[PART I. FINANCIAL INFORMATION](index=3&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This section presents the unaudited condensed consolidated financial statements, along with management's discussion and analysis of financial condition, results of operations, and market risk disclosures [Item 1. Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20%28Unaudited%29) This section presents unaudited consolidated financial statements, including balance sheets, income, comprehensive income, equity, and cash flows, with notes [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This section provides a snapshot of the company's financial position, detailing assets, liabilities, and equity at specific dates | Metric | September 30, 2022 (in millions) | December 31, 2021 (in millions) | | :-------------------------------- | :------------------------------- | :------------------------------ | | Total Assets | $8,396.8 | $6,812.6 | | Total Liabilities | $7,113.8 | $5,798.6 | | Total Stockholders' Equity | $1,283.0 | $1,014.0 | | Cash and cash equivalents | $1,153.8 | $856.5 | | Inventories, net | $1,634.2 | $1,260.7 | | Long-term debt, net of current portion | $2,670.6 | $2,125.8 | [Condensed Consolidated Statements of Income](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) This section presents the company's revenues, expenses, and net income over specific reporting periods | Metric | Three Months Ended Sep 30, 2022 (in millions) | Three Months Ended Sep 30, 2021 (in millions) | Nine Months Ended Sep 30, 2022 (in millions) | Nine Months Ended Sep 30, 2021 (in millions) | | :--------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | :------------------------------------------- | :------------------------------------------- | | Net revenues | $5,324.9 | $2,956.5 | $15,766.6 | $7,540.2 | | Net income (loss) attributable to Delek | $7.4 | $11.8 | $375.8 | $(114.9) | | Basic income (loss) per share | $0.11 | $0.16 | $5.26 | $(1.55) | | Diluted income (loss) per share | $0.10 | $0.16 | $5.21 | $(1.55) | [Condensed Consolidated Statements of Comprehensive Income](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income) This section details comprehensive income, including net income and other comprehensive income components | Metric | Three Months Ended Sep 30, 2022 (in millions) | Three Months Ended Sep 30, 2021 (in millions) | Nine Months Ended Sep 30, 2022 (in millions) | Nine Months Ended Sep 30, 2021 (in millions) | | :------------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | :------------------------------------------- | :------------------------------------------- | | Comprehensive income (loss) attributable to Delek | $7.3 | $11.8 | $375.6 | $(115.1) | [Condensed Consolidated Statements of Changes in Stockholders' Equity](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Stockholders%27%20Equity) This section outlines changes in stockholders' equity from net income, dividends, and stock transactions | Metric | Nine Months Ended Sep 30, 2022 (in millions) | | :-------------------------------------------------- | :------------------------------------------- | | Total Stockholders' Equity (Balance at Sep 30, 2022) | $1,283.0 | | Total Stockholders' Equity (Balance at Dec 31, 2021) | $1,014.0 | | Net income | $400.2 | | Common stock dividends | $(28.3) | | Repurchase of common stock | $(40.0) | | Purchase of Delek common stock from IEP Energy Holding LLC | $(64.0) | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This section reports cash inflows and outflows from operating, investing, and financing activities | Cash Flow Activity | Nine Months Ended Sep 30, 2022 (in millions) | Nine Months Ended Sep 30, 2021 (in millions) | | :--------------------------------- | :------------------------------------------- | :------------------------------------------- | | Net cash provided by operating activities | $716.1 | $210.2 | | Net cash used in investing activities | $(819.9) | $(143.2) | | Net cash provided by (used in) financing activities | $401.1 | $(23.9) | | Acquisition of 3 Bear | $(625.4) | — | | Purchases of property, plant and equipment | $(192.8) | $(163.1) | [Notes to Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations and additional information supporting the financial statements [Note 1 - Organization and Basis of Presentation](index=11&type=section&id=Note%201%20-%20Organization%20and%20Basis%20of%20Presentation) This note describes the company's operations and the accounting principles used in financial statement preparation - Delek US Holdings, Inc. operates through consolidated subsidiaries in refining, logistics, and retail[31](index=31&type=chunk) - Effective January 1, 2022, the company changed its inventory accounting method for the Tyler Refinery from LIFO to FIFO, applied retrospectively, to improve consistency and transparency[32](index=32&type=chunk) - Total inventories accounted for using LIFO, prior to the accounting method change, comprised **28.0%** of the Company's total inventories as of December 31, 2021[32](index=32&type=chunk) [Note 2 - Acquisitions](index=12&type=section&id=Note%202%20-%20Acquisitions) This note details significant business acquisitions, including purchase price allocation and strategic rationale - Delek Logistics acquired 3 Bear Delaware Holding – NM, LLC on June 1, 2022, for **$628.1 million**, expanding crude oil and natural gas gathering, processing, transportation, and water disposal/recycling operations in the Delaware Basin[38](index=38&type=chunk) | Metric | Nine Months Ended Sep 30, 2022 (in millions) | | :-------------------------------- | :------------------------------------------- | | Revenue from 3 Bear Acquisition | $81.5 | | Net income from 3 Bear Acquisition | $9.8 | - The acquisition included identified intangible assets: customer relationship (**$210.0 million**, 11.6-year useful life) and rights-of-way (**$13.5 million**, 25.4-year useful life)[43](index=43&type=chunk) - Goodwill recognized is primarily attributable to enhancing third-party revenues, diversifying customer/product mix, expanding into the Delaware basin, and bolstering ESG optionality[44](index=44&type=chunk) [Note 3 - Segment Data](index=14&type=section&id=Note%203%20-%20Segment%20Data) This note provides financial information for the company's operating segments, including revenues and contribution margins - Delek operates in three reportable segments: Refining, Logistics, and Retail[49](index=49&type=chunk) - The Refining segment has a combined nameplate capacity of **302,000 barrels per day** as