Delek US Holdings Reports Second Quarter 2020 Results
BRENTWOOD, Tenn., Aug. 4, 2020 /PRNewswire/ -- Delek US Holdings, Inc. (NYSE: DK) ("Delek US") today announced financial results for its second quarter ended June 30, 2020. Delek US reported second quarter 2020 net income of $87.7 million, or $1.18 per diluted share, versus net income of $77.3 million, or $1.00 per diluted share, for the quarter ended June 30, 2019, which included a $16.8 million income tax benefit relating to incremental loss carrybacks provided by the CARES Act. On an adjusted basis, Delek US reported Adjusted net loss of $110.5 million, or $(1.50) per share for the second quarter 2020. This compares to Adjusted net income of $97.5 million, or $1.27 per share, in the prior-year period. Adjusted earnings before interest, taxes, depreciation and amortization ("Adjusted EBITDA") was $(85.1) million compared to Adjusted EBITDA of $210.7 million in the prior-year period. Reconciliations of net income reported under U.S. GAAP to Adjusted net income and Adjusted EBITDA are included in the financial tables attached to this release.
Adjusted quarterly results were impacted by net losses totaling approximately $(74.9) million (after-tax) or $(1.02) per share, which is comprised of the following: an inventory headwind (or, an unfavorable "other inventory impact") on margin in the amount of $(91.4) million pre-tax, or $(69.9) million after-tax, related to FIFO accounting as compared to current market prices; and a negative margin impact of $(29.0) million pre-tax, or $(22.2) million after-tax, related to the sale of purchased product; realized hedging losses in the amount of $(134.0) million pre-tax, or $(103.9) million after-tax, the majority of which related to fixed price crude transactions that resulted in margin gains at our Tyler Refinery totaling $111.0 million pre-tax, or $84.9 million after-tax, where the magnitude was driven by the historic volatility in the crude market during the second quarter; and a reversal of the $36.1 million tax headwind disclosed in the first quarter of 2020. Note, the other inventory impact is separate from LCM inventory impacts that are excluded from adjusted results. Additionally, a breakdown of realized and unrealized hedging by segment is provided in the tables on page 10.
Uzi Yemin, Chairman, President and Chief Executive Officer of Delek US, stated, "Our diversified portfolio is providing resilience during this period of weak refining margins with the logistics and retail segments generating a contribution margin above $80 million collectively. Our transition to midstream and more stable cash flow is well underway with previous capital investments poised to support ongoing growth from robust second quarter levels."
Mr. Yemin continued, "Our company has a long history of being nimble and we remain agile in terms of flexing our capital spending and cost structure to the prevailing macro environment. We are on-track to exceed guidance of $100 million of cost reductions year over year. Capital spending was reduced dramatically from first quarter levels and we expect to remain disciplined with minimal outlay anticipated for the balance of the year. As of June 30th, the company had a cash balance of $849 million and is well positioned for a turbulent macro environment."
Regular Quarterly Dividend
Delek US announced today its Board of Directors declared a regular quarterly cash dividend of $0.31 per share. Shareholders of record on August 19, 2020 will receive this cash dividend payable on September 3, 2020.
Liquidity
As of June 30, 2020, Delek US had a cash balance of $849.0 million and total consolidated long-term debt of $2,454.9 million, resulting in net debt of $1,605.9 million. As of June 30, 2020, Delek Logistics Partners, LP (NYSE: DKL) ("Delek Logistics") had $995.2 million of total debt and $16.2 million of cash, which is included in the consolidated amounts on Delek US' balance sheet. Excluding Delek Logistics, Delek US had approximately $832.8 million in cash and $1,459.7 million of debt, or a $626.9 million net debt position.
Refining Segment
Refining contribution margin decreased to $59.7 million in the second quarter 2020 from $198.1 million in the second quarter 2019. On an adjusted basis, adjusted refining contribution margin was $(124.1) million in the second quarter 2020 compared to $216.5 million in the second quarter 2019. The current period adjusted refining contribution margin reflects $(90.6) million of other inventory impact, $(29.0) million of losses related to the sale of purchased product, and $(137.0) million of realized hedging losses, partially offset by a $111.0 million benefit from fixed price crude cost transactions.
On a year-over-year basis, results were reduced primarily due to lower crude oil differentials, crack spreads and throughputs as a result of decreased demand due to COVID-19. Further, during the second quarter 2020, the realized Midland-Cushing crude oil discount was $0.48 per barrel compared to a realized discount of $1.77 per barrel in the prior year period. These factors were partially offset by the crude oil futures market that was in contango of $3.06 per barrel in the second quarter 2020 compared to contango of $0.20 per barrel in the second quarter 2019.
Other inventory impact is primarily calculated by multiplying the change of barrels in refined inventory by the difference between current period average NYMEX WTI price and per barrel cost of materials and other for the period recognized on a FIFO basis. The other inventory impact on adjusted refining contribution margin was a charge of $(90.6) million in the second quarter 2020 compared to a charge of $(12.0) million in the second quarter 2019. Other inventory impact included a (charge) benefit to the refineries during the second quarter of 2020 of $(11.8) million for Big Spring, $(59.8) million for El Dorado and $(17.5) million Krotz Springs, as compared to a (charge) benefit of $(11.6) million for Big Spring, $1.1 million for El Dorado and $(1.5) million for Krotz Springs in the second quarter of 2019. Additionally, we buy and sell purchased product to optimize margins and to meet contractual demands, as needed. We recognized losses of $(29.0) million within the refining margins during the second quarter 2020, of which $(30.5) million relates to the Krotz Springs refinery, compared to gains totaling $8.3 million during the second quarter 2019.
Logistics Segment
The logistics segment contribution margin in the second quarter 2020 was $61.4 million compared to $44.2 million in the second quarter 2019. Results improved on a year-over-year basis primarily due to the drop down of the Delek Permian Gathering business and Trucking Assets, increased crude gathering, operating expense reductions and an increase in income from equity method investments. This was partially offset by lower West Texas gross margin on a year-over-year basis.
Logistics segment contribution margin reflected another inventory impact to earnings relating to its West Texas inventory consisting of a charge totaling $(0.5) million during the second quarter of 2020 compared to a charge of $(0.8) million during the second quarter of 2019.
Retail Segment
For the second quarter 2020, contribution margin was $24.3 million compared to $17.6 million in the prior year period for the retail segment. Merchandise sales were approximately $89.4 million with an average retail margin of 30.8% in the second quarter 2020, compared to merchandise sales of approximately $83.3 million with an average retail margin of 31.2% in the prior-year period. Approximately 42.4 million retail fuel gallons were sold at an average margin of $0.45 per gallon in the second quarter 2020 compared to 53.7 million retail fuel gallons sold at an average margin of $0.29 per gallon in the second quarter 2019. In the second quarter 2020, the average merchandise store count was 253 compared to 277 in the prior year period. On a same store sales basis in the second quarter 2020, merchandise sales increased 13.1% and fuel gallons sold decreased 19.7% compared to the prior-year period.
Retail segment contribution margin reflected another inventory impact to earnings relating to its fuel inventory consisting of a charge totaling $(3.2) million during the second quarter of 2020 compared to no charge during the second quarter of 2019.
