Delek US Holdings, Inc. (NYSE: DK) (“Delek US”) today announced
financial results for its third quarter ended September 30,
2019. Delek US reported third quarter 2019 net income of $51.3
million, or $0.68 per diluted share, versus a net income of $179.8
million, or $2.03 per diluted share, for the quarter ended
September 30, 2018. On an adjusted basis, Delek US
reported adjusted net income of $58.7 million, or $0.78 per diluted
share for the third quarter 2019. This compares to adjusted net
income of $186.4 million, or $2.15 per diluted share, in the
prior-year period. Adjusted earnings before interest, taxes,
depreciation and amortization ("Adjusted EBITDA") was $163.1
million compared to Adjusted EBITDA of $325.5 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 include a net income
benefit of approximately $5.6 million or $0.07 per share. This
consists of a net before tax gain of $20.7 million related to RIN
waivers, partially offset by a refining inventory valuation
headwind of $13.5 million, separate from the effect of a lower of
cost or market loss. The overall decrease in year-over-year results
were primarily driven by a lower crude differential environment
where the realized Midland to Cushing differential declined from
$10.40 per barrel in the third quarter 2018 to $0.94 per barrel in
the third quarter of 2019. The effect from a lower crude oil
differential was partially offset by the alkylation unit at Krotz
Springs that began operating in the second quarter 2019 and an
increase in income from joint ventures.
Uzi Yemin, Chairman, President and Chief
Executive Officer of Delek US, stated, "Cash generation in the
quarter was significant and allowed us to fund an approximate
investment of $75.3 million in the Wink to Webster project and
return cash to shareholders. We continue evaluating project
financing as a funding option for Wink to Webster and, if
successful, we expect limited equity contributions beyond the
investments in the third quarter. Our Big Spring Gathering system
continues expanding, where we now have over 275,000 dedicated
acres. Our gathering system build-out positions us uniquely among
refiners with access to crude, in excess of our refining
capability. The Wink to Webster pipeline compliments this "long
crude position" by providing increased optionality to place barrels
at the most attractive destination points, including the Gulf
Coast."
Mr. Yemin continued, "The macro environment is
moving toward our competitive advantage underpinned by strong
distillate margins. With a design change completed at El Dorado at
the beginning of October, this facility is now positioned to run at
improved utilization rates with enhanced product yield, largely
driven by higher distillate output. Finally, we remain committed to
returning cash to shareholders. Our quarterly dividend is being
increased by 3.5% from the second quarter 2019, marking the sixth
increase since the dividend paid during the first quarter of 2018.
We have continued to repurchase shares, which resulted in a 16%
reduction in our weighted average share count in the third quarter
2019, compared to the peak in the second quarter 2018. As we
continue to balance our capital allocation program between
investing in our business and returning cash to shareholders, we
expect to repurchase approximately $30 million of our common stock
in the fourth quarter 2019."
Regular Quarterly Dividend and Share
RepurchaseDelek US announced today its Board of Directors
declared a regular quarterly cash dividend of $0.30 per share. This
represents a 3.5% increase from our previous regular quarterly
dividend. Shareholders of record on November 18, 2019 will
receive this cash dividend payable on December 2, 2019.
During the third quarter 2019, Delek US
repurchased approximately 1.2 million shares of Delek US common
stock for approximately $43.0 million, with an average price of
$34.76 per share. On a year to date basis, Delek US repurchased
approximately 4.2 million shares for approximately $147.8 million
with an average price of $35.39 per share. At September 30,
2019, there was approximately $261.9 million of total available
authorization remaining to repurchase shares. Delek US expects
additional repurchases of approximately $30.0 million of Delek US
common stock during the fourth quarter 2019.
LiquidityAs of
September 30, 2019, Delek US had a cash balance of $1,006.4
million and total consolidated debt of $1,999.9 million, resulting
in net debt of $993.5 million. As of September 30, 2019,
Delek Logistics Partners, LP (NYSE: DKL) ("Delek Logistics") had
$840.8 million of total debt and $6.4 million of cash, which is
included in the consolidated amounts on Delek US' balance sheet.
Excluding Delek Logistics, Delek US had approximately $1,000.0
million in cash and $1,159.1 million of debt, or a $159.1 million
net debt position.
Refining SegmentRefining
segment contribution margin was $127.5 million in the third quarter
2019 compared to $319.5 million in the third quarter 2018. On a
year-over-year basis, results were negatively impacted by a lower
crude differential environment. Taking into account the timing
effect between the purchase price of Permian Basin crude oil and
when it is realized as finished products are sold, the
Midland-Cushing differential in the reported results was a realized
discount of approximately $0.94 per barrel in the third quarter
2019 compared to a realized discount of approximately $10.40 per
barrel in the prior year period. Contango in the oil futures
market was $0.08 per barrel in the third quarter 2019, compared to
backwardation of $1.27 per barrel in the third quarter 2018.
Third Quarter results were negatively impacted
by planned downtime at El Dorado. A design change was completed on
the vacuum tower at the end of the quarter. The facility is now
positioned to run at higher utilization rates, with potential to
improve the distillate yield over 4%, along with increased
flexibility to run West Texas Sour crude.
In August 2019, the El Dorado, Arkansas, Krotz
Springs, Louisiana and Tyler, Texas refineries received approval
from the Environmental Protection Agency for a small refinery
exemption from the requirements of the renewable fuel standard for
the 2018 calendar year. This waiver resulted in approximately $20.7
million of benefit with $7.4 million of RINs expense reduction at
El Dorado, $4.9 million at Krotz Springs and $8.4 million at
Tyler.
Logistics SegmentThe logistics
segment contribution margin was a record in the third quarter 2019,
with an increase to $46.6 million compared to $43.1 million in the
third quarter 2018. Strong results in the third quarter 2019
benefited from improved performance in the Paline Pipeline and SALA
gathering system, which was partially offset by a lower gross
margin in west Texas.
Retail SegmentFor the third
quarter 2019, contribution margin was $18.6 million compared to
$15.3 million in the prior year period for the retail segment.
Merchandise sales were approximately $81.5 million with an average
retail margin of 30.5% in the third quarter 2019, compared to
merchandise sales of approximately $89.7 million with an average
retail margin of 31.3% in the prior year period. Approximately 54.9
million retail fuel gallons were sold at an average margin of $0.31
per gallon in the third quarter 2019 compared to 56.0 million
retail fuel gallons sold at an average margin of $0.23 per gallon
in the third quarter 2018. In the third quarter 2019, the average
store count was 263 compared to 295 in the prior year period.
