Delek US Holdings Files Q3 2024 10-Q

Ticker: DK · Form: 10-Q · Filed: Nov 7, 2024 · CIK: 1694426

Sentiment: neutral

Topics: 10-Q, earnings, petroleum-refining

TL;DR

Delek US Holdings filed its Q3 2024 10-Q. Check financials.

AI Summary

Delek US Holdings, Inc. filed its 10-Q for the period ending September 30, 2024. The filing covers the third quarter and the first nine months of the year. Specific financial details and operational updates for this period are detailed within the report.

Why It Matters

This filing provides investors with the latest financial performance and operational status of Delek US Holdings, crucial for understanding the company's trajectory in the petroleum refining sector.

Risk Assessment

Risk Level: medium — As a petroleum refining company, Delek US Holdings is subject to significant market volatility, regulatory changes, and commodity price fluctuations.

Key Numbers

Key Players & Entities

FAQ

What is the reporting period for this 10-Q filing?

The conformed period of report is 20240930, indicating the filing covers the period ending September 30, 2024.

When was this 10-Q filed with the SEC?

This 10-Q was filed as of date 20241107.

What is the primary business of Delek US Holdings, Inc. according to the filing?

Delek US Holdings, Inc. is in the PETROLEUM REFINING industry, SIC code 2911.

What is the company's fiscal year end?

The company's fiscal year ends on 1231.

Where is Delek US Holdings, Inc. headquartered?

The company's business address is 310 SEVEN SPRINGS WAY, SUITE 500, BRENTWOOD, TN 37027.

Filing Stats: 4,793 words · 19 min read · ~16 pages · Grade level 7.7 · Accepted 2024-11-07 12:17:40

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 Statements of Changes in Stockholders' Equity 7 Condensed Consolidated Statements of Cash Flows 8 Notes to Condensed Consolidated Financial Statements 9

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 33

Quantitative and Qualitative Disclosures about Market Risk

Item 3. Quantitative and Qualitative Disclosures about Market Risk 69

Controls and Procedures

Item 4. Controls and Procedures 71

OTHER INFORMATION

PART II. OTHER INFORMATION

Legal Proceedings

Item 1. Legal Proceedings 72

Risk Factors

Item 1A. Risk Factors 72

Other Information

Item 5. Other Information 73

Exhibits

Item 6. Exhibits 75

Signatures

Signatures 76 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) September 30, 2024 December 31, 2023 ASSETS Current assets: Cash and cash equivalents $ 1,037.6 $ 821.8 Accounts receivable, net 561.6 783.7 Inventories, net of inventory valuation reserves 915.0 941.2 Current assets of discontinued operations — 41.5 Other current assets 50.6 77.8 Total current assets 2,564.8 2,666.0 Property, plant and equipment: Property, plant and equipment 4,790.7 4,460.3 Less: accumulated depreciation ( 1,961.7 ) ( 1,764.0 ) Property, plant and equipment, net 2,829.0 2,696.3 Operating lease right-of-use assets 98.8 121.5 Goodwill 687.5 687.5 Other intangibles, net 328.6 287.7 Equity method investments 408.7 360.7 Non-current assets of discontinued operations — 228.1 Other non-current assets 112.9 124.0 Total assets $ 7,030.3 $ 7,171.8 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 1,713.6 $ 1,814.3 Current portion of long-term debt 9.5 44.5 Current portion of obligation under Inventory Intermediation Agreement 3.6 0.4 Current portion of operating lease liabilities 45.6 50.1 Current liabilities of discontinued operations — 11.5 Accrued expenses and other current liabilities 694.7 764.3 Total current liabilities 2,467.0 2,685.1 Non-current liabilities: Long-term debt, net of current portion 2,779.9 2,555.3 Obligation under Inventory Intermediation Agreement 385.3 407.2 Environmental liabilities, net of current portion 33.7 110.9 Asset retirement obligations 24.4 36.4 Deferred tax liabilities 243.9 264.1 Operating lease liabilities, net of current portion 63.7 85.7 Non-current liabilities of discontinued operations — 34.3 Other non-current liabilities 87.0 33.1 Total non-current liabilities 3,617.9 3,527.0 Redeemable non-controlling interest 70.0 — Stockholders' equity: Preferred stock, $ 0.01 par value, 10,000,000 shares