Corporate/Other
Contribution margin from Corporate/Other was a loss of $15.5 million in the second quarter 2020 compared to a loss of $9.6 million in the prior-year period. Note, hedging gains (losses) related to the refining segment have been reclassified from the corporate and other segment to the refining segment starting in the first quarter of 2020 and have been retrospectively reclassified in 2019 for comparison purposes.
Corporate/Other segment contribution margin reflected another inventory impact to earnings consisting of a benefit totaling $2.9 million during the second quarter of 2020 compared to no benefit during the second quarter of 2019.
Second Quarter 2020 Results | Conference Call Information
Delek US will hold a conference call to discuss its second quarter 2020 results on Wednesday, August 5, 2020 at 8:30 a.m. Central Time. Investors will have the opportunity to listen to the conference call live by going to www.DelekUS.com and clicking on the Investor Relations tab. Participants are encouraged to register at least 15 minutes early to download and install any necessary software. Presentation materials accompanying the call will be available on the investor relations tab of the Delek US website approximately five minutes prior to the start of the call. For those who cannot listen to the live broadcast, the online replay will be available on the website for 90 days.
Investors may also wish to listen to Delek Logistics' (NYSE: DKL) second quarter 2020 earnings conference call that will be held on Wednesday, August 5, 2020 at 7:30 a.m. Central Time and review Delek Logistics' earnings press release. Market trends and information disclosed by Delek Logistics may be relevant to the logistics segment reported by Delek US. Both a replay of the conference call and press release for Delek Logistics are available online at www.deleklogistics.com.
About Delek US Holdings, Inc.
Delek US Holdings, Inc. is a diversified downstream energy company with assets in petroleum refining, logistics, renewable fuels and convenience store retailing. The refining assets consist of refineries operated in Tyler and Big Spring, Texas, El Dorado, Arkansas and Krotz Springs, Louisiana with a combined nameplate crude throughput capacity of 302,000 barrels per day.
The logistics operations primarily consist of Delek Logistics Partners, LP (NYSE: DKL). Delek US Holdings, Inc. and its affiliates own approximately 71% (including the 2% general partner interest) of Delek Logistics Partners, LP. Delek Logistics Partners, LP is a growth-oriented master limited partnership focused on owning and operating midstream energy infrastructure assets.
The convenience store retail operates approximately 253 convenience stores in central and West Texas and New Mexico.
Safe Harbor Provisions Regarding Forward-Looking Statements
This press release contains forward-looking statements that are based upon current expectations and involve a number of risks and uncertainties. Statements concerning current estimates, expectations and projections about future results, performance, prospects, opportunities, plans, actions and events and other statements, concerns, or matters that are not historical facts are "forward-looking statements," as that term is defined under the federal securities laws. These statements contain words such as "possible," "believe," "should," "could," "would," "predict," "plan," "estimate," "intend," "may," "anticipate," "will," "if", "potential," "expect" or similar expressions, as well as statements in the future tense. These forward-looking statements include, but are not limited to, statements regarding throughput at the Company's refineries; crude oil prices, discounts and quality and our ability to benefit therefrom; share repurchases; returning cash to shareholders; payments of dividends; growth; investments into our business; the performance and execution of our midstream growth initiatives, including the Big Spring Gathering System, the Red River joint venture and the Wink to Webster long-haul crude oil pipeline, and the flexibility, benefits and the expected returns therefrom; RINs waivers and tax credits and the value and benefit therefrom; cash and liquidity; opportunities and anticipated performance and financial position.
Investors are cautioned that the following important factors, among others, may affect these forward-looking statements. These factors include, but are not limited to: uncertainty related to timing and amount of future share repurchases and dividend payments; risks and uncertainties with respect to the quantities and costs of crude oil we are able to obtain and the price of the refined petroleum products we ultimately sell; including uncertainties regarding future decisions by OPEC regarding production and pricing disputes between OPEC members and Russia; uncertainty relating to the impact of the COVID-19 outbreak on the demand for crude oil, refined products and transportation and storage services; risks related to Delek US' exposure to Permian Basin crude oil, such as supply, pricing, gathering, production and transportation capacity; gains and losses from derivative instruments; management's ability to execute its strategy of growth, including risks associated with acquisitions and dispositions; acquired assets may suffer a diminishment in fair value as a result of which we may need to record a write-down or impairment in carrying value of the asset; the possibility of litigation challenging renewable fuel standard waivers;changes in the scope, costs, and/or timing of capital and maintenance projects; the ability to grow the Big Spring Gathering System; the ability of the Red River joint venture to complete the expansion project to increase the Red River pipeline capacity; the ability of the joint venture to construct the Wink to Webster long haul crude oil pipeline; operating hazards inherent in transporting, storing and processing crude oil and intermediate and finished petroleum products; our competitive position and the effects of competition; the projected growth of the industries in which we operate; general economic and business conditions affecting the geographic areas in which we operate; and other risks described in Delek US' filings with the United States Securities and Exchange Commission (the "SEC"), including risks disclosed in our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and other filings and reports with the SEC.
Forward-looking statements should not be read as a guarantee of future performance or results and will not be accurate indications of the times at, or by, which such performance or results will be achieved. Forward-looking information is based on information available at the time and/or management's good faith belief with respect to future events, and is subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in the statements. Delek US undertakes no obligation to update or revise any such forward-looking statements to reflect events or circumstances that occur, or which Delek US becomes aware of, after the date hereof, except as required by applicable law or regulation.
Non-GAAP Disclosures:
Our management uses certain "non-GAAP" operational measures to evaluate our operating segment performance and non-GAAP financial measures to evaluate past performance and prospects for the future to supplement our GAAP financial information presented in accordance with U.S. GAAP. These financial and operational non-GAAP measures are important factors in assessing our operating results and profitability and include:
-- Adjusted net income (loss) - calculated as net income attributable to
Delek US adjusted for certain identified infrequently occurring items,
non-cash items and items that are not attributable to our on-going
operations (collectively, "Adjusting Items") recorded during the period;
-- Adjusted net income (loss) per share - calculated as Adjusted net income
(loss) divided by weighted average shares outstanding, assuming
dilution, as adjusted for any anti-dilutive instruments that may not be
permitted for consideration in GAAP earnings per share calculations but
that nonetheless favorably impact dilution;
-- Earnings before interest, taxes, depreciation and amortization
("EBITDA") - calculated as net income attributable to Delek adjusted to
add back interest expense, income tax expense, depreciation and
amortization;
-- Adjusted EBITDA - calculated as EBITDA adjusted for the identified
Adjusting Items in Adjusted net income (loss) that do not relate to
interest expense, income tax expense, depreciation or amortization, and
adjusted to include income (loss) attributable to non-controlling
interests;
-- Adjusted Segment Contribution Margin - calculated as Segment
Contribution Margin adjusted for the identified Adjusting Items in
Adjusted net income (loss) that impact Segment Contribution Margin;
-- Refining margin - calculated as the difference between total refining
revenues and total cost of materials and other;
-- Adjusted refining margin -- calculated as refining margin adjusted for
certain identified infrequently occurring items, non-cash items and
items that are not attributable to our on-going refining operations
recorded during the period;
-- Refining margin per sales barrel - calculated as refining margin divided
by our average refining sales in barrels per day (excluding purchased
barrels) multiplied by 1,000 and multiplied by the number of days in the
period; and
-- Adjusted refining margin per sales barrel - calculated as adjusted
refining margin divided by our average refining sales in barrels per day
(excluding purchased barrels) multiplied by 1,000 and multiplied by the
number of days in the period;
We believe these non-GAAP operational and financial measures are useful to investors, lenders, ratings agencies and analysts to assess our ongoing performance because, when reconciled to their most comparable GAAP financial measure, they provide improved comparability between periods through the exclusion of certain items that we believe are not indicative of our core operating performance and that may obscure our underlying results and trends.