On a same store sales basis in the third quarter 2019, merchandise
sales decreased 1.5% and fuel gallons sold increased 3.0% compared
to the prior-year period.
Corporate/OtherContribution
margin from Corporate/Other was $10.6 million in the third quarter
2019 compared to a loss of $17.2 million in the prior-year period.
This year over year increase was driven by a combination of
commercial initiative contributions, including Permian gathering
and asphalt, along with approximately $13 million of unrealized
hedging income, that is adjusted from reported net income.
Third Quarter 2019 Results | Conference
Call InformationDelek US will hold a conference call to
discuss its third quarter 2019 results on Tuesday, November 5, 2019
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, a
telephonic replay will be available through February 5, 2020 by
dialing (855) 859-2056, passcode 4964936. An archived version of
the replay will also be available at www.DelekUS.com for 90
days.
Investors may also wish to listen to Delek
Logistics’ (NYSE: DKL) third quarter 2019 earnings conference call
that will be held on Tuesday, November 5, 2019 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 63% (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 business is the
largest 7-Eleven licensee in the United States and operates
approximately 263 convenience stores in central and west Texas and
New Mexico.
Safe Harbor Provisions Regarding
Forward-Looking StatementsThis 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; 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
through acquisitions and the transactional 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;
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 southern United States; 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 unrealized hedging (gains) losses - calculated as GAAP
unrealized (gains) losses on commodity derivatives that are
economic hedges but not designated as hedging instruments adjusted
to exclude unrealized (gains) losses where the instrument has
matured but where it has not cash settled as of the balance sheet
date. This adjustment more appropriately aligns matured commodity
derivatives gains and losses with the recognition of the related
cost of materials and other. There are no premiums paid or received
at the inception of the derivative contracts, and upon settlement
there is no cost recovery associated with these contracts;
- 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;
- Refining margin - calculated as the difference between total
refining revenues and total cost of materials and other; and
- 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.
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 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) |
|
|
September 30, 2019 |
|
December 31, 2018 |
ASSETS |
|
|
|
|
Current assets: |
|
|
|
|
Cash and cash equivalents |
|
$ |
1,006.4 |
|
|
$ |
1,079.3 |
|
Accounts receivable, net |
|
834.3 |
|
|
514.4 |
|
Inventories, net of inventory valuation reserves |
|
908.6 |
|
|
690.9 |
|
Other current assets |
|
115.1 |
|
|
135.7 |
|
Total current assets |
|
2,864.4 |
|
|
2,420.3 |
|
Property, plant and
equipment: |
|
|
|
|
Property, plant and equipment |
|
3,309.9 |
|
|
2,999.6 |
|
Less: accumulated depreciation |
|
(944.7 |
) |
|
(804.7 |
) |
Property, plant and equipment, net |
|
2,365.2 |
|
|
2,194.9 |
|
Operating lease right-of-use
assets |
|
187.6 |
|
|
— |
|
Goodwill |
|
856.6 |
|
|
857.8 |
|
Other intangibles, net |
|
92.9 |
|
|
104.4 |
|
Equity method investments |
|
360.2 |
|
|
130.3 |
|
Other non-current assets |
|
66.4 |
|
|
52.9 |
|
Total assets |
|
$ |
6,793.3 |
|
|
$ |
5,760.6 |
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS’ EQUITY |
|
|
|
|
Current liabilities: |
|
|
|
|
Accounts payable |
|
$ |
1,364.5 |
|
|
$ |
1,011.2 |
|
Accounts payable to related parties |
|
— |
|
|
— |
|
Current portion of long-term debt |
|
64.5 |
|
|
32.0 |
|
Obligation under Supply and Offtake Agreements |
|
265.0 |
|
|
312.6 |
|
Current portion of operating lease liabilities |
|
45.1 |
|
|
— |
|
Accrued expenses and other current liabilities |
|
487.6 |
|
|
307.7 |
|
Total current liabilities |
|
2,226.7 |
|
|
1,663.5 |
|
Non-current liabilities: |
|
|
|
|
Long-term debt, net of current portion |
|
1,935.4 |
|
|
1,751.3 |
|
Obligation under Supply and Offtake Agreements |
|
143.6 |
|
|
49.6 |
|
Environmental liabilities, net of current portion |
|
139.1 |
|
|
139.5 |
|
Asset retirement obligations |
|
70.3 |
|
|
75.5 |
|
Deferred tax liabilities |
|
232.1 |
|
|
210.2 |
|
Operating lease liabilities, net of current portion |
|
144.2 |
|
|
— |
|
Other non-current liabilities |
|
38.5 |
|
|
62.9 |
|
Total non-current liabilities |
|
2,703.2 |
|
|
2,289.0 |
|
Stockholders’ equity: |
|
|
|
|
Common stock, $0.01 par value, 110,000,000 shares authorized,
90,940,393 shares and 90,478,075 shares issued at September 30,
2019 and December 31, 2018, respectively |
