Delek US Holdings, Inc. Files 10-Q for Period Ending March 31, 2024

Ticker: DK · Form: 10-Q · Filed: May 8, 2024 · CIK: 1694426

Sentiment: neutral

Topics: 10-Q, Delek US Holdings, Petroleum Refining, Financial Report, Q1 2024

TL;DR

<b>Delek US Holdings, Inc. has filed its Q1 2024 10-Q report, detailing financial performance and position.</b>

AI Summary

Delek US Holdings, Inc. (DK) filed a Quarterly Report (10-Q) with the SEC on May 8, 2024. Delek US Holdings, Inc. filed its 10-Q report for the period ending March 31, 2024. The filing covers the first quarter of fiscal year 2024. The company's principal business is petroleum refining. The filing includes financial data for the periods ending March 31, 2024, December 31, 2023, and March 31, 2023. Key financial statement items such as common stock, additional paid-in capital, and retained earnings are detailed for these periods.

Why It Matters

For investors and stakeholders tracking Delek US Holdings, Inc., this filing contains several important signals. This 10-Q filing provides investors with the latest financial results and operational updates for Delek US Holdings, Inc., crucial for assessing the company's performance in the petroleum refining sector. The detailed financial statements and segment reporting allow for a granular analysis of revenue streams and profitability across Delek's refining, logistics, and retail operations.

Risk Assessment

Risk Level: medium — Delek US Holdings, Inc. shows moderate risk based on this filing. The company operates in the volatile petroleum refining industry, which is subject to significant price fluctuations and regulatory changes, posing inherent risks to financial performance.

Analyst Insight

Investors should review the detailed segment performance and risk factors in the 10-Q to understand the company's current operational health and future outlook.

Key Numbers

Key Players & Entities

FAQ

When did Delek US Holdings, Inc. file this 10-Q?

Delek US Holdings, Inc. filed this Quarterly Report (10-Q) with the SEC on May 8, 2024.

What is a 10-Q filing?

A 10-Q is a quarterly financial report with unaudited financials, management discussion, and interim business updates. This particular 10-Q was filed by Delek US Holdings, Inc. (DK).

Where can I read the original 10-Q filing from Delek US Holdings, Inc.?

You can access the original filing directly on the SEC's EDGAR system. The filing is publicly available and includes all exhibits and attachments submitted by Delek US Holdings, Inc..

What are the key takeaways from Delek US Holdings, Inc.'s 10-Q?

Delek US Holdings, Inc. filed this 10-Q on May 8, 2024. Key takeaways: Delek US Holdings, Inc. filed its 10-Q report for the period ending March 31, 2024.. The filing covers the first quarter of fiscal year 2024.. The company's principal business is petroleum refining..

Is Delek US Holdings, Inc. a risky investment based on this filing?

Based on this 10-Q, Delek US Holdings, Inc. presents a moderate-risk profile. The company operates in the volatile petroleum refining industry, which is subject to significant price fluctuations and regulatory changes, posing inherent risks to financial performance.

What should investors do after reading Delek US Holdings, Inc.'s 10-Q?

Investors should review the detailed segment performance and risk factors in the 10-Q to understand the company's current operational health and future outlook. The overall sentiment from this filing is neutral.

How does Delek US Holdings, Inc. compare to its industry peers?

Delek US Holdings, Inc. operates within the petroleum refining industry, a sector characterized by significant capital investment, complex operations, and sensitivity to global energy markets and regulatory environments.

Are there regulatory concerns for Delek US Holdings, Inc.?

The petroleum refining industry is heavily regulated, with companies like Delek US Holdings, Inc. facing compliance requirements related to environmental protection, safety standards, and fuel specifications.

Risk Factors

Industry Context

Delek US Holdings, Inc. operates within the petroleum refining industry, a sector characterized by significant capital investment, complex operations, and sensitivity to global energy markets and regulatory environments.

Regulatory Implications

The petroleum refining industry is heavily regulated, with companies like Delek US Holdings, Inc. facing compliance requirements related to environmental protection, safety standards, and fuel specifications.

What Investors Should Do

  1. Analyze the detailed financial statements for Q1 2024, comparing key metrics to prior periods.
  2. Review the segment reporting to understand performance drivers in Refining, Logistics, and Retail.
  3. Examine the risk factors section for any new or evolving risks impacting the company's operations and financial stability.

Key Dates

Year-Over-Year Comparison

This filing represents the first quarterly report of 2024, providing updated financial data and operational insights compared to the previous year's Q1 report and the most recent annual report.