Non-GAAP measures have important limitations as analytical tools, because they exclude some, but not all, items that affect net earnings and operating income. These measures should not be considered substitutes for their most directly comparable U.S. GAAP financial measures. Additionally, because Adjusted net income or loss, adjusted net income or loss per share, EBITDA and adjusted EBITDA, and Adjusted Segment Contribution Margin or any of our other identified non-GAAP measures may be defined differently by other companies in its industry, Delek US' definition may not be comparable to similarly titled measures of other companies. See the accompanying tables in this earnings release for a reconciliation of these non-GAAP measures to the most directly comparable GAAP measures.
Delek US Holdings, Inc.
Condensed Consolidated Balance Sheets (Unaudited)
(In millions, except share and per share data)
June 30, December 31,
2020 2019
ASSETS
Current assets:
Cash and cash equivalents $
849.0 $
955.3
Accounts receivable, net 480.4 792.6
Inventories, net of inventory valuation
reserves 653.5 946.7
Other current assets 390.0 268.7
Total current assets 2,372.9 2,963.3
Property, plant and equipment:
Property, plant and equipment 3,514.9 3,362.8
Less: accumulated depreciation (1,031.5) (934.5)
Property, plant and equipment, net 2,483.4 2,428.3
Operating lease right-of-use assets 183.9 183.6
Goodwill 855.7 855.7
Other intangibles, net 110.0 110.3
Equity method investments 367.3 407.3
Other non-current assets 64.4 67.8
Total assets $
6,437.6 $
7,016.3
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $
1,004.2 $
1,599.7
Current portion of long-term debt 33.4 36.4
Obligation under Supply and Offtake
Agreements 99.0 332.5
Current portion of operating lease
liabilities 43.4 40.5
Accrued expenses and other current
liabilities 409.3 346.8
Total current liabilities 1,589.3 2,355.9
Non-current liabilities:
Long-term debt, net of current portion 2,421.5 2,030.7
Obligation under Supply and Offtake
Agreements 215.0 144.8
Environmental liabilities, net of
current portion 106.3 137.9
Asset retirement obligations 36.8 68.6
Deferred tax liabilities 335.4 267.9
Operating lease liabilities, net of
current portion 140.2 144.3
Other non-current liabilities 33.8 30.9
Total non-current liabilities 3,289.0 2,825.1
Stockholders' equity:
Preferred stock, $0.01 par value,
11,000,000 shares and 10,000,000
shares authorized at June 30,2020 and
December 31, 2019, respectively, no
shares issued and outstanding
Common stock, $0.01 par value,
110,000,000 shares authorized,
91,232,964 shares and 90,987,025
shares issued at June 30, 2020 and
December 31, 2019, respectively 0.9 0.9
Additional paid-in capital 1,160.1 1,151.9
Accumulated other comprehensive income 0.5 0.1
Treasury stock, 17,575,527 shares and
17,516,814 shares, at cost, as of June
30, 2020 and December 31, 2019,
respectively (694.1) (692.2)
Retained earnings 926.4 1,205.6
Non-controlling interests in
subsidiaries 165.5 169.0
Total stockholders' equity 1,559.3 1,835.3
Total liabilities and stockholders'
equity $
6,437.6 $
7,016.3
Delek US Holdings, Inc.
Condensed Consolidated Statements of Income (Unaudited) (1)
(In millions, except share and per share data)
Three Months Ended June 30, Six Months Ended June 30,
2020 2019 2020 2019
Net revenues $
1,535.5 $
2,480.3 $
3,356.7 $
4,680.2
Cost of sales:
Cost of materials and other 1,277.8 2,067.7 3,188.4 3,767.1
Operating expenses (excluding
depreciation and amortization
presented below) 103.4 135.8 232.6 276.7
Depreciation and amortization 53.6 42.6 100.6 81.9
Total cost of sales 1,434.8 2,246.1 3,521.6 4,125.7
Operating expenses related to
retail and wholesale business
(excluding depreciation and
amortization presented below) 24.4 26.5 49.7 52.3
General and administrative
expenses 61.7 69.5 127.4 131.7
Depreciation and amortization 6.0 7.5 11.6 15.0
Other operating income, net (14.2) (3.6) (14.9) (1.2)
Total operating costs and
expenses 1,512.7 2,346.0 3,695.4 4,323.5
Operating income (loss) 22.8 134.3 (338.7) 356.7
Interest expense 29.8 32.8 66.1 61.5
Interest income (0.5) (3.3) (2.2) (5.8)
Income from equity method
investments (10.7) (9.3) (15.8) (11.9)
Gain on sale on non-operating
refinery (56.9) (56.9)
Other (income) expense, net (1.5) 4.9 (2.4) 3.5
Total non-operating (income)
expense, net (39.8) 25.1 (11.2) 47.3
Income (loss) before income tax
(benefit) expense 62.6 109.2 (327.5) 309.4
Income tax (benefit) expense (35.9) 24.6 (119.0) 70.4
Income (loss) from continuing
operations, net of tax 98.5 84.6 (208.5) 239.0
Discontinued operations:
Loss from discontinued
operations, including gain
(loss) on sale of discontinued
operations (1.0) (1.0)
Income tax benefit (0.2) (0.2)
Loss from discontinued
operations, net of tax (0.8) (0.8)
Net income (loss) 98.5 83.8 (208.5) 238.2
Net income attributed to non-
controlling interests 10.8 6.5 18.2 11.6
Net income (loss) attributable to
Delek $
87.7 $
77.3 $
(226.7) $
226.6
Basic income (loss) per share:
Income (loss) from continuing
operations $
1.19 $
1.02 $
(3.08) $
2.95
Loss from discontinued operations (0.01)
$ $
(0.01)
Basic (loss) income per share $
1.19 $
1.01 $
(3.08) $
2.94
Diluted income (loss) per share:
Income (loss) from continuing
operations $
1.18 $
1.01 $
(3.08) $
2.92
Loss from discontinued operations (0.01)
$ $
(0.01)
Diluted (loss) income per share $
1.18 $
1.00 $
(3.08) $
2.91
Weighted average common shares
outstanding:
Basic 73,547,582 76,598,846 73,492,656 77,192,763
Diluted 74,028,043 77,280,692 73,492,656 77,883,285
Dividends declared per common
share outstanding $
0.31 $
0.28 $
0.93 $
0.55
Delek US Holdings, Inc.
