- Net loss of $32.6 million or $(0.51) per share, adjusted net
loss of $26.2 million or $(0.41) per share, adjusted EBITDA of
$158.7 million
- In 2024, successfully executed Delek Logistics debt and
equity offerings:
- Improved liquidity to approximately $800 million
- Added 3.6 million DKL units for a total 47.2 million
outstanding units and increased volume activity
- Improved leverage ratio to 4.01x from 4.34x at year-end
2023
- Diluted DK ownership to 72.7%
- Paid $15.7 million of dividends and increased regular
quarterly dividend to $0.250 per share in May
Delek US Holdings, Inc. (NYSE: DK) (“Delek US”, "Company") today
announced financial results for its first quarter ended March 31,
2024.
“We are proud of our operational excellence progress that
reflects favorable EHS performance trends,” said Avigal Soreq,
President and Chief Executive Officer of Delek US. “We navigated
regional demand headwinds early in the quarter and delivered solid
operational performance. This resulted in a quarter that was in
line with our guidance.”
"On the strategic front, we made significant headway," Soreq
continued. "Delek Logistics improved its financial strength and
flexibility with the debt and equity offerings executed during the
quarter. The $800 million of liquidity and additional volume
activity in the units enhances our opportunities with DKL. In
addition, we initiated a process to unlock the value inherit in the
retail business. We are well positioned to execute the sum of the
parts initiative and realize value for our stakeholders."
"Looking ahead, we will continue to execute on our priorities of
running safe and reliable operations, enhancing our portfolio with
strategic growth projects, and delivering shareholder value while
maintaining our financial strength and flexibility,” Soreq
concluded.
Delek US Results
Three Months Ended March
31,
($ in millions, except per share
data)
2024
2023
Net (loss) income attributable to Delek
US
$
(32.6
)
$
64.3
Diluted (loss) income per share
$
(0.51
)
$
0.95
Adjusted net (loss) income
$
(26.2
)
$
92.7
Adjusted net (loss) income per share
$
(0.41
)
$
1.37
Adjusted EBITDA
$
158.7
$
284.6
Refining Segment
The refining segment Adjusted EBITDA was $106.1 million in the
first quarter 2024 compared with $230.2 million in the same quarter
last year, which reflects other inventory impacts of $(1.4) million
and $77.1 million for first quarter 2024 and 2023, respectively.
The decrease over 2023 is primarily due to lower refining crack
spreads, partially offset by higher sales volume. During the first
quarter 2024, Delek US's benchmark crack spreads were down an
average of 22.2% from prior-year levels.
Logistics Segment
The logistics segment Adjusted EBITDA in the first quarter 2024
was $99.7 million compared with $91.4 million in the prior year
quarter. The increase over last year's first quarter was driven by
strong contributions from Delaware Gathering systems in addition to
annual rate increases.
Retail Segment
For the first quarter 2024, Adjusted EBITDA for the retail
segment was $6.5 million compared with $6.4 million in the
prior-year period.
Corporate and Other
Activity
Adjusted EBITDA from Corporate, Other and Eliminations was a
loss of $(53.6) million in the first quarter 2024 compared with a
loss of $(43.4) million in the prior-year period. The increased
losses were driven by higher employee related expenses.
Shareholder
Distributions
On May 2, 2024, the Board of Directors approved the regular
quarterly dividend of $0.25 per share that will be paid on May 24,
2024 to shareholders of record on May 17, 2024.
Liquidity
As of March 31, 2024, Delek US had a cash balance of $753.4
million and total consolidated long-term debt of $2,496.9 million,
resulting in net debt of $1,743.5 million. As of March 31, 2024,
Delek Logistics Partners, LP (NYSE: DKL) ("Delek Logistics") had
$9.7 million of cash and $1,601.2 million of total long-term debt,
which are included in the consolidated amounts on Delek US' balance
sheet. Excluding Delek Logistics, Delek US had $743.7 million in
cash and $895.7 million of long-term debt, or a $152.0 million net
debt position.
First Quarter 2024 Results | Conference
Call Information
Delek US will hold a conference call to discuss its first
quarter 2024 results on Tuesday, May 7, 2024 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) first quarter 2024 earnings conference call that will be held
on Tuesday May 7, 2024 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 72.7% (including the general
partner interest) of Delek Logistics Partners, LP at March 31,
2024.