Filing Stats: 4,663 words · 19 min read · ~16 pages · Grade level 8.8 · Accepted 2024-05-08 12:27:32

Key Financial Figures

Filing Documents

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

Financial Statements (unaudited)

Item 1. Financial Statements (unaudited) 3 Condensed Consolidated Balance Sheets 3 Condensed Consolidated Statements of Income 4 Condensed Consolidated Statements of Comprehensive Income 5 Condensed Consolidated Statement s of Changes in Stockholders' Equity 6 Condensed Consolidated Statements of Cash Flows 7 Notes to Condensed Consolidated Financial Statements 8

Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 24

Quantitative and Qualitative Disclosures about Market Risk

Item 3. Quantitative and Qualitative Disclosures about Market Risk 53

Controls and Procedures

Item 4. Controls and Procedures 55

OTHER INFORMATION

PART II. OTHER INFORMATION

Legal Proceedings

Item 1. Legal Proceedings 56

Risk Factors

Item 1A. Risk Factors 56

Other Information

Item 5. Other Information 56

Exhibits

Item 6. Exhibits 56

Signatures

Signatures 57 2 |

Financial Statements

Financial Statements

- FINANCIAL INFORMATION

Part I - FINANCIAL INFORMATION

FINANCIAL STATEMENTS

ITEM 1. FINANCIAL STATEMENTS 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 1,1

Financial Statements

Financial Statements 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 See accompanying notes to the condensed consolidated financial statements 4 |

Financial Statements

Financial Statements Delek US Holdings, Inc. Condensed Consolidated Statements of Comprehensive Income (Loss) (unaudited) (In millions) Three Months Ended March 31, 2024 2023 Net (loss) income $ ( 25.2 ) $ 72.2 Comprehensive (loss) income $ ( 25.2 ) $ 72.2 Comprehensive income attributable to non-controlling interest 7.4 7.9 Comprehensive (loss) income attributable to Delek $ ( 32.6 ) $ 64.3 See accompanying notes to the condensed consolidated financial statements 5 |

Financial Statements

Financial Statements Delek US Holdings, Inc. Condensed Consolidated Statements of Changes in Stockholders' Equity (unaudited) (In millions, except share and per share data) Three Months Ended March 31, 2024 Common Stock Additional Paid-in Capital Accumulated Other Comprehensive Loss Retained Earnings Treasury Shares Non-Controlling Interest in Subsidiaries Total Stockholders' Equity Shares Amount Shares Amount Balance at December 31, 2023 81,539,871 $ 0.8 $ 1,113.6 $ ( 4.8 ) $ 430.0 ( 17,575,527 ) $ ( 694.1 ) $ 114.2 $ 959.7 Net (loss) income — — — — ( 32.6 ) — — 7.4 ( 25.2 ) Common stock dividends ($ 0.245 per share) — — — — ( 15.7 ) — — — ( 15.7 ) Distributions to non-controlling interests — — — — — — — ( 9.8 ) ( 9.8 ) Equity-based compensation expense — — 7.0 — — — — 0.2 7.2 Taxes paid due to the net settlement of equity-based compensation — — ( 0.5 ) — — — — ( 0.3 ) ( 0.8 ) Exercise of equity-based awards 44,374 — — — — — — — — Equity attributable to issuance of Delek Logistic common limited partner units, net of tax — — 50.5 — — — — 68.4 118.9 Other 41,771 — 1.2 — ( 0.2 ) — — ( 0.2 ) 0.8 Balance at March 31, 2024 81,626,016 $ 0.8 $ 1,171.8 $ ( 4.8 ) $ 381.5 ( 17,575,527 ) $ ( 694.1 ) $ 179.9 $ 1,035.1 Three Months Ended March 31, 2023 Common Stock Additional Paid-in Capital Accumulated Other Comprehensive Loss Retained Earnings Treasury Stock Non-Controlling Interest in Subsidiaries Total Stockholders' Equity Shares Amount Shares Amount Balance at December 31, 2022 84,509,517 $ 0.9 $ 1,134.1 $ ( 5.2 ) $ 507.9 ( 17,575,527 ) $ ( 694.1 ) $ 125.9 $ 1,069.5 Net income — — — — 64.3 — — 7.9 72.2 Common stock dividends ($ 0.220 per share) — — — — ( 14.7 ) — — — ( 14.7 ) Equity-based compensation expense — — 6.3 — — — — 0.1 6.4 Distributions to non-controlling interests — — — — — — — ( 9.5 ) ( 9.5 ) Repurchase of common stock ( 16,292 ) — ( 0.2 ) — ( 0.2 ) — — — ( 0.4 ) Taxes paid due to the net settlement of equity-based compensatio