Condensed Cash Flow Data (Unaudited)
(In millions)
Three Months Ended June 30, Six Months Ended June 30,
2020 2019 2020 2019
---
Cash flows from operating
activities:
Net cash (used in)
provided by
operating
activities $
(169.0) $
102.0 (323.1) 235.4
Cash flows from investing
activities:
Net cash used in
investing
activities (9.3) (202.4) (155.9) (329.4)
Cash flows from financing
activities:
Net cash provided
by (used in)
financing
activities 242.4 62.1 372.7 (33.9)
Net decrease in
cash and cash
equivalents 64.1 (38.3) (106.3) (127.9)
Cash and cash
equivalents at the
beginning of the
period 784.9 989.7 955.3 1,079.3
Cash and cash
equivalents of
continuing
operations at the
end of the period $
849.0 $
951.4 $
849.0 $
951.4
COVID-19 Tax Legislative Changes
On March 27, 2020, the Coronavirus Aid Relief, and Economic Security Act (the "CARES Act") was enacted into law. The Act includes several significant provisions for corporations, including the usage of net operating losses, interest deductions and payroll benefits. Pursuant to the provisions of the CARES Act, we recognized $16.8 million of current federal income tax benefit for the three and six months ended June 30, 2020, attributable to anticipated tax refunds from net operating loss carryback to prior 35% tax rate years. Additionally, we recorded an income tax receivable totaling $193 million as of June 30, 2020 related to the net operating loss carryback, which we expect to collect in the first half of 2021. Finally, we deferred $4.4 million of payroll tax payments under the provisions of the CARES Act during the six months ended June 30, 2020, which will be payable in equal installments in December 2021 and December 2022.
Delek US Holdings, Inc.
Segment Data (Unaudited)
(In millions)
Three Months Ended June 30, 2020
Refining Logistics Retail Corporate, Other
and Eliminations Consolidated
Net revenues (excluding
inter-segment fees and
revenues) $
1,001.9 $
27.3 $
165.4 $
340.9 $
1,535.5
Inter-segment fees and
revenues 75.1 90.4 (165.5)
Operating costs and
expenses:
Cost of materials and
other 928.6 43.9 119.6 185.7 1,277.8
Operating expenses
(excluding depreciation
and amortization
presented below) 88.7 12.4 21.5 5.2 127.8
Segment contribution
margin $
59.7 $
61.4 $
24.3 $
(15.5) $
129.9
Depreciation and
amortization $
44.8 $
8.7 $
3.3 $
2.8 59.6
General and
administrative expenses 61.7
Other operating income,
net (14.2)
Operating income $
22.8
Capital spending
(excluding business
combinations) $
12.2 $
0.7 $
1.3 $
0.8 $
15.0
Three Months Ended June 30, 2019
Refining (1) Logistics Retail Corporate,
Other and
Eliminations (1) Consolidated
Net revenues (excluding
inter-segment fees and
revenues) $
2,152.5 $
93.1 $
224.5 $
10.2 $
2,480.3
Inter-segment fees and
revenues 215.3 62.2 (277.5)
Operating costs and
expenses:
Cost of materials and
other 2,054.7 93.8 182.1 (262.9) 2,067.7
Operating expenses
(excluding depreciation
and amortization
presented below) 115.0 17.3 24.8 5.2 162.3
Segment contribution
margin $
198.1 $
44.2 $
17.6 $
(9.6) $
250.3
Depreciation and
amortization $
33.2 $
6.7 $
4.2 $
6.0 50.1
General and
administrative expenses 69.5
Other operating income,
net (3.6)
Operating income $
134.3
Capital spending
(excluding business
combinations) $
48.9 $
1.3 $
5.4 $
30.4 $
86.0
Delek US Holdings, Inc.
Segment Data (Unaudited)
(In millions)
Six Months Ended June 30, 2020
Refining Logistics Retail Corporate, Other
and Eliminations Consolidated
Net revenues (excluding
inter-segment fees and
revenues) $
2,571.1 $
84.2 $
344.0 $
357.4 $
3,356.7
Inter-segment fees and
revenues 233.8 196.9 (430.7)
Operating costs and
expenses:
Cost of materials and
other 2,835.2 145.2 263.7 (55.7) 3,188.4
Operating expenses
(excluding depreciation
and amortization
presented below) 200.4 27.2 43.7 11.0 282.3
Segment contribution
margin $
(230.7) $
108.7 $
36.6 $
(28.6) $
(114.0)
Depreciation and
amortization $
82.0 $
15.0 $
6.2 $
9.0 112.2
General and
administrative expenses 127.4
Other operating income,
net (14.9)
Operating loss $
(338.7)
Capital spending
(excluding business
combinations) $
180.3 $
3.7 $
7.5 $
11.8 $
203.3
Six Months Ended June 30, 2019
Refining (1) Logistics Retail Corporate, Other
and E
liminations (1) Consolidated
Net revenues (excluding
inter-segment fees and
revenues) $
4,059.9 $
182.9 $
421.7 $
15.7 $
4,680.2
Inter-segment fees and
revenues 399.9 124.9 (524.8)
Operating costs and
expenses:
Cost of materials and
other 3,723.8 190.1 345.5 (492.3) 3,767.1
Operating expenses
(excluding depreciation
and amortization
presented below) 236.0 33.4 48.4 11.2 329.0
Segment contribution
margin $
500.0 $
84.3 $
27.8 $
(28.0) $
584.1
Depreciation and
amortization $
64.3 $
13.2 $
8.5 10.9 96.9
General and
administrative expenses 131.7
Other operating income,
net (1.2)
Operating income $
356.7
Capital spending
(excluding business
combinations) $
130.5 $
2.2 $
10.5 $
71.1 $
214.3
(1) The refining segment results of
operations for the three and
six months ended June 30, 2019,
includes hedging gains, a
component of cost of materials
and other, of $19.8 million and
$27.4 million, respectively,
which was previously included
and reported in corporate,
other and eliminations.
Delek US Holdings, Inc.
Schedule of Hedging Gains (Losses)
$ in millions
Three Months Ended June 30, 2020
Hedging Gains (Losses)
Included in Segment
Contribution Margin Refining Logistics Retail Corporate, Other and Consolidated
Eliminations
---
Unrealized hedging gain
(loss) $
(9.9) $
(2.3)
$ $
(11.2) $
(23.4)
Realized hedging gain (loss) (137.0) 1.3 1.7 (134.0)
Total hedging gain (loss) $
(146.9) $
(1.0)
$ $
(9.5) $
(157.4)
Delek US Holdings, Inc.
Schedule of Hedging Gains (Losses)
$ in millions
Three Months Ended June 30, 2019
Hedging Gains (Losses)
Included in Segment
Contribution Margin Refining Logistics Retail Corporate, Other and Consolidated
Eliminations
---
Unrealized hedging gain
(loss) $
(6.8) $
0.2
$ $
3.0 $
(3.6)
Realized hedging gain (loss) 32.4 0.2 0.4 33.0
Total hedging gain (loss) $
25.6 $
0.4
$ $
3.4 $
29.4
Delek US Holdings, Inc.
Schedule of Hedging Gains (Losses)
$ in millions
Six Months Ended June 30, 2020
Hedging Gains (Losses)
Included in Segment
Contribution Margin Refining Logistics Retail Corporate, Other and Consolidated
Eliminations
---
Unrealized hedging gain
(loss) $
38.7
$
$ $
(10.1) $
28.6
Realized hedging gain (loss) (105.2) 2.1 (6.9) (110.0)
Total hedging gain (loss) $
(66.5) $
2.1
$ $
(17.0) $
(81.4)
Delek US Holdings, Inc.