of September 30, 2022[50](index=50&type=chunk) | Segment | Nine Months Ended Sep 30, 2022 (in millions) | Nine Months Ended Sep 30, 2021 (in millions) | | :------------------------ | :------------------------------------------- | :------------------------------------------- | | Refining Segment Contribution Margin | $821.2 | $106.6 | | Logistics Segment Contribution Margin | $222.1 | $188.0 | | Retail Segment Contribution Margin | $49.4 | $56.5 | - The Retail segment consists of **248 owned and leased convenience store sites** as of September 30, 2022[55](index=55&type=chunk) [Note 4 - Earnings (Loss) Per Share](index=17&type=section&id=Note%204%20-%20Earnings%20%28Loss%29%20Per%20Share) This note presents basic and diluted earnings per share calculations and related share adjustments | EPS Metric | Nine Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2021 | | :-------------------------- | :----------------------------- | :----------------------------- | | Basic income (loss) per share | $5.26 | $(1.55) | | Diluted income (loss) per share | $5.21 | $(1.55) | - Antidilutive stock-based compensation excluded from diluted EPS calculation was **2,380,376 shares** for the nine months ended September 30, 2022, compared to **3,572,995 shares** in the prior year[67](index=67&type=chunk) [Note 5 - Delek Logistics](index=18&type=section&id=Note%205%20-%20Delek%20Logistics) This note details Delek's ownership interest and transactions related to Delek Logistics Partners, LP - Delek owned a **78.9% interest** in Delek Logistics as of September 30, 2022[68](index=68&type=chunk) - Delek Logistics completed the 3 Bear Acquisition on June 1, 2022, for **$628.1 million**[68](index=68&type=chunk) - For the nine months ended September 30, 2022, Delek sold **385,522 common limited partner units** of Delek Logistics for gross proceeds of **$16.4 million**[68](index=68&type=chunk) [Note 6 - Equity Method Investments](index=19&type=section&id=Note%206%20-%20Equity%20Method%20Investments) This note provides information on investments accounted for using the equity method, including income and balances | Metric | Nine Months Ended Sep 30, 2022 (in millions) | Nine Months Ended Sep 30, 2021 (in millions) | | :-------------------------------- | :------------------------------------------- | :------------------------------------------- | | Income from equity method investments | $44.4 | $14.5 | | Investment | Balance as of Sep 30, 2022 (in millions) | | :-------------------------------- | :--------------------------------------- | | WWP Project Financing Joint Venture | $54.7 | | Red River Pipeline Company LLC | $143.7 | | Caddo Pipeline and Rio Pipeline Joint Ventures | $104.3 | | Other (asphalt/ethanol terminals) | $57.9 | [Note 7 - Inventory](index=20&type=section&id=Note%207%20-%20Inventory) This note describes the company's inventory valuation methods, balances, and related adjustments - Effective January 1, 2022, the company changed its inventory valuation method for the Tyler Refinery from LIFO to FIFO, applied retrospectively to all periods presented[78](index=78&type=chunk) | Metric | September 30, 2022 (in millions) | December 31, 2021 (in millions) | | :---------------- | :------------------------------- | :------------------------------ | | Total inventories | $1,634.2 | $1,260.7 | - The change to FIFO resulted in a **$37.6 million increase** in net income attributable to Delek for the nine months ended September 30, 2022, compared to if LIFO had been used[85](index=85&type=chunk) - A pre-tax inventory valuation reserve of **$28.4 million** was recorded at September 30, 2022, due to market price declines[88](index=88&type=chunk) [Note 8 - Crude Oil Supply and Inventory Purchase Agreement](index=24&type=section&id=Note%208%20-%20Crude%20Oil%20Supply%20and%20Inventory%20Purchase%20Agreement) This note details agreements for crude oil supply and inventory financing, including related obligations and fair value changes - Delek has Supply and Offtake Agreements with J. Aron & Company for its El Dorado, Big Spring, and Krotz Springs refineries, accounted for as inventory financing arrangements[89](index=89&type=chunk) - The agreements were renewed and extended to December 30, 2022; J. Aron did not provide notice to further extend to May 30, 2025[91](index=91&type=chunk) | Metric | September 30, 2022 (in millions) | | :----------------------------------------- | :------------------------------- | | Total Obligations Under Supply and Offtake Agreements | $596.2 | | Baseline Step-Out Liability | $413.0 | | Revolving over/short inventory financing liability (receivable) | $183.2 | - Gains (losses) in cost of materials and other attributable to changes in fair value due to commodity-index price totaled **$(82.6) million** for the nine months ended September 30, 2022[91](index=91&type=chunk) [Note 9 - Long-Term Obligations and Notes Payable](index=27&type=section&id=Note%209%20-%20Long-Term%20Obligations%20and%20Notes%20Payable) This note outlines the company's long-term debt instruments, credit facilities, and related financial covenants | Debt Instrument | September 30, 2022 (in millions) | December 31, 2021 (in millions) | | :-------------------------------- | :------------------------------- | :------------------------------ | | Total Long-Term Debt | $2,733.6 | $2,218.0 | | Term Loan Credit Facility | $1,234.8 | $1,240.0 | | Delek Logistics Credit Facility | $806.4 | $258.0 | | Delek Logistics 2025 Notes | $247.4 | $246.7 | | Delek Logistics 2028 Notes | $395.0 | $394.3 | | United Community Bank Revolver | $50.0 | $50.0 | | Hapoalim Term Loan | — | $29.0 | - The Delek Hapoalim Term Loan was fully repaid by September 30, 2022[106](index=106&type=chunk) - As of September 30, 2022, unused credit commitments under the Revolving Credit Facility were approximately **$787.4 million**, with no principal outstanding[105](index=105&type=chunk) - As of September 30, 2022, Delek Logistics had **$193.1 million** in unused credit commitments under its Credit Facility[110](index=110&type=chunk) [Note 10 - Derivative Instruments](index=32&type=section&id=Note%2010%20-%20Derivative%20Instruments) This note describes the company's use of derivative instruments to manage market risks and their fair value - Delek uses commodity swaps, futures, forward contracts, and options to reduce operating and market risks, manage commodity price fluctuations, crack spread, and RINs obligations[117](index=117&type=chunk) | Metric | September 30, 2022 (in millions) | | :-------------------------------- | :------------------------------- | | Total