|
0.9 |
|
|
0.9 |
|
Additional paid-in capital |
|
1,146.1 |
|
|
1,135.4 |
|
Accumulated other comprehensive income |
|
10.7 |
|
|
28.6 |
|
Treasury stock, 16,653,356 shares and 12,477,780 shares, at cost,
as of September 30, 2019 and December 31, 2018, respectively |
|
(661.9 |
) |
|
(514.1 |
) |
Retained earnings |
|
1,195.3 |
|
|
981.8 |
|
Non-controlling interests in subsidiaries |
|
172.3 |
|
|
175.5 |
|
Total stockholders’ equity |
|
1,863.4 |
|
|
1,808.1 |
|
Total liabilities and stockholders’ equity |
|
$ |
6,793.3 |
|
|
$ |
5,760.6 |
|
|
Delek US
Holdings, Inc. |
Condensed
Consolidated Statements of Income (Unaudited) (1) |
(In
millions, except share and per share data) |
|
|
Three Months Ended September 30, |
|
Nine Months
Ended September 30, |
|
|
2019 |
|
2018 (1) |
|
2019 |
|
2018 (1),(2) |
|
|
|
|
|
|
|
|
|
Net revenues |
|
$ |
2,334.3 |
|
|
$ |
2,768.9 |
|
|
$ |
7,014.5 |
|
|
$ |
7,759.0 |
|
Cost of sales: |
|
|
|
|
|
|
|
|
Cost of materials and other |
|
1,964.1 |
|
|
2,244.2 |
|
|
5,731.2 |
|
|
6,537.2 |
|
Operating expenses (excluding depreciation and amortization
presented below) |
|
141.7 |
|
|
136.4 |
|
|
418.4 |
|
|
400.7 |
|
Depreciation and amortization |
|
43.8 |
|
|
41.2 |
|
|
125.7 |
|
|
119.3 |
|
Total cost of sales |
|
2,149.6 |
|
|
2,421.8 |
|
|
6,275.3 |
|
|
7,057.2 |
|
Operating expenses related to
retail and wholesale business (excluding depreciation and
amortization presented below) |
|
25.2 |
|
|
27.6 |
|
|
77.5 |
|
|
78.9 |
|
General and administrative
expenses |
|
65.6 |
|
|
58.0 |
|
|
197.3 |
|
|
176.1 |
|
Depreciation and
amortization |
|
6.0 |
|
|
8.0 |
|
|
21.0 |
|
|
27.1 |
|
Other operating expense
(income), net |
|
0.5 |
|
|
(1.7 |
) |
|
(0.7 |
) |
|
(9.4 |
) |
Total operating costs and expenses |
|
2,246.9 |
|
|
2,513.7 |
|
|
6,570.4 |
|
|
7,329.9 |
|
Operating income |
|
87.4 |
|
|
255.2 |
|
|
444.1 |
|
|
429.1 |
|
Interest expense |
|
33.9 |
|
|
31.2 |
|
|
95.4 |
|
|
95.2 |
|
Interest income |
|
(3.2 |
) |
|
(1.4 |
) |
|
(9.0 |
) |
|
(3.0 |
) |
Income from equity method
investments |
|
(16.5 |
) |
|
(4.0 |
) |
|
(28.4 |
) |
|
(6.9 |
) |
Gain on sale of business |
|
— |
|
|
— |
|
|
— |
|
|
(13.2 |
) |
Impairment loss on assets held
for sale |
|
— |
|
|
— |
|
|
— |
|
|
27.5 |
|
Loss on extinguishment of
debt |
|
— |
|
|
0.1 |
|
|
— |
|
|
9.1 |
|
Other (income) expense,
net |
|
(0.2 |
) |
|
(7.5 |
) |
|
3.3 |
|
|
(7.9 |
) |
Total non-operating expenses, net |
|
14.0 |
|
|
18.4 |
|
|
61.3 |
|
|
100.8 |
|
Income from continuing operations before income tax expense |
|
73.4 |
|
|
236.8 |
|
|
382.8 |
|
|
328.3 |
|
Income tax expense |
|
13.4 |
|
|
51.0 |
|
|
83.8 |
|
|
72.3 |
|
Income from continuing operations, net of tax |
|
60.0 |
|
|
185.8 |
|
|
299.0 |
|
|
256.0 |
|
Discontinued operations: |
|
|
|
|
|
|
|
|
Income (loss) from discontinued operations, including gain (loss)
on sale of discontinued operations |
|
— |
|
|
0.8 |
|
|
(1.0 |
) |
|
(10.7 |
) |
Income tax expense (benefit) |
|
— |
|
|
0.3 |
|
|
(0.2 |
) |
|
(2.2 |
) |
Income (loss) from discontinued operations, net of tax |
|
— |
|
|
0.5 |
|
|
(0.8 |
) |
|
(8.5 |
) |
Net income |
|
60.0 |
|
|
186.3 |
|
|
298.2 |
|
|
247.5 |
|
Net income attributed to
non-controlling interests |
|
8.7 |
|
|
6.5 |
|
|
20.3 |
|
|
29.0 |
|
Net income attributable to
Delek |
|
$ |
51.3 |
|
|
$ |
179.8 |
|
|
$ |
277.9 |
|
|
$ |
218.5 |
|
|
|
|
|
|
|
|
|
|
Basic income (loss) per share: |
|
|
|
|
|
|
|
|
Income from continuing operations |
|
$ |
0.68 |
|
|
$ |
2.15 |
|
|
$ |
3.64 |
|
|
$ |
2.82 |
|
Income (loss) from discontinued operations |
|
— |
|
|
0.01 |
|
|
$ |
(0.01 |
) |
|
$ |
(0.20 |
) |
Total basic income per
share |
|
$ |
0.68 |
|
|
$ |
2.16 |
|
|
$ |
3.63 |
|
|
$ |
2.62 |
|
|
|
|
|
|
|
|
|
|
Diluted income (loss) per share: |
|
|
|
|
|
|
|
|
Income from continuing operations |
|
$ |
0.68 |
|
|
$ |
2.02 |
|
|
$ |
3.61 |
|
|
$ |
2.69 |
|
Income (loss) from discontinued operations |
|
— |
|
|
0.01 |
|
|
$ |
(0.01 |
) |
|
$ |
(0.19 |
) |
Total diluted income per
share |
|
$ |
0.68 |
|
|
$ |
2.03 |
|
|
$ |
3.60 |
|
|
$ |
2.50 |
|
Weighted average common shares
outstanding: |
|
|
|
|
|
|
|
|
Basic |
|
75,028,562 |
|
|
83,575,122 |
|
|
76,463,435 |
|
|
83,294,473 |
|
Diluted |
|
75,702,311 |
|
|
89,021,260 |
|
|
77,167,834 |
|
|
88,369,113 |
|
Dividends declared per common
share outstanding |
|
$ |
0.29 |
|
|
$ |
0.25 |
|
|
$ |
0.84 |
|
|
$ |
0.70 |
|
(1) Net revenues and cost of materials and
other for the quarter and nine months ended September 30, 2018
reflect a correction of an intercompany elimination which resulted
in an increase in those accounts of $273.7 million and $347.1
million, respectively, not previously reflected on the unaudited
consolidated financial statements in our September 30, 2018
Quarterly Report on Form 10-Q filed on November 9, 2018. Such
amounts are not considered material to the financial statements and
had no impact to operating income or net income for those periods.
