Delek US(DK) - 2025 Q2 - Quarterly Results

Executive Summary & Strategic Outlook Company Overview & CEO Commentary Delek US Holdings reported strong Q2 2025 results, exceeding EOP targets and increasing cash flow improvement goals, while advancing midstream deconsolidation and shareholder value initiatives - Delek US achieved its original $120 million EOP target one quarter in advance, and has increased its run-rate cash flow improvement target to $130 to $170 million[3] - DKL's new Libby 2 gas processing plant strengthens its position in the Permian basin and contributes to unlocking the full value of midstream assets[3] - Future priorities include safe and reliable operations, further midstream deconsolidation, improving cash flow generation, and delivering shareholder value while maintaining financial strength[3] Second Quarter 2025 Financial Highlights Delek US reported a net loss attributable to Delek US of $106.4 million for Q2 2025, with a diluted loss per share of $(1.76), while Adjusted EBITDA reached $170.2 million Second Quarter 2025 Financial Highlights ($ in millions, except per share data) | ($ in millions, except per share data) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------ | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | Net loss attributable to Delek US | $(106.4) | $(37.2) | $(279.1) | $(69.8) | | Total diluted loss per share | $(1.76) | $(0.58) | $(4.55) | $(1.09) | | Adjusted net loss | $(33.1) | $(59.3) | $(177.5) | $(85.5) | | Adjusted net loss per share | $(0.56) | $(0.92) | $(2.90) | $(1.33) | | Adjusted EBITDA | $170.2 | $107.5 | $196.7 | $266.2 | Operational & Strategic Achievements Key achievements in Q2 2025 included the continued success of the Enterprise Optimization Plan, the completion of DKL's new Libby 2 gas processing plant, a successful $700.0 million debt offering by DKL, and share repurchases by DK - The Enterprise Optimization Plan (EOP) continues to exceed expectations, forecasted to deliver $130 to $170 million in annual run-rate cash flow improvements, with approximately $30 million recognized in Q2 2025[6] - Delek Logistics (DKL) completed its new Libby 2 gas processing plant, expanding processing capacity for producer customers in Lea County, New Mexico[6] - DKL successfully executed a $700.0 million debt offering maturing in June 2033, reinforcing its growth efforts and economic independence[6] - DK repurchased approximately $13 million in DK common stock during Q2 2025, and an additional $7.5 million after the quarter[6] Consolidated Financial Performance Condensed Consolidated Statements of Income (Loss) For the second quarter of 2025, Delek US reported a net loss of $90.1 million, a significant increase from a $26.1 million net loss in Q2 2024, with net revenues decreasing to $2,764.6 million Condensed Consolidated Statements of Income (Loss) ($ in millions, except share and per share data) | ($ in millions, except share and per share data) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | Net revenues | $2,764.6 | $3,308.1 | $5,406.5 | $6,436.1 | | Total cost of sales | $2,712.4 | $3,291.3 | $5,418.0 | $6,324.4 | | Operating (loss) income | $(33.5) | $4.6 | $(159.3) | $33.8 | | Net loss attributable to Delek | $(106.4) | $(37.2) | $(279.1) | $(69.8) | | Total diluted loss per share | $(1.76) | $(0.58) | $(4.55) | $(1.09) | Condensed Consolidated Balance Sheets As of June 30, 2025, Delek US reported total assets of $7,068.8 million, an increase from $6,665.8 million at December 31, 2024, while total liabilities increased to $6,773.9 million Condensed Consolidated Balance Sheets ($ in millions) | ($ in millions) | June 30, 2025 | December 31, 2024 | | :-------------------------- | :------------ | :---------------- | | Cash and cash equivalents | $615.5 | $735.6 | | Total assets | $7,068.8 | $6,665.8 | | Total current liabilities | $2,905.8 | $2,516.0 | | Total non-current liabilities | $3,868.1 | $3,574.6 | | Total liabilities | $6,773.9 | $6,090.6 | | Total stockholders' equity | $294.9 | $575.2 | Condensed Consolidated Cash Flow Data In Q2 2025, net cash provided by operating activities was $51.4 million, a significant improvement from a net use of $48.4 million in Q2 2024, despite increased net cash used in investing activities Condensed Consolidated Cash Flow Data ($ in millions) | ($ in millions) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------------------ | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | Net cash provided by (used in) operating activities | $51.4 | $(48.4) | $(11.0) | $118.3 | | Net cash used in investing activities | $(163.0) | $(62.5) | $(477.6) | $(104.1) | | Net cash provided by (used in) financing activities | $103.3 | $15.4 | $368.5 | $(178.5) | | Net decrease in cash and cash equivalents | $(8.3) | $(95.5) | $(120.1) | $(164.3) | Segment Performance Refining Segment The Refining segment's Adjusted EBITDA significantly increased in Q2 2025, primarily driven by higher crack spreads, reporting improved production margins despite slight decreases in total sales volume and production Refining Segment Adjusted EBITDA Refining Segment Adjusted EBITDA ($ in millions) | Segment | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :------ | :------------------------------- | :------------------------------- | | Refining | $113.6 | $42.1 | - The increase in Refining segment Adjusted EBITDA was primarily due to an increase in refining margin driven by increased crack spreads, which were up an average of 11.4% from prior-year levels[5] Refining Segment Selected Financial Information Refining Segment Selected Financial Information | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :----------------------------------------- | :------------------------------- | :------------------------------- | | Total sales volume - refined product (bpd) | 315,259 | 320,514 | | Total production (bpd) | 311,298 | 311,957 | | Total throughput (bpd) | 316,325 | 316,054 | | Total refining production margin per bbl | $8.03 | $7.07 | | Total refining operating expenses per bbl | $5.17 | $5.02 | | Crude utilization (% of nameplate capacity) | 100.9% | 100.4% | - WTI crude oil constituted 77.5% of the total crude slate in Q2 2025, up from 72.0% in Q2 2024[41] Logistics Segment The Logistics segment demonstrated strong growth in Adjusted EBITDA for Q2 2025, primarily driven by strategic acquisitions and increased wholesale margins, with varied performance across its operations Logistics Segment Adjusted EBITDA Logistics Segment Adjusted EBITDA ($ in millions) | Segment | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :------- | :------------------------------- | :------------------------------- | | Logistics | $120.2 | $100.6 | - The increase in Logistics segment Adjusted EBITDA was driven by the impact of the W2W dropdown, incremental contribution from the H2O Midstream Acquisition (September 11, 2024), the Gravity Acquisition (January 2, 2025), and an increase in wholesale margins[7] Logistics Segment Selected Information Logistics Segment Selected Information | Gathering & Processing (average bpd) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :----------------------------------- | :------------------------------- | :------------------------------- | | Midland Gathering Assets | 207,183 | 206,933 | | Delaware Crude oil gathering | 137,167 | 123,927 | | Delaware Natural gas gathering (Mcfd) | 60,940 | 76,237 | | Midland Water disposal and recycling (bpd) | 600,891 | — | - West Texas wholesale marketing margin per barrel increased to $4.12 in Q2 2025 from $2.99 in Q2 2024[43] Liquidity & Capital Management Liquidity Position As of June 30, 2025, Delek US maintained a cash balance of $615.5 million, with total consolidated long-term debt of $3,100.7 million, resulting in a net debt of $2,485.2 million Liquidity Position ($ in millions) | Metric | June 30, 2025 | | :----------------------------------- | :------------ | | Cash balance | $615.5 million | | Total consolidated long-term debt | $3,100.7 million | | Net debt | $2,485.2 million | | Net debt, excluding Delek Logistics | $275.2 million | Shareholder Distributions & Capital Actions Delek US announced a regular quarterly dividend of $0.255 per share and continued its share repurchase program, buying back approximately $13 million in common stock during the quarter - The Board of Directors approved a regular quarterly dividend of $0.255 per share, payable on August 18, 2025, to shareholders of record on August 11, 2025[8] - Delek US purchased approximately $13 million in DK common stock during Q2 2025 and an additional $7.5 million after the quarter[6] Significant Transactions & Non-GAAP Disclosures Significant Transactions During the Quarter During Q2 2025, Delek US recorded impairment charges of $8.6 million, incurred $3.9 million in transaction-related costs for acquisitions, and recognized $25.5 million in restructuring costs, while also completing the DPG Dropdown to Delek Logistics - Recorded an $8.6 million ($6.7 million after-tax) impairment in connection with two investments held at cost[27] - Incurred $3.9 million ($3.0 million after-tax) in transaction-related costs for the H2O Midstream and Gravity Acquisitions[28] - Recognized $25.5 million ($19.8 million after-tax) in restructuring costs associated with business transformation efforts[29] - Transferred Delek Permian Gathering (DPG) purchasing and blending activities to Delek Logistics, with operating results now reported in the Logistics segment[31] Non-GAAP Financial Measures Delek US utilizes various non-GAAP operational and financial