- Reported second quarter net income of $361.8 million or $5.05 per share and Adjusted EBITDA of
$518.4 million
- Record refinery utilization rates and strong operational
performance helped drive record quarterly results
- Announced special dividend of $0.20 per share on June
21, 2022
- Announced a regular quarterly dividend at $0.20 per share
- Board approved expanded share repurchase authorization
program up to $400 million
- DKL closed 3 Bear acquisition early on June 1, 2022; increases third party revenue,
product mix and geography
- Strong free cash generation led to improved cash balance
with $1.24 billion of cash as of
June 30, 2022
BRENTWOOD, Tenn., Aug. 4, 2022
/PRNewswire/ -- Delek US Holdings, Inc. (NYSE: DK) ("Delek US")
today announced financial results for its second quarter ended
June 30, 2022. Delek US reported
second quarter 2022 net income of $361.8
million, or $5.05 per share,
versus a net loss of $(56.7) million,
or $(0.77) per share, for the quarter
ended June 30, 2021. On an adjusted
basis, Delek US reported Adjusted net income of $314.5 million, or $4.40 per share, for the second quarter 2022.
This compares to Adjusted net loss of $(33.9) million, or $(0.46) per share, in the prior year. Adjusted
earnings before interest, taxes, depreciation and amortization
("Adjusted EBITDA") was $518.4
million for the second quarter compared to Adjusted EBITDA
of $46.1 million in the prior
year.
Avigal Soreq, President and Chief Executive Officer of Delek US,
stated, "The Board has approved a reinstatement of the "regular"
quarterly dividend at $0.20 per share
as well as an expansion of the share repurchase authorization to
$400 million. Based on the current
outlook, we expect to repurchase approximately $25 to $35 million
of stock in the third quarter, while simultaneously further
enhancing the balance sheet. We expect that the combination of full
year dividend payments, along with announced share repurchases
through the third quarter, will result in approximately
$135 million of cash returns to
shareholders in 2022, with upside depending on potential buyback
activity in the fourth quarter. Our organic growth initiatives
remain intact in both the midstream and retail segments. Finally, I
would like to welcome the 3 Bear team to our organization. This
acquisition closed early on June 1st
and offers third party revenue, an expanded product mix and
geographic diversification into the Delaware portion of the Permian."
Uzi Yemin, Executive Chairman of
Delek US, stated, "The combination of multiple factors including:
global capacity rationalization, post COVID demand recovery,
reduced utilization trends in China and capacity outages stemming from the
Russian/Ukraine conflict, have led
to unprecedented strength in refining margins. This coupled with
record utilization rates within our system led to record results in
the quarter. I'm pleased to hand off the reins of CEO to Avigal
Soreq with the company on strong financial footing including a cash
balance of $1.24 billion and an
outlook for strong cash generation into the future."
Regular Quarterly Dividend and Share Repurchase
On June 21, 2022 the company
announced a special dividend of $0.20
per share that was paid on July 20,
2022. On August 1, 2022 the
Board of Directors approved a regular quarterly cash dividend of
$0.20 per share. Shareholders of
record on August 22, 2022 will
receive this cash dividend payable on September 6, 2022.
The Board also approved an approximately $170 million increase in its share repurchase
authorization, bringing the total amount available for repurchases
under current authorizations to $400
million. Delek US expects to commence the program with share
repurchases of approximately $25 to
$35 million of Delek US common stock
during the third quarter 2022.
Consolidated Results
Net income attributable to Delek in the second quarter 2022 was
$361.8 million compared to a
$(56.7) million net loss in the
second quarter 2021. On an adjusted basis, Adjusted net income was
$314.5 million in the second quarter
2022 compared to Adjusted net loss of $(33.9) million in the second quarter 2021. The
$348.4 million improvement in
Adjusted net income is primarily attributable to improvements in
refining operating results and contribution margins compared to the
prior year quarter, including the impact of higher refining
utilization rates and crack spreads during the current quarter
compared to the prior period. See below for further discussion of
operating results and contribution margin across our segments.
Refining Segment Results
Refining contribution margin increased to $618.3 million in the second quarter 2022 from
$14.1 million in the second quarter
2021, while Adjusted segment contribution margin was $557.4 million in the second quarter 2022
compared to $37.9 million in the
second quarter 2021. On a year-over-year basis, our refining
segment results were favorably impacted by improvements in crack
spreads and increased demand, attributable in part to low clean
product inventories and continued macroeconomic improvements around
the pandemic combined with the impact of sanctions on Russian oil
supply. We also experienced marked improvements in our refining
utilization rates compared to the prior year period. Additionally,
during the second quarter 2022, Delek US's benchmark crack spreads
were up an average of approximately 181.7% from prior-year levels,
though the refineries' ability to capture crack spreads continues
to be negatively impacted by elevated RIN costs with an ongoing
burden of the RFS program on small refineries.
Logistics Segment Results
The logistics segment contribution margin in the second quarter
2022 was $69.3 million compared to
$64.2 million in the second quarter
2021, where Adjusted segment contribution margin was $69.5 million compared to $64.0 million in the prior year quarter. Overall
performance benefited from strong refinery utilization rates and
closing of the 3 Bear Delaware Holding - NM, LLC ("3 Bear")
acquisition on June 1, 2022 (the "3
Bear Acquisition").
Retail Segment Results
For the second quarter 2022, contribution margin, on both a GAAP
and adjusted basis, was $18.2 million
compared to $21.9 million and
$22.0 million on a GAAP and adjusted
basis, respectively, in the prior-year period for the retail
segment. Merchandise sales were approximately $83.4 million with an average retail margin of
34.0% in the second quarter 2022, compared to merchandise sales of
approximately $84.5 million with an
average retail margin of 32.7% in the prior-year period.
Approximately 44.9 million retail fuel gallons were sold at an
average margin of $0.33 per gallon in
the second quarter 2022 compared to 43.0 million retail fuel
gallons sold at an average margin of $0.39 per gallon in the second quarter 2021. In
the second quarter 2022, the average merchandise store count was
248 compared to 252 in the prior-year period. On a same-store-sales
basis in the second quarter 2022, merchandise sales increased 0.1%
and fuel gallons sold increased 5.8% compared to the prior-year
period.
Corporate and Other Activity
Contribution margin from Corporate, Other and Eliminations was a
loss of $28.3 million in the second
quarter 2022 compared to a loss of $35.5
million in the prior-year period, where Adjusted
contribution margin was a $27.4
million loss compared to a $35.7
million loss in the same quarter of 2021, and where these
amounts include inter-segment eliminations.
Returns from the Wink-to-Webster crude oil pipeline, in which Delek
owns a 15% indirect joint venture interest, is currently reflected
in income from equity method investments in the condensed
consolidated statements of income, and is expected to ratably
increase throughout the year. The 36-inch diameter pipeline, which
is fully contracted with minimum volume commitments ("MVCs"), will
originate in the Permian Basin and have destination points in the
Houston market.
Liquidity
As of June 30, 2022, Delek US had
a cash balance of $1.24 billion and
total consolidated long-term debt of $2.82
billion, resulting in Net debt of $1.57 billion. As of June 30, 2022, Delek Logistics Partners, LP
(NYSE: DKL) ("Delek Logistics") had $13.8
million of cash and $1.52
billion of total long-term debt, which are included in the
consolidated amounts on Delek US' balance sheet. Excluding Delek
Logistics, Delek US had approximately $1.23
billion in cash and $1.30
billion of long-term debt, or a $64.7
million Net debt position.
Second Quarter 2022 Results | Conference Call
Information
Delek US will hold a conference call to discuss its second
quarter 2022 results on Thursday, August 4,
2022 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.
2
|
Investors may also wish to listen to Delek Logistics' (NYSE:
DKL) second quarter 2022 earnings conference call that will be held
on Thursday, August 4, 2022 at
9:00 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, 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.
The logistics operations primarily consist of Delek Logistics
Partners, LP (NYSE: DKL). Delek US Holdings, Inc. and its
affiliates own approximately 78.9% (including the general partner
interest) of Delek Logistics Partners, LP at June 30, 2022. Delek Logistics Partners, LP is a
growth-oriented master limited partnership focused on owning and
operating midstream energy infrastructure assets.
The convenience store retail segment operates approximately 248
convenience stores in West Texas
and New Mexico.
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 3 Bear acquisition, RINs waivers and tax credits
and the value and benefit therefrom; cash and liquidity; emissions
reductions; opportunities and anticipated performance and financial
position.
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 OPEC regarding production and pricing
disputes between OPEC members and Russia; risks and uncertainties related to the
integration by Delek Logistics of the 3 Bear business following the
recent acquisition; risks and uncertainties related to the Covid-19
pandemic; 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.
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 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:
- 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
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 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;
- Adjusted segment contribution margin - calculated as Segment
contribution margin adjusted for the identified Adjusting Items in
Adjusted net income (loss) that impact Segment contribution
margin;
- Refining margin - calculated as the difference between total
refining revenues and total cost of materials and other;
- Adjusted refining margin - calculated as refining margin
adjusted for the relevant identified Adjusting items in Adjusted
net income (loss) that impact refining margin and that, where
applicable, can be identified and/or are measured and recognized at
the refinery level;
- Refining margin per sales barrel - calculated as refining
margin divided by our average refining sales in barrels per day
(excluding purchased barrels) multiplied by 1,000 and multiplied by
the number of days in the period;
- Adjusted refining margin per sales barrel - calculated as
adjusted refining margin divided by our average refining sales 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, and Adjusted Segment Contribution 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.