Schedule of Hedging Gains (Losses)
$ in millions
Six Months Ended June 30, 2019
Hedging Gains (Losses)
Included in Segment
Contribution Margin Refining Logistics Retail Corporate, Other and Consolidated
Eliminations
---
Unrealized hedging gain
(loss) $
(23.2)
$
$ $
(7.5) $
(30.7)
Realized hedging gain (loss) 67.4 (0.6) 8.4 75.2
Total hedging gain (loss) $
44.2 $
(0.6)
$ $
0.9 $
44.5
Refining Segment Three Months Ended June 30, Six Months Ended June 30,
2020 2019 2020 2019
Tyler, TX Refinery
(Unaudited)
(Unaudited)
---
Days in period 91 91 182 181
Total sales volume -
refined product (average
barrels per day)(1) 69,746 77,657 72,364 73,863
Products manufactured
(average barrels per
day):
Gasoline 37,225 39,997 38,633 39,671
Diesel/Jet 27,897 31,505 27,650 29,455
Petrochemicals, LPG, NGLs 3,216 3,318 2,604 2,690
Other 1,319 1,654 1,281 1,411
Total production 69,657 76,474 70,168 73,227
Throughput (average
barrels per day):
Crude oil 64,408 71,918 65,187 68,219
Other feedstocks 5,848 5,106 5,648 5,785
Total throughput 70,256 77,024 70,835 74,004
Per barrel of refined
product sales:
Tyler refining margin (2) $
32.72 $
12.15 $
4.62 $
16.84
Tyler adjusted refining
margin (2) $
21.24 $
12.12 $
10.32 $
13.98
Operating expenses $
3.00 $
3.65 $
3.38 $
4.15
Crude Slate: (% based on
amount received in
period)
WTI crude oil 94.2 87.7 93.3 89.3
% % % %
East Texas crude oil 5.8 12.3 6.7 10.7
% % % %
El Dorado, AR Refinery
---
Days in period 91 91 182 181
Total sales volume -
refined product (average
barrels per day)(1) 76,059 51,002 76,805 51,717
Products manufactured
(average barrels per
day):
Gasoline 34,346 21,821 35,376 21,159
Diesel 30,060 17,802 28,849 16,633
Petrochemicals, LPG, NGLs 2,063 551 2,062 678
Asphalt 6,049 6,961 6,345 5,899
Other 605 683 788 661
Total production 73,123 47,818 73,420 45,030
Throughput (average
barrels per day):
Crude oil 71,406 47,935 71,514 44,542
Other feedstocks 2,369 359 2,506 1,270
Total throughput 73,775 48,294 74,020 45,812
Per barrel of refined
product sales:
El Dorado refining margin $
3.08 $
8.93 $
(2.74) $
11.21
El Dorado adjusted
refining margin $
(4.29) 8.98 $
(2.74) $
10.84
Operating expenses $
3.53 $
5.93 $
3.98 $
6.31
Crude Slate: (% based on
amount received in
period)
WTI crude oil 51.4 43.9 42.9 42.6
% % % %
Local Arkansas crude oil 14.7 29.0 17.0 28.3
% % % %
Other 33.9 27.1 40.1 29.1
% % % %
Refining Segment Three Months Ended June 30, Six Months Ended June 30,
2020 2019 2020 2019
Big Spring, TX Refinery
(Unaudited)
(Unaudited)
---
Days in period -based on
date acquired 91 91 182 181
Total sales volume -
refined product (average
barrels per day) (1) 70,679 78,158 54,382 79,993
Products manufactured
(average barrels per
day):
Gasoline 35,789 36,428 25,198 37,657
Diesel/Jet 27,924 26,638 18,860 27,494
Petrochemicals, LPG, NGLs 3,563 3,679 2,472 3,763
Asphalt 2,055 1,900 1,452 1,707
Other 1,208 1,354 844 1,296
Total production 70,539 69,999 48,826 71,917
Throughput (average
barrels per day):
Crude oil 70,327 72,965 50,116 72,649
Other feedstocks 1,483 (581) 78 648
Total throughput 71,810 72,384 50,194 73,297
Per barrel of refined
product sales:
Big Spring refining
margin $
7.88 $
13.77 $
0.71 $
16.00
Big Spring adjusted
refining margin $
3.76 $
13.82 $
0.73 $
15.79
Operating expenses $
3.55 $
3.69 $
4.89 $
3.75
Crude Slate: (% based on
amount received in
period)
WTI crude oil 83.9 73.3 75.1 76.3
% % % %
WTS crude oil 16.1 26.7 24.9 23.7
% % % %
Krotz Springs, LA
Refinery
---
Days in period -based on
date acquired 91 91 182 181
Total sales volume -
refined product (average
barrels per day) (1) 61,441 75,283 71,229 76,749
Products manufactured
(average barrels per
day):
Gasoline 17,461 34,498 24,135 36,270
Diesel/Jet 21,742 29,776 26,337 30,082
Heavy oils 215 1,110 473 1,100
Petrochemicals, LPG, NGLs 840 4,264 1,923 5,758
Other 18,871 14,704 52
Total production 59,129 69,648 67,572 73,262
Throughput (average
barrels per day):
Crude oil 59,468 70,162 65,975 71,240
Other feedstocks 1,114 (1,327) 2,104 908
Total throughput 60,582 68,835 68,079 72,148
Per barrel of refined
product sales:
Krotz Springs refining
margin $
(0.64) $
9.69 $
(1.12) $
10.84
Krotz Springs adjusted
refining margin $
(8.12) $
9.72 $
(1.12) $
10.36
Operating expenses $
3.53 $
4.39 $
3.47 $
4.14
Crude Slate: (% based on
amount received in
period)
WTI Crude 69.7 61.0 67.7 62.0
% % % %
Gulf Coast Sweet Crude 30.3 39.0 32.3 38.0
% % % %
(1) Includes inter-refinery sales and
sales to other segments which are
eliminated in consolidation. See
tables below.
(2) Tyler's refining margin per barrel
and the adjusted refining margin
per barrel for the second quarter
2020 both reflect the $111.0
million margin benefit of
favorable fixed price crude cost
transactions during the quarter,
but exclude the offsetting
realized hedging losses of
approximately $(111.0) million.
Giving effect to the related
hedging losses, both the refining
margin per barrel and the adjusted
refining margin per barrel would
have decreased by $(17.49). Such
margin impact was unusually large
because of the historic volatility
in the crude commodities market
during the period.