measures, such as Adjusted net income (loss), Adjusted EBITDA, and Net debt, to evaluate performance and provide improved comparability - Management uses non-GAAP measures to evaluate operating segment performance and past performance, believing they are useful to investors for assessing ongoing performance and comparability[19][20] - Non-GAAP measures include Adjusted net income (loss), Adjusted net income (loss) per share, EBITDA, Adjusted EBITDA, Refining margin, Adjusted refining margin, Refining production margin, Refining production margin per throughput barrel, and Net debt[22] - These measures have limitations as analytical tools and should not be considered substitutes for their most directly comparable U.S. GAAP financial measures[21] Non-GAAP Reconciliations The report provides detailed reconciliations of GAAP financial measures to their non-GAAP counterparts, including Adjusted Net Income (Loss), Adjusted EBITDA, and Adjusted Segment EBITDA, outlining the specific adjusting items for both quarterly and year-to-date periods Adjusted Net Income (Loss) Reconciliation Adjusted Net Income (Loss) Reconciliation ($ in millions, unaudited) | $ in millions (unaudited) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------ | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | Reported net loss attributable to Delek US | $(106.4) | $(37.2) | $(279.1) | $(69.8) | | Total Adjusting items | $73.3 | $(22.1) | $101.6 | $(15.7) | | Adjusted net loss | $(33.1) | $(59.3) | $(177.5) | $(85.5) | Adjusted Net Income (Loss) Reconciliation ($ per share, unaudited) | $ per share (unaudited) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------------------- | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | Reported diluted loss per share | $(1.76) | $(0.58) | $(4.55) | $(1.09) | | Total Adjusting items, after tax (per share) | $1.20 | $(0.34) | $1.65 | $(0.24) | | Adjusted net loss per share | $(0.56) | $(0.92) | $(2.90) | $(1.33) | Adjusted EBITDA Reconciliation Adjusted EBITDA Reconciliation ($ in millions, unaudited) | $ in millions (unaudited) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------ | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | Reported net loss attributable to Delek US | $(106.4) | $(37.2) | $(279.1) | $(69.8) | | EBITDA attributable to Delek US | $59.3 | $124.9 | $35.1 | $268.0 | | Total Adjusting items | $110.9 | $(17.4) | $161.6 | $(1.8) | | Adjusted EBITDA | $170.2 | $107.5 | $196.7 | $266.2 | Adjusted EBITDA from Continuing Operations ($ in millions, unaudited) | $ in millions (unaudited) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------ | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | Reported loss from continuing operations, net of tax | $(89.3) | $(33.8) | $(247.5) | $(62.2) | | Adjusted EBITDA from continuing operations | $171.2 | $94.9 | $198.1 | $246.5 | Adjusted Segment EBITDA Reconciliation Adjusted Segment EBITDA Reconciliation (Q2 2025, $ in millions, unaudited) | $ in millions (unaudited) | Refining (Q2 2025) | Logistics (Q2 2025) | Corporate, Other and Eliminations (Q2 2025) | Consolidated (Q2 2025) | | :------------------------ | :----------------- | :------------------ | :------------------------------------------ | :--------------------- | | Segment EBITDA Attributable to Delek US | $95.1 | $90.1 | $(108.6) | $76.6 | | Total Adjusting items | $18.5 | $30.1 | $46.0 | $94.6 | | Adjusted Segment EBITDA | $113.6 | $120.2 | $(62.6) | $171.2 | Adjusted Segment EBITDA Reconciliation (YTD 2025, $ in millions, unaudited) | $ in millions (unaudited) | Refining (YTD 2025) | Logistics (YTD 2025) | Corporate, Other and Eliminations (YTD 2025) | Consolidated (YTD 2025) | | :------------------------ | :------------------ | :------------------- | :------------------------------------------- | :---------------------- | | Segment EBITDA Attributable to Delek US | $78.9 | $175.6 | $(187.5) | $67.0 | | Total Adjusting items | $7.3 | $61.1 | $62.7 | $131.1 | | Adjusted Segment EBITDA | $86.2 | $236.7 | $(124.8) | $198.1 | Adjusted Refining Margin Reconciliation Adjusted Refining Margin Reconciliation ($ in millions, unaudited) | $ in millions (unaudited) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------ | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | Gross margin | $21.3 | $(49.2) | $(71.3) | $(8.0) | | Refining margin | $238.3 | $156.8 | $375.7 | $425.2 | | Total Adjusting items | $18.5 | $12.9 | $7.0 | $17.9 | | Adjusted refining margin | $256.8 | $169.7 | $382.7 | $443.1 | Net Debt Calculation Net Debt Calculation ($ in millions) | Calculation of Net (Cash) Debt | June 30, 2025 | December 31, 2024 | | :----------------------------- | :------------ | :---------------- | | Total long-term debt | $3,100.7 | $2,765.2 | | Less: Cash and cash equivalents | $615.5 | $735.6 | | Net debt - consolidated | $2,485.2 | $2,029.6 | | Less: DKL net debt | $2,210.0 | $1,870.0 | | Net debt, excluding DKL | $275.2 | $159.6 | Supplemental Information & Corporate Details Selected Segment Financial Data The supplemental data provides a breakdown of net revenues, inter-segment fees, total revenues, cost of sales, and gross margin for the Refining and Logistics segments, as well as consolidated figures for Q2 and YTD 2025 and 2024 Selected Segment Financial Data (Q2 2025, $ in millions, unaudited) | $ in millions (unaudited) | Refining (Q2 2025) | Logistics (Q2 2025) | Consolidated (Q2 2025) | | :------------------------ | :----------------- | :------------------ | :--------------------- | | Net revenues (excluding intercompany fees and revenues) | $2,632.3 | $132.3 | $2,764.6 | | Total revenues | $2,716.8 | $246.4 | $2,764.6 | | Gross margin | $21.3 | $60.7 | $52.2 | Selected Segment Financial Data (YTD 2025, $ in millions, unaudited) | $ in millions (unaudited) | Refining (YTD 2025) | Logistics (YTD 2025) | Consolidated (YTD 2025) | | :------------------------ | :------------------ | :------------------- | :---------------------- | | Net revenues (excluding intercompany fees and revenues) | $5,150.6 | $255.9 | $5,406.5 | | Total revenues | $5,325.1 | $496.3 | $5,406.5 | | Gross margin | $(71.3) | $111.3 | $(11.5) | Pricing Statistics The report provides average pricing statistics for key crude oil benchmarks (WTI, LLS, Brent), various U.S. Gulf Coast crack spreads, and refined product prices for Q2 and YTD 2025 compared to 2024 Pricing Statistics ($ average for the period presented) | (average for the period presented) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--------------------------------- | :------------------------------- | :------------------------------- | | WTI — Cushing crude oil (per barrel) | $63.81 | $80.83 | | Brent (per barrel) | $66.71 | $85.06 | | U.S. Gulf Coast 5-3-2 crack spread (per barrel) | $20.19 | $18.12 | | U.S. Gulf Coast Unleaded Gasoline (per gallon) | $1.95 | $2.30 | | Gulf Coast Ultra-low sulfur diesel (per gallon) | $2.08 | $2.44 | | Natural gas (per MMBTU) | $3.51 | $2.37 | About Delek US Holdings, Inc. Delek US Holdings, Inc. is a diversified downstream energy company with assets in petroleum refining, logistics, pipelines, and renewable fuels, operating four refineries with a combined crude throughput capacity of 302,000 barrels per day - Delek US Holdings, Inc. is a diversified downstream energy company with assets in petroleum refining, logistics, pipelines, and renewable fuels[12] - The company's refining assets include refineries in Tyler and Big Spring, Texas, El Dorado, Arkansas, and Krotz Springs, Louisiana, with a combined nameplate crude throughput capacity of 302,000 barrels per day[12] - Delek US and its subsidiaries owned approximately 63.3% (including the general partner interest) of Delek Logistics Partners, LP at June 30, 2025[13] Forward-Looking Statements This section serves as a cautionary note regarding forward-looking statements, which are based on current expectations and involve risks and uncertainties, advising investors that actual results may differ materially - The press release contains forward-looking statements based on current expectations, involving risks and uncertainties, and are not guarantees of future performance[14][18] - Important factors that may affect these statements include political/regulatory developments, crude oil prices, acquisition risks, and general economic conditions[15][17] - Delek US undertakes no obligation to update or revise any forward-looking statements to reflect events or circumstances that occur after the date of the release, except as required by law[18] Conference Call Information Delek US will host a conference call on August 6, 2025, to discuss its Q2 2025 results, with details provided for live access and replay, and a separate call for Delek Logistics' results will also be held - Delek US will hold a conference call on Wednesday, August 6, 2025, at 10:00 a.m. Central Time, accessible via www.DelekUS.com under the Investor Relations tab[10] - Delek Logistics (DKL) will hold its Q2 2025 earnings conference call on Wednesday, August 6, 2025, at 11:30 a.m. Central Time, with information available at www.deleklogistics.com[11](index=11&type=chunk) Investor/Media Relations Contacts Contact information for investor and media relations is provided, along with links to Delek US Holdings, Inc.'s website and social media - Investor/Media Relations can be contacted via investor.relations@delekus.com[48] - Information about Delek US Holdings, Inc. is available on its website (www.delekus.com), investor relations webpage (ir.delekus.com), news webpage (www.delekus.com/news), and X account (@DelekUSHoldings)[48]