Delek US Holdings,
Inc.
|
Condensed
Consolidated Balance Sheets (Unaudited)
|
(In millions,
except share and per share data)
|
|
|
June 30,
2022
|
|
December 31,
2021
As
Adjusted(1)
|
ASSETS
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
|
$
1,244.6
|
|
$
856.5
|
Accounts receivable,
net
|
|
1,319.4
|
|
776.6
|
Inventories, net of
inventory valuation reserves
|
|
1,805.9
|
|
1,260.7
|
Other current
assets
|
|
187.5
|
|
126.0
|
Total current
assets
|
|
4,557.4
|
|
3,019.8
|
Property, plant and
equipment:
|
|
|
|
|
Property, plant and
equipment
|
|
4,107.1
|
|
3,645.4
|
Less: accumulated
depreciation
|
|
(1,447.1)
|
|
(1,338.1)
|
Property, plant and
equipment, net
|
|
2,660.0
|
|
2,307.3
|
Operating lease
right-of-use assets
|
|
190.7
|
|
208.5
|
Goodwill
|
|
740.0
|
|
729.7
|
Other intangibles,
net
|
|
325.8
|
|
102.7
|
Equity method
investments
|
|
354.6
|
|
344.1
|
Other non-current
assets
|
|
96.1
|
|
100.5
|
Total
assets
|
|
$
8,924.6
|
|
$
6,812.6
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts
payable
|
|
$
2,449.6
|
|
$
1,695.3
|
Current portion of
long-term debt
|
|
72.0
|
|
92.2
|
Obligation under
Supply and Offtake Agreements
|
|
770.5
|
|
487.5
|
Current portion of
operating lease liabilities
|
|
51.4
|
|
53.9
|
Accrued expenses and
other current liabilities
|
|
885.6
|
|
797.8
|
Total current
liabilities
|
|
4,229.1
|
|
3,126.7
|
Non-current
liabilities:
|
|
|
|
|
Long-term debt, net of
current portion
|
|
2,745.7
|
|
2,125.8
|
Environmental
liabilities, net of current portion
|
|
112.7
|
|
109.5
|
Asset retirement
obligations
|
|
41.1
|
|
38.3
|
Deferred tax
liabilities
|
|
300.3
|
|
214.5
|
Operating lease
liabilities, net of current portion
|
|
131.9
|
|
152.0
|
Other non-current
liabilities
|
|
26.4
|
|
31.8
|
Total non-current
liabilities
|
|
3,358.1
|
|
2,671.9
|
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, 88,610,583 shares and
91,772,080 shares issued at June 30, 2022 and December 31, 2021,
respectively
|
|
0.9
|
|
0.9
|
Additional paid-in
capital
|
|
1,159.1
|
|
1,206.5
|
Accumulated other
comprehensive loss
|
|
(3.9)
|
|
(3.8)
|
Treasury stock,
17,575,527 shares, at cost, as of June 30, 2022 and December 31,
2021
|
|
(694.1)
|
|
(694.1)
|
Retained
earnings
|
|
753.0
|
|
384.7
|
Non-controlling
interests in subsidiaries
|
|
122.4
|
|
119.8
|
Total stockholders'
equity
|
|
1,337.4
|
|
1,014.0
|
Total liabilities and
stockholders' equity
|
|
$
8,924.6
|
|
$
6,812.6
|
|
(1)
Adjusted to reflect the retrospective change in accounting policy
from LIFO to FIFO for certain inventories.
|
Delek US Holdings,
Inc.
|
Condensed
Consolidated Statements of Income (Unaudited)
|
(In millions,
except share and per share data)
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
|
2022
|
|
2021
As Adjusted(1)
(2)
|
|
2022
|
|
2021
As Adjusted(1)
(2)
|
Net revenues
|
|
$
5,982.6
|
|
$
2,191.5
|
|
$
10,441.7
|
|
$
4,583.7
|
Cost of
sales:
|
|
|
|
|
|
|
|
|
Cost of materials and
other
|
|
5,082.6
|
|
1,960.6
|
|
9,235.1
|
|
4,133.4
|
Operating expenses
(excluding depreciation and amortization presented
below)
|
|
188.5
|
|
130.8
|
|
328.0
|
|
260.7
|
Depreciation and
amortization
|
|
62.8
|
|
60.5
|
|
125.5
|
|
122.8
|
Total cost of
sales
|
|
5,333.9
|
|
2,151.9
|
|
9,688.6
|
|
4,516.9
|
Operating expenses
related to retail and wholesale business (excluding depreciation
and amortization presented below)
|
|
34.0
|
|
35.4
|
|
61.4
|
|
60.8
|
General and
administrative expenses
|
|
126.5
|
|
53.5
|
|
179.6
|
|
94.6
|
Depreciation and
amortization
|
|
5.2
|
|
5.8
|
|
10.8
|
|
12.0
|
Impairment of
goodwill
|
|
—
|
|
—
|
|
—
|
|
—
|
Other operating income,
net
|
|
(10.3)
|
|
(4.9)
|
|
(38.7)
|
|
(3.0)
|
Total operating costs
and expenses
|
|
5,489.3
|
|
2,241.7
|
|
9,901.7
|
|
4,681.3
|
Operating income
(loss)
|
|
493.3
|
|
(50.2)
|
|
540.0
|
|
(97.6)
|
Interest expense,
net
|
|
43.6
|
|
33.1
|
|
82.0
|
|
62.5
|
Income from equity
method investments
|
|
(15.7)
|
|
(6.8)
|
|
(26.6)
|
|
(11.6)
|
Other (income) expense,
net
|
|
(3.6)
|
|
6.8
|
|
(2.3)
|
|
5.8
|
Total non-operating
expense, net
|
|
24.3
|
|
33.1
|
|
53.1
|
|
56.7
|
Income (loss) before
income tax expense (benefit)
|
|
469.0
|
|
(83.3)
|
|
486.9
|
|
(154.3)
|
Income tax expense
(benefit)
|
|
100.4
|
|
(35.2)
|
|
103.5
|
|
(43.5)
|
Net income
(loss)
|
|
368.6
|
|
(48.1)
|
|
383.4
|
|
(110.8)
|
Net income attributed
to non-controlling interests
|
|
6.8
|
|
8.6
|
|
15.0
|
|
15.9
|
Net income (loss)
attributable to Delek
|
|
$
361.8
|
|
$
(56.7)
|
|
$
368.4
|
|
$
(126.7)
|
Basic income (loss) per
share
|
|
$
5.11
|
|
$
(0.77)
|
|
$
5.12
|
|
$
(1.72)
|
Diluted income (loss)
per share
|
|
$
5.05
|
|
$
(0.77)
|
|
$
5.07
|
|
$
(1.72)
|
Weighted average common
shares outstanding:
|
|
|
|
|
|
|
|
|
Basic
|
|
70,805,458
|
|
73,911,582
|
|
72,014,151
|
|
73,857,975
|
Diluted
|
|
71,679,954
|
|
73,911,582
|
|
72,675,313
|
|
73,857,975
|
|
|
(1)
|
Adjusted to reflect the
retrospective change in accounting policy from LIFO to FIFO for
certain inventories.
|
(2)
|
In the current period,
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 $5.1 million and
$11.1 million for the three and six months ended June 30, 2021,
respectively.
|
Condensed Cash Flow
Data (Unaudited)
|
(In
millions)
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
2022
|
|
2021
As
Adjusted(1)
|
|
2022
|
|
2021
As
Adjusted(1)
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
Net cash provided by
operating activities
|
$
559.1
|
|
$
169.2
|
|
$
585.9
|
|
$
134.9
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
Net cash used in
investing activities
|
(690.7)
|
|
(72.6)
|
|
(720.9)
|
|
(118.7)
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
Net cash provided by
(used in) financing activities
|
522.1
|
|
(57.1)
|
|
523.1
|
|
29.3
|
Net increase in
cash and cash equivalents
|
390.5
|
|
39.5
|
|
388.1
|
|
45.5
|
Cash and cash
equivalents at the beginning of the period
|
854.1
|
|
793.5
|
|
856.5
|
|
787.5
|
Cash and cash
equivalents at the end of the period
|
$
1,244.6
|
|
$
833.0
|
|
$
1,244.6
|
|
$
833.0
|
|
|
(1)
|
Adjusted to reflect the
retrospective change in accounting policy from LIFO to FIFO for
certain inventories.
|
Delek US Holdings,
Inc.