gross fair value of derivatives (Assets) | $253.9 | | Total gross fair value of derivatives (Liabilities) | $(224.9) | - As of September 30, 2022, open derivative positions included **115,800,264 barrels** of crude oil and refined petroleum products, **7,785,000 MMBTU** of natural gas products, and **150,800,000 RINs**[121](index=121&type=chunk) - Gains (losses) on non-hedging derivatives recognized in cost of materials and other totaled **$(27.7) million** for the nine months ended September 30, 2022[122](index=122&type=chunk) [Note 11 - Fair Value Measurements](index=35&type=section&id=Note%2011%20-%20Fair%20Value%20Measurements) This note explains the valuation techniques and inputs used for fair value measurements of financial instruments - Fair value measurements are categorized into Level 1, 2, or 3 based on input observability; commodity derivatives, RINs commitment contracts, and J. Aron supply and offtake obligations are primarily Level 2[127](index=127&type=chunk)[130](index=130&type=chunk) | Metric | September 30, 2022 (in millions) | | :-------------------------------- | :------------------------------- | | Environmental credits obligation deficit | $(168.7) | | J. Aron supply and offtake obligations | $(596.2) | - The 3 Bear Acquisition's fair value measurements for assets acquired and liabilities assumed were based on Level 3 inputs[135](index=135&type=chunk) [Note 12 - Commitments and Contingencies](index=39&type=section&id=Note%2012%20-%20Commitments%20and%20Contingencies) This note discloses significant commitments, environmental liabilities, and legal contingencies impacting the company - Environmental liabilities totaled approximately **$115.1 million** as of September 30, 2022, primarily for remediation costs[141](index=141&type=chunk) - The company recognized a gain of **$8.1 million** from business interruption claims related to the El Dorado Refinery Fire for the nine months ended September 30, 2022[145](index=145&type=chunk) - A gain of **$17.9 million** was recognized from business interruption claims related to Winter Storm Uri for the nine months ended September 30, 2022[146](index=146&type=chunk) - Letters of credit outstanding totaled approximately **$212.6 million** as of September 30, 2022[148](index=148&type=chunk) [Note 13 - Income Taxes](index=42&type=section&id=Note%2013%20-%20Income%20Taxes) This note provides details on income tax expense, effective tax rates, and deferred tax assets and liabilities | Metric | Nine Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2021 | | :-------------------- | :----------------------------- | :----------------------------- | | Effective tax rate | 21.2% | 30.2% | | Pre-tax income (loss) | $507.7 million | $(129.2) million | [Note 14 - Related Party Transactions](index=42&type=section&id=Note%2014%20-%20Related%20Party%20Transactions) This note discloses transactions with related parties, including revenues and cost of materials | Metric | Nine Months Ended Sep 30, 2022 (in millions) | Nine Months Ended Sep 30, 2021 (in millions) | | :-------------------------- | :------------------------------------------- | :------------------------------------------- | | Revenues from related parties | $81.7 | $55.3 | | Cost of materials and other | $81.8 | $37.4 | [Note 15 - Other Current Assets and Liabilities](index=43&type=section&id=Note%2015%20-%20Other%20Current%20Assets%20and%20Liabilities) This note details the components of other current assets and accrued expenses and other current liabilities | Metric | September 30, 2022 (in millions) | December 31, 2021 (in millions) | | :--------------------------------------- | :------------------------------- | :------------------------------ | | Total Other Current Assets | $206.0 | $126.0 | | Total Accrued Expenses and Other Current Liabilities | $969.8 | $797.8 | | Product financing agreements | $305.7 | $249.6 | | Crude purchase liabilities | $204.0 | $107.4 | [Note 16 - Equity-Based Compensation](index=43&type=section&id=Note%2016%20-%20Equity-Based%20Compensation) This note describes the company's equity-based compensation plans, expense, and unrecognized costs | Metric | Nine Months Ended Sep 30, 2022 (in millions) | Nine Months Ended Sep 30, 2021 (in millions) | | :-------------------------------- | :------------------------------------------- | :------------------------------------------- | | Equity-based compensation expense | $19.1 | $16.7 | - The Delek US Holdings, Inc. 2016 Long-Term Incentive Plan was amended to increase the number of shares available for issuance by **760,000** to **14,995,000 shares**[155](index=155&type=chunk) - As of September 30, 2022, total unrecognized compensation cost related to non-vested share-based compensation arrangements was **$49.6 million**, expected to be recognized over a weighted-average period of **1.4 years**[155](index=155&type=chunk) [Note 17 - Shareholders' Equity](index=44&type=section&id=Note%2017%20-%20Shareholders%27%20Equity) This note provides details on changes in shareholders' equity, including dividends and share repurchases - The Board of Directors reinstated a regular cash dividend of **$0.20 per share** in Q2 2022 and increased it to **$0.21 per share** on October 31, 2022[159](index=159&type=chunk)[182](index=182&type=chunk) - The share repurchase authorization was increased by approximately **$170.3 million** to **$400.0 million** on August 1, 2022[160](index=160&type=chunk)[182](index=182&type=chunk) - During the three and nine months ended September 30, 2022, **1,435,602 shares** of common stock were repurchased for **$40.0 million**[160](index=160&type=chunk) - On March 7, 2022, Delek purchased **3,497,268 shares** of common stock from the Icahn Group for **$64.0 million**[161](index=161&type=chunk) [Note 18 - Leases](index=44&type=section&id=Note%2018%20-%20Leases) This note outlines the company's lease arrangements, including operating lease costs and discount rates | Metric | Nine Months Ended Sep 30, 2022 (in millions) | | :------------------------ | :------------------------------------------- | | Operating lease costs | $52.7 | | Short-term lease costs | $26.5 | | Sublease income | $(0.2) | | Net lease costs | $79.0 | - Weighted-average remaining operating lease term was **4.3 years**, and the weighted-average operating lease discount rate was **6.0%** as of September 30, 2022[165](index=165&type=chunk) [Note 19 - Subsequent Events](index=45&type=section&id=Note%2019%20-%20Subsequent%20Events) This note discloses significant