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 September 30, Nine Months Ended September 30, 2024 2023 2024 2023 Net revenues $ 3,042.4 $ 4,628.8 $ 9,478.5 $ 12,525.1 Cost of sales: Cost of materials and other 2,788.7 4,049.4 8,547.1 11,111.2 Operating expenses (excluding depreciation and amortization presented below) 181.4 217.7 580.3 577.2 Depreciation and amortization 92.5 83.7 259.6 243.1 Total cost of sales 3,062.6 4,350.8 9,387.0 11,931.5 Operating expenses related to wholesale business (excluding depreciation and amortization presented below) 3.7 ( 3.7 ) 5.7 3.9 General and administrative expenses 70.4 67.7 191.6 208.0 Depreciation and amortization 5.6 4.0 18.6 12.1 Asset impairment 9.2 — 31.3 — Other operating expense (income), net 12.8 ( 2.1 ) ( 67.6 ) ( 19.0 ) Total operating costs and expenses 3,164.3 4,416.7 9,566.6 12,136.5 Operating (loss) income ( 121.9 ) 212.1 ( 88.1 ) 388.6 Interest expense, net 78.8 82.4 244.1 239.1 Income from equity method investments ( 25.1 ) ( 27.0 ) ( 77.4 ) ( 67.1 ) Other (income) expense, net ( 0.5 ) 2.0 ( 1.1 ) ( 4.6 ) Total non-operating expense, net 53.2 57.4 165.6 167.4 (Loss) income from continuing operations before income tax (benefit) expense ( 175.1 ) 154.7 ( 253.7 ) 221.2 Income tax (benefit) expense ( 40.3 ) 29.1 ( 56.7 ) 38.3 (Loss) income from continuing operations, net of tax ( 134.8 ) 125.6 ( 197.0 ) 182.9 Discontinued operations: Income from discontinued operations, including gain on sale of discontinued operations 95.4 12.9 107.8 29.1 Income tax expense 28.1 2.4 29.6 5.2 Income from discontinued operations, net of tax 67.3 10.5 78.2 23.9 Net (loss) income ( 67.5 ) 136.1 ( 118.8 ) 206.8 Net income attributable to: Non-controlling interests 9.3 7.4 27.8 22.1 Net (loss) income attributable to Delek $ ( 76.8 ) $ 128.7 $ ( 146.6 ) $ 184.7 Basic (loss) incom