|
|
|
|
|
|
|
|
|
|
|
Segment Data
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
(In
millions)
|
|
Three Months Ended
June 30, 2022
|
|
|
Refining
|
|
Logistics
|
|
Retail
|
|
Corporate,
Other and
Eliminations
|
|
Consolidated
|
Net revenues (excluding
intercompany fees and sales)
|
|
$
4,498.0
|
|
$
142.4
|
|
$
277.1
|
|
$
1,065.1
|
|
$
5,982.6
|
Inter-segment fees and
revenues
|
|
312.5
|
|
124.3
|
|
—
|
|
(436.8)
|
|
—
|
Operating costs and
expenses:
|
|
|
|
|
|
|
|
|
|
|
Cost of materials and
other
|
|
4,027.2
|
|
176.4
|
|
233.8
|
|
645.2
|
|
5,082.6
|
Operating expenses
(excluding depreciation and amortization presented
below)
|
|
165.0
|
|
21.0
|
|
25.1
|
|
11.4
|
|
222.5
|
Segment contribution
margin
|
|
618.3
|
|
69.3
|
|
18.2
|
|
(28.3)
|
|
677.5
|
Income from equity
method investments
|
|
0.2
|
|
7.1
|
|
—
|
|
8.4
|
|
|
Segment contribution
margin and income (loss) from equity method investments
|
|
$
618.5
|
|
$
76.4
|
|
$
18.2
|
|
$
(19.9)
|
|
|
Depreciation and
amortization
|
|
$
49.9
|
|
$
13.3
|
|
$
3.2
|
|
$
1.6
|
|
68.0
|
General and
administrative expenses
|
|
|
|
|
|
|
|
|
|
126.5
|
Other operating
income, net
|
|
|
|
|
|
|
|
|
|
(10.3)
|
Operating
income
|
|
|
|
|
|
|
|
|
|
$
493.3
|
Capital spending
(excluding business combinations)
|
|
$
19.0
|
|
$
26.7
|
|
$
6.0
|
|
$
8.7
|
|
$
60.4
|
|
|
Three Months Ended
June 30, 2021, As Adjusted (1)
|
|
|
Refining
(1)
|
|
Logistics
|
|
Retail
|
|
Corporate,
Other and
Eliminations (3)
|
|
Consolidated
(1)(3)
|
Net revenues (excluding
inter-segment fees and revenues)
|
|
$
2,226.9
|
|
$
66.1
|
|
$
209.0
|
|
$
(310.5)
|
|
$
2,191.5
|
Inter-segment fees and
revenues
|
|
188.8
|
|
102.4
|
|
—
|
|
(291.2)
|
|
—
|
Operating costs and
expenses:
|
|
|
|
|
|
|
|
|
|
|
Cost of materials and
other
|
|
2,286.6
|
|
88.8
|
|
164.7
|
|
(579.5)
|
|
1,960.6
|
Operating expenses
(excluding depreciation and amortization presented below)
(2)
|
|
115.0
|
|
15.5
|
|
22.4
|
|
13.3
|
|
166.2
|
Segment contribution
margin (2)
|
|
14.1
|
|
64.2
|
|
21.9
|
|
(35.5)
|
|
64.7
|
Income from equity
method investments
|
|
0.1
|
|
6.7
|
|
—
|
|
—
|
|
|
Segment contribution
margin and income (loss) from equity method investments
|
|
$
14.2
|
|
$
70.9
|
|
$
21.9
|
|
$
(35.5)
|
|
|
Depreciation and
amortization
|
|
$
51.0
|
|
$
10.0
|
|
$
3.4
|
|
$
1.9
|
|
66.3
|
General and
administrative expenses (2)
|
|
|
|
|
|
|
|
|
|
53.5
|
Other operating
income, net
|
|
|
|
|
|
|
|
|
|
(4.9)
|
Operating
loss
|
|
|
|
|
|
|
|
|
|
$
(50.2)
|
Capital spending
(excluding business combinations)
|
|
$
60.7
|
|
$
2.6
|
|
$
0.5
|
|
$
1.9
|
|
$
65.7
|
|
|
Six Months Ended
June 30, 2022
|
|
|
Refining
|
|
Logistics
|
|
Retail
|
|
Corporate,
Other and
Eliminations
|
|
Consolidated
|
Net revenues (excluding
inter-segment fees and revenues)
|
|
$
7,766.1
|
|
$
225.2
|
|
$
486.6
|
|
$
1,963.8
|
|
$
10,441.7
|
Inter-segment fees and
revenues
|
|
538.1
|
|
248.1
|
|
—
|
|
(786.2)
|
|
—
|
Operating costs and
expenses:
|
|
|
|
|
|
|
|
|
|
|
Cost of materials and
other
|
|
7,304.1
|
|
302.6
|
|
406.8
|
|
1,221.6
|
|
9,235.1
|
Operating expenses
(excluding depreciation and amortization presented
below)
|
|
284.9
|
|
39.1
|
|
47.8
|
|
17.6
|
|
389.4
|
Segment contribution
margin
|
|
715.2
|
|
131.6
|
|
32.0
|
|
(61.6)
|
|
817.2
|
Income from equity
method investments
|
|
0.4
|
|
14.1
|
|
—
|
|
12.1
|
|
|
Segment contribution
margin and income (loss) from equity method investments
|
|
$
715.6
|
|
$
145.7
|
|
$
32.0
|
|
$
(49.5)
|
|
|
Depreciation and
amortization
|
|
$
102.7
|
|
$
23.7
|
|
$
6.7
|
|
$
3.2
|
|
136.3
|
General and
administrative expenses
|
|
|
|
|
|
|
|
|
|
179.6
|
Other operating
income, net
|
|
|
|
|
|
|
|
|
|
(38.7)
|
Operating
income
|
|
|
|
|
|
|
|
|
|
$
540.0
|
Capital spending
(excluding business combinations)
|
|
$
33.3
|
|
$
35.8
|
|
$
9.0
|
|
$
15.2
|
|
$
93.3
|
|
|
Six Months Ended
June 30, 2021, As Adjusted (1)
|
|
|
Refining
|
|
Logistics
|
|
Retail
|
|
Corporate,
Other and
Eliminations
|
|
Consolidated
|
Net revenues (excluding
inter-segment fees and revenues)
|
|
$
3,811.4
|
|
$
122.8
|
|
$
383.8
|
|
$
265.7
|
|
$
4,583.7
|
Inter-segment fees and
revenues
|
|
344.4
|
|
198.6
|
|
—
|
|
(543.0)
|
|
—
|
Operating costs and
expenses:
|
|
|
|
|
|
|
|
|
|
|
Cost of materials and
other
|
|
3,901.6
|
|
169.9
|
|
301.2
|
|
(239.3)
|
|
4,133.4
|
Operating expenses
(excluding depreciation and amortization presented below)
(2)
|
|
229.7
|
|
30.4
|
|
44.0
|
|
17.4
|
|
321.5
|
Segment contribution
margin (2)
|
|
24.5
|
|
121.1
|
|
38.6
|
|
(55.4)
|
|
128.8
|
Income from equity
method investments
|
|
0.3
|
|
10.7
|
|
—
|
|
0.6
|
|
|
Segment contribution
margin and income (loss) from equity method investments
|
|
$
24.8
|
|
$
131.8
|
|
$
38.6
|
|
$
(54.8)
|
|
|
Depreciation and
amortization
|
|
$
103.1
|
|
$
20.7
|
|
$
6.6
|
|
$
4.4
|
|
134.8
|
Impairment of
goodwill
|
|
|
|
|
|
|
|
|
|
—
|
General and
administrative expenses (2)
|
|
|
|
|
|
|
|
|
|
94.6
|
Other operating
income, net
|
|
|
|
|
|
|
|
|
|
(3.0)
|
Operating
loss
|
|
|
|
|
|
|
|
|
|
$
(97.6)
|
Capital spending
(excluding business combinations)
|
|
$
118.5
|
|
$
10.4
|
|
$
1.3
|
|
$
2.5
|
|
$
132.7
|
|
|
(1)
|
Adjusted to reflect the
retrospective change in accounting policy from LIFO to FIFO for
certain inventories.
|
(2)
|
In the current period,
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 $5.1 million and $11.1
million for the three and six months ended June 30, 2021,
respectively.
|
(3)
|
Reflects an adjustment
to net down year-to-date net revenues and cost of materials and
other of approximately $362 million related to certain crude
wholesale net settled transactions included in corporate, other and
eliminations that occurred during the three months ended March 31,
2021, which was not reflected in the unaudited condensed
consolidated financial statements as of and for the three months
ended March 31, 2021, as filed on our March 31, 2021 Quarterly
Report on Form 10-Q on May 6, 2021. Such uncorrected adjustment, as
well as the subsequent out-of-period correction reflected above,
did not relate to any of our reportable segments, had no impact on
segment contribution margin, consolidated contribution margin or
consolidated operating loss, and are not considered material to the
condensed consolidated financial statements in either
period.
|
|
|
Significant Transactions During the Quarter Impacting
Results:
Dividends
On June 21, 2022, Delek announced that its Board of
Directors declared a special cash dividend on its common stock of
$0.20 per share payable to all
shareholders of record of the Company's common stock as of the
close of business on July 12, 2022. The payment date for
the special dividend was July 20, 2022.
Membership Interest Purchase Agreement
On June 1, 2022, DKL Delaware
Gathering, LLC, a subsidiary of Delek Logistics, completed the
acquisition of 100% of the limited liability company interests in 3
Bear Delaware Holding – NM, LLC from 3 Bear Energy – New Mexico LLC
(the "Seller"), related to Seller's crude oil and natural gas
gathering, processing and transportation businesses, as well as
water disposal and recycling operations, located in the
Delaware Basin in New Mexico (the "3 Bear Acquisition"). The
purchase price was $624.7 million,
subject to final working capital closing adjustments. We incurred
$6.2 million of transaction
related expenses In connection with the 3 Bear Acquisition during
the three months ended June 30,
2022.