See Note 23 to our annual audited consolidated financial statements
included in Part II, Item 8 of our 2018 Annual Report on Form 10-K
as amended and filed on June 27, 2019, for further discussion.
(2) Income tax benefit for the nine
months ended September 30, 2018 reflects a correction made in
our 2018 Annual Report on Form 10-K (filed on March 1, 2019) to
record additional deferred tax expense totaling $5.5 million
related to the recognition of a valuation allowance on deferred tax
assets recognized in connection with the Big Spring Logistic Assets
Acquisition (see Note 5) not previously reported in our
September 30, 2018 Quarterly Report on Form 10-Q filed on
November 09, 2018. Such amount is not considered material to the
financial statements or the trend of earnings for that period. See
Note 23 to our annual audited consolidated financial statements
included in Part II, Item 8 of our 2018 Annual Report on Form 10-K
as amended and filed on June 27, 2019, for further discussion.
|
Delek US
Holdings, Inc. |
Condensed
Cash Flow Data (Unaudited) |
(In
millions) |
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
|
|
|
|
|
|
Cash flows from
operating activities: |
|
|
|
|
|
Cash provided by operating activities - continuing operations |
$ |
213.0 |
|
|
$ |
352.1 |
|
|
$ |
448.4 |
|
|
$ |
231.3 |
|
Cash used in operating activities - discontinued operations |
— |
|
|
(14.5 |
) |
|
— |
|
|
(30.1 |
) |
Net cash provided by operating activities |
213.0 |
|
|
337.6 |
|
|
448.4 |
|
|
201.2 |
|
Cash flows from
investing activities: |
|
|
|
|
|
|
|
Cash used in investing activities - continuing operations |
(180.1 |
) |
|
(65.5 |
) |
|
(509.5 |
) |
|
(57.2 |
) |
Cash provided by investing activities - discontinued
operations |
— |
|
|
14.5 |
|
|
— |
|
|
20.0 |
|
Net cash used in provided by investing activities |
(180.1 |
) |
|
(51.0 |
) |
|
(509.5 |
) |
|
(37.2 |
) |
Cash flows from
financing activities: |
|
|
|
|
|
|
|
Cash (used in) provided by financing activities - continuing
operations |
22.1 |
|
|
(310.3 |
) |
|
(11.8 |
) |
|
3.2 |
|
Net cash (used in) provided by financing activities |
22.1 |
|
|
(310.3 |
) |
|
(11.8 |
) |
|
3.2 |
|
Net increase (decrease) in
cash and cash equivalents |
55.0 |
|
|
(23.7 |
) |
|
(72.9 |
) |
|
167.2 |
|
Cash and cash equivalents at
the beginning of the period |
951.4 |
|
|
1,132.8 |
|
|
1,079.3 |
|
|
941.9 |
|
Cash and cash equivalents at
the end of the period |
1,006.4 |
|
|
1,109.1 |
|
|
1,006.4 |
|
|
1,109.1 |
|
Less cash and cash equivalents
of discontinued operations at the end of the period |
— |
|
|
— |
|
|
— |
|
|
— |
|
Cash and cash equivalents of
continuing operations at the end of the period |
$ |
1,006.4 |
|
|
$ |
1,109.1 |
|
|
$ |
1,006.4 |
|
|
$ |
1,109.1 |
|
|
|
|
|
|
|
|
|
|
|
|
Delek US Holdings,
Inc. |
|
|
|
|
|
|
|
|
|
|
Segment Data
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
(In
millions) |
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, 2019 |
|
|
Refining |
|
Logistics |
|
Retail |
|
Corporate, Other and Eliminations |
|
Consolidated |
Net revenues (excluding intercompany fees and sales) |
|
$ |
2,036.9 |
|
|
$ |
71.4 |
|
|
$ |
218.5 |
|
|
$ |
7.5 |
|
|
$ |
2,334.3 |
|
Inter-segment fees and revenues |
|
139.9 |
|
|
66.2 |
|
|
— |
|
|
(206.1 |
) |
|
— |
|
Operating costs and expenses: |
|
|
|
|
|
|
|
|
|
|
Cost of materials and other |
|
1,928.6 |
|
|
72.6 |
|
|
176.4 |
|
|
(213.5 |
) |
|
1,964.1 |
|
Operating expenses (excluding depreciation and amortization
presented below) |
|
120.7 |
|
|
18.4 |
|
|
23.5 |
|
|
4.3 |
|
|
166.9 |
|
Segment contribution margin |
|
$ |
127.5 |
|
|
$ |
46.6 |
|
|
$ |
18.6 |
|
|
$ |
10.6 |
|
|
$ |
203.3 |
|
Depreciation and amortization |
|
34.6 |
|
|
6.6 |
|
|
3.0 |
|
|
5.6 |
|
|
49.8 |
|
General and administrative expenses |
|
|
|
|
|
|
|
|
|
65.6 |
|
Other operating income, net |
|
|
|
|
|
|
|
|
|
0.5 |
|
Operating income |
|
|
|
|
|
|
|
|
|
$ |
87.4 |
|
Capital spending (excluding
business combinations) |
|
$ |
63.3 |
|
|
$ |
4.0 |
|
|
$ |
3.8 |
|
|
$ |
39.4 |
|
|
$ |
110.5 |
|
|
|
Three Months Ended September 30, 2018 |
|
|
Refining (1) |
|
Logistics |
|
Retail |
|
Corporate, Other and Eliminations |
|
Consolidated (1) |
Net revenues (excluding intercompany fees and sales) |