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; projected capital expenditures and
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.
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.
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
US 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.
Delek US Holdings, Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
($ in millions, except share and per
share data)
March 31, 2024
December 31, 2023
ASSETS
Current assets:
Cash and cash equivalents
$
753.4
$
822.2
Accounts receivable, net
831.7
783.7
Inventories, net of inventory valuation
reserves
1,037.8
981.9
Other current assets
85.2
78.2
Total current assets
2,708.1
2,666.0
Property, plant and equipment:
Property, plant and equipment
4,736.4
4,690.7
Less: accumulated depreciation
(1,932.1
)
(1,845.5
)
Property, plant and equipment, net
2,804.3
2,845.2
Operating lease right-of-use assets
142.2
148.2
Goodwill
729.4
729.4
Other intangibles, net
291.0
296.2
Equity method investments
370.3
360.7
Other non-current assets
135.0
126.1
Total assets
$
7,180.3
$
7,171.8
LIABILITIES AND STOCKHOLDERS’
EQUITY
Current liabilities:
Accounts payable
$
1,732.3
$
1,814.3
Current portion of long-term debt
14.5
44.5
Current portion of obligation under
Inventory Intermediation Agreement
—
0.4
Current portion of operating lease
liabilities
51.5
54.7
Accrued expenses and other current
liabilities
808.2
771.2
Total current liabilities
2,606.5
2,685.1
Non-current liabilities:
Long-term debt, net of current portion
2,482.4
2,555.3
Obligation under Inventory Intermediation
Agreement
492.7
407.2
Environmental liabilities, net of current
portion
110.5
110.9
Asset retirement obligations
43.6
43.3
Deferred tax liabilities
269.6
264.1
Operating lease liabilities, net of
current portion
104.7
111.2
Other non-current liabilities
35.2
35.0
Total non-current liabilities
3,538.7
3,527.0
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, 81,626,016 shares and 81,539,871 shares issued
at March 31, 2024 and December 31, 2023, respectively
0.8
0.8
Additional paid-in capital
1,171.8
1,113.6
Accumulated other comprehensive loss
(4.8
)
(4.8
)
Treasury stock, 17,575,527 shares, at
cost, at March 31, 2024 and December 31, 2023, respectively
(694.1
)
(694.1
)
Retained earnings
381.5
430.0
Non-controlling interests in
subsidiaries
179.9
114.2
Total stockholders’ equity
1,035.1
959.7
Total liabilities and stockholders’
equity
$
7,180.3
$
7,171.8
Delek US Holdings, Inc.
Condensed Consolidated Statements of
Income (Unaudited)
($ in millions, except share and per
share data)
Three Months Ended March
31,
2024
2023
Net revenues
$
3,227.6
$
3,924.3
Cost of sales:
Cost of materials and other
2,797.3
3,439.6
Operating expenses (excluding depreciation
and amortization presented below)
213.8
170.8
Depreciation and amortization
86.4
76.8
Total cost of sales
3,097.5
3,687.2
Operating expenses related to retail and
wholesale business (excluding depreciation and amortization
presented below)
25.8
27.0
General and administrative expenses
64.4
71.5
Depreciation and amortization
8.8
6.6
Other operating income, net
(1.6
)
(10.8
)
Total operating costs and expenses
3,194.9
3,781.5
Operating income
32.7
142.8
Interest expense, net
87.7
76.5
Income from equity method investments
(21.9
)
(14.6
)
Other income, net
(0.7
)
(7.1
)
Total non-operating expense, net
65.1
54.8
(Loss) income before income tax (benefit)
expense
(32.4
)
88.0
Income tax (benefit) expense
(7.2
)
15.8
Net (loss) income
(25.2
)
72.2
Net income attributed to non-controlling
interests
7.4
7.9
Net (loss) income attributable to
Delek
$
(32.6
)
$
64.3
Basic (loss) income per share
$
(0.51
)
$
0.96
Diluted (loss) income per share
$
(0.51
)
$
0.95
Weighted average common shares
outstanding:
Basic
64,021,988
66,951,975
Diluted
64,021,988
67,369,374
Condensed Cash Flow Data
(Unaudited)
($ in millions)
Three Months Ended March
31,
2024
2023
Cash flows from operating
activities:
Net cash provided by operating
activities
$
166.7
$
395.1
Cash flows from investing
activities:
Net cash used in investing activities
(41.6
)
(222.1
)
Cash flows from financing
activities:
Net cash used in financing activities
(193.9
)
(149.3
)
Net (decrease) increase in cash and cash
equivalents
(68.8
)
23.7
Cash and cash equivalents at the beginning
of the period
822.2
841.3
Cash and cash equivalents at the end of
the period
$
753.4
$
865.0
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 first quarter 2024,
we recorded restructuring costs totaling $3.2 million ($2.5 million
after-tax) associated with our business transformation, which are
recorded in general and administrative expenses in our condensed
consolidated statements of income.