Insurance Recoveries
During the second quarter 2022, we received insurance recoveries
related to the fire and freeze events that occurred during the
first quarter 2021, which unfavorably impacted our results during
the first two quarters of 2021. For the three months ended
June 30, 2022, we have recognized an
additional $8.6 million ($6.7 million after-tax) of business interruption
insurance recoveries, which were recorded in other operating income
on the consolidated statement of income. We have additional
business interruption claims that are outstanding and still pending
which are expected to be recognized in future quarters. Because
business interruption losses are economic in nature rather than
recognized, the related insurance recoveries are included as an
Adjusting item in Adjusted net income and Adjusted EBITDA.
Reconciliation of
Net Income (Loss) Attributable to Delek to Adjusted Net Income
(Loss)
|
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
$ in millions
(unaudited)
|
|
2022
|
|
2021
As
Adjusted(1)
|
|
2022
|
|
2021
As
Adjusted(1)
|
|
|
(Unaudited)
|
|
(Unaudited)
|
Reported net income
(loss) attributable to Delek
|
|
$
361.8
|
|
$
(56.7)
|
|
$
368.4
|
|
$
(126.7)
|
Adjusting
items (2)
|
|
|
|
|
|
|
|
|
Inventory LCM valuation
(benefit) loss
|
|
7.3
|
|
(0.8)
|
|
(1.2)
|
|
0.1
|
Tax effect
|
|
(1.7)
|
|
0.2
|
|
0.3
|
|
—
|
Inventory LCM valuation
loss (benefit), net
|
|
5.6
|
|
(0.6)
|
|
(0.9)
|
|
0.1
|
Business interruption
insurance recoveries
|
|
(8.6)
|
|
—
|
|
(18.6)
|
|
—
|
Tax effect
|
|
1.9
|
|
—
|
|
4.2
|
|
—
|
Business interruption
insurance recoveries, net (3)
|
|
(6.7)
|
|
—
|
|
(14.4)
|
|
—
|
Total El Dorado
refinery fire net losses (recoveries)
|
|
—
|
|
—
|
|
—
|
|
4.8
|
Tax effect
|
|
—
|
|
—
|
|
—
|
|
(1.1)
|
El Dorado refinery fire
losses, net of related recoveries, net
|
|
—
|
|
—
|
|
—
|
|
3.7
|
Total unrealized
hedging (gain) loss where the hedged item is not yet recognized in
the financial statements
|
|
(67.1)
|
|
24.3
|
|
(0.3)
|
|
11.8
|
Tax effect
|
|
16.2
|
|
(5.8)
|
|
0.1
|
|
(2.8)
|
Unrealized hedging
(gain) loss where the hedged item is not yet recognized in the
financial statements, net
|
|
(50.9)
|
|
18.5
|
|
(0.2)
|
|
9.0
|
Non-cash change in fair
value of Supply and Offtake ("S&O") Obligation associated with
hedging activities
|
|
—
|
|
—
|
|
—
|
|
(6.9)
|
Tax effect
|
|
—
|
|
—
|
|
—
|
|
1.5
|
Non-cash change in fair
value of S&O Obligation associated with hedging activities,
net
|
|
—
|
|
—
|
|
—
|
|
(5.4)
|
Non-operating
litigation accrual related to pre-Delek/Alon Merger shareholder
action
|
|
—
|
|
6.5
|
|
—
|
|
6.5
|
Tax effect
|
|
—
|
|
(1.6)
|
|
—
|
|
(1.6)
|
Non-operating
litigation accrual related to pre-Delek/Alon Merger shareholder
action, net
|
|
—
|
|
4.9
|
|
—
|
|
4.9
|
Transaction related
expenses
|
|
6.2
|
|
—
|
|
6.4
|
|
—
|
Tax effect
|
|
(1.5)
|
|
—
|
|
(1.5)
|
|
—
|
Transaction related
expenses, net (3)
|
|
4.7
|
|
—
|
|
4.9
|
|
—
|
Total adjusting
items (2)
|
|
(47.3)
|
|
22.8
|
|
(10.6)
|
|
12.3
|
Adjusted net
income (loss)
|
|
$
314.5
|
|
$
(33.9)
|
|
$
357.8
|
|
$
(114.4)
|
|
|
(1)
|
Adjusted to reflect the
retrospective change in accounting policy from LIFO to FIFO for
certain inventories.
|
(2)
|
All adjustments have
been tax effected using the estimated marginal income tax rate, as
applicable.
|
(3)
|
See further
discussion in the "Significant Transactions During the Quarter
Impacting Results" section on page 8.
|
Reconciliation of
U.S. GAAP Income (Loss) per share to Adjusted Net Income (Loss) per
share:
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
$ in millions
(unaudited)
|
|
2022
|
|
2021
As
Adjusted(1)
|
|
2022
|
|
2021
As
Adjusted(1)
|
|
|
(Unaudited)
|
|
(Unaudited)
|
Reported diluted
income (loss) per share
|
|
$
5.05
|
|
$
(0.77)
|
|
$
5.07
|
|
$
(1.72)
|
Adjusting items,
after tax (per share) (2) (3)
|
|
|
|
|
|
|
|
|
Net inventory LCM
valuation loss (benefit)
|
|
0.08
|
|
(0.01)
|
|
(0.01)
|
|
—
|
COVID-related
severance costs
|
|
—
|
|
—
|
|
—
|
|
—
|
El Dorado refinery
fire net losses (recoveries)
|
|
—
|
|
—
|
|
—
|
|
0.05
|
Business interruption
insurance recoveries (4)
|
|
(0.09)
|
|
—
|
|
(0.20)
|
|
—
|
Total unrealized
hedging (gain) loss where the hedged item is not yet recognized in
the financial statements
|
|
(0.71)
|
|
0.25
|
|
—
|
|
0.12
|
Non-cash change in
fair value of S&O Obligation associated with hedging
activities
|
|
—
|
|
—
|
|
—
|
|
(0.07)
|
Non-operating
litigation accrual related to pre-Delek/Alon Merger shareholder
action
|
|
—
|
|
0.07
|
|
—
|
|
0.07
|
Transaction related
expenses (4)
|
|
0.07
|
|
—
|
|
0.07
|
|
—
|
Total adjusting
items (2)
|
|
(0.65)
|
|
0.31
|
|
(0.14)
|
|
0.17
|
Adjusted net
income (loss) per share
|
|
$
4.40
|
|
$
(0.46)
|
|
$
4.93
|
|
$
(1.55)
|
|
|
(1)
|
Adjusted to reflect the
retrospective change in accounting policy from LIFO to FIFO for
certain inventories.
|
(2)
|
The adjustments have
been tax effected using the estimated marginal tax rate, as
applicable.
|
(3)
|
For periods of Adjusted
net loss, Adjustments (Adjusting Items) and Adjusted net loss per
share are presented using basic weighted average shares
outstanding.
|
(4)
|
See further discussion
in the "Significant Transactions During the Quarter Impacting
Results" section on page 8.
|
Reconciliation of
Net Income (Loss) attributable to Delek to Adjusted
EBITDA
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
$ in millions
(unaudited)
|
|
2022
|
|
2021
As
Adjusted(1)
|
|
2022
|
|
2021
As
Adjusted(1)
|
Reported net (loss)
income attributable to Delek
|
|
$
361.8
|
|
$
(56.7)
|
|
$
368.4
|
|
$
(126.7)
|
Interest expense,
net
|
|
43.6
|
|
33.1
|
|
82.0
|
|
62.5
|
Income tax expense
(benefit)
|
|
100.4
|
|
(35.2)
|
|
103.5
|
|
(43.5)
|
Depreciation and
amortization
|
|
68.0
|
|
66.3
|
|
136.3
|
|
134.8
|
EBITDA attributable to
Delek
|
|
573.8
|
|
7.5
|
|
690.2
|
|
27.1
|
Adjusting
items
|
|
|
|
|
|
|
|
|
Net inventory LCM
valuation loss (benefit)
|
|
7.3
|
|
(0.8)
|
|
(1.2)
|
|
0.1
|
Business Interruption
insurance recoveries (2)
|
|
(8.6)
|
|
—
|
|
(18.6)
|
|
—
|
El Dorado refinery fire
losses, net of related insurance recoveries
|
|
—
|
|
—
|
|
—
|
|
3.8
|
Unrealized hedging
(gain) loss where the hedged item is not yet recognized in the
financial statements
|
|
(67.1)
|
|
24.3
|
|
(0.3)
|
|
11.8
|
Non-cash change in fair
value of S&O Obligation associated with hedging
activities
|
|
—
|
|
—
|
|
—
|
|
(6.9)
|
Non-operating
litigation accrual related to pre-Delek/Alon Merger shareholder
action
|
|
—
|
|
6.5
|
|
—
|
|
6.5
|
Transaction related
expenses (2)
|
|
6.2
|
|
—
|
|
6.4
|
|
—
|
Net income attributable
to non-controlling interest
|
|
6.8
|
|
8.6
|
|
15.0
|
|
15.9
|
Total Adjusting
items
|
|
(55.4)
|
|
38.6
|
|
1.3
|
|
31.2
|
Adjusted
EBITDA
|
|
$
518.4
|
|
$
46.1
|
|
$
691.5
|
|
$
58.3
|
|
|
(1)
|
Adjusted to reflect the
retrospective change in accounting policy from LIFO to FIFO for
certain inventories.
|
(2)
|
See further
discussion in the "Significant Transactions During the Quarter
Impacting Results" section on page 8.