Included in the refinery statistics above are the following inter-refinery and sales to other segments:
Inter-
refinery
Sales
Three Months Ended June Six Months Ended June
30, 30,
(in
barrels
per day) 2020 2019 2020 2019
---
(Unaudited)
(Unaudited)
Tyler
refined
product
sales to
other
Delek
refineries 2,190 914 1,477 557
El Dorado
refined
product
sales to
other
Delek
refineries 1,074 988 446 1,886
Big Spring
refined
product
sales to
other
Delek
refineries 1,269 653 1,147 903
Krotz
Springs
refined
product
sales to
other
Delek
refineries 197 10,211 245 5,530
Refinery
Sales to
Other
Segments
Three Months Ended June Six Months Ended June
30, 30,
(in barrels
per day) 2020 2019 2020 2019
---
(Unaudited)
(Unaudited)
Tyler refined
product
sales to
other Delek
segments 1,592 24 2,400 281
El Dorado
refined
product
sales to
other Delek
segments 11 58 169 155
Big Spring
refined
product
sales to
other Delek
segments 20,570 25,215 22,841 26,034
Pricing
statistics
(average for
the period
presented)
Three Months Ended June 30, Six Months Ended June 30,
2020 2019 2020 2019
(Unaudited)
(Unaudited)
WTI -Cushing
crude oil (per
barrel) $
29.77 $
59.80 $
37.93 $
57.36
WTI -Midland
crude oil (per
barrel) $
29.77 $
57.56 $
37.90 $
55.65
WTS --Midland
crude oil (per
barrel) (1) $
29.61 $
57.93 $
37.69 $
55.95
LLS (per
barrel) (1) $
31.30 $
67.06 $
39.73 $
64.73
Brent crude oil
(per barrel) $
33.35 $
68.44 $
42.16 $
66.14
U.S. Gulf Coast
5-3-2 crack
spread (per
barrel) (1) $
6.67 $
17.74 $
8.74 $
15.77
U.S. Gulf Coast
3-2-1 crack
spread (per
barrel) (1) $
7.08 $
19.24 $
9.32 $
17.23
U.S. Gulf Coast
2-1-1 crack
spread (per
barrel) (1) $
2.35 $
9.75 $
5.35 $
8.55
U.S. Gulf Coast
Unleaded
Gasoline (per
gallon) $
0.81 $
1.79 $
1.02 $
1.66
Gulf Coast
Ultra low
sulfur diesel
(per gallon) $
0.91 $
1.94 $
1.19 $
1.91
U.S. Gulf Coast
high sulfur
diesel (per
gallon) $
0.73 $
1.80 $
1.04 $
1.78
Natural gas
(per MMBTU) $
1.75 $
2.51 $
1.81 $
2.69
(1) For our Tyler and El Dorado
refineries, we compare our per
barrel refining product margin
to the Gulf Coast 5-3-2 crack
spread consisting of WTI Cushing
crude, U.S. Gulf Coast CBOB and
U.S, Gulf Coast Pipeline No. 2
heating oil (ultra low sulfur
diesel). For our Big Spring
refinery, we compare our per
barrel refined product margin to
the Gulf Coast 3-2-1 crack
spread consisting of WTI Cushing
crude, Gulf Coast 87
Conventional gasoline and Gulf
Coast ultra-low sulfur diesel,
and for our Krotz Springs
refinery, we compare our per
barrel refined product margin to
the Gulf Coast 2-1-1 crack
spread consisting of LLS crude
oil, Gulf Coast 87 Conventional
gasoline and U.S, Gulf Coast
Pipeline No. 2 heating oil (high
sulfur diesel). The Tyler
refinery's crude oil input is
primarily WTI Midland and east
Texas, while the El Dorado
refinery's crude input is
primarily a combination of WTI
Midland, local Arkansas and
other domestic inland crude oil.
The Big Spring refinery's crude
oil input is primarily comprised
of WTS and WTI Midland. The
Krotz Springs refinery's crude
oil input is primarily comprised
of LLS and WTI Midland.
Delek US Holdings, Inc.
Reconciliation of Refining Margin per barrel to Adjusted Refining Margin per barrel (1)
$ in millions, except per share data
Three Months Ended June 30, Six Months Ended June 30,
2020 2019 2020 2019
(Unaudited)
(Unaudited)
Tyler (2)
Reported refining margin,
$ per barrel $
32.72 $
12.15 $
4.62 $
16.84
Adjustments:
---
LCM net inventory
valuation loss (benefit) (11.48) (0.03) 5.70 (2.86)
Adjusted refining margin
$/bbl $
21.24 $
12.12 $
10.32 $
13.98
El Dorado (3)
Reported refining margin,
$ per barrel $
3.08 $
8.93 $
(2.74) $
11.21
Adjustments:
---
LCM net inventory
valuation loss (benefit) (7.37) 0.05 (0.37)
Adjusted refining margin
$/bbl $
(4.29) $
8.98 $
(2.74) $
10.84
Big Spring (4)
Reported refining margin,
$ per barrel $
7.88 $
13.77 $
0.71 $
16.00
Adjustments:
---
LCM net inventory
valuation loss (benefit) (4.12) 0.05 0.02 (0.21)
Adjusted refining margin
$/bbl $
3.76 $
13.82 $
0.73 $
15.79
Krotz Springs (5)
Reported refining margin,
$ per barrel $
(0.64) $
9.69 $
(1.12) $
10.84
Adjustments:
---
LCM net inventory
valuation loss (benefit) (7.48) 0.03 (0.48)
Adjusted refining margin
$/bbl $
(8.12) $
9.72 $
(1.12) $
10.36
(1) Adjusted refining margin per barrel is presented to provide a
measure to evaluate performance excluding inventory
valuation adjustments and other items at the individual
refinery level. Delek US believes that the presentation of
adjusted measures provides useful information to investors
in assessing its results of operations at each refinery.
Because adjusted refining margin per barrel may be defined
differently by other companies in its industry, Delek US'
definition may not be comparable to similarly titled
measures of other companies.
(2) Tyler adjusted refining margins exclude the following items.
Net inventory valuation loss/benefit
-There
was approximately $72.8 million and $0.2 million of
valuation benefit in the second quarter 2020 and 2019,
respectively. There was approximately $75.1 million of
valuation loss and $38.3 million of valuation benefit for
the six months ended June 30, 2020 and 2019, respectively.
These amounts resulted from lower of cost or market
adjustments on LIFO inventory in the respective periods.
Note also that Tyler's refining margin per barrel and the
adjusted refining margin per barrel for the second quarter
2020 both reflect the $111.0 million margin benefit of
favorable fixed price crude cost transactions during the
quarter, but exclude the offsetting realized hedging losses
of approximately $(111.0) million. Giving effect to the
related hedging losses, both the refining margin per barrel
and the adjusted refining margin per barrel would have
decreased by $(17.49). Such margin impact was unusually
large because of the historic volatility in the crude
commodities market during the period.
(3) El Dorado adjusted refining margins exclude the following
items.
Net inventory valuation loss/benefit
-There
was approximately $51.0 million of valuation benefit as
compared to a $0.3 million of valuation loss in the second
quarter 2020 and 2019, respectively. There was a nominal
amount of valuation benefit and $3.4 million of valuation
benefit for the six months ended June 30, 2020 and 2019,
respectively. These amounts resulted from lower of cost or
net realizable value adjustments on FIFO inventory in the
respective periods.
(4) Big Spring adjusted refining margins exclude the following
items.
Net inventory valuation loss/benefit
-There
was approximately $26.5 million of valuation benefit and
$0.4 million of valuation losses in the second quarter 2020
and 2019, respectively. There was approximately $0.2 million
of valuation loss and $3.0 million of valuation benefit for
the six months ended June 30, 2020 and 2019, respectively.
These amounts resulted from lower of cost or net realizable
value adjustments on FIFO inventory in the respective
periods.
(5) Krotz Springs adjusted refining margins exclude the following
items.