|
$ |
2,420.5 |
|
|
$ |
100.3 |
|
|
$ |
246.4 |
|
|
$ |
1.7 |
|
|
$ |
2,768.9 |
|
Intercompany fees and sales |
|
228.8 |
|
|
63.8 |
|
|
— |
|
|
(292.6 |
) |
|
— |
|
Operating costs and expenses: |
|
|
|
|
|
|
|
|
|
|
Cost of materials and other |
|
2,211.0 |
|
|
105.6 |
|
|
204.4 |
|
|
(276.8 |
) |
|
2,244.2 |
|
Operating expenses (excluding depreciation and amortization
presented below) |
|
118.8 |
|
|
15.4 |
|
|
26.7 |
|
|
3.1 |
|
|
164.0 |
|
Segment contribution margin |
|
$ |
319.5 |
|
|
$ |
43.1 |
|
|
$ |
15.3 |
|
|
$ |
(17.2 |
) |
|
$ |
360.7 |
|
Depreciation and amortization |
|
33.8 |
|
|
6.7 |
|
|
5.3 |
|
|
3.4 |
|
|
$ |
49.2 |
|
General and administrative expenses |
|
|
|
|
|
|
|
|
|
58.0 |
|
Other operating income, net |
|
|
|
|
|
|
|
|
|
(1.7 |
) |
Operating income |
|
|
|
|
|
|
|
|
|
$ |
255.2 |
|
Capital spending (excluding
business combinations) |
|
$ |
51.1 |
|
|
$ |
2.9 |
|
|
$ |
1.9 |
|
|
$ |
30.2 |
|
|
$ |
86.1 |
|
|
|
|
|
|
|
|
|
|
|
|
Delek US Holdings,
Inc. |
|
|
|
|
|
|
|
|
|
|
Segment Data
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
(In
millions) |
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended September 30, 2019 |
|
|
Refining |
|
Logistics |
|
Retail |
|
Corporate, Other and Eliminations |
|
Consolidated |
Net revenues (excluding intercompany fees and sales) |
|
$ |
6,096.7 |
|
|
$ |
254.3 |
|
|
$ |
640.2 |
|
|
$ |
23.3 |
|
|
$ |
7,014.5 |
|
Intercompany fees and sales |
|
539.9 |
|
|
191.1 |
|
|
— |
|
|
(731.0 |
) |
|
— |
|
Operating costs and expenses: |
|
|
|
|
|
|
|
|
|
|
Cost of materials and other |
|
5,679.8 |
|
|
262.7 |
|
|
521.9 |
|
|
(733.2 |
) |
|
5,731.2 |
|
Operating expenses (excluding depreciation and amortization
presented below) |
|
356.7 |
|
|
51.8 |
|
|
71.9 |
|
|
15.5 |
|
|
495.9 |
|
Segment contribution margin |
|
$ |
600.1 |
|
|
$ |
130.9 |
|
|
$ |
46.4 |
|
|
$ |
10.0 |
|
|
$ |
787.4 |
|
Depreciation and amortization |
|
98.9 |
|
|
19.8 |
|
|
11.5 |
|
|
16.5 |
|
|
146.7 |
|
General and administrative expenses |
|
|
|
|
|
|
|
|
|
197.3 |
|
Other operating income, net |
|
|
|
|
|
|
|
|
|
(0.7 |
) |
Operating income |
|
|
|
|
|
|
|
|
|
$ |
444.1 |
|
Capital spending (excluding
business combinations) |
|
$ |
193.8 |
|
|
$ |
6.2 |
|
|
$ |
14.3 |
|
|
$ |
110.5 |
|
|
$ |
324.8 |
|
|
|
Nine Months Ended September 30, 2018 |
|
|
Refining (1) |
|
Logistics |
|
Retail |
|
Corporate, Other and Eliminations |
|
Consolidated (1) |
Net revenues (excluding intercompany fees and sales) |
|
$ |
6,678.2 |
|
|
$ |
319.8 |
|
|
$ |
700.8 |
|
|
$ |
60.2 |
|
|
$ |
7,759.0 |
|
Intercompany fees and sales |
|
640.2 |
|
|
178.5 |
|
|
— |
|
|
(818.7 |
) |
|
— |
|
Operating costs and expenses: |
|
|
|
|
|
|
|
|
|
|
Cost of materials and other |
|
6,341.9 |
|
|
330.6 |
|
|
578.5 |
|
|
(713.8 |
) |
|
6,537.2 |
|
Operating expenses (excluding depreciation and amortization
presented below) |
|
346.7 |
|
|
42.9 |
|
|
76.5 |
|
|
13.5 |
|
|
479.6 |
|
Segment contribution margin |
|
$ |
629.8 |
|
|
$ |
124.8 |
|
|
$ |
45.8 |
|
|
$ |
(58.2 |
) |
|
$ |
742.2 |
|
Depreciation and amortization |
|
99.1 |
|
|
19.7 |
|
|
16.8 |
|
|
10.8 |
|
|
146.4 |
|
General and administrative expenses |
|
|
|
|
|
|
|
|
|
176.1 |
|
Other operating income, net |
|
|
|
|
|
|
|
|
|
(9.4 |
) |
Operating Income |
|
|
|
|
|
|
|
|
|
$ |
429.1 |
|
Capital spending (excluding
business combinations) |
|
$ |
136.3 |
|
|
$ |
7.4 |
|
|
$ |
6.0 |
|
|
$ |
61.2 |
|
|
$ |
210.9 |
|
(1) Refining segment and consolidated
net revenues and cost of materials and other for the quarter and
nine months ended September 30, 2018 reflect a correction of
an intercompany elimination which resulted in an increase in those
accounts of $273.7 million and $347.1 million, respectively, not
previously reflected on the unaudited consolidated financial
statements in our September 30, 2018 Quarterly Report on Form 10-Q
filed on November 9, 2018. Such amounts are not considered material
to the financial statements and had no impact to operating income
or segment contribution margin for those periods. See Note 23 to
our annual audited consolidated financial statements included in
Part II, Item 8 of our 2018 Annual Report on Form 10-K, as amended
and filed on June 27, 2019, for further discussion.