|
Reconciliation of
U.S. GAAP Segment Contribution Margin to Adjusted Segment
Contribution Margin:
|
|
|
Three Months Ended
June 30, 2022
|
$ in millions
(unaudited)
|
|
Refining
|
|
Logistics
|
|
Retail
|
|
Corporate, Other
and Eliminations
|
|
Consolidated
|
Reported segment
contribution margin
|
|
$
618.3
|
|
$
69.3
|
|
$
18.2
|
|
$
(28.3)
|
|
$
677.5
|
Adjusting
items
|
|
|
|
|
|
|
|
|
|
|
Net inventory LCM
valuation (benefit) loss
|
|
6.4
|
|
—
|
|
—
|
|
0.9
|
|
7.3
|
Unrealized
inventory/commodity hedging (gain) loss where the hedged item is
not yet recognized in the financial statements
|
|
(68.5)
|
|
0.2
|
|
—
|
|
—
|
|
(68.3)
|
Unrealized RINs and
other hedging (gain) loss where the hedged item is not yet
recognized in the financial statements
|
|
1.2
|
|
—
|
|
—
|
|
—
|
|
1.2
|
Total unrealized
hedging (gain) loss where the hedged item is not yet recognized in
the financial statements
|
|
(67.3)
|
|
0.2
|
|
—
|
|
—
|
|
(67.1)
|
Total Adjusting
items
|
|
(60.9)
|
|
0.2
|
|
—
|
|
0.9
|
|
(59.8)
|
Adjusted segment
contribution margin
|
|
$
557.4
|
|
$
69.5
|
|
$
18.2
|
|
$
(27.4)
|
|
$
617.7
|
|
|
Three Months Ended
June 30, 2021, As Adjusted (1)
|
$ in millions
(unaudited)
|
|
Refining
(1)
|
|
Logistics
|
|
Retail
|
|
Corporate, Other
and Eliminations
|
|
Consolidated(1)
|
Reported segment
contribution margin (2)
|
|
$
14.1
|
|
$
64.2
|
|
$
21.9
|
|
$
(35.5)
|
|
64.7
|
Adjusting
items
|
|
|
|
|
|
|
|
|
|
|
Net inventory LCM
valuation (benefit) loss
|
|
(0.7)
|
|
—
|
|
0.1
|
|
(0.2)
|
|
(0.8)
|
Unrealized
inventory/commodity hedging (gain) loss where the hedged item is
not yet recognized in the financial statements
|
|
24.9
|
|
(0.2)
|
|
—
|
|
—
|
|
24.7
|
Unrealized RINs and
other hedging (gain) loss where the hedged item is not yet
recognized in the financial statements
|
|
(0.4)
|
|
—
|
|
—
|
|
—
|
|
(0.4)
|
Total unrealized
hedging gain where the hedged item is not yet recognized in the
financial statements
|
|
24.5
|
|
(0.2)
|
|
—
|
|
—
|
|
24.3
|
Total Adjusting
items
|
|
23.8
|
|
(0.2)
|
|
0.1
|
|
(0.2)
|
|
23.5
|
Adjusted segment
contribution margin
|
|
$
37.9
|
|
$
64.0
|
|
$
22.0
|
|
$
(35.7)
|
|
$
88.2
|
|
|
Six Months Ended
June 30, 2022
|
$ in millions
(unaudited)
|
|
Refining
|
|
Logistics
|
|
Retail
|
|
Corporate, Other
and Eliminations
|
|
Consolidated
|
Reported segment
contribution margin
|
|
$
715.2
|
|
$
131.6
|
|
$
32.0
|
|
$
(61.6)
|
|
$
817.2
|
Adjusting
items
|
|
|
|
|
|
|
|
|
|
|
Net inventory LCM
valuation (benefit) loss
|
|
(2.0)
|
|
—
|
|
—
|
|
0.8
|
|
(1.2)
|
Unrealized
inventory/commodity hedging (gain) loss where the hedged item is
not yet recognized in the financial statements
|
|
(3.7)
|
|
—
|
|
—
|
|
—
|
|
(3.7)
|
Unrealized RINs and
other hedging (gain) loss where the hedged item is not yet
recognized in the financial statements
|
|
3.4
|
|
—
|
|
—
|
|
—
|
|
3.4
|
Total unrealized
hedging (gain) loss where the hedged item is not yet recognized in
the financial statements
|
|
(0.3)
|
|
—
|
|
—
|
|
—
|
|
(0.3)
|
Total Adjusting
items
|
|
(2.3)
|
|
—
|
|
—
|
|
0.8
|
|
(1.5)
|
Adjusted segment
contribution margin
|
|
$
712.9
|
|
$
131.6
|
|
$
32.0
|
|
$
(60.8)
|
|
$
815.7
|
|
|
Six Months Ended
June 30, 2021, As Adjusted (1)
|
$ in millions
(unaudited)
|
|
Refining
(1)
|
|
Logistics
|
|
Retail
|
|
Corporate, Other
and Eliminations
|
|
Consolidated(1)
|
Reported segment
contribution margin (2)
|
|
$
24.5
|
|
$
121.1
|
|
$
38.6
|
|
$
(55.4)
|
|
$
128.8
|
Adjusting
items
|
|
|
|
|
|
|
|
|
|
|
Net inventory LCM
valuation (benefit) loss
|
|
0.1
|
|
—
|
|
—
|
|
—
|
|
0.1
|
Unrealized
inventory/commodity hedging (gain) loss where the hedged item is
not yet recognized in the financial statements
|
|
14.2
|
|
(0.4)
|
|
—
|
|
(0.2)
|
|
13.6
|
Unrealized RINs and
other hedging (gain) loss where the hedged item is not yet
recognized in the financial statements
|
|
(1.8)
|
|
—
|
|
—
|
|
—
|
|
(1.8)
|
Total unrealized
hedging (gain) loss where the hedged item is not yet recognized in
the financial statements
|
|
12.4
|
|
(0.4)
|
|
—
|
|
(0.2)
|
|
11.8
|
El Dorado refinery fire
losses
|
|
3.8
|
|
|
|
|
|
|
|
3.8
|
Non-cash change in fair
value of S&O Obligation associated with hedging
activities
|
|
(6.9)
|
|
—
|
|
—
|
|
—
|
|
(6.9)
|
Total Adjusting
items
|
|
9.4
|
|
(0.4)
|
|
—
|
|
(0.2)
|
|
8.8
|
Adjusted segment
contribution margin
|
|
$
33.9
|
|
$
120.7
|
|
$
38.6
|
|
$
(55.6)
|
|
$
137.6
|
|
|
(1)
|
Adjusted to reflect the
retrospective change in accounting policy from LIFO to FIFO for
certain inventories.
|
(2)
|
Reflects the prior
period conforming reclassification adjustment between
operating expenses and general and administrative
expenses.