Financial Statements

Financial Statements Delek US Holdings, Inc. Condensed Consolidated Statements of Comprehensive Income (Loss) (unaudited) (In millions) Three Months Ended September 30, Nine Months Ended September 30, 2024 2023 2024 2023 Net (loss) income $ ( 67.5 ) $ 136.1 $ ( 118.8 ) $ 206.8 Other comprehensive (loss) income: Other loss, net of taxes — — — ( 0.1 ) Total other comprehensive loss — — — ( 0.1 ) Comprehensive (loss) income attributable to: $ ( 67.5 ) $ 136.1 $ ( 118.8 ) $ 206.7 Non-controlling interest 9.3 7.4 27.8 22.1 Comprehensive (loss) income attributable to Delek $ ( 76.8 ) $ 128.7 $ ( 146.6 ) $ 184.6 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 September 30, 2024 Common Stock Additional Paid-in Capital Accumulated Other Comprehensive Loss Retained Earnings Treasury Stock Non-Controlling Interest in Subsidiaries Total Stockholders' Equity Redeemable Non-Controlling Interest Shares Amount Shares Amount Balance at June 30, 2024 82,085,570 $ 0.8 $ 1,175.8 $ ( 4.8 ) $ 328.1 ( 17,575,527 ) $ ( 694.1 ) $ 177.0 $ 982.8 $ — Net (loss) income — — — — ( 76.8 ) — — 9.3 ( 67.5 ) — Common stock dividends ($ 0.255 per share) — — — — ( 16.4 ) — — — ( 16.4 ) — Distributions to non-controlling interests — — — — — — — ( 14.1 ) ( 14.1 ) — Equity-based compensation expense — — 10.0 — — — — 0.3 10.3 — Repurchase of common stock ( 942,329 ) — ( 13.5 ) — ( 6.5 ) — — — ( 20.0 ) Taxes paid due to the net settlement of equity-based compensation — — ( 0.5 ) — — — — ( 0.3 ) ( 0.8 ) — Exercise of equity-based awards 59,485 — — — — — — — — — Issuance of Delek Logistics preferred units — — — — — — — — — 70.0 Other 28,582 — 0.9 — 0.1 — — 0.1 1.1 — Balance at September 30, 2024 81,231,308 $ 0.8 $ 1,172.7 $ ( 4.8 ) $ 228.5 ( 17,575,527 ) $ ( 694.1 ) $ 172.3 $ 875.4 $ 70.0 Three Months Ended September 30, 2023 Common Stock Additional Paid-in Capital Accumulated Other Comprehensive Loss Retained Earnings Treasury Stock Non-Controlling Interest in Subsidiaries Total Stockholders' Equity Redeemable Non-Controlling Interest Shares Amount Shares Amount Balance at June 30, 2023 83,150,295 $ 0.8 $ 1,121.8 $ ( 5.3 ) $ 518.1 ( 17,575,527 ) $ ( 694.1 ) $ 121.6 $ 1,062.9 $ — Net income — — — — 128.7 — — 7.4 136.1 — Common stock dividends ($ 0.235 per share) — — — — ( 15.2 ) — — — ( 15.2 ) — Distributions to non-controlling interests — — — — — — — ( 9.7 ) ( 9.7 ) — Equity-based compensation expense — — 8.0 — — — — 0.2 8.2 —

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) Nine Months Ended September 30, 2024 Common Stock Additional Paid-in Capital Accumulated Other Comprehensive Loss Retained Earnings Treasury Shares Non-Controlling Interest in Subsidiaries Total Stockholders' Equity Redeemable Non-controlling Interest 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 — — — — ( 146.6 ) — — 27.8 ( 118.8 ) — Common stock dividends ($ 0.750 per share) — — — — ( 48.1 ) — — — ( 48.1 ) — Distributions to non-controlling interests — — — — — — — ( 37.7 ) ( 37.7 ) — Equity-based compensation expense — — 24.3 — — — — 0.8 25.1 — Repurchase of common stock ( 942,329 ) — ( 13.5 ) — ( 6.5 ) — — — ( 20.0 ) Taxes paid due to the net settlement of equity-based compensation — — ( 4.9 ) — — — — ( 0.8 ) ( 5.7 ) — Exercise of equity-based awards 506,524 — — — — — — — — — Equity attributable to issuance of Delek Logistics common limited partner units, net of tax — — 50.5 — — — — 68.3 118.8 — Issuance of Delek Logistics preferred units — — — — — — — — — 70.0 Other 127,242 — 2.7 — ( 0.3 ) — — ( 0.3 ) 2.1 — Balance at September 30, 2024 81,231,308 $ 0.8 $ 1,172.7 $ ( 4.8 ) $ 228.5 ( 17,575,527 ) $ ( 694.1 ) $ 172.3 $ 875.4 $ 70.0 Nine Months Ended September 30, 2023 Common Stock Additional Paid-in Capital Accumulated Other Comprehensive Loss Retained Earnings Treasury Stock Non-Controlling Interest in Subsidiaries Total Stockholders' Equity Redeemable Non-Controlling Interest 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 — — — — 184.7 — — 22.1 206.8 — Common stock dividends ($ 0.685 per share) — — — — ( 44.9 ) — — — ( 44.9 ) —