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.
Reconciliation of Net Income (Loss)
Attributable to Delek US to Adjusted Net Income (Loss)
Three Months Ended March
31,
$ in millions (unaudited)
2024
2023
Reported net (loss) income attributable
to Delek US
$
(32.6
)
$
64.3
Adjusting items (1)
Inventory LCM valuation (benefit) loss
(8.8
)
(1.7
)
Tax effect
2.0
0.4
Inventory LCM valuation (benefit) loss,
net
(6.8
)
(1.3
)
Other inventory impact
(1.4
)
77.1
Tax effect
0.3
(17.3
)
Other inventory impact, net (2) (3)
(1.1
)
59.8
Business interruption insurance
recoveries
—
(5.1
)
Tax effect
—
1.1
Business interruption insurance
recoveries, net
—
(4.0
)
Unrealized inventory/commodity hedging
(gain) loss where the hedged item is not yet recognized in the
financial statements
9.0
(32.2
)
Tax effect
(2.0
)
7.2
Unrealized inventory/commodity hedging
(gain) loss where the hedged item is not yet recognized in the
financial statements, net
7.0
(25.0
)
Unrealized RINs hedging (gain) loss where
the hedged item is not yet recognized in the financial
statements
6.2
—
Tax effect
(1.4
)
—
Unrealized RINs hedging (gain) loss where
the hedged item is not yet recognized in the financial statements,
net (4)
4.8
—
Restructuring costs
3.2
(1.4
)
Tax effect
(0.7
)
0.3
Restructuring costs, net (2)
2.5
(1.1
)
Total adjusting items (1)
6.4
28.4
Adjusted net (loss) income
$
(26.2
)
$
92.7
(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,
2024, we updated our non-GAAP financial measures to include the
impact of unrealized gains and losses related to RINs where the
hedged item is not yet recognized in the financial statements. The
impact to historical non-GAAP financial measures is immaterial.
Reconciliation of U.S. GAAP Income
(Loss) per share to Adjusted Net Income (Loss) per share
Three Months Ended March
31,
$ per share (unaudited)
2024
2023
Reported diluted (loss) income per
share
$
(0.51
)
$
0.95
Adjusting items,
after tax (per share) (1) (2)
Net inventory LCM valuation (benefit)
loss
(0.11
)
(0.02
)
Other inventory impact (3) (4)
(0.02
)
0.89
Business interruption insurance
recoveries
—
(0.06
)
Unrealized inventory/commodity hedging
(gain) loss where the hedged item is not yet recognized in the
financial statements
0.11
(0.37
)
Unrealized RINs hedging (gain) loss where
the hedged item is not yet recognized in the financial statements
(5)
0.08
—
Restructuring costs (3)
0.04
(0.02
)
Total adjusting items (1)
0.10
0.42
Adjusted net (loss) income per
share
$
(0.41
)
$
1.37
(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,
2024, we updated our non-GAAP financial measures to include the
impact of unrealized gains and losses related to RINs where the
hedged item is not yet recognized in the financial statements. The
impact to historical non-GAAP financial measures is immaterial.