|
Refining Segment
Selected Financial Information
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
2022
|
|
2021
As
Adjusted(3)
|
|
2022
|
|
2021
As
Adjusted(3)
|
Tyler, TX
Refinery
|
|
(Unaudited)
|
|
(Unaudited)
|
Days in
period
|
|
91
|
|
91
|
|
181
|
|
181
|
Total sales volume -
refined product (average barrels per day)(1)
|
|
72,283
|
|
77,529
|
|
72,922
|
|
75,389
|
Products manufactured
(average barrels per day):
|
|
|
|
|
|
|
|
|
Gasoline
|
|
32,645
|
|
37,495
|
|
34,924
|
|
38,522
|
Diesel/Jet
|
|
30,271
|
|
30,449
|
|
29,644
|
|
29,102
|
Petrochemicals, LPG,
NGLs
|
|
1,983
|
|
2,079
|
|
2,116
|
|
1,903
|
Other
|
|
1,824
|
|
1,633
|
|
1,748
|
|
1,552
|
Total
production
|
|
66,723
|
|
71,656
|
|
68,432
|
|
71,079
|
Throughput (average
barrels per day):
|
|
|
|
|
|
|
|
|
Crude
oil
|
|
66,681
|
|
72,639
|
|
66,559
|
|
68,718
|
Other
feedstocks
|
|
552
|
|
(384)
|
|
2,128
|
|
2,779
|
Total
throughput
|
|
67,233
|
|
72,255
|
|
68,687
|
|
71,497
|
Total refining revenue
( $ in millions)
|
|
$
1,039.9
|
|
$
625.0
|
|
$
1,809.8
|
|
$
1,115.0
|
Cost of materials and
other ($ in millions) (3)
|
|
834.2
|
|
553.1
|
|
1,523.8
|
|
961.6
|
Total refining margin
($ in millions) (2) (3)
|
|
$
205.7
|
|
$
71.9
|
|
$
286.0
|
|
$
153.4
|
Per barrel of refined
product sales:
|
|
|
|
|
|
|
|
|
Tyler refining margin
(2) (3)
|
|
$
31.27
|
|
$
10.18
|
|
$
21.67
|
|
$
11.24
|
Tyler adjusted
refining margin (2) (3)
|
|
$
31.37
|
|
$
10.18
|
|
$
21.68
|
|
$
11.24
|
Operating expenses
(4)
|
|
$
5.61
|
|
$
3.51
|
|
$
4.95
|
|
$
3.54
|
Crude Slate: (% based
on amount received in period)
|
|
|
|
|
|
|
|
|
WTI crude
oil
|
|
83.8 %
|
|
86.7 %
|
|
85.4 %
|
|
90.6 %
|
East Texas crude
oil
|
|
16.2 %
|
|
13.3 %
|
|
14.6 %
|
|
9.0 %
|
Other
|
|
— %
|
|
— %
|
|
— %
|
|
0.4 %
|
Capture Rate
(5)
|
|
71.2 %
|
|
60.9 %
|
|
64.2 %
|
|
73.9 %
|
El Dorado, AR
Refinery
|
|
|
|
|
|
|
|
|
Days in
period
|
|
91
|
|
91
|
|
181
|
|
181
|
Total sales volume -
refined product (average barrels per day)(1)
|
|
84,299
|
|
55,381
|
|
82,825
|
|
52,561
|
Products manufactured
(average barrels per day):
|
|
|
|
|
|
|
|
|
Gasoline
|
|
39,347
|
|
26,143
|
|
38,118
|
|
21,872
|
Diesel
|
|
32,855
|
|
20,534
|
|
31,027
|
|
17,271
|
Petrochemicals, LPG,
NGLs
|
|
1,549
|
|
808
|
|
1,285
|
|
780
|
Asphalt
|
|
8,181
|
|
5,997
|
|
7,655
|
|
4,840
|
Other
|
|
805
|
|
603
|
|
795
|
|
521
|
Total
production
|
|
82,737
|
|
54,085
|
|
78,880
|
|
45,284
|
Throughput (average
barrels per day):
|
|
|
|
|
|
|
|
|
Crude oil
|
|
81,510
|
|
54,086
|
|
76,827
|
|
44,479
|
Other
feedstocks
|
|
2,221
|
|
1,451
|
|
3,079
|
|
1,558
|
Total
throughput
|
|
83,731
|
|
55,537
|
|
79,906
|
|
46,037
|
Total refining revenue
( $ in millions)
|
|
$
1,130.1
|
|
$
489.5
|
|
$
1,942.2
|
|
$
926.2
|
Cost of materials and
other ($ in millions)
|
|
939.2
|
|
479.1
|
|
$
1,711.8
|
|
930.0
|
Total refining margin
($ in millions) (2)
|
|
$
190.9
|
|
$
10.4
|
|
$
230.4
|
|
$
(3.8)
|
Per barrel of refined
product sales:
|
|
|
|
|
|
|
|
|
El Dorado refining
margin (2)
|
|
$
24.88
|
|
$
2.06
|
|
$
15.37
|
|
$
(0.39)
|
El Dorado adjusted
refining margin (2)
|
|
$
24.91
|
|
$
2.03
|
|
$
15.34
|
|
$
(0.39)
|
Operating expenses
(4)
|
|
$
4.88
|
|
$
5.14
|
|
$
4.34
|
|
$
5.71
|
Crude Slate: (% based
on amount received in period)
|
|
|
|
|
|
|
|
|
WTI crude
oil
|
|
53.1 %
|
|
48.9 %
|
|
43.2 %
|
|
46.9 %
|
Local Arkansas crude
oil
|
|
15.6 %
|
|
20.4 %
|
|
16.4 %
|
|
25.1 %
|
Other
|
|
31.3 %
|
|
30.7 %
|
|
40.4 %
|
|
28.0 %
|
Capture Rate
(5)
|
|
56.6 %
|
|
12.1 %
|
|
45.4 %
|
|
(2.6) %
|
Refining Segment
Selected Financial Information (continued)
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
2022
|
|
2021
As
Adjusted(3)
|
|
2022
|
|
2021
As
Adjusted(3)
|
Big Spring, TX
Refinery
|
|
(Unaudited)
|
(Unaudited)
|
Days in period - based
on date acquired
|
|
91
|
|
91
|
|
181
|
|
181
|
Total sales volume -
refined product (average barrels per day) (1)
|
|
72,928
|
|
69,191
|
|
71,039
|
|
68,947
|
Products manufactured
(average barrels per day):
|
|
|
|
|
|
|
|
|
Gasoline
|
|
34,918
|
|
33,501
|
|
33,912
|
|
33,159
|
Diesel/Jet
|
|
27,043
|
|
25,492
|
|
24,877
|
|
23,226
|
Petrochemicals, LPG,
NGLs
|
|
3,537
|
|
4,335
|
|
3,436
|
|
3,745
|
Asphalt
|
|
1,406
|
|
1,012
|
|
1,642
|
|
1,400
|
Other
|
|
1,410
|
|
1,491
|
|
1,345
|
|
1,448
|
Total
production
|
|
68,314
|
|
65,831
|
|
65,212
|
|
62,978
|
Throughput (average
barrels per day):
|
|
|
|
|
|
|
|
|
Crude oil
|
|
70,662
|
|
69,731
|
|
65,675
|
|
64,772
|
Other
feedstocks
|
|
(1,093)
|
|
(1,704)
|
|
315
|
|
(395)
|
Total
throughput
|
|
69,569
|
|
68,027
|
|
65,990
|
|
64,377
|
Total refining revenue
( $ in millions)
|
|
$
1,116.4
|
|
$
615.1
|
|
$
1,941.9
|
|
$
1,117.1
|
Cost of materials and
other ($ in millions)
|
|
922.9
|
|
572.0
|
|
1,650.5
|
|
1,033.2
|
Total refining margin
($ in millions) (2)
|
|
$
193.5
|
|
$
43.1
|
|
$
291.4
|
|
$
83.9
|
Per barrel of refined
product sales:
|
|
|
|
|
|
|
|
|
Big Spring refining
margin (2)
|
|
$
29.16
|
|
$
6.84
|
|
$
22.66
|
|
$
6.72
|
Big Spring adjusted
refining margin (2)
|
|
$
29.27
|
|
$
6.81
|
|
$
22.61
|
|
$
6.68
|
Operating expenses
(4)
|
|
$
7.06
|
|
$
5.34
|
|
$
6.24
|
|
$
5.88
|
Crude Slate: (% based
on amount received in period)
|
|
|
|
|
|
|
|
|
WTI crude
oil
|
|
68.2 %
|
|
66.4 %
|
|
67.5 %
|
|
64.7 %
|
WTS crude
oil
|
|
31.8 %
|
|
33.6 %
|
|
32.5 %
|
|
35.3 %
|
Capture Rate
(5)
|
|
69.0 %
|
|
40.5 %
|
|
69.4 %
|
|
43.8 %
|
Krotz Springs, LA
Refinery
|
|
|
|
|
|
|
|
|
Days in period - based
on date acquired
|
|
91
|
|
91
|
|
181
|
|
181
|
Total sales volume -
refined product (average barrels per day) (1)
|
|
75,791
|
|
77,318
|
|
77,800
|
|
51,286
|
Products manufactured
(average barrels per day):
|
|
|
|
|
|
|
|
|
Gasoline
|
|
31,298
|
|
33,056
|
|
31,979
|
|
19,661
|
Diesel/Jet
|
|
32,419
|
|
26,611
|
|
31,711
|
|
15,370
|
Heavy oils
|
|
845
|
|
868
|
|
1,690
|
|
527
|
Petrochemicals, LPG,
NGLs
|
|
7,152
|
|
6,601
|
|
7,040
|
|
3,948
|
Other
|
|
5,970
|
|
6,705
|
|
5,840
|
|
8,948
|
Total
production
|
|
77,684
|
|
73,841
|
|
78,260
|
|
48,454
|
Throughput (average
barrels per day):
|
|
|
|
|
|
|
|
|
Crude oil
|
|
75,849
|
|
70,883
|
|
74,430
|
|
42,377
|
Other
feedstocks
|
|
922
|
|
2,240
|
|
3,181
|
|
6,786
|
Total
throughput
|
|
76,771
|
|
73,123
|
|
77,611
|
|
49,163
|
Total refining revenue
( $ in millions)
|
|
$
1,514.0
|
|
$
687.4
|
|
$
2,604.1
|
|
$
1,007.1
|
Cost of materials and
other ($ in millions)
|
|
1,271.3
|
|
668.4
|
|
2,319.1
|
|
974.0
|
Total refining margin
($ in millions) (2)
|
|
$
242.7
|
|
$
19.0
|
|
$
285.0
|
|
$
33.1
|
Per barrel of refined
product sales:
|
|
|
|
|
|
|
|
|
Krotz Springs refining
margin (2)
|
|
$
35.20
|
|
$
2.71
|
|
$
20.24
|
|
$
3.56
|
Krotz Springs adjusted
refining margin (2)
|
|
$
35.74
|
|
$
2.64
|
|
$
20.31
|
|
$
3.61
|
Operating expenses
(4)
|
|
$
6.05
|
|
$
3.96
|
|
$
5.05
|
|
$
5.19
|
Crude Slate: (% based
on amount received in period)
|
|
|
|
|
|
|
|
|
WTI Crude
|
|
49.4 %
|
|
65.0 %
|
|
56.6 %
|
|
67.9 %
|
Gulf Coast Sweet
Crude
|
|
40.6 %
|
|
33.5 %
|
|
38.2 %
|
|
30.9 %
|
Other
|
|
10.0 %
|
|
1.5 %
|
|
5.2 %
|
|
1.2 %
|
Capture Rate
(5)
|
|
110.1 %
|
|
30.4 %
|
|
84.2 %
|
|
45.6 %
|
|
|
(1)
|
Includes inter-refinery
sales and sales to other segments which are eliminated in
consolidation.
|
(2)
|
See the calculations of
Adjusted refining margin on the following page as well as Other
Items Impacting Refining Margin discussed on page 17.
|
(3)
|
Adjusted to reflect the
retrospective change in accounting policy from LIFO to FIFO for
certain inventories.