Net inventory valuation loss/benefit
-There
was approximately $41.8 million of valuation benefit and
$0.2 million of valuation loss in the second quarter 2020
and 2019, respectively. There was nominal amount of
valuation benefit and $6.7 million of valuation benefit for
the six months ended June 30, 2020 and 2019,
respectively.These amounts resulted from lower of cost or
net realizable value adjustments on FIFO inventory in the
respective periods.
Logistics Segment Three Months Ended June 30, Six Months Ended June 30,
2020 2019 2020 2019
(Unaudited)
(Unaudited)
Pipelines &
Transportation: (average
bpd)
Lion Pipeline System:
Crude pipelines (non-
gathered) 79,066 37,625 75,995 33,179
Refined products
pipelines 56,093 29,893 55,110 26,511
SALA Gathering System 9,447 14,315 13,449 14,798
East Texas Crude
Logistics System 10,275 19,550 12,224 18,835
Wholesale Marketing &
Terminalling:
East Texas -Tyler
Refinery sales volumes
(average bpd) (1) 65,028 71,123 68,839 69,857
West Texas wholesale
marketing throughputs
(average bpd) 9,143 11,404 12,612 12,418
West Texas wholesale
marketing margin per
barrel $
0.64 $
6.25 $
1.96 $
4.84
Big Spring wholesale
marketing throughputs
(average bpd) 76,004 82,964 71,195 85,339
Terminalling throughputs
(average bpd) (2) 138,593 156,922 136,961 154,643
(1) Excludes jet fuel and
petroleum coke.
(2) Consists of terminalling
throughputs at our Tyler, Big
Spring, Big Sandy and Mount
Pleasant, Texas, El Dorado
and North Little Rock,
Arkansas and Memphis and
Nashville, Tennessee
terminals.
Retail Segment Three Months Ended June 30, Six Months Ended June 30,
2020 2019 2020 2019
(Unaudited)
(Unaudited)
Number of stores
(end of period) 253 263 253 263
Average number of
stores 253 277 253 279
Retail fuel sales
(thousands of
gallons) 42,436 53,743 90,376 107,633
Average retail
gallons sold per
average number
of fuel stores
(in thousands) 171 201 365 399
Retail fuel
margin ($ per
gallon) (1) $
0.45 $
0.29 $
0.37 $
0.25
Merchandise sales
(in millions) $
89.4 $
83.3 $
161.1 $
158.6
Merchandise sales
per average
number of stores
(in millions) $
0.4 $
0.3 $
0.6 $
0.6
Merchandise 30.8 31.2 31.1 31.1
margin % % % % %
Same-Store Three Months Ended June
Comparison (2) 30, Six Months Ended June 30,
2020 2019 2020 2019
(Unaudited)
(Unaudited)
Change in same- (19.7) 1.7 (13.9) 3.1
store fuel % %
gallons sold % %
Change in same-
store % %
merchandise % %
sales 13.1 (2.5) 7.6 (0.5)
(1) Retail fuel margin represents
gross margin on fuel sales in
the retail segment, and is
calculated as retail fuel sales
revenue less retail fuel cost
of sales. The retail fuel
margin per gallon calculation
is derived by dividing retail
fuel margin by the total retail
fuel gallons sold for the
period.
(2) Same-store comparisons include
period-over-period increases
or decreases in specified
metrics for stores that were in
service at both the beginning
of the earliest period and the
end of the most recent period
used in the comparison.
Delek US Holdings,
Inc.
Reconciliation of
Amounts Reported
Under U.S. GAAP
$ in millions
Three Months Ended June 30, Six Months Ended June 30,
Reconciliation of Net
Income (Loss)
attributable to Delek
to Adjusted Net
Income (Loss) 2020 2019 2020 2019
---
(Unaudited)
(Unaudited)
Reported net income
(loss) attributable
to Delek $
87.7 $
77.3 $
(226.7) $
226.6
Adjustments
---
Net inventory
valuation (benefit)
loss (203.1) 0.6 75.1 (51.5)
Tax effect of
inventory valuation 47.7 (0.1) (17.7) 12.1
Net after tax
inventory valuation
(benefit) loss (155.4) 0.5 57.4 (39.4)
Unrealized hedging
(gain) loss 23.4 3.6 (28.6) 30.7
Tax effect of
unrealized hedging
(gain) loss (5.3) (0.8) 6.5 (6.9)
Net after tax
unrealized hedging
(gain) loss 18.1 2.8 (22.1) 23.8
Gain from sale of
Bakersfield non-
operating refinery (56.9) (56.9)
Tax effect of gain
from sale of
Bakersfield non-
operating refinery 12.8 12.8
Net after tax effect
of gain from sale of
Bakersfield non-
operating refinery (44.1) (44.1)
Non-operating, pre-
acquisition
litigation contingent
losses and related
legal expenses 6.7 6.7
Tax effect of non-
operating pre-
acquisition
litigation contingent
losses and related
legal expenses (1.5) (1.5)
Net after tax non-
operating pre-
acquisition
litigation contingent
losses and related
legal expenses 5.2 5.2
Retroactive biodiesel
tax credit (1) 11.0 20.7
Tax effect of
retroactive biodiesel
tax credit (0.1) (0.2)
Net after tax
retroactive biodiesel
tax credit 10.9 20.5
Discontinued
operations (income)
loss 1.0 1.0
Tax effect of
discontinued
operations (0.2) (0.2)
Net after tax
discontinued
operations (income)
loss 0.8 0.8
Tax benefit from loss
carryback provided by
CARES Act (2) (16.8) (16.8)
Tax adjustment to
reduce deferred tax
asset valuation
allowance resulting
from Big Springs
Gathering Assets
Acquisition (22.3)
Total after tax
adjustments (198.2) 20.2 (47.9) 10.9
Adjusted net income
(loss) $
(110.5) $
97.5 $
(274.6) $
237.5
(1) An adjustment for the portion of
the retroactive biodiesel tax
credit reenacted in December 2019
that was attributable to 2019 has
been included in the three and six
months ended June 30, 2019 for
comparability.
(2) As a result of the reinstatement of
the tax-loss carryback provisions
under the Coronavirus Aid, Relief,
and Economic Security Act (the
"CARES" Act), we recognized an
additional tax benefit in the
second quarter 2020 from applying
the carryback to periods with a
35% tax rate.
Delek US Holdings,
Inc.
Reconciliation of
Amounts Reported
Under U.S. GAAP
per share data
Three Months Ended June 30, Six Months Ended June 30,
Reconciliation of U.S.