Reconciliation of Net Income (Loss)
attributable to Delek US to Adjusted EBITDA
Three Months Ended March
31,
$ in millions (unaudited)
2024
2023
Reported net (loss) income attributable
to Delek US
$
(32.6
)
$
64.3
Add:
Interest expense, net
87.7
76.5
Income tax expense (benefit)
(7.2
)
15.8
Depreciation and amortization
95.2
83.4
EBITDA attributable to Delek US
143.1
240.0
Adjusting items
Net inventory LCM valuation (benefit)
loss
(8.8
)
(1.7
)
Other inventory impact (1) (2)
(1.4
)
77.1
Business interruption insurance
recoveries
—
(5.1
)
Unrealized inventory/commodity hedging
(gain) loss where the hedged item is not yet recognized in the
financial statements
9.0
(32.2
)
Unrealized RINs hedging (gain) loss where
the hedged item is not yet recognized in the financial statements
(3)
6.2
—
Restructuring costs (1)
3.2
(1.4
)
Net income attributable to non-controlling
interest
7.4
7.9
Total Adjusting items
15.6
44.6
Adjusted EBITDA
$
158.7
$
284.6
(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,
2024, we updated our non-GAAP financial measures to include the
impact of unrealized gains and losses related to RINs where the
hedged item is not yet recognized in the financial statements. The
impact to historical non-GAAP financial measures is immaterial.
Reconciliation of Segment EBITDA
Attributable to Delek US to Adjusted Segment EBITDA
Three Months Ended March 31,
2024
$ in millions (unaudited)
Refining
Logistics
Retail
Corporate,
Other and
Eliminations
Consolidated
Segment EBITDA Attributable to Delek
US
$
101.1
$
99.7
$
6.5
$
(64.2
)
$
143.1
Adjusting items
Net inventory LCM valuation (benefit)
loss
(8.8
)
—
—
—
(8.8
)
Other inventory impact (1) (2)
(1.4
)
—
—
—
(1.4
)
Unrealized inventory/commodity hedging
(gain) loss where the hedged item is not yet recognized in the
financial statements
9.0
—
—
—
9.0
Unrealized RINs hedging (gain) loss where
the hedged item is not yet recognized in the financial statements
(3)
6.2
—
—
—
6.2
Restructuring costs (1)
—
—
—
3.2
3.2
Net income attributable to non-controlling
interest
—
—
—
7.4
7.4
Total Adjusting items
5.0
—
—
10.6
15.6
Adjusted Segment EBITDA
$
106.1
$
99.7
$
6.5
$
(53.6
)
$
158.7
Three Months Ended March 31,
2023
$ in millions (unaudited)
Refining
Logistics
Retail
Corporate,
Other and
Eliminations
Consolidated
Segment EBITDA Attributable to Delek
US
$
192.1
$
91.4
$
6.4
$
(49.9
)
$
240.0
Adjusting
items
Net inventory LCM valuation (benefit)
loss
(1.7
)
—
—
—
(1.7
)
Other inventory impact (1) (2)
77.1
—
—
—
77.1
Unrealized inventory/commodity hedging
(gain) loss where the hedged item is not yet recognized in the
financial statements
(32.2
)
—
—
—
(32.2
)
Restructuring costs
—
—
—
(1.4
)
(1.4
)
Business Interruption insurance
recoveries
(5.1
)
—
—
—
(5.1
)
Net income attributable to non-controlling
interest
—
—
—
7.9
7.9
Total Adjusting items
38.1
—
—
6.5
44.6
Adjusted Segment EBITDA
$
230.2
$
91.4
$
6.4
$
(43.4
)
$
284.6
(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,
2024, we updated our non-GAAP financial measures to include the
impact of unrealized gains and losses related to RINs where the
hedged item is not yet recognized in the financial statements. The
impact to historical non-GAAP financial measures is immaterial.
