selected Information
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
|
(Unaudited)
|
|
(Unaudited)
|
|
Number of stores (end
of period)
|
|
250
|
|
248
|
|
250
|
|
248
|
|
Average number of
stores
|
|
250
|
|
248
|
|
250
|
|
248
|
|
Average number of fuel
stores
|
|
245
|
|
243
|
|
245
|
|
243
|
|
Retail fuel sales
(thousands of gallons)
|
|
43,170
|
|
44,729
|
|
128,821
|
|
129,145
|
|
Average retail gallons
sold per average number of fuel stores (in
thousands)
|
|
176
|
|
184
|
|
526
|
|
533
|
|
Average retail sales
price per gallon sold
|
|
$
3.54
|
|
$
3.78
|
|
$
3.36
|
|
$
3.89
|
|
Retail fuel margin ($
per gallon) (1)
|
|
$
0.42
|
|
$
0.35
|
|
$
0.34
|
|
$
0.33
|
|
Merchandise sales (in
millions)
|
|
$
83.5
|
|
$
84.2
|
|
$
241.7
|
|
$
237.3
|
|
Merchandise sales per
average number of stores (in millions)
|
|
$
0.3
|
|
$
0.3
|
|
$
1.0
|
|
$
1.0
|
|
Merchandise margin
%
|
|
34.4 %
|
|
32.6 %
|
|
33.8 %
|
|
33.7 %
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
Same-Store
Comparison (2)
|
|
(Unaudited)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
Change in same-store
fuel gallons sold
|
|
(6.8) %
|
|
7.4 %
|
|
(3.3) %
|
|
4.7 %
|
|
Change in same-store
merchandise sales
|
|
(1.9) %
|
|
3.9 %
|
|
1.1 %
|
|
(0.3) %
|
|
|
(1) Retail
fuel margin represents gross margin on fuel sales in the retail
segment, and is calculated as retail fuel sales revenue less retail
fuel cost of
sales. The retail fuel margin per gallon
calculation is derived by dividing retail fuel margin by the total
retail fuel gallons sold for the period.
|
|
(2)
Same-store comparisons include period-over-period changes in
specified metrics for stores that were in service at both the
beginning of the earliest
period and the end of the most recent period
used in the comparison.
|
|
15 |
|
Supplemental
Information
|
|
|
Schedule of Selected
Segment Financial Data, Pricing Statistics Impacting our
Refining Segment, and Other Reconciliations of Amounts Reported
Under U.S.
GAAP
|
|
|
Selected Segment
Financial Data
|
|
Three Months Ended
September 30, 2023
|
|
$ in millions
(unaudited)
|
|
Refining
|
|
Logistics
|
|
Retail
|
|
Corporate,
Other and
Eliminations
|
|
Consolidated
|
|
Net revenues
(excluding
intercompany fees and revenues)
|
|
$
4,392.4
|
|
$
119.5
|
|
$
236.5
|
|
$
—
|
|
$
4,748.4
|
|
Inter-segment fees and
revenues
|
|
232.1
|
|
156.4
|
|
—
|
|
(388.5)
|
|
—
|
|
Total
revenues
|
|
$
4,624.5
|
|
$
275.9
|
|
$
236.5
|
|
$
(388.5)
|
|
$
4,748.4
|
|
Cost of
sales
|
|
4,394.4
|
|
206.5
|
|
189.6
|
|
(367.0)
|
|
4,423.5
|
|
Gross
margin
|
|
$
230.1
|
|
$
69.4
|
|
$
46.9
|
|
$
(21.5)
|
|
$
324.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30, 2022
|
|
$ in millions
(unaudited)
|
|
Refining
|
|
Logistics
|
|
Retail
|
|
Corporate,
Other and
Eliminations
|
|
Consolidated
|
|
Net revenues
(excluding
intercompany fees and revenues)
|
|
$
4,904.5
|
|
$
166.9
|
|
$
253.1
|
|
$
0.4
|
|
$
5,324.9
|
|
Inter-segment fees and
revenues
|
|
262.9
|
|
127.2
|
|
—
|
|
(390.1)
|
|
—
|
|
Total