Financial Statements

Financial Statements Delek US Holdings, Inc. Condensed Consolidated Statements of Cash Flows (unaudited) (In millions) Three Months Ended March 31, 2024 2023 Cash flows from operating activities: Net (loss) income $ ( 25.2 ) $ 72.2 Adjustments to reconcile net (loss) income to net cash provided by operating activities: Depreciation and amortization 95.2 83.4 Non-cash lease expense 14.1 15.4 Deferred income taxes ( 8.1 ) 16.6 Income from equity method investments ( 21.9 ) ( 14.6 ) Dividends from equity method investments 9.5 8.7 Non-cash lower of cost or market/net realizable value adjustment ( 8.8 ) ( 1.7 ) Loss on extinguishment of debt 3.6 — Equity-based compensation expense 7.2 6.4 Other ( 0.1 ) 3.3 Changes in assets and liabilities: Accounts receivable ( 48.0 ) 395.9 Inventories and other current assets ( 48.3 ) 166.8 Fair value of derivatives 13.5 ( 0.4 ) Accounts payable and other current liabilities 110.4 ( 293.1 ) Obligation under Inventory Intermediation Agreements 85.1 ( 63.5 ) Non-current assets and liabilities, net ( 11.5 ) ( 0.3 ) Net cash provided by operating activities 166.7 395.1 Cash flows from investing activities: Distributions from equity method investments 2.8 2.1 Purchases of property, plant and equipment ( 47.3 ) ( 211.3 ) Purchase of equity securities — ( 7.5 ) Purchases of intangible assets ( 0.7 ) ( 0.6 ) Insurance proceeds 3.6 — Other — ( 4.8 ) Net cash used in investing activities ( 41.6 ) ( 222.1 ) Cash flows from financing activities: Proceeds from long-term revolvers 1,493.1 848.6 Payments on long-term revolvers ( 1,708.4 ) ( 1,123.5 ) Proceeds from term debt 650.0 — Payments on term debt ( 533.7 ) ( 6.1 ) Proceeds from product and other financing agreements 101.0 335.0 Repayments of product and other financing agreements ( 290.7 ) ( 236.1 ) Proceeds from Inventory Intermediation Agreement — 32.2 Proceeds from termination of Supply & Offtake Obligation — 25.8 Taxes paid due to the

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements Delek US Holdings, Inc. Notes to Condensed Consolidated Financial Statements (unaudited) 1. Organization and Basis of Presentation Delek US Holdings, Inc. operates through its consolidated subsidiaries, which include Delek US Energy, Inc. ("Delek Energy") (and its subsidiaries) and Alon USA Energy, Inc. ("Alon") (and its subsidiaries). The terms "we," "our," "us," "Delek" and the "Company" are used in this report to refer to Delek and its consolidated subsidiaries. Delek's common stock is listed on the New York Stock Exchange ("NYSE") under the symbol "DK." Our condensed consolidated financial statements include the accounts of Delek and its subsidiaries. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with United States ("U.S.") Generally Accepted Accounting Principles ("GAAP") have been condensed or omitted, although management believes that the disclosures herein are adequate to make the financial information presented not misleading. Our unaudited condensed consolidated financial statements have been prepared in conformity with GAAP applied on a consistent basis with those of the annual audited consolidated financial statements included in our Annual Report on Form 10-K filed with the Securities and Exchange Commission ("SEC") on February 28, 2024 (the "Annual Report on Form 10-K") and in accordance with the rules and regulations of the SEC. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto for the year ended December 31, 2023 included in our Annual Report on Form 10-K. Our condensed consolidated financial statements include Delek Logistics Partners, LP ("Delek Logistics", NYSE:DKL), which is a variable interest entity ("VIE"). As the indirect owner of the general partner of Delek Logistics, we have the ability to direct the activiti