|
(4)
|
Reflects the prior
period conforming reclassification adjustment between operating
expenses and general and administrative expenses.
|
(5)
|
Defined as Adjusted
refining margin divided by the respective crack spread. See
page 16 for crack spread information.
|
Reconciliation of
Refining margin per barrel to Adjusted Refining margin per barrel
(1)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
|
2022
|
|
2021
As Adjusted
(6)
|
|
2022
|
|
2021
As Adjusted
(6)
|
|
|
(Unaudited)
|
|
(Unaudited)
|
Tyler
(2)
|
|
|
|
|
|
|
|
|
Reported refining
margin, $ per barrel
|
|
$
31.27
|
|
$
10.18
|
|
$
21.67
|
|
$
11.24
|
Adjusting
items:
|
|
|
|
|
|
|
|
|
Net inventory LCM
valuation loss (benefit)
|
|
0.10
|
|
—
|
|
0.01
|
|
—
|
Adjusted refining
margin $/bbl
|
|
$
31.37
|
|
$
10.18
|
|
$
21.68
|
|
$
11.24
|
El Dorado
(3)
|
|
|
|
|
|
|
|
|
Reported refining
margin, $ per barrel
|
|
$
24.88
|
|
$
2.06
|
|
$
15.37
|
|
$
(0.39)
|
Adjusting
items:
|
|
|
|
|
|
|
|
|
Net inventory LCM
valuation loss (benefit)
|
|
0.03
|
|
(0.03)
|
|
(0.03)
|
|
—
|
Adjusted refining
margin $/bbl
|
|
$
24.91
|
|
$
2.03
|
|
$
15.34
|
|
$
(0.39)
|
Big Spring
(4)
|
|
|
|
|
|
|
|
|
Reported refining
margin, $ per barrel
|
|
$
29.16
|
|
$
6.84
|
|
$
22.66
|
|
$
6.72
|
Adjusting
items:
|
|
|
|
|
|
|
|
|
Net inventory LCM
valuation loss (benefit)
|
|
0.11
|
|
(0.03)
|
|
(0.05)
|
|
(0.04)
|
Adjusted refining
margin $/bbl
|
|
$
29.27
|
|
$
6.81
|
|
$
22.61
|
|
$
6.68
|
Krotz Springs
(5)
|
|
|
|
|
|
|
|
|
Reported refining
margin, $ per barrel
|
|
$
35.20
|
|
$
2.71
|
|
$
20.24
|
|
$
3.56
|
Adjusting
items:
|
|
|
|
|
|
|
|
|
Net inventory LCM
valuation loss (benefit)
|
|
0.54
|
|
(0.07)
|
|
0.07
|
|
0.05
|
Adjusted refining
margin $/bbl
|
|
$
35.74
|
|
$
2.64
|
|
$
20.31
|
|
$
3.61
|
|
|
(1)
|
Adjusted refining
margin per barrel is presented to provide a measure to evaluate
performance excluding inventory valuation adjustments and other
items at the individual refinery level. Delek US believes that the
presentation of adjusted measures provides useful information to
investors in assessing its results of operations at each refinery.
Because adjusted refining margin per barrel may be defined
differently by other companies in its industry, Delek US'
definition may not be comparable to similarly titled measures of
other companies. Additionally, management evaluates other impacts
to refining margin by refinery which may not represent adjustments,
but which provide information useful for evaluating the results
compared to current crack spreads and peers. See the 'Other Items
Impacting Refining Margin' for further discussion.
|
(2)
|
Tyler adjusted refining
margins exclude the following items:
|
|
|
Net inventory LCM
valuation loss/benefit - There was approximately $0.7
million and a nominal net valuation loss in the second quarter 2022
and 2021, respectively. There was approximately $0.2 million and a
nominal net valuation loss for the six months ended June 30, 2022
and 2021, respectively.
|
|
Tyler's refining margin
per barrel and the adjusted refining margin per barrel have been
adjusted to reflect the retrospective change in accounting policy
from LIFO to FIFO for certain inventories.
|
(3)
|
El Dorado Adjusted
refining margins exclude the following items:
|
|
|
Net inventory LCM
valuation loss/benefit - There was approximately $0.2 million
of net valuation loss and $0.2 million of net valuation benefit in
the second quarter 2022 and 2021, respectively. There was
approximately a $0.5 of net valuation benefit and a nominal
net valuation loss for the six months ended June 30, 2022 and 2021,
respectively.
|
|
|
Note also that El
Dorado's refining margin per barrel and the adjusted refining
margin per barrel for the three and six months ended June 30, 2021
reflect a RINs inventory true-up resulting from our annual
compliance review totaling $(12.3) million which negatively
impacted the related per barrel amount by $(2.44)and $(1.29),
respectively. See further discussion in the section "Other Items
Impacting Refining Margin" on page 17.
|
(4)
|
Big Spring Adjusted
refining margins exclude the following items:
|
|
|
Net inventory LCM
valuation loss/benefit - There was approximately $0.7
million of net valuation loss and $0.2 million of net
valuation benefit in the second quarter 2022 and 2021,
respectively. There was approximately $0.7 million and $0.6 million
of net valuation benefit for the six months ended June 30, 2022 and
2021, respectively.
|
(5)
|
Krotz Springs Adjusted
refining margins exclude the following items:
|
|
|
Net inventory LCM
valuation loss/benefit - There was approximately $3.7
million of net valuation loss and $0.5 million of net valuation
benefit in the second quarter 2022 and 2021, respectively. There
was approximately $1.0 million and $0.4 amount of net
valuation loss for the six months ended June 30, 2022 and 2021,
respectively.
|
(6)
|
Adjusted to reflect the
retrospective change in accounting policy from LIFO to FIFO for
certain inventories.
|
Logistics Segment
Selected Information
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
|
(Unaudited)
|
|
(Unaudited)
|
Pipelines &
Transportation: (average bpd)
|
|
|
|
|
|
|
|
|
Lion Pipeline
System:
|
|
|
|
|
|
|
|
|
Crude pipelines
(non-gathered)
|
|
84,699
|
|
53,316
|
|
78,818
|
|
48,743
|
Refined products
pipelines
|
|
64,821
|
|
39,193
|
|
62,186
|
|
32,806
|
SALA Gathering
System
|
|
17,961
|
|
17,430
|
|
17,064
|
|
14,670
|
East Texas Crude
Logistics System
|
|
19,942
|
|
27,497
|
|
18,010
|
|
26,790
|
Permian Gathering
Assets (3)
|
|
101,236
|
|
79,589
|
|
100,783
|
|
76,672
|
Plains Connection
System
|
|
154,086
|
|
122,529
|
|
158,025
|
|
115,484
|
Trucking
Assets
|
|
15,679
|
|
10,314
|
|
12,510
|
|
10,251
|
|
|
|
|
|
|
|
|
|
Wholesale Marketing
& Terminalling:
|
|
|
|
|
|
|
|
|
East Texas - Tyler
Refinery sales volumes (average bpd) (1)
|
|
63,502
|
|
74,565
|
|
67,021
|
|
73,271
|
West Texas wholesale
marketing throughputs (average bpd)
|
|
10,073
|
|
9,395
|
|
9,994
|
|
9,765
|
West Texas wholesale
marketing margin per barrel
|
|
$
2.67
|
|
$
4.24
|
|
$
2.85
|
|
$
3.81
|
Big Spring wholesale
marketing throughputs (average bpd)
|
|
78,634
|
|
75,136
|
|
77,100
|
|
74,038
|
Terminalling
throughputs (average bpd) (2)
|
|
130,002
|
|
139,987
|
|
136,808
|
|
142,250
|
|
|
(1)
|
Excludes jet fuel and
petroleum coke.
|
(2)
|
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.
|
(3)
|
Formerly known as the
Big Spring Gathering System. Excludes volumes that are being
temporarily transported via trucks while connectors are under
construction.
|
Retail Segment
Selected Information
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
|
(Unaudited)
|
|
(Unaudited)
|
Number of stores (end
of period)
|
|
248
|
|
252
|
|
248
|
|
252
|
Average number of
stores
|
|
248
|
|
252
|
|
248
|
|
252
|
Average number of fuel
stores
|
|
243
|
|
247
|
|
243
|
|
247
|
Retail fuel sales
(thousands of gallons)
|
|
44,911
|
|
42,978
|
|
84,416
|
|
82,744
|
Average retail gallons
sold per average number of fuel stores (in thousands)
|
|
185
|
|
174
|
|
348
|
|
336
|
Average retail sales
price per gallon sold
|
|
$
4.31
|
|
$
2.90
|
|
$
3.95
|
|
$
2.71
|
Retail fuel margin ($
per gallon) (1)
|
|
$
0.33
|
|
$
0.39
|
|
$
0.32
|
|
$
0.37
|
Merchandise sales (in
millions)
|
|
$
83.4
|
|
$
84.5
|
|
$
153.1
|
|
$
159.2
|
Merchandise sales per
average number of stores (in millions)
|
|
$
0.3
|
|
$
0.3
|
|
$
0.6
|
|
$
0.6
|
Merchandise margin
%
|
|
34.0 %
|
|
32.7 %
|
|
34.3 %
|
|
32.7 %
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Same-Store
Comparison (2)
|
|
(Unaudited)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
Change in same-store
fuel gallons sold
|
|
5.8 %
|
|
1.3 %
|
|
3.4 %
|
|
(10.7) %
|
Change in same-store
merchandise sales
|
|
0.1 %
|
|
(5.4) %
|
|
(2.4) %
|
|
(1.9) %
|
|
|
(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.