|
|
|
|
|
Refining
Segment |
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
|
2019 |
|
2018 |
|
2019 |
|
2018 |
|
|
|
|
|
|
|
|
|
Tyler, TX
Refinery |
|
(Unaudited) |
|
(Unaudited) |
Days in period |
|
92 |
|
|
92 |
|
|
273 |
|
|
273 |
|
Total sales volume - refined
product (average barrels per day)(1) |
|
80,981 |
|
|
79,691 |
|
|
76,262 |
|
|
78,497 |
|
Products manufactured (average
barrels per day): |
|
|
|
|
|
|
|
|
Gasoline |
|
41,480 |
|
|
40,663 |
|
|
40,281 |
|
|
41,417 |
|
Diesel/Jet |
|
33,105 |
|
|
31,659 |
|
|
30,685 |
|
|
30,742 |
|
Petrochemicals, LPG, NGLs |
|
3,992 |
|
|
3,199 |
|
|
3,129 |
|
|
2,722 |
|
Other |
|
1,853 |
|
|
1,646 |
|
|
1,560 |
|
|
1,718 |
|
Total production |
|
80,430 |
|
|
77,167 |
|
|
75,655 |
|
|
76,599 |
|
Throughput (average barrels
per day): |
|
|
|
|
|
|
|
|
Crude oil |
|
75,266 |
|
|
72,845 |
|
|
70,594 |
|
|
71,161 |
|
Other feedstocks |
|
5,565 |
|
|
4,713 |
|
|
5,710 |
|
|
5,867 |
|
Total throughput |
|
80,831 |
|
|
77,558 |
|
|
76,304 |
|
|
77,028 |
|
Per barrel of refined product
sales: |
|
|
|
|
|
|
|
|
Tyler refining margin |
|
$ |
11.96 |
|
|
$ |
19.84 |
|
|
$ |
15.09 |
|
|
$ |
13.47 |
|
Tyler adjusted refining margin |
|
$ |
12.35 |
|
|
$ |
19.84 |
|
|
$ |
13.39 |
|
|
$ |
12.71 |
|
Direct operating expenses |
|
$ |
3.11 |
|
|
$ |
3.57 |
|
|
$ |
3.77 |
|
|
$ |
3.45 |
|
Crude Slate: (% based on
amount received in period) |
|
|
|
|
|
|
|
|
WTI crude oil |
|
94.6 |
% |
|
82.2 |
% |
|
91.3 |
% |
|
80.7 |
% |
East Texas crude oil |
|
2.7 |
% |
|
17.8 |
% |
|
8.0 |
% |
|
18.4 |
% |
Other |
|
2.8 |
% |
|
— |
% |
|
0.7 |
% |
|
0.9 |
% |
|
|
|
|
|
|
|
|
|
El Dorado, AR
Refinery |
|
|
|
|
|
|
|
|
Days in period |
|
92 |
|
|
92 |
|
|
273 |
|
|
273 |
|
Total sales volume - refined
product (average barrels per day)(1) |
|
71,282 |
|
|
76,196 |
|
|
58,310 |
|
|
74,400 |
|
Products manufactured (average
barrels per day): |
|
|
|
|
|
|
|
|
Gasoline |
|
30,766 |
|
|
30,522 |
|
|
24,396 |
|
|
33,948 |
|
Diesel |
|
22,348 |
|
|
24,734 |
|
|
18,559 |
|
|
25,423 |
|
Petrochemicals, LPG, NGLs |
|
834 |
|
|
1,012 |
|
|
731 |
|
|
1,236 |
|
Asphalt |
|
5,886 |
|
|
5,313 |
|
|
5,894 |
|
|
5,036 |
|
Other |
|
713 |
|
|
504 |
|
|
678 |
|
|
708 |
|
Total production |
|
60,547 |
|
|
62,085 |
|
|
50,258 |
|
|
66,351 |
|
Throughput (average barrels
per day): |
|
|
|
|
|
|
|
|
Crude oil |
|
58,362 |
|
|
65,975 |
|
|
49,199 |
|
|
67,688 |
|
Other feedstocks |
|
1,748 |
|
|
(2,197 |
) |
|
1,431 |
|
|
237 |
|
Total throughput |
|
60,110 |
|
|
63,778 |
|
|
50,630 |
|
|
67,925 |
|
Per barrel of refined product
sales: |
|
|
|
|
|
|
|
|
El Dorado refining margin |
|
$ |
4.25 |
|
|
$ |
9.21 |
|
|
$ |
8.34 |
|
|
$ |
8.89 |
|
El Dorado adjusted refining margin |
|
$ |
4.16 |
|
|
9.22 |
|
|
$ |
8.52 |
|
|
$ |
5.67 |
|
Direct operating expenses |
|
$ |
5.27 |
|
|
$ |
4.79 |
|
|
$ |
5.88 |
|
|
$ |
4.92 |
|
Crude Slate: (% based on
amount received in period) |
|
|
|
|
|
|
|
|
WTI crude oil |
|
72.0 |
% |
|
68.3 |
% |
|
53.8 |
% |
|
66.2 |
% |
Local Arkansas crude oil |
|
20.7 |
% |
|
20.2 |
% |
|
25.4 |
% |
|
20.6 |
% |
Other |
|
7.2 |
% |
|
11.5 |
% |
|
20.8 |
% |
|
13.2 |
% |
|
|
|
|
|
Refining
Segment |
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
|
2019 |
|
2018 |
|
2019 |
|
2018 |
|
|
|
|
|
|
|
|
|
Big Spring, TX
Refinery |
|
(Unaudited) |
(Unaudited) |
Days in period - based on date
acquired |
|
92 |
|
|
92 |
|
|
273 |
|
|
273 |
|
Total sales volume - refined
product (average barrels per day) (1) |
|
72,909 |
|
|
78,062 |
|
|
77,712 |
|
|
72,669 |
|
Products manufactured (average
barrels per day): |
|
|
|
|
|
|
|
|
Gasoline |
|
33,561 |
|
|
37,587 |
|
|
36,276 |
|
|
34,931 |
|
Diesel/Jet |
|
28,391 |
|
|
29,177 |
|
|
27,796 |
|
|
25,864 |
|
Petrochemicals, LPG, NGLs |
|
3,755 |
|
|
3,889 |
|
|
3,761 |
|
|
3,585 |
|
Asphalt |
|
2,027 |
|
|
1,713 |
|
|
1,815 |
|
|
1,808 |
|
Other |
|
1,423 |
|
|
1,504 |
|
|
1,339 |
|
|
1,366 |
|
Total production |
|
69,157 |
|
|
73,870 |
|
|
70,987 |
|
|
67,554 |
|
Throughput (average barrels
per day): |
|
|
|
|
|
|
|
|
Crude oil |
|
70,542 |
|
|
72,689 |
|
|
71,939 |
|
|
66,223 |
|
Other feedstocks |
|
(1,282 |
) |
|
828 |
|
|
(3 |
) |
|
947 |
|
Total throughput |
|
69,260 |
|
|
73,517 |
|
|
71,936 |
|
|
67,170 |
|
Per barrel of refined product
sales: |
|
|
|
|
|
|
|
|
Big Spring refining margin |
|
$ |
12.21 |
|
|
$ |
22.20 |
|
|
$ |
14.78 |
|
|
$ |
16.73 |