revenues
|
|
$
5,167.4
|
|
$
294.1
|
|
$
253.1
|
|
$
(389.7)
|
|
$
5,324.9
|
|
Cost of
sales
|
|
5,138.0
|
|
220.4
|
|
210.3
|
|
(384.9)
|
|
5,183.8
|
|
Gross
margin
|
|
$
29.4
|
|
$
73.7
|
|
$
42.8
|
|
$
(4.8)
|
|
$
141.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended
September 30, 2023
|
|
$ in millions
(unaudited)
|
|
Refining
|
|
Logistics
|
|
Retail
|
|
Corporate,
Other and
Eliminations
|
|
Consolidated
|
|
Net revenues
(excluding
intercompany fees and revenues)
|
|
$
11,842.2
|
|
$
351.9
|
|
$
674.2
|
|
$
—
|
|
$
12,868.3
|
|
Inter-segment fees and
revenues
|
|
629.3
|
|
414.4
|
|
—
|
|
(1,043.7)
|
|
—
|
|
Total
revenues
|
|
$
12,471.5
|
|
$
766.3
|
|
$
674.2
|
|
$
(1,043.7)
|
|
$
12,868.3
|
|
Cost of
sales
|
|
12,045.8
|
|
555.6
|
|
548.1
|
|
(1,000.9)
|
|
12,148.6
|
|
Gross
margin
|
|
$
425.7
|
|
$
210.7
|
|
$
126.1
|
|
$
(42.8)
|
|
$
719.7
|
|
|
|
Nine Months Ended
September 30, 2022
|
|
$ in millions
(unaudited)
|
|
Refining
|
|
Logistics
|
|
Retail
|
|
Corporate,
Other and
Eliminations
|
|
Consolidated
|
|
Net revenues
(excluding
intercompany fees and revenues)
|
|
$
14,633.6
|
|
$
392.1
|
|
$
739.7
|
|
$
1.2
|
|
$
15,766.6
|
|
Inter-segment fees and
revenues
|
|
801.0
|
|
375.3
|
|
—
|
|
(1,176.3)
|
|
—
|
|
Total
revenues
|
|
$
15,434.6
|
|
$
767.4
|
|
$
739.7
|
|
$
(1,175.1)
|
|
$
15,766.6
|
|
Cost of
sales
|
|
14,819.5
|
|
583.6
|
|
617.1
|
|
(1,140.7)
|
|
14,879.5
|
|
Gross
margin
|
|
$
615.1
|
|
$
183.8
|
|
$
122.6
|
|
$
(34.4)
|
|
$
887.1
|
|
16 |
|
Pricing
Statistics
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
(average for the
period presented)
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
|
|
|
|
|
|
|
|
|
WTI — Cushing crude oil
(per barrel)
|
|
$
82.51
|
|
$
91.63
|
|
$
77.37
|
|
$
98.50
|
|
WTI — Midland crude oil
(per barrel)
|
|
$
83.85
|
|
$
93.41
|
|
$
78.63
|
|
$
99.87
|
|
WTS — Midland crude oil
(per barrel)
|
|
$
83.01
|
|
$
92.17
|
|
$
77.34
|
|
$
98.58
|
|
LLS (per
barrel)
|
|
$
84.88
|
|
$
94.07
|
|
$
79.82
|
|
$
100.58
|
|
Brent (per
barrel)
|
|
$
85.92
|
|
$
97.69
|
|
$
81.96
|
|
$
102.48
|
|
|
|
|
|
|
|
|
|
|
U.S. Gulf Coast 5-3-2
crack spread (per barrel) (1)
|
|
$
32.39
|
|
$
33.65
|
|
$
30.15
|
|
$
33.73
|
|
U.S. Gulf Coast 3-2-1
crack spread (per barrel) (1)
|
|
$
31.30
|
|
$
31.28
|
|
$
29.30
|
|
$
32.12
|
|
U.S. Gulf Coast 2-1-1
crack spread (per barrel) (1)
|
|
$
19.48
|
|
$
25.63
|
|
$
16.64
|
|
$
26.33
|
|
|
|
|
|
|
|
|
|
|
U.S. Gulf Coast
Unleaded Gasoline (per gallon)
|
|
$
2.58
|
|
$
2.64
|
|
$
2.44
|
|
$
2.92
|
|
Gulf Coast Ultra low
sulfur diesel (per gallon)
|
|
$
2.97
|
|
$
3.49
|
|
$
2.74
|
|
$
3.49
|
|
U.S. Gulf Coast high
sulfur diesel (per gallon)
|
|
$
2.04
|
|
$
2.86
|
|
$
1.80
|
|
$
2.98
|
|
Natural gas (per
MMBTU)
|
|
$
2.66
|
|
$
7.97
|
|
$
2.57
|
|
$
6.69
|
|
|
|
(1)
|
For our Tyler and El
Dorado refineries, we compare our per barrel refining product
margin to the Gulf Coast 5-3-2 crack spread consisting of (Argus
pricing) WTI Cushing crude, U.S. Gulf Coast CBOB gasoline and U.S.