Refining Segment Selected Financial
Information
Three Months Ended March
31,
2024
2023
Total Refining Segment
(Unaudited)
Days in period
91
90
Total sales volume - refined product
(average barrels per day ("bpd")) (1)
306,567
271,715
Total production (average bpd)
292,725
266,606
Crude oil
274,554
248,199
Other feedstocks
22,098
20,336
Total throughput (average bpd)
296,652
268,535
Total refining production margin per bbl
total throughput
$
12.55
$
16.44
Total refining operating expenses per bbl
total throughput
$
5.90
$
5.60
Total refining production margin ($ in
millions)
$
338.8
$
397.3
Supply, marketing and other ($ millions)
(2)
(65.4
)
(18.4
)
Total adjusted refining margin ($ in
millions)
$
273.4
$
378.9
Total crude slate details
Total crude slate: (% based on amount
received in period)
WTI crude oil
71.4
%
69.8
%
Gulf Coast Sweet crude
6.2
%
4.7
%
Local Arkansas crude oil
3.4
%
4.5
%
Other
19.0
%
21.0
%
Crude utilization (% based on nameplate
capacity) (4)
90.9
%
82.2
%
Tyler, TX Refinery
Days in period
91
90
Products manufactured (average bpd):
Gasoline
37,368
18,776
Diesel/Jet
30,105
13,042
Petrochemicals, LPG, NGLs
1,983
736
Other
1,217
1,778
Total production
70,673
34,332
Throughput (average bpd):
Crude oil
67,792
29,810
Other feedstocks
4,473
4,694
Total throughput
72,265
34,504
Tyler refining production margin ($ in
millions)
$
103.4
$
67.2
Per barrel of throughput:
Tyler refining production margin
$
15.72
$
21.65
Operating expenses
$
5.28
$
8.70
Crude Slate: (% based on amount received
in period)
WTI crude oil
82.6
%
37.5
%
East Texas crude oil
17.4
%
62.5
%
Capture rate (3)
68.1
%
66.5
%
El Dorado, AR Refinery
Days in period
91
90
Products manufactured (average bpd):
Gasoline
41,542
38,044
Diesel
30,035
27,710
Petrochemicals, LPG, NGLs
1,583
1,290
Asphalt
8,305
7,718
Other
795
746
Total production
82,260
75,508
Throughput (average bpd):
Crude oil
80,183
72,637
Other feedstocks
3,404
4,558
Total throughput
83,587
77,195
Refining Segment Selected Financial
Information (continued)
Three Months Ended March
31,
2024
2023
El Dorado refining production margin ($ in
millions)
$
70.7
$
93.0
Per barrel of throughput:
El Dorado refining production margin
$
9.29
$
13.38
Operating expenses
$
4.72
$
4.47
Crude Slate: (% based on amount received
in period)
WTI crude oil
66.4
%
61.9
%
Local Arkansas crude oil
11.6
%
14.7
%
Other
22.0
%
23.4
%
Capture rate (3)
40.3
%
41.1
%
Big Spring, TX Refinery
Days in period
91
90
Products manufactured (average bpd):
Gasoline
29,975
38,509
Diesel/Jet
22,446
25,642
Petrochemicals, LPG, NGLs
5,436
3,133
Asphalt
2,088
1,642
Other
3,662
2,642
Total production
63,607
71,568
Throughput (average bpd):
Crude oil
59,448
67,989
Other feedstocks
5,405
4,625
Total throughput
64,853
72,614
Big Spring refining production margin ($
in millions)
$
75.9
$
119.8
Per barrel of throughput:
Big Spring refining production margin
$
12.87
$
18.33
Operating expenses
$
8.08
$
5.80
Crude Slate: (% based on amount received
in period)
WTI crude oil
72.7
%
74.8
%
WTS crude oil
27.3
%
25.2
%
Capture rate (3)
58.5
%
58.7
%
Krotz Springs, LA Refinery
Days in period
91
90
Products manufactured (average bpd):
Gasoline
38,777
41,846
Diesel/Jet
28,244
32,783
Heavy oils
2,731
3,509
Petrochemicals, LPG, NGLs
5,731
6,873
Other
702
187
Total production
76,185
85,198
Throughput (average bpd):
Crude oil
67,131
77,764
Other feedstocks
8,816
6,459
Total throughput
75,947
84,223
Krotz Springs refining production margin
($ in millions)
$
88.8
$
117.3
Per barrel of throughput:
Krotz Springs refining production
margin
$
12.85
$
15.47
Operating expenses
$
5.94
$
5.21
Crude Slate: (% based on amount received
in period)
WTI Crude
64.5
%
79.8
%
Gulf Coast Sweet Crude
25.1
%
14.3
%
Other
10.4
%
5.9
%
Capture rate (3)
66.2
%
81.1
%
(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)
Defined as refining production margin
divided by the respective crack spread. See page 15 for crack
spread information.