|
Big Spring adjusted refining margin |
|
$ |
12.46 |
|
|
$ |
22.24 |
|
|
$ |
15.00 |
|
|
$ |
16.76 |
|
Direct operating expenses |
|
$ |
4.50 |
|
|
$ |
3.78 |
|
|
$ |
3.98 |
|
|
$ |
4.12 |
|
Crude Slate: (% based on
amount received in period) |
|
|
|
|
|
|
|
|
WTI crude oil |
|
76.4 |
% |
|
75.4 |
% |
|
76.4 |
% |
|
72.7 |
% |
WTS crude oil |
|
23.6 |
% |
|
24.6 |
% |
|
23.6 |
% |
|
27.3 |
% |
|
|
|
|
|
|
|
|
|
Krotz Springs, LA
Refinery |
|
|
|
|
|
|
|
|
Days in period - based on date
acquired |
|
92 |
|
|
92 |
|
|
273 |
|
|
273 |
|
Total sales volume - refined
product (average barrels per day) (1) |
|
72,173 |
|
|
76,353 |
|
|
75,207 |
|
|
77,667 |
|
Products manufactured (average
barrels per day): |
|
|
|
|
|
|
|
|
Gasoline |
|
34,757 |
|
|
33,103 |
|
|
35,760 |
|
|
36,028 |
|
Diesel/Jet |
|
27,277 |
|
|
30,428 |
|
|
29,137 |
|
|
31,161 |
|
Heavy oils |
|
1,125 |
|
|
1,031 |
|
|
1,108 |
|
|
1,243 |
|
Petrochemicals, LPG, NGLs |
|
3,814 |
|
|
6,531 |
|
|
5,103 |
|
|
7,188 |
|
Other |
|
— |
|
|
— |
|
|
35 |
|
|
— |
|
Total production |
|
66,973 |
|
|
71,093 |
|
|
71,143 |
|
|
75,620 |
|
Throughput (average barrels
per day): |
|
|
|
|
|
|
|
|
Crude oil |
|
69,805 |
|
|
71,746 |
|
|
70,757 |
|
|
73,410 |
|
Other feedstocks |
|
(3,553 |
) |
|
(1,552 |
) |
|
(596 |
) |
|
1,072 |
|
Total throughput |
|
66,252 |
|
|
70,194 |
|
|
70,161 |
|
|
74,482 |
|
Per barrel of refined product
sales: |
|
|
|
|
|
|
|
|
Krotz Springs refining margin |
|
$ |
9.88 |
|
|
$ |
10.41 |
|
|
$ |
10.53 |
|
|
$ |
8.70 |
|
Krotz Springs adjusted refining margin |
|
$ |
9.80 |
|
|
$ |
10.43 |
|
|
$ |
10.82 |
|
|
$ |
7.22 |
|
Direct operating expenses |
|
$ |
4.27 |
|
|
$ |
3.98 |
|
|
$ |
4.18 |
|
|
$ |
3.80 |
|
Crude Slate: (% based on
amount received in period) |
|
|
|
|
|
|
|
|
WTI Crude |
|
78.7 |
% |
|
71.6 |
% |
|
73.9 |
% |
|
62.1 |
% |
Gulf Coast Sweet Crude |
|
21.3 |
% |
|
28.4 |
% |
|
26.1 |
% |
|
37.9 |
% |
(1) Includes inter-refinery sales and sales to other
segments which are eliminated in consolidation. See tables
below.
Included in the refinery statistics above are the following
inter-refinery and sales to other segments:
Inter-refinery
Sales |
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
(in
barrels per day) |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
|
|
(Unaudited) |
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
Tyler refined product sales to other Delek refineries |
|
1,543 |
|
|
975 |
|
|
890 |
|
|
791 |
|
El Dorado refined product
sales to other Delek refineries |
|
39,885 |
|
|
48,071 |
|
|
38,614 |
|
|
29,331 |
|
Big Spring refined product
sales to other Delek refineries |
|
1,754 |
|
|
762 |
|
|
1,190 |
|
|
529 |
|
Krotz Springs refined product
sales to other Delek refineries |
|
15,189 |
|
|
41,123 |
|
|
8,785 |
|
|
33,538 |
|
Refinery Sales to
Other Segments |
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
(in
barrels per day) |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
|
|
(Unaudited) |
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
Tyler refined product sales to other Delek segments |
|
18 |
|
|
— |
|
|
192 |
|
|
608 |
|
El Dorado refined product
sales to other Delek segments |
|
11 |
|
|
217 |
|
|
106 |
|
|
580 |
|
Big Spring refined product
sales to other Delek segments |
|
24,404 |
|
|
17,034 |
|
|
25,735 |
|
|
18,858 |
|
Krotz Springs refined product
sales to other Delek segments |
|
408 |
|
|
— |
|
|
271 |
|
|
— |
|
Pricing
statistics |
|
|
|
|
(average for the
period presented) |
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
|
2019 |
|
2018 |
|
2019 |
|
2018 |
|
|
|
|
|
|
|
|
|
|
|
(Unaudited) |
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
WTI — Cushing crude oil (per barrel) |
|
$ |
56.40 |
|
|
$ |
69.63 |
|
|
$ |
57.03 |
|
|
$ |
66.90 |
|
WTI — Midland crude oil (per
barrel) |
|
$ |
56.12 |
|
|
$ |
55.28 |
|
|
$ |
55.81 |
|
|
$ |
59.21 |
|
WTS -- Midland crude oil (per
barrel) (1) |
|
$ |
55.94 |
|
|
$ |
55.36 |
|
|
$ |
55.95 |
|
|
$ |
58.76 |
|
LLS crude oil (per barrel)
(1) |
|
$ |
60.58 |
|
|
$ |
74.14 |
|
|
$ |
63.32 |
|
|
$ |
71.06 |
|
Brent crude oil (per
barrel) |
|
$ |
62.03 |
|
|
$ |
75.76 |
|
|
$ |
64.73 |
|
|
$ |
72.71 |
|
|
|
|
|
|
|
|
|
|
US Gulf Coast 5-3-2 crack
spread (per barrel) (1) |
|
$ |
14.18 |
|
|
$ |
14.33 |
|
|
$ |
14.25 |
|
|
$ |
13.44 |
|
US Gulf Coast 3-2-1 crack
spread (per barrel) (1) |
|
$ |
17.55 |
|
|
$ |