Gulf Coast Pipeline No. 2 heating oil (ultra low sulfur diesel).
For our Big Spring refinery, we compare our per barrel refining
margin to the Gulf Coast 3-2-1 crack spread consisting of (Argus
pricing) WTI Cushing crude, U.S. Gulf Coast CBOB gasoline and Gulf
Coast ultra-low sulfur diesel. Starting in Q1 2023, for our Krotz
Springs refinery, we compare our per barrel refining margin to the
Gulf Coast 2-1-1 crack spread consisting of (Argus pricing) LLS
crude oil, (Argus pricing) U.S. Gulf Coast CBOB gasoline and 50% of
(Argus pricing) U.S. Gulf Coast Pipeline No. 2 heating oil (high
sulfur diesel) and 50% of (Platts pricing) U.S. Gulf Coast Pipeline
No. 2 heating oil (high sulfur diesel). Historical Gulf Coast 2-1-1
crack spread measures have been revised to conform to current
period presentation. 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.
|
|
17 |
|
Other
Reconciliations of Amounts Reported Under U.S. GAAP
|
|
$ in millions
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
Reconciliation of
gross margin to Refining margin to Adjusted
refining margin
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
Gross margin
|
|
$
230.1
|
|
$
29.4
|
|
$
425.7
|
|
$
615.1
|
|
Add back (items
included in cost of sales):
|
|
|
|
|
|
|
|
|
|
Operating expenses
(excluding depreciation and amortization)
|
|
166.5
|
|
175.4
|
|
459.4
|
|
467.5
|
|
Depreciation and
amortization
|
|
60.1
|
|
48.9
|
|
176.5
|
|
151.6
|
|
Refining
margin
|
|
$
456.7
|
|
$
253.7
|
|
$
1,061.6
|
|
$
1,234.2
|
|
Adjusting
items
|
|
|
|
|
|
|
|
|
|
Net inventory LCM
valuation loss (benefit)
|
|
3.4
|
|
20.3
|
|
(6.2)
|
|
19.1
|
|
Other inventory impact
(1) (2)
|
|
(28.2)
|
|
279.5
|
|
145.4
|
|
137.5
|
|
Unrealized
inventory/commodity hedging (gain) loss where the
hedged item is not yet recognized in the financial statements
(3)
|
|
17.4
|
|
(27.1)
|
|
(8.1)
|
|
(30.9)
|
|
Total adjusting
items
|
|
(7.4)
|
|
272.7
|
|
131.1
|
|
125.7
|
|
Adjusted refining
margin
|
|
$
449.3
|
|
$
526.4
|
|
$
1,192.7
|
|
$
1,359.9
|
|
|
(1) See
further discussion in the "Significant Transactions During the
Quarter Impacting Results" section.
|
|
(2) Starting with the quarter ended
September 30, 2023, we updated our other inventory impact
calculation to exclude the impact of certain pipeline inventories
not used in
our refinery operations. The impact to
historical non-GAAP financial measures is
immaterial.
|
|
(3) Starting with the quarter ended
March 31, 2023, we no longer adjust non-GAAP financial measures for
unrealized gains and losses related to RINs where the
hedged
item is not yet recognized in the financial
statements. Historical non-GAAP financial measures have been
revised to conform to current period presentation.
|
|
|
Calculation of (Net
Cash)/Net Debt
|
|
September 30,
2023
|
|
December 31,
2022
|
|
Long-term debt -
current portion
|
|
$
29.5
|
|
$
74.5
|
|
Long-term debt -
non-current portion
|
|
2,608.5
|
|
2,979.2
|
|
Total long-term
debt
|
|
2,638.0
|
|
3,053.7
|
|
Less: Cash and cash
equivalents
|
|
901.7
|
|
841.3
|
|
Net debt -
consolidated
|
|
1,736.3
|
|
2,212.4
|
|
Less: DKL net
debt
|
|
1,737.2
|
|
1,653.6
|
|
(Net Cash)/Net debt,
excluding DKL
|
|
$
(0.9)
|
|
$
558.8
|
|
Information about Delek US Holdings, Inc. can be found on its
website (www.delekus.com), investor relations webpage
(ir.delekus.com), news webpage (www.delekus.com/news) and its
Twitter account (@DelekUSHoldings).
18 |
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SOURCE Delek US Holdings, Inc.