(4)
Crude throughput as % of total nameplate
capacity of 302,000 bpd.
Logistics Segment Selected
Information
Three Months Ended March
31,
2024
2023
(Unaudited)
Gathering & Processing: (average
bpd)
Lion Pipeline System:
Crude pipelines (non-gathered)
73,011
63,528
Refined products pipelines
63,234
55,003
SALA Gathering System
12,987
13,872
East Texas Crude Logistics System
19,702
22,670
Midland Gathering Assets
213,458
222,112
Plains Connection System
256,844
240,597
Delaware Gathering Assets:
Natural gas gathering and processing
(Mcfd) (1)
76,322
74,716
Crude oil gathering (average bpd)
123,509
103,725
Water disposal and recycling (average
bpd)
120,269
88,182
Wholesale Marketing &
Terminalling:
East Texas - Tyler Refinery sales volumes
(average bpd) (2)
66,475
34,816
Big Spring wholesale marketing throughputs
(average bpd)
76,615
78,380
West Texas wholesale marketing throughputs
(average bpd)
9,976
8,696
West Texas wholesale marketing margin per
barrel
$
2.15
$
5.47
Terminalling throughputs (average bpd)
(3)
136,614
93,305
(1)
Mcfd - average thousand cubic feet per
day.
(2)
Excludes jet fuel and petroleum coke.
(3)
Consists of terminalling throughputs at
our Tyler, Big Spring, Big Sandy and Mount Pleasant, Texas
terminals, El Dorado and North Little Rock, Arkansas terminals and
Memphis and Nashville, Tennessee terminals.
Retail Segment Selected
Information
Three Months Ended March
31,
2024
2023
(Unaudited)
Number of stores (end of period)
250
249
Average number of stores
250
249
Average number of fuel stores
245
244
Retail fuel sales (thousands of
gallons)
39,683
39,964
Average retail gallons sold per average
number of fuel stores (in thousands)
162
164
Average retail sales price per gallon
sold
$
3.09
$
3.28
Retail fuel margin ($ per gallon) (1)
$
0.29
$
0.27
Merchandise sales (in millions)
$
70.7
$
73.9
Merchandise sales per average number of
stores (in millions)
$
0.3
$
0.3
Merchandise margin %
33.5
%
33.0
%
Three Months Ended March
31,
2024
2023
Same-Store Comparison (2)
(Unaudited)
Change in same-store fuel gallons sold
0.7
%
(1.7
)%
Change in same-store merchandise sales
(4.1
)%
5.3
%
(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.
Supplemental Information
Schedule of Selected Segment Financial
Data, Pricing Statistics Impacting our Refining Segment, and Other
Reconciliations of Amounts Reported Under U.S. GAAP
Three Months Ended March 31,
2024
$ in millions (unaudited)
Refining
Logistics
Retail
Corporate,
Other and
Eliminations
Consolidated
Net revenues (excluding intercompany fees
and revenues)
$
2,921.6
$
112.5
$
193.5
$
—
$
3,227.6
Inter-segment fees and revenues
186.7
139.6
—
(326.3
)
—
Total revenues
$
3,108.3
$
252.1
$
193.5
$
(326.3
)
$
3,227.6
Cost of sales
3,067.1
180.6
158.7
(308.9
)
3,097.5
Gross margin
$
41.2
$
71.5
$
34.8
$
(17.4
)
$
130.1
Three Months Ended March 31,
2023
$ in millions (unaudited)
Refining
Logistics
Retail
Corporate,
Other and
Eliminations
Consolidated
Net revenues (excluding intercompany fees
and revenues)
$
3,600.8
$
118.5
$
205.0
$
—
$
3,924.3
Inter-segment fees and revenues
193.7
125.0
—
(318.7
)
—
Total revenues
$
3,794.5
$
243.5
$
205.0
$
(318.7
)
$
3,924.3
Cost of sales
3,654.5
170.1
170.0
(307.4
)
3,687.2
Gross margin
$
140.0
$
73.4
$
35.0
$
(11.3
)
$
237.1
Pricing Statistics
Three Months Ended March
31,
(average for the period presented)
2024
2023
WTI — Cushing crude oil (per barrel)
$
77.01
$
75.96
WTI — Midland crude oil (per barrel)
$
78.55
$
77.50
WTS — Midland crude oil (per barrel)
$
77.48
$
75.39
LLS (per barrel)
$
79.69
$
78.84
Brent (per barrel)
$
81.76
$
82.10
U.S. Gulf Coast 5-3-2 crack spread (per
barrel) (1)
$
23.09
$
32.55
U.S. Gulf Coast 3-2-1 crack spread (per
barrel) (1)
$
21.98
$
31.22
U.S. Gulf Coast 2-1-1 crack spread (per
barrel) (1)
$
19.40
$
19.08
U.S. Gulf Coast Unleaded Gasoline (per
gallon)
$
2.22
$
2.39
Gulf Coast Ultra low sulfur diesel (per
gallon)
$
2.62
$
2.87
U.S. Gulf Coast high sulfur diesel (per
gallon)
$
1.95
$
1.92
Natural gas (per MMBTU)
$
2.10
$
2.73
(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.