events occurring after the balance sheet date, impacting financial position - On October 13, 2022, Delek Logistics amended its credit facility, increasing total commitments to **$1.2 billion** (**$900.0 million** revolving, **$300.0 million** term loan) and extending the revolving maturity to October 13, 2027[166](index=166&type=chunk) - On October 26, 2022, Delek amended its Revolving Credit Facility, increasing total credit commitment to **$1.1 billion** and extending the maturity date to October 26, 2027[170](index=170&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=47&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section analyzes Delek's financial performance, condition, and outlook, covering segments, strategy, market trends, and liquidity [Forward-Looking Statements](index=47&type=section&id=Forward-Looking%20Statements) This section highlights statements about future expectations, risks, and factors that could cause actual results to differ - The report contains forward-looking statements regarding future results, performance, prospects, and opportunities, including the 3 Bear Acquisition, COVID-19 impact, and the Russia-Ukraine War[174](index=174&type=chunk) - Important factors that could cause actual results to differ materially include volatility in refining margins, reliability of operating assets, regulatory changes, ability to execute growth strategy, and global conflicts[174](index=174&type=chunk)[177](index=177&type=chunk) [Executive Summary](index=48&type=section&id=Executive%20Summary) This section provides a high-level overview of Delek's business, strategic priorities, and recent operational achievements - Delek is an integrated downstream energy business focused on petroleum refining, transportation, storage, wholesale distribution, and convenience store retailing[179](index=179&type=chunk) - The company achieved record refinery utilization rates and expanded logistics through the 3 Bear Acquisition in the first nine months of 2022, capitalizing on strong demand and constrained supply[179](index=179&type=chunk) - Strategic priorities include operational optimization, digital transformation, ESG-conscious investments, and enhancing shareholder value through dividends and share repurchases[182](index=182&type=chunk) [Refining Overview](index=50&type=section&id=Refining%20Overview) This section describes the Refining segment's operations, capacities, and product offerings - The Refining segment processes crude oil and other feedstocks into transportation motor fuels, asphalt, and other petroleum-based products[183](index=183&type=chunk) - Combined nameplate capacity of the four refineries (Tyler, El Dorado, Big Spring, Krotz Springs) is **302,000 barrels per day** as of September 30, 2022[183](index=183&type=chunk) - The segment also owns and operates three biodiesel facilities in Arkansas, Texas, and Mississippi[184](index=184&type=chunk) [Logistics Overview](index=51&type=section&id=Logistics%20Overview) This section details the Logistics segment's assets, operations, and recent expansion activities - The Logistics segment owns and operates crude oil, refined products, and natural gas logistics and marketing assets, as well as water disposal and recycling assets[187](index=187&type=chunk) - Delek owned a **78.9% interest** in Delek Logistics Partners, LP at September 30, 2022[187](index=187&type=chunk) - The 3 Bear Acquisition (June 1, 2022) added approximately **485 miles of pipelines**, **88 MMCf/d natural gas processing capacity**, **140 MBbl/d crude gathering capacity**, **120 MBbl crude storage capacity**, and **200 MBbl/d water disposal capacity**[187](index=187&type=chunk) [Retail Overview](index=51&type=section&id=Retail%20Overview) This section outlines the Retail segment's convenience store operations, branding, and fuel supply - The Retail segment consists of **248 owned and leased convenience store sites** as of September 30, 2022, primarily in West Texas and New Mexico[188](index=188&type=chunk) - The company is phasing out 7-Eleven branding on a store-by-store basis by December 31, 2023, with **55 stores** already de-branded as of September 30, 2022[188](index=188&type=chunk) - Substantially all motor fuel sold through the retail segment is supplied by the Big Spring refinery[188](index=188&type=chunk) [Corporate and Other Overview](index=51&type=section&id=Corporate%20and%20Other%20Overview) This section covers corporate activities, immaterial operating segments, and certain hedging activities - This category includes corporate activities, results of immaterial operating segments (e.g., Canadian crude trading), asphalt terminal operations, wholesale crude operations, and intercompany eliminations[189](index=189&type=chunk) - Certain commodity and other hedging activities are also reported within corporate, other and eliminations[189](index=189&type=chunk) [Strategic Update](index=52&type=section&id=Strategic%20Update) This section discusses the company's long-term sustainability framework, key initiatives, and shareholder value enhancements - Delek's Long-Term Sustainability Framework focuses on redirecting corporate culture, operational optimization, digital transformation, ESG-conscious investments, and redefining its business model[192](index=192&type=chunk) - Key initiatives include transforming corporate and operating culture into 'One Delek,' planning for the 'Refinery of the Future,' and developing a 'New Energy' mentality[193](index=193&type=chunk) - Shareholder value was enhanced by reinstating and increasing quarterly cash dividends (to **$0.21/share**) and expanding the share repurchase authorization to **$400.0 million**[196](index=196&type=chunk) - Operational improvements include implementing a new enterprise resource planning system (October 2022) and conforming refining inventory accounting to FIFO (January 2022)[197](index=197&type=chunk) - The company completed the 3 Bear Acquisition in June 2022 and strengthened leadership with Avigal Soreq appointed President and CEO[201](index=201&type=chunk)[202](index=202&type=chunk) [Market Trends](index=55&type=section&id=Market%20Trends) This section analyzes market factors influencing the company's results, including commodity prices and regulatory impacts - Delek's results are significantly affected by fluctuations in crude oil, gasoline, distillate fuel, biofuels, natural gas, and electricity prices, as well as regulatory factors like RINs costs[205](index=205&type=chunk) - The market outlook for the remainder of 2022 anticipates continued volatility, strong