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements ASU 2023-06, Codification Amendments in Response to the SEC's Disclosure Update and Simplification Initiative In October 2023, the FASB issued ASU 2023-06 Codification Amendments in Response to the SEC's Disclosure Update and Simplification Initiative ("ASU 2023-06"). The main provision of ASU 2023-06 is to clarify or improve disclosure and presentation requirements of a variety of topics, which will allow users to more easily compare entities subject to the SEC's existing disclosures with those entities that were not previously subject to the requirements, and align the requirements in the FASB accounting standard codification with the SEC's regulations. The effective date for each amendment will be the date on which the SEC's removal of that related disclosure from Regulation S-X or Regulation S-K becomes effective, with early adoption prohibited. The Company is currently evaluating the provisions of the amendments and the impact on its future condensed consolidated financial statements, but does not currently expect adopting this new guidance will have a material impact on our condensed consolidated financial statements and related disclosures. 2. Segment Data We aggregate our operating units into three reportable segments: Refining, Logistics, and Retail. Operations that are not specifically included in the reportable segments are included in Corporate, Other and Eliminations, which consist of the following: our corporate activities; results of certain immaterial operating segments, including our Canadian crude trading operations (as discussed in Note 9); and intercompany eliminations. The disaggregated financial results for the reporting segments have been prepared using a management approach, which is consistent with the basis and manner in which management internally disaggregates financial information for the purposes of assisting internal operating decisions. The CODM evaluates performance based upon EBI

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements Three Months Ended March 31, 2024 (In millions) 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 Segment EBITDA attributable to Delek $ 101.1 $ 99.7 $ 6.5 $ ( 64.2 ) $ 143.1 Depreciation and amortization ( 61.4 ) ( 26.5 ) ( 3.5 ) ( 3.8 ) ( 95.2 ) Interest expense, net ( 12.1 ) ( 40.3 ) — ( 35.3 ) ( 87.7 ) Income tax benefit 7.2 Net loss attributable to Delek $ ( 32.6 ) Income from equity method investments $ — $ ( 8.5 ) $ — $ ( 13.4 ) $ ( 21.9 ) Capital spending (1) $ 21.5 $ 15.2 $ 4.1 $ 5.1 $ 45.9 Three Months Ended March 31, 2023 (In millions) 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 Segment EBITDA attributable to Delek $ 192.1 $ 91.4 $ 6.4 $ ( 49.9 ) $ 240.0 Depreciation and amortization ( 56.6 ) ( 21.1 ) ( 2.7 ) ( 3.0 ) ( 83.4 ) Interest expense, net ( 9.0 ) ( 32.6 ) ( 0.2 ) ( 34.7 ) ( 76.5 ) Income tax expense ( 15.8 ) Net income attributable to Delek $ 64.3 Income from equity method investments $ ( 0.4 ) $ ( 6.3 ) $ — $ ( 7.9 ) $ ( 14.6 ) Capital spending (1) $ 147.6 $ 36.1 $ 2.7 $ 5.7 $ 192.1 (1) Capital spending includes additions on an accrual basis. 3. Earnings Per Share Basic earnings per share (or "EPS") is computed by dividing net income (loss) by the weighted average common shares outstanding. Diluted earnings per share is computed by dividing net income, as adjusted for changes to income that would result from the assumed settlement of the dilutive equity instruments included in diluted weigh

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements The following table sets forth the computation of basic and diluted earnings per share. Three Months Ended March 31, 2024 2023 Numerator: Numerator for EPS Net (loss) income $ ( 25.2 ) $ 72.2 Less: Income attributed to non-controlling interests 7.4 7.9 Numerator for basic and diluted EPS attributable to Delek $ ( 32.6 ) $ 64.3 Denominator: Weighted average common shares outstanding (denominator for basic EPS) 64,021,988 66,951,975 Dilutive effect of stock-based awards — 417,399 Weighted average common shares outstanding, assuming dilution (denominator for diluted EPS) 64,021,988 67,369,374 EPS: Basic (loss) income per share $ ( 0.51 ) $ 0.96 Diluted (loss) income per share $ ( 0.51 ) $ 0.95 The following equity instruments were excluded from the diluted weighted average common shares outstanding because their effect would be anti-dilutive: Antidilutive stock-based compensation (because average share price is less than exercise price) 829,292 2,181,281 Antidilutive due to loss 550,254 — Total antidilutive stock-based compensation 1,379,546 2,181,281 4. Delek Logistics Delek Logistics is a publicly traded limited partnership formed by Delek in 2012 that owns and operates crude oil, refined products and natural gas logistics and marketing assets as well as water disposal and recycling assets. A substantial majority of Delek Logistics' assets are integral to Delek's refining and marketing operations. As of March 31, 2024, we owned a 72.7 % interest in Delek Logistics, consisting of 34,311,278 common limited partner units and the non-economic general partner interest. The limited partner interests in Delek Logistics not owned by us are reflected in net income attributable to non-controlling interest in the accompanying condensed consolidated statements of income and in non-controlling interest in subsidiaries in the accompanying condensed consolidated balance sheets. On March 12, 2024, Delek Logi

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