For 2023, for our Krotz Springs refinery, we compare our per barrel
refining margin to the Gulf Coast 2-1-1 crack spread consisting of
(Argus pricing) LLS crude oil, (Argus pricing) U.S. Gulf Coast CBOB
gasoline and 50% of (Argus pricing) U.S. Gulf Coast Pipeline No. 2
heating oil (high sulfur diesel) and 50% of (Platts pricing) U.S.
Gulf Coast Pipeline No. 2 heating oil (high sulfur diesel). For
2024, for our Krotz Springs refinery, we compare our per barrel
refining margin to the Gulf Coast 2-1-1 crack spread consisting of
(Argus pricing) LLS crude oil, (Argus pricing) U.S. Gulf Coast CBOB
gasoline and (Platts pricing) U.S. Gulf Coast Pipeline No. 2
heating oil (high sulfur diesel). The Tyler refinery's crude oil
input is primarily WTI Midland and East Texas, while the El Dorado
refinery's crude input is primarily a combination of WTI Midland,
local Arkansas and other domestic inland crude oil. The Big Spring
refinery’s crude oil input is primarily comprised of WTS and WTI
Midland. The Krotz Springs refinery’s crude oil input is primarily
comprised of LLS and WTI Midland.
Other Reconciliations of Amounts
Reported Under U.S. GAAP
$ in millions (unaudited)
Three Months Ended March
31,
Reconciliation of gross margin to
Refining margin to Adjusted refining margin
2024
2023
Gross margin
$
41.2
$
140.0
Add back (items included in cost of
sales):
Operating expenses (excluding depreciation
and amortization)
165.8
139.1
Depreciation and amortization
61.4
56.6
Refining margin
$
268.4
$
335.7
Adjusting
items
Net inventory LCM valuation loss
(benefit)
(8.8
)
(1.7
)
Other inventory impact (1) (2)
(1.4
)
77.1
Unrealized inventory/commodity hedging
(gain) loss where the hedged item is not yet recognized in the
financial statements
9.0
(32.2
)
Unrealized RINs hedging (gain) loss where
the hedged item is not yet recognized in the financial statements
(3)
6.2
—
Total adjusting items
5.0
43.2
Adjusted refining margin
$
273.4
$
378.9
(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,
2024, we updated our non-GAAP financial measures to include the
impact of unrealized gains and losses related to RINs where the
hedged item is not yet recognized in the financial statements. The
impact to historical non-GAAP financial measures is immaterial.
Calculation of Net Debt
March 31, 2024
December 31, 2023
Long-term debt - current portion
$
14.5
$
44.5
Long-term debt - non-current portion
2,482.4
2,555.3
Total long-term debt
2,496.9
2,599.8
Less: Cash and cash equivalents
753.4
822.2
Net debt - consolidated
1,743.5
1,777.6
Less: DKL net debt
1,591.5
1,700.0
Net debt, excluding DKL
$
152.0
$
77.6
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240507778765/en/
Investor/Media Relations
Contacts: Rosy Zuklic, Vice President of Investor
Relations and Market Intelligence
investor.relations@delekus.com; rosy.zuklic@delekus.com;
615-767-4344
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 X
account (@DelekUSHoldings).
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