demand for refined products, and challenges from rising natural gas prices and inflation[206](index=206&type=chunk) | Metric | Q3 2022 Average | Q3 2021 Average | | :-------------------------------- | :-------------- | :-------------- | | WTI Cushing crude oil (per barrel) | $91.63 | $70.54 | | WTI Midland crude oil (per barrel) | $91.43 | $70.74 | | Gulf Coast 5-3-2 crack spread (ULSD, per barrel) | $33.65 | $18.46 | | Gulf Coast 3-2-1 crack spread (ULSD, per barrel) | $31.28 | $18.64 | | Gulf Coast 2-1-1 crack spread (HSD/LLS, per barrel) | $21.53 | $11.11 | | Ethanol RINs (per RIN) | $1.41 | $1.70 | | Biodiesel RINs (per RIN) | $1.43 | $1.71 | | Natural gas (per MMBtu) | $7.97 | $4.32 | [Critical Accounting Estimates](index=58&type=section&id=Critical%20Accounting%20Estimates) This section describes accounting policies requiring significant judgment and estimation, such as impairment and tax rates - Critical accounting policies include evaluating impairment for property, plant and equipment, definite life intangibles, goodwill, environmental expenditures, and asset retirement obligations[223](index=223&type=chunk) - The development of the estimated annual effective tax rate (AETR) involves significant judgment due to various inputs and economic uncertainties[224](index=224&type=chunk) - Business combinations require fair value estimates for acquired assets and liabilities, often using income, cost, and market approaches, which are inherently uncertain[228](index=228&type=chunk) [Non-GAAP Measures](index=60&type=section&id=Non-GAAP%20Measures) This section explains the use of non-GAAP financial measures for evaluating segment performance and comparability - Management uses non-GAAP operational measures such as Refining margin, Refining segment margin, and Refining margin per barrels sold to evaluate segment performance[232](index=232&type=chunk) - These measures are used to assess ongoing performance and provide improved comparability by excluding certain items not indicative of core operating performance[232](index=232&type=chunk) [Non-GAAP Reconciliations](index=60&type=section&id=Non-GAAP%20Reconciliations) This section provides reconciliations of non-GAAP financial measures to their most directly comparable GAAP measures | Metric | Nine Months Ended Sep 30, 2022 (in millions) | Nine Months Ended Sep 30, 2021 (in millions) | | :------------------------ | :------------------------------------------- | :------------------------------------------- | | Refining segment margin | $1,278.1 | $420.5 | | Gross margin | $669.6 | $(42.4) | [Summary Financial and Other Information](index=61&type=section&id=Summary%20Financial%20and%20Other%20Information) This section presents a concise overview of key consolidated financial metrics and operational data | Metric | Nine Months Ended Sep 30, 2022 (in millions) | Nine Months Ended Sep 30, 2021 (in millions) | | :--------------------------------------- | :------------------------------------------- | :------------------------------------------- | | Net revenues | $15,766.6 | $7,540.2 | | Operating income (loss) | $593.0 | $(59.7) | | Net income (loss) attributable to Delek | $375.8 | $(114.9) | [Results of Operations](index=62&type=section&id=Results%20of%20Operations) This section analyzes the company's consolidated and segment-specific financial performance over periods [Consolidated Results of Operations — Comparison of the Three and Nine Months Ended September 30, 2022 versus the Three and Nine Months Ended September 30, 2021](index=62&type=section&id=Consolidated%20Results%20of%20Operations%20%E2%80%94%20Comparison%20of%20the%20Three%20and%20Nine%20Months%20Ended%20September%2030%2C%202022%20versus%20the%20Three%20and%20Nine%20Months%20Ended%20September%2030%2C%202021) This section compares consolidated financial results for the three and nine months ended September 30, 2022 and 2021 | Metric | Nine Months Ended Sep 30, 2022 (in millions) | Nine Months Ended Sep 30, 2021 (in millions) | Change (in millions) | % Change | | :--------------------------------------- | :------------------------------------------- | :------------------------------------------- | :------------------- | :------- | | Net income (loss) attributable to Delek | $375.8 | $(114.9) | $490.7 | N/A | | Net revenues | $15,766.6 | $7,540.2 | $8,226.4 | 109.1% | | Cost of materials and other | $14,151.1 | $6,811.4 | $7,339.7 | 107.8% | | Operating expenses | $615.8 | $450.0 | $165.8 | 36.8% | | General and administrative expenses | $242.0 | $147.6 | $94.4 | 64.0% | | Other operating income, net | $44.5 | $4.7 | $39.8 | 846.8% | | Interest expense, net | $132.7 | $100.0 | $32.7 | 32.7% | | Income from equity method investments | $44.4 | $14.5 | $29.9 | 206.2% | | Income tax expense (benefit) | $107.5 | $(39.0) | $146.5 | N/A | [Refining Segment](index=66&type=section&id=Refining%20Segment) This section analyzes the financial performance and key operational metrics of the Refining segment | Metric | Nine Months Ended Sep 30, 2022 (in millions) | Nine Months Ended Sep 30, 2021 (in millions) | % Change | | :-------------------------------- | :------------------------------------------- | :------------------------------------------- | :------- | | Refining segment contribution margin | $821.2 | $106.6 | 670.4% | | Net revenues | $12,550.3 | $6,970.4 | 80.1% | | Cost of materials and other | $11,272.2 | $6,549.9 | 72.1% | | Operating expenses | $456.9 | $313.9 | 45.6% | | Total production (average bpd) | 293,969 | 245,849 | 19.6% | | Total throughput (average bpd) | 295,582 | 248,462 | 18.9% | - Refining segment margin improved significantly due to a **110.8% improvement** in the 5-3-2 crack spread, **95.6%** in the 3-2-1 crack spread, and **157.9%** in the 2-1-1 crack spread for the nine months ended September 30, 2022[288](index=288&type=chunk)[289](index=289&type=chunk) - Increased RINs expense due to higher production partially offset the margin improvements[289](index=289&type=chunk) [Logistics Segment](index=74&type=section&id=Logistics%20Segment) This section reviews the financial results and operational drivers of the Logistics segment | Metric | Nine Months Ended Sep 30, 2022 (in millions) | Nine Months Ended Sep 30, 2021 (in millions) | % Change | | :-------------------------------- | :------------------------------------------- | :------------------------------------------- | :------- | | Logistics contribution margin | $222.1 | $188.0 | 18.1% | | Net revenues | $767.4 | $511.0 | 50.2% | | Cost of materials and other | $480.3 | $275.0 | 