GAAP Income (Loss)
per share to Adjusted
Net Income (Loss) per
share 2020 2019 2020 2019
---
(Unaudited)
(Unaudited)
Reported diluted
income (loss) per
share $
1.18 $
1.00 $
(3.08) $
2.91
Adjustments, after tax
(per share)
(1) (2)
---
Adjustment to convert
reported diluted
income (loss) per
share to basic (in
periods when adjusted
earnings is a loss
but we have GAAP net
income) 0.01
Net inventory
valuation loss
(benefit) (2.11) 0.01 0.78 (0.51)
Unrealized hedging
(gain) loss 0.25 0.04 (0.30) 0.30
Gain from sale of
Bakersfield non-
operating refinery (0.60) (0.60)
Non-operating, pre-
acquisition
litigation contingent
losses and related
legal expenses 0.07 0.07
Retroactive biodiesel
tax credit 0.14 0.26
Discontinued
operations (income)
loss 0.01 0.01
Tax benefit from loss
carryback provided by
CARES Act (0.23) (0.23)
Tax adjustment to
reduce deferred tax
asset valuation
allowance resulting
from Big Springs
Gathering Assets
Acquisition (0.30)
Total adjustments (2.68) 0.27 (0.65) 0.13
Adjusted net income
(loss) per share $
(1.50) $
1.27 $
(3.73) $
3.04
(1) The tax calculation is based on
the appropriate marginal income
tax rate related to each
adjustment and for each
respective time period, which
is applied to the adjusted
items in the calculation of
adjusted net income in all
periods.
(2) For periods of Adjusted net
loss, Adjustments (Adjusting
Items) and Adjusted net loss
per share are presented using
basic weighted average shares
outstanding.
Delek US Holdings,
Inc.
Reconciliation of
Amounts Reported
Under U.S. GAAP
$ in millions
Three Months Ended June 30, Six Months Ended June 30,
Reconciliation of Net
Income (Loss)
attributable to Delek
to Adjusted EBITDA 2020 2019 2020 2019
(Unaudited)
(Unaudited)
Reported net income
(loss) attributable
to Delek $
87.7 $
77.3 $
(226.7) $
226.6
Add:
Interest expense, net 29.3 29.5 63.9 55.7
Income tax (benefit)
expense -continuing
operations (35.9) 24.6 (119.0) 70.4
Depreciation and
amortization 59.6 50.1 112.2 96.9
EBITDA 140.7 181.5 (169.6) 449.6
Adjustments
---
Net inventory
valuation (benefit)
loss (203.1) 0.6 75.1 (51.5)
Unrealized hedging
(gain) loss 23.4 3.6 (28.6) 30.7
Gain from sale of
Bakersfield non-
operating refinery (56.9) (56.9)
Non-operating, pre-
acquisition
litigation contingent
losses and related
legal expenses 6.7 6.7
Retroactive biodiesel
tax credit (1) 11.0 20.7
Discontinued
operations (income)
loss, net of tax 0.8 0.8
Net income
attributable to non-
controlling interest 10.8 6.5 18.2 11.6
Total adjustments (225.8) 29.2 7.8 19.0
Adjusted EBITDA $
(85.1) $
210.7 $
(161.8) $
468.6
(1) The portion of the
retroactive biodiesel tax
credit reenacted in December
2019 that was attributable
to 2019 has been added to
the three and six months
ended June 30, 2019.
Delek US Holdings, Inc.
Reconciliation of Amounts Reported Under U.S. GAAP
$ in millions
Three Months Ended June 30, 2020
Reconciliation of U.S. GAAP Refining Logistics Retail Corporate,
Segment Contribution Margin Other
to Adjusted Segment and
Contribution Margin Eliminations Consolidated
---
Reported segment contribution
margin $
59.7 $
61.4 $
24.3 $
(15.5) $
129.9
Adjustments
---
Net inventory valuation
(benefit) loss (193.7) (2.9) (3.2) (3.3) (203.1)
Unrealized hedging (gain) loss 9.9 2.3 11.2 23.4
Total adjustments $
(183.8) $
(0.6) $
(3.2) $
7.9 $
(179.7)
Adjusted segment contribution
margin $
(124.1) $
60.8 $
21.1 $
(7.6) $
(49.8)
Delek US Holdings, Inc.
Reconciliation of Amounts Reported Under U.S. GAAP
$ in millions
Three Months Ended June 30, 2019
Reconciliation of U.S. GAAP Corporate,
Segment Contribution Margin Other and
to Adjusted Segment Eliminations
Contribution Margin Refining Logistics Retail Consolidated
---
Reported segment contribution
margin $
198.1 $
44.2 $
17.6 $
(9.6) $
250.3
Adjustments
---
Net inventory valuation
(benefit) loss 0.6 0.6
Unrealized hedging (gain) loss 6.8 (0.2) (3.0) 3.6
Retroactive biodiesel tax
credit (1) 11.0 11.0
Total adjustments $
18.4 $
(0.2)
$ $
(3.0) $
15.2
Adjusted segment contribution
margin $
216.5 $
44.0 $
17.6 $
(12.6) $
265.5
Delek US Holdings, Inc.
Reconciliation of Amounts Reported Under U.S. GAAP
$ in millions
Six Months Ended June 30, 2020
Reconciliation of U.S. GAAP Corporate,
Segment Contribution Margin Other and
to Adjusted Segment Eliminations
Contribution Margin Refining Logistics Retail Consolidated
---
Reported segment contribution
margin $
(230.7) $
108.7 $
36.6 $
(28.6) $
(114.0)
Adjustments
---
Net inventory valuation
(benefit) loss 75.3 (0.1) (0.1) 75.1
Unrealized hedging (gain) loss (38.7) 10.1 (28.6)
Total adjustments $
36.6 $
(0.1)
$ $
10.0 $
46.5
Adjusted segment contribution
margin $
(194.1) $
108.6 $
36.6 $
(18.6) $
(67.5)
Delek US Holdings, Inc.
Reconciliation of Amounts Reported Under U.S. GAAP
$ in millions
Six Months Ended June 30, 2019
Reconciliation of U.S. GAAP Corporate,
Segment Contribution Margin Other and
to Adjusted Segment Eliminations
Contribution Margin Refining Logistics Retail Consolidated
---
Reported segment contribution
margin $
500.0 $
84.3 $
27.8 $
(28.0) $
584.1
Adjustments
---
Net inventory valuation
(benefit) loss (51.4) (0.1) (51.5)
Unrealized hedging (gain) loss 23.2 7.5 30.7
Retroactive biodiesel tax
credit (1) 20.7 20.7
Total adjustments $
(7.5) $
(0.1)
$ $
7.5 $
(0.1)
Adjusted segment contribution
margin $
492.5 $
84.2 $
27.8 $
(20.5) $
584.0
(1) An adjustment for the portion of
the retroactive biodiesel tax
credit reenacted in December 2019
that was attributable to 2019 has
been included in the three and six
months ended June 30, 2019 for
comparability.
Three Months Ended June 30, Six Months Ended June 30,
Reconciliation of
Refining Segment
Gross Margin to
Refining Margin 2020 2019 2020 2019
---
(Unaudited)
(Unaudited)
Net revenues $
1,077.0 $
2,367.8 $
2,804.9 $
4,459.8
Cost of sales 1,062.1 2,202.9 3,117.6 4,024.1
Gross margin 14.9 164.9 (312.7) 435.7
Add back (items
included in cost of
sales):
Operating expenses
(excluding
depreciation and
amortization) 88.7 115.0 200.4 236.0
Depreciation and
amortization 44.8 33.2 82.0 64.3
Refining margin $
148.4 $
313.1 $
(30.3) $
736.0
Information about Delek US Holdings, Inc. can be found on its website (www.delekus.com), investor relations webpage (ir.delekus.com), news webpage (www.delekus.com/news) and its Twitter account (@DelekUSHoldings).
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SOURCE Delek US Holdings, Inc.