|
Supplemental
Information
|
|
|
|
|
|
|
|
|
Schedule of
Inter-refinery Sales, Refinery Sales to Other Segments, and Pricing
Statistics Impacting our Refining Segment Selected Financial
Information
|
|
|
|
|
|
|
|
|
$ in millions
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Inter-refinery
Sales
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
(in barrels per
day)
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Tyler refined product
sales to other Delek refineries
|
|
2,378
|
|
1,797
|
|
1,746
|
|
1,945
|
El Dorado refined
product sales to other Delek refineries
|
|
1,531
|
|
961
|
|
1,201
|
|
704
|
Big Spring refined
product sales to other Delek refineries
|
|
470
|
|
874
|
|
554
|
|
801
|
Krotz Springs refined
product sales to other Delek refineries
|
|
1,061
|
|
590
|
|
783
|
|
297
|
Refinery Sales to
Other Segments
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
(in barrels per
day)
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
|
|
|
|
|
|
|
|
Tyler refined product
sales to other Delek segments
|
|
—
|
|
897
|
|
—
|
|
909
|
El Dorado refined
product sales to other Delek segments
|
|
9
|
|
11
|
|
8
|
|
9
|
Big Spring refined
product sales to other Delek segments
|
|
22,647
|
|
22,179
|
|
22,209
|
|
22,145
|
Krotz Springs refined
product sales to other Delek segments
|
|
—
|
|
2,069
|
|
—
|
|
2,038
|
Pricing
Statistics
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
(average for the
period presented)
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
|
|
|
|
|
|
|
|
WTI — Cushing crude oil
(per barrel)
|
|
$
108.74
|
|
$
66.19
|
|
$
102.02
|
|
$
62.21
|
WTI — Midland crude oil
(per barrel)
|
|
$
108.50
|
|
$
66.41
|
|
$
101.81
|
|
$
62.74
|
WTS -- Midland crude
oil (per barrel)
|
|
$
109.06
|
|
$
66.57
|
|
$
101.92
|
|
$
62.73
|
LLS (per
barrel)
|
|
$
110.25
|
|
$
68.04
|
|
$
103.92
|
|
$
64.21
|
Brent crude oil (per
barrel)
|
|
$
111.84
|
|
$
69.08
|
|
$
104.93
|
|
$
65.22
|
|
|
|
|
|
|
|
|
|
U.S. Gulf Coast 5-3-2
crack spread (per barrel) (1)
|
|
$
44.03
|
|
$
16.72
|
|
$
33.77
|
|
$
15.20
|
U.S. Gulf Coast 3-2-1
crack spread (per barrel) (1)
|
|
$
42.44
|
|
$
16.82
|
|
$
32.56
|
|
$
15.26
|
U.S. Gulf Coast 2-1-1
crack spread (per barrel) (1)
|
|
$
32.47
|
|
$
8.68
|
|
$
24.12
|
|
$
7.91
|
|
|
|
|
|
|
|
|
|
U.S. Gulf Coast
Unleaded Gasoline (per gallon)
|
|
$
3.40
|
|
$
1.99
|
|
$
3.05
|
|
$
1.85
|
Gulf Coast Ultra low
sulfur diesel (per gallon)
|
|
$
3.98
|
|
$
1.95
|
|
$
3.50
|
|
$
1.83
|
U.S. Gulf Coast high
sulfur diesel (per gallon)
|
|
$
3.39
|
|
$
1.67
|
|
$
3.04
|
|
$
1.58
|
Natural gas (per
MMBTU)
|
|
$
7.50
|
|
$
2.98
|
|
$
6.05
|
|
$
2.85
|
|
|
(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 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 refined product
margin to the Gulf Coast 3-2-1 crack spread consisting of WTI
Cushing crude, Gulf Coast CBOB gasoline and Gulf Coast ultra-low
sulfur diesel, and for our Krotz Springs refinery, we compare our
per barrel refined product margin to the Gulf Coast 2-1-1 crack
spread consisting of LLS crude oil, Gulf Coast CBOB gasoline and
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.
|
|
|
Other Items Impacting Adjusted Refining Margin:
In addition to the items that were reflected as adjustments for
deriving our Adjusted refining margin, which then was used to
calculate Adjusted refining margin per barrel presented on page 14,
there were other items that were recognized during the periods that
impacted our Refining margins at the refineries. The primary items
are as follows:
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 and per barrel cost of materials and other
for the period recognized on a FIFO basis. 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.
Realized Inventory/Commodity Hedging Gains (Losses): We
enter into fixed price financial hedges to manage price risk on
forward (including prompt month) physical inventory contracts as
well as forecasted crack spreads. Such hedging activities are based
on our determination of tolerable price risk as well as our
specific position and location/optimization strategy objectives.
Because of inventory builds and draws and volatility in the market
compared to initial forward curve and other pricing expectations,
such hedging activities are inherently subject to a certain degree
of unanticipated favorability or unfavorability compared to the
estimated other inventory impact.
Summary of Other
Favorable (Unfavorable) Items Impacting Refining
Margin:
|
|
|
$ in millions
(unaudited)
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
|
2022
|
|
2021
As
Adjusted(1)
|
|
2022
|
|
2021
As
Adjusted(1)
|
Tyler
|
|
|
|
|
|
|
|
|
Other inventory
impact
|
|
$
(9.5)
|
|
$
63.2
|
|
$
28.8
|
|
$
87.0
|
|
|
$
(9.5)
|
|
$
63.2
|
|
$
—
|
|
$
—
|
El
Dorado
|
|
|
|
|
|
|
|
|
Other inventory
impact
|
|
$
33.1
|
|
$
41.0
|
|
$
54.3
|
|
$
41.0
|
Impact of RINs
inventory true-up (3)
|
|
—
|
|
(12.3)
|
|
—
|
|
(12.3)
|
|
|
$
33.1
|
|
$
28.7
|
|
$
54.3
|
|
$
28.7
|
Big
Spring
|
|
|
|
|
|
|
|
|
Other inventory
impact
|
|
$
21.5
|
|
$
6.9
|
|
$
58.7
|
|
$
21.0
|
|
|
$
21.5
|
|
$
6.9
|
|
$
58.7
|
|
$
21.0
|
Krotz
Springs
|
|
|
|
|
|
|
|
|
Other inventory
impact
|
|
$
(4.7)
|
|
$
(0.9)
|
|
$
(2.9)
|
|
$
(10.9)
|
|
|
$
(4.7)
|
|
$
(0.9)
|
|
$
(2.9)
|
|
$
(10.9)
|
Total
Refining
|
|
|
|
|
|
|
|
|
Other inventory
impact
|
|
$
40.4
|
|
$
110.2
|
|
$
138.9
|
|
$
138.1
|
|
|
|
|
|
|
|
|
|
Realized
inventory/commodity gains (losses)
|
|
$
(113.5)
|
|
$
(1.7)
|
|
$
(104.2)
|
|
$
(19.1)
|
|
|
(1)
|
Adjusted to reflect the
retrospective change in accounting policy from LIFO to FIFO for
certain inventories.
|
(2)
|
Represents a RINs
inventory true-up resulting from our annual compliance
review.
|
Other Reconciliation
of Amounts Reported Under U.S. GAAP
|
$ in millions
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
Reconciliation of
Refining Segment Gross Margin (Loss) to Refining
Margin
|
|
2022
|
|
2021
As
Adjusted(1)
|
|
2022
|
|
2021
As
Adjusted(1)
|
Net revenues
|
|
$
4,810.5
|
|
$
2,415.7
|
|
$
8,304.2
|
|
$
4,155.8
|
Cost of
sales
|
|
4,242.1
|
|
2,452.6
|
|
7,691.7
|
|
4,234.4
|
Gross
margin
|
|
568.4
|
|
(36.9)
|
|
612.5
|
|
(78.6)
|
Add back (items
included in cost of sales):
|
|
|
|
|
|
|
|
|
Operating expenses
(excluding depreciation and amortization) (2)
|
|
165.0
|
|
115.0
|
|
284.9
|
|
229.7
|
Depreciation and
amortization
|
|
49.9
|
|
51.0
|
|
102.7
|
|
103.1
|
Refining
margin
|
|
$
783.3
|
|
$
129.1
|
|
$
1,000.1
|
|
$
254.2
|
|
|
(1)
|
Adjusted to reflect the
retrospective change in accounting policy from LIFO to FIFO for
certain inventories.
|
(2)
|
Reflects the prior
period conforming reclassification adjustment between
operating expenses and general and administrative
expenses.
|
Calculation of Net
Debt
|
|
June 30,
2022
|
|
December 31,
2021
|
Long-term debt -
current portion
|
|
$
72.0
|
|
$
92.2
|
Long-term debt -
non-current portion
|
|
2,745.7
|
|
2,125.8
|
Total long-term
debt
|
|
2,817.7
|
|
2,218.0
|
Less: Cash and cash
equivalents
|
|
1,244.6
|
|
856.5
|
Net debt -
consolidated
|
|
1,573.1
|
|
1,361.5
|
Less: DKL net
debt
|
|
1,508.4
|
|
894.7
|
Net debt, excluding
DKL
|
|
$
64.7
|
|
$
466.8
|
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).
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SOURCE Delek US Holdings, Inc.