74.7% | | Operating expenses | $65.0 | $48.0 | 35.4% | | West Texas wholesale marketing margin per barrel | $3.84 | $3.64 | 5.5% | - Revenue increases were driven by higher average sales prices for gasoline and diesel, incremental revenues from the 3 Bear Acquisition, and increased pipeline throughputs[298](index=298&type=chunk) [Retail Segment](index=77&type=section&id=Retail%20Segment) This section examines the financial performance and key metrics of the Retail segment | Metric | Nine Months Ended Sep 30, 2022 (in millions) | Nine Months Ended Sep 30, 2021 (in millions) | % Change | | :-------------------------------- | :------------------------------------------- | :------------------------------------------- | :------- | | Retail contribution margin | $49.4 | $56.5 | -12.6% | | Net revenues | $739.7 | $590.3 | 25.3% | | Cost of materials and other | $617.1 | $466.4 | 32.3% | | Operating expenses | $73.2 | $67.4 | 8.6% | | Average retail sales price per gallon sold | $3.89 | $2.80 | 38.9% | | Retail fuel margin ($ per gallon) | $0.330 | $0.356 | -7.3% | | Merchandise sales | $237.3 | $240.9 | -1.5% | | Merchandise margin % | 33.7% | 33.1% | 1.8% | - The decline in contribution margin was primarily due to a decrease in average fuel margin per gallon and a slight decrease in merchandise sales, coupled with increased operating expenses[326](index=326&type=chunk) [Liquidity and Capital Resources](index=79&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses the company's cash flows, debt, financing arrangements, and capital spending plans [Cash Flows](index=80&type=section&id=Cash%20Flows) This section analyzes cash generated from operating, investing, and financing activities | Cash Flow Activity | Nine Months Ended Sep 30, 2022 (in millions) | Nine Months Ended Sep 30, 2021 (in millions) | | :--------------------------------- | :------------------------------------------- | :------------------------------------------- | | Net cash provided by operating activities | $716.1 | $210.2 | | Net cash used in investing activities | $(819.9) | $(143.2) | | Net cash provided by financing activities | $401.1 | $(23.9) | - The increase in cash used in investing activities was primarily due to the **$625.4 million** acquisition of 3 Bear[334](index=334&type=chunk) - Net cash provided by financing activities was driven by **$510.0 million** in net proceeds on revolvers and term debt[335](index=335&type=chunk) [Cash Position, Indebtedness and Other Financing Arrangements](index=81&type=section&id=Cash%20Position%2C%20Indebtedness%20and%20Other%20Financing%20Arrangements) This section details the company's cash balances, total debt, and available credit facilities | Metric | September 30, 2022 (in millions) | | :-------------------------------- | :------------------------------- | | Cash and cash equivalents | $1,153.8 | | Total long-term indebtedness | $2,733.6 | | Unused credit commitments | $980.5 | | Supply and offtake obligation | $596.2 | | Product financing liabilities | $305.7 | [Capital Spending](index=82&type=section&id=Capital%20Spending) This section outlines capital expenditures by segment and provides full-year forecasts | Segment | Nine Months Ended Sep 30, 2022 (in millions) | 2022 Forecast Full Year (in millions) | | :---------------- | :------------------------------------------- | :------------------------------------ | | Total capital spending | $174.1 | $300.0 | | Refining segment total | $56.0 | $113.5 | | Logistics segment total | $68.0 | $116.8 | | Retail segment total | $22.6 | $33.5 | | Other total | $27.5 | $36.2 | [Cash Requirements](index=83&type=section&id=Cash%20Requirements) This section details future contractual obligations and commitments requiring cash outlays | Contractual Obligation | Total (in millions) | | :--------------------------------- | :------------------ | | Long term debt and notes payable obligations | $2,757.1 | | Interest | $476.3 | | Operating lease commitments | $204.4 | | Finance lease commitments | $15.8 | | Purchase commitments | $697.9 | | Product financing commitments | $305.7 | | Transportation agreements | $892.5 | | J. Aron supply and offtake obligations | $428.5 | | **Total** | **$5,778.2** | [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=84&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) This section details market risks, including commodity price, interest rate, and inflation, and the company's management strategies [Price Risk Management Activities](index=84&type=section&id=Price%20Risk%20Management%20Activities) This section describes the use of derivative contracts to manage commodity price and RINs obligations risk - Delek uses commodity derivative contracts (swaps, futures, options, forward physical contracts) and future RINs commitment contracts to manage market-indexed pricing risk for inventory, crude oil purchases, refined product sales, and RINs obligations[347](index=347&type=chunk) - These contracts are recorded at fair value, with changes recognized in profit and loss, or in other comprehensive income for designated cash flow hedges[347](index=347&type=chunk) - Total outstanding notional contract volume for non-trading commodity derivatives was **271,158,000 units** as of September 30, 2022[348](index=348&type=chunk) [Interest Risk Management Activities](index=84&type=section&id=Interest%20Risk%20Management%20Activities) This section outlines strategies for managing interest rate risk on floating rate borrowings - Delek had approximately **$2,107.1 million** in outstanding floating rate borrowings as of September 30, 2022[349](index=349&type=chunk) - A hypothetical **one percent change** in interest rates would impact annual interest expense by approximately **$21.1 million**[349](index=349&type=chunk) [Inflation](index=84&type=section&id=Inflation) This section discusses the impact of inflationary factors on operating results and future cost pressures - Inflationary factors, including higher natural gas costs, labor costs, and supply chain disruptions, negatively affected operating results in 2022[350](index=350&type=chunk) - These cost pressures and supply chain challenges are expected to continue into fiscal year 2023[350](index=350&type=chunk) [LIBOR Transition](index=85&type=section&id=LIBOR%20Transition) This section addresses the planned discontinuation of LIBOR and its potential impact on borrowing costs - USD LIBOR rates are expected to be discontinued after June 2023, requiring a transition to alternative reference rates[353](index=353&type=chunk) - The transition could