Financial Statements

Financial Statements Delek US Holdings, Inc. Condensed Consolidated Statements of Cash Flows (unaudited) (In millions) Nine Months Ended September 30, 2024 2023 Cash flows from operating activities: Net (loss) income $ ( 118.8 ) $ 206.8 Adjustments to reconcile net (loss) income to net cash provided by operating activities: Depreciation and amortization 278.2 255.2 Non-cash lease expense 23.7 43.9 Deferred income taxes ( 56.8 ) 24.9 Asset impairment 31.3 — Income from equity method investments ( 77.4 ) ( 67.1 ) Dividends from equity method investments 43.9 35.8 Non-cash lower of cost or market/net realizable value adjustment ( 10.5 ) ( 6.2 ) Loss on extinguishment of debt 3.6 — Equity-based compensation expense 25.1 20.5 Income from discontinued operations, including gain on sale of discontinued operations, net ( 78.2 ) ( 23.9 ) Other 1.6 6.4 Changes in assets and liabilities: Accounts receivable 233.6 78.6 Inventories and other current assets 70.3 373.7 Fair value of derivatives 3.0 ( 8.6 ) Accounts payable and other current liabilities ( 177.9 ) 54.8 Obligation under Inventory Intermediation Agreements ( 18.7 ) ( 97.5 ) Non-current assets and liabilities, net ( 97.1 ) ( 5.6 ) Cash provided by operating activities - continuing operations 78.9 891.7 Cash provided by (used in) operating activities - discontinued operations 17.8 31.1 Net cash provided by operating activities 96.7 922.8 Cash flows from investing activities: Acquisition of H2O ( 159.5 ) — Equity method investment contributions ( 18.6 ) — Distributions from equity method investments 4.1 10.5 Purchases of property, plant and equipment ( 237.2 ) ( 320.3 ) Purchase of equity securities ( 0.7 ) ( 11.0 ) Purchases of intangible assets ( 1.6 ) ( 2.6 ) Proceeds from sale of property, plant and equipment 10.6 1.3 Insurance and settlement proceeds 15.5 1.5 Cash used in investing activities - continuing operations ( 387.4 ) ( 320.6 ) Cash provided by (used in) inves

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 Accounting Pronouncements Adopted ASU 2024-02, Codification Improvements - Amendments to Remove References to the Concepts Statements In March 2024, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2024-02 Codificatio n Improvements - Amendments to Remove References to the Concepts Statements (" ASU 2024-02"), which amends the Accounting Standards Codification ("Codification") to remove references to various concepts statements and impacts a variety of topics in the Codification. The ASU is intended to simplify the Codification and draw a distinction between authoritative and non-authoritative literature. ASU 2024-02 is effective for annual reporting periods beginning after December 15, 2024, with early adoption permitted and can be applied on either a prospective or retroactive basis. The Company adopted the provisions of ASU 2024-02 in the third quarter of 2024, and the adoption of this standard did not have a material impact on the Company's condensed consolidated financial statements and related disclosures. Accounting Pronouncements Not Yet Adopted ASU 2023-09, Income Taxes(Topic 740): Improvements to Income Tax Disclosures In December 2023, the FASB issued ASU 2023-09 Income Taxes(Topic 740): Improvements to Income Tax Disclosures ("ASU 2023-09"). The standard is intended to enhance the transparency and decision usefulness of income tax disclosures. ASU 2023-09 requires disaggregated information about a reporting entity's effective tax rate reconciliation as well as information on income taxes paid. The amendments in this ASU are effective for annual periods beginning after December 15, 2024, with early adoption permitted, and should be applied on a prospective basis with the option to apply the standard retrospectively. The adoption of ASU 2023-09 will result in additional disclosure requirements but is not anticipated to have a significant impact on our condensed co

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