materially impact borrowing costs on variable rate indebtedness, although a significant impact on business or operations is not expected[353](index=353&type=chunk) [Commodity Derivatives Trading Activities](index=85&type=section&id=Commodity%20Derivatives%20Trading%20Activities) This section describes the company's active trading of commodity derivatives to capitalize on market opportunities - Delek engages in active trading of commodity derivatives (forward physical contracts, swaps, futures) to capitalize on crude oil supply and pricing seasonality[354](index=354&type=chunk) - These trading activities are classified as held for trading and recognized at fair value, with changes in fair value recognized in the income statement[354](index=354&type=chunk) - Total outstanding notional contract volume for trading commodity derivatives was **2,977,263 barrels** as of September 30, 2022[354](index=354&type=chunk) [Item 4. Controls and Procedures](index=85&type=section&id=Item%204.%20Controls%20and%20Procedures) Disclosure controls and procedures were effective as of September 30, 2022, excluding the 3 Bear acquisition, with no other material changes - Disclosure controls and procedures were effective as of September 30, 2022[355](index=355&type=chunk) - Management's assessment of disclosure controls and procedures did not include the newly acquired 3 Bear business[355](index=355&type=chunk) - 3 Bear accounted for approximately **8.0% of total assets** and **0.5% of total revenues** for the nine months ended September 30, 2022[355](index=355&type=chunk) - No other material changes in internal control over financial reporting occurred during the third quarter of 2022[355](index=355&type=chunk) [PART II. OTHER INFORMATION](index=76&type=section&id=PART%20II.%20OTHER%20INFORMATION) This section covers legal proceedings, risk factors, equity security sales, other information, and exhibits [Item 1. Legal Proceedings](index=76&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various legal proceedings, but management anticipates no material adverse effect on financial condition - Delek is subject to lawsuits, investigations, and claims, including environmental and employee-related matters[358](index=358&type=chunk) - Management does not believe any currently pending legal proceeding will have a material adverse effect on the company's financial statements[358](index=358&type=chunk) [Item 1A. Risk Factors](index=76&type=section&id=Item%201A.%20Risk%20Factors) This section details key risk factors, including acquisition integration, geopolitical events, climate change, and environmental hazards - Risks include difficulties in integrating acquired operations, such as the 3 Bear Acquisition, and the inability to realize anticipated benefits or synergies[359](index=359&type=chunk) - The Russia-Ukraine War and related sanctions may adversely impact the business, financial condition, and results of operations due to global economic effects, market volatility, and supply chain disruptions[359](index=359&type=chunk) - Physical effects of climate change and severe weather events (e.g., floods, hurricanes) present risks to operations, potentially causing disruptions and substantial costs[361](index=361&type=chunk) - Inherent environmental hazards in operations, such as spills and discharges, could lead to significant remediation costs and penalties[361](index=361&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=77&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details common stock repurchases and the remaining authorization under the share repurchase program | Metric | Three Months Ended Sep 30, 2022 | | :-------------------------------- | :------------------------------ | | Total Number of Shares Purchased | 1,435,602 | | Average Price per Share | $27.86 | | Total Purchase Amount | $40.0 million | | Approximate Dollar Value of Shares that May Yet Be Purchased | $360.0 million | [Item 5. Other Information](index=77&type=section&id=Item%205.%20Other%20Information) This section indicates that there is no other information to report [Item 6. Exhibits](index=78&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including bylaws, agreements, and officer certifications - Key exhibits include Fifth Amended and Restated Bylaws, Assignment and Assumption Agreements, and certifications from the CEO and CFO[367](index=367&type=chunk) - The financial statements are formatted in Inline XBRL (eXtensible Business Reporting Language)[367](index=367&type=chunk) [Signatures](index=79&type=section&id=Signatures) This section provides the official signatures of the company's key executives and the report's signing date - The report is signed by Avigal Soreq (President and CEO), Reuven Spiegel (EVP and CFO), and Robert Wright (SVP and CAO)[370](index=370&type=chunk) - The signing date for the report is November 8, 2022[370](index=370&type=chunk)

Delek US Holdings, Inc. (NYSE:DK) Q2 2022 Earnings Conference Call August 4, 2022 11:00 AM ET Company Participants Blake Fernandez - Senior Vice President, Investor Relations and Market Intelligence Uzi Yemin - Executive Chairman Avigal Soreq - President and CEO Todd O’Malley - EVP and Chief Operating Officer Conference Call Participants Carly Davenport - Goldman Sachs Manav Gupta - Credit Suisse Roger Read - Wells Fargo Matthew Blair - Tudor, Pickering & Holt Kalei Akamine - Bank of America Jason Gabelman ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q (Mark One) ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2022 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 001-38142 DELEK US HOLDINGS, INC. (Exact name of registrant as specified in its charter) Delaware 35-2581557 (State or other jurisdic ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q (Mark One) Title of Each Class Trading Symbol Name of Each Exchange on Which Registered Common Stock, par value $0.01 DK New York Stock Exchange ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2022 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file numbe ...

Delek US Holdings, Inc. (NYSE:DK) Q1 2022 Earnings Conference Call May 3, 2022 12:00 PM ET Company Participants Blake Fernandez - Senior Vice President of Investor Relations Uzi Yemin - Chairman, President & Chief Executive Officer Reuven Spiegel - Executive Vice President & Chief Financial Officer Todd O'Malley - Executive Vice President & Chief Operating Officer Nithianathan Thaver - Executive Vice President & President-Refining Conference Call Participants Carly Davenport - Goldman Sachs Roger Read - Wel ...

Financial Data and Key Metrics Changes - For Q4 2021, Delek US reported an adjusted net loss of $44.9 million, or a loss of $0.61 per share, compared to a net loss of $204 million, or a loss of $2.77 per share in the prior year period [7] - Adjusted EBITDA for Q4 2021 was $58.2 million, a significant improvement from a loss of $137.6 million in the prior year period [7] - The company had a positive cash flow of approximately $161 million from continuing operations in Q4 2021, which included a working capital benefit of $110 million [8] Business Line Data and Key Metrics Changes - Total refining system crude oil throughput for Q4 2021 was approximately 279,000 barrels per day, with expectations for Q1 2022 to average between 275,000 and 285,000 barrels per day [12] - Capital expenditures during Q4 2021 were $66 million, reflecting maintenance at the Tyler refinery and initial growth spending on the Permian gathering business [13] Market Data and Key Metrics Changes - The company ended Q4 2021 with $857 million in cash and $1.36 billion in net debt [10] - The first quarter operating costs are forecasted to be in the range of $160 million to $170 million, influenced by elevated natural gas prices [11] Company Strategy and Development Direction - The company is optimistic about increasing activity levels in the Permian Basin and sees opportunities for organic growth in existing assets [15] - A partial divestiture program of DKL units has been successful, creating options for future sales [16] - The company aims for a 34% reduction in Scope one and two carbon emissions by 2030 as part of its ESG efforts [17] Management's Comments on Operating Environment and Future Outlook - Management noted that the macro backdrop is improving, and the lack of major turnaround activities in 2022 positions the company well to capture margin opportunities [15] - There is a strong expectation for demand recovery across various products, including gasoline, distillate, and jet fuel, as the pandemic subsides [44] Other Important Information - The company is exploring options for feedstock optionality to improve the economics of its biodiesel plants [68] - The Wink to Webster project is in a ramp-up phase, with expectations for full utilization by the end of 2023 [33][52] Q&A Session Summary Question: Delek's leverage to positive crude prices - Management acknowledged that higher crude prices would positively impact the company, particularly in terms of gathering volumes and differentials [18][22] Question: Capital allocation priorities - Management indicated that they do not have major turnarounds planned for 2022 and are focused on growth spending, with a careful approach to capital returns [28][32] Question: Impact of asphalt prices on refining profits - Management noted strong asphalt prices but emphasized the seasonal nature of the business, expecting robust prices as they move into the paving and roofing season [65] Question: Biodiesel plant conversion - Management clarified that they are not currently exploring converting biodiesel plants into pretreatment facilities but are looking at feedstock options [70]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-K (Mark One) ☑ ANNUAL REPORT PURSUANT TO SECTION 18 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Fiscal Year Ended December 31, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 001-38142 DELEK US HOLDINGS, INC. (Exact name of registrant as specified in its charter) (State or other jurisdiction of incorporation or ...

Delek US Holdings, Inc. (NYSE:DK) Q3 2021 Earnings Conference Call November 5, 2021 9:00 AM ET Company Participants Blake Fernandez - Senior Vice President of Investor Relations & Market Intelligence Reuven Spiegel - Executive Vice President & Chief Financial Officer Uzi Yemin - Chairman, President & Chief Executive Officer Todd O'Malley - Executive Vice President/Chief Commercial Officer Conference Call Participants Ryan Todd - Piper Sandler Manav Gupta - Credit Suisse Securities Carly Davenport - Goldman ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q (Mark One) ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2021 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to | --- | --- | --- | |--------------------------------------------------------------------------------------------------------------------------------|- ...

Financial Data and Key Metrics Changes - For Q2 2021, Delek US reported an adjusted net loss of $65.2 million, or a loss of $0.88 per share, compared to a net loss of $121.7 million, or a loss of $1.66 per share in the prior year period [7] - Adjusted EBITDA was $2 million in Q2 2021, a significant improvement from a loss of $100 million in the prior year period [7] - The company ended Q2 2021 with $833 million in cash and $1.41 billion in net debt [10] Business Line Data and Key Metrics Changes - Total refining system crude oil throughput was approximately 267,000 barrels per day in Q2 2021, impacted by turnaround activities and the Colonial Pipeline outage [12] - Expected crude oil throughput for Q3 2021 is projected to average between 280,000 to 290,000 barrels per day, indicating a return to normal operations [12] Market Data and Key Metrics Changes - The company experienced operational disruptions due to the Colonial Pipeline shutdown and other incidents, which resulted in incremental costs of approximately $40 million to $45 million [8][21] - The logistics performance has recovered from depressed levels in the first quarter, with expectations for stability for the remainder of the year [14] Company Strategy and Development Direction - The company is actively pursuing small refinery exemptions (SREs) to improve the economics of its facilities, with a history of being granted such exemptions [14][17] - Plans to grow the retail segment with two new industry stores in the planning phase, complementing the existing branded portfolio [14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in receiving meaningful cash benefits from insurance claims and tax refunds in the coming quarters [14] - The company anticipates a positive cash flow environment moving forward, with expectations for a strong recovery in 2022 [73] Other Important Information - Capital expenditures in Q2 2021 were $66 million, reflecting turnaround activities and fire-related repairs [13] - The company is in discussions with insurance carriers regarding property damage and business interruption claims, with expectations for recovery in the coming quarters [21] Q&A Session Summary Question: Confidence in SREs and potential benefits - Management expressed a high level of confidence in obtaining SREs for Krotz and El Dorado, estimating potential benefits in the hundreds of millions of dollars [17][19] Question: Timeline and confidence regarding insurance claims - Management indicated that the claims process is ongoing, with expectations for recovery exceeding initial estimates of $40 million to $45 million [21] Question: Retail business growth and potential sale - Management stated that while they are open to offers for the retail business, they currently see a low chance of selling it due to a strong cash position [23] Question: Operational performance and crude differentials - Management noted a deterioration in crude differentials but emphasized ongoing optimization efforts to take advantage of market conditions [30][31] Question: M&A activity and market environment - Management acknowledged the need for small refiners to consider growth through M&A, but emphasized patience in pursuing the right opportunities [34][36] Question: Mid-cycle EBITDA capacity - Management provided estimates for mid-cycle EBITDA, suggesting a potential range of $400 million to $500 million from refining under normalized conditions [78]