17.43 |
|
|
$ |
17.34 |
|
|
$ |
17.02 |
|
US Gulf Coast 2-1-1 crack
spread (per barrel) (1) |
|
$ |
12.03 |
|
|
$ |
11.20 |
|
|
$ |
9.73 |
|
|
$ |
10.59 |
|
|
|
|
|
|
|
|
|
|
US Gulf Coast Unleaded
Gasoline (per gallon) |
|
$ |
1.64 |
|
|
$ |
1.98 |
|
|
$ |
1.65 |
|
|
$ |
1.91 |
|
Gulf Coast Ultra low sulfur
diesel (per gallon) |
|
$ |
1.85 |
|
|
$ |
2.14 |
|
|
$ |
1.89 |
|
|
$ |
2.06 |
|
US Gulf Coast high sulfur
diesel (per gallon) |
|
$ |
1.74 |
|
|
$ |
2.03 |
|
|
$ |
1.77 |
|
|
$ |
1.92 |
|
Natural gas (per MMBTU) |
|
$ |
2.33 |
|
|
$ |
2.86 |
|
|
$ |
2.56 |
|
|
$ |
2.85 |
|
(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
(high 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 September 30, |
|
Nine Months Ended September 30, |
|
|
2019 |
|
2018 |
|
2019 |
|
2018 |
|
|
|
|
|
|
|
|
|
|
|
(Unaudited) |
|
(Unaudited) |
Tyler
(2) |
|
|
|
|
|
|
|
|
Reported refining margin, $ per barrel |
|
$ |
11.96 |
|
|
$ |
19.84 |
|
|
$ |
15.09 |
|
|
$ |
13.47 |
|
Adjustments: |
|
|
|
|
|
|
|
|
LCM net inventory valuation
loss (benefit) |
|
1.52 |
|
|
— |
|
|
(1.29 |
) |
|
(0.04 |
) |
RIN waiver |
|
(1.13 |
) |
|
— |
|
|
(0.41 |
) |
|
— |
|
Renewable biofuels credit
allocated to refinery |
|
— |
|
|
— |
|
|
— |
|
|
(0.72 |
) |
|
|
|
|
|
|
|
|
|
Adjusted refining margin
$/bbl |
|
$ |
12.35 |
|
|
$ |
19.84 |
|
|
$ |
13.39 |
|
|
$ |
12.71 |
|
|
El Dorado
(3) |
|
|
|
|
|
|
|
|
Reported refining margin, $
per barrel |
|
$ |
4.25 |
|
|
$ |
9.21 |
|
|
$ |
8.34 |
|
|
$ |
8.89 |
|
Adjustments: |
|
|
|
|
|
|
|
|
LCM net inventory valuation
loss |
|
1.04 |
|
|
0.01 |
|
|
0.64 |
|
|
— |
|
RIN waiver |
|
(1.13 |
) |
|
— |
|
|
(0.46 |
) |
|
(2.92 |
) |
Renewable biofuels credit
allocated to refinery |
|
— |
|
|
— |
|
|
— |
|
|
(0.30 |
) |
|
|
|
|
|
|
|
|
|
Adjusted refining margin
$/bbl |
|
$ |
4.16 |
|
|
$ |
9.22 |
|
|
$ |
8.52 |
|
|
$ |
5.67 |
|
|
|
|
|
|
|
|
|
|
Big Spring
(4) |
|
|
|
|
|
|
|
|
Reported refining margin, $
per barrel |
|
$ |
12.21 |
|
|
$ |
22.20 |
|
|
$ |
14.78 |
|
|
$ |
16.73 |
|
Adjustments: |
|
|
|
|
|
|
|
|
LCM net inventory valuation
loss |
|
0.25 |
|
|
0.04 |
|
|
0.22 |
|
|
0.03 |
|
|
|
|
|
|
|
|
|
|
Adjusted refining margin
$/bbl |
|
$ |
12.46 |
|
|
$ |
22.24 |
|
|
$ |
15.00 |
|
|
$ |
16.76 |
|
|
|
|
|
|
|
|
|
|
Krotz Springs
(5) |
|
|
|
|
|
|
|
|
Reported refining margin, $
per barrel |
|
$ |
9.88 |
|
|
$ |
10.41 |
|
|
$ |
10.53 |
|
|
$ |
8.70 |
|
Adjustments: |
|
|
|
|
|
|
|
|
LCM net inventory valuation
loss |
|
0.65 |
|
|
0.02 |
|
|
0.53 |
|
|
0.01 |
|
RIN waiver |
|
(0.73 |
) |
|
— |
|
|
(0.24 |
) |
|
(1.49 |
) |
|
|
|
|
|
|
|
|
|
Adjusted refining margin
$/bbl |
|
$ |
9.80 |
|
|
$ |
10.43 |
|
|
$ |
10.82 |
|
|
$ |
7.22 |
|
|
|
|
|
|
|
|
|
|
(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 benefit/loss - There was approximately $11.3
million and $0.0 million of valuation loss in the third quarter
2019 and 2018, respectively. There was approximately $26.9 million
and $0.9 million of valuation benefit for the nine months ended
September 30, 2019 and 2018, respectively. These amounts resulted
from lower of cost or market adjustments on LIFO inventory in the
respective periods.
Biodiesel tax
credit allocation - There was approximately $15.4 million
related to the biodiesel tax credit that was allocated to Tyler in
the first quarter of 2018 that is included in the renewables
portion of the refining segment for the nine months ended September
30, 2018.
RIN
waiver - In August 2019, the Tyler,Texas refinery received
approval from the Environmental Protection Agency for a small
refinery exemption from the requirements of the renewable fuel
standard for the 2018 calendar year. This waiver equated to a
benefit of approximately $8.4 million recognized in the third
quarter 2019.
(3) El Dorado adjusted refining margins exclude the
following items.
Net inventory
valuation loss - There were $6.8 million and $0.04 million
of valuation losses in the third quarter 2019 and 2018,
respectively. There was approximately $10.2 million and
$0.08 million of valuation losses for the nine months ended
September 30, 2019 and 2018, respectively. These amounts resulted
from lower of cost or market adjustments on FIFO inventory in the
respective periods.
RIN
waiver - In August 2019, the El Dorado, Arkansas refinery
received approval from the Environmental Protection Agency for a
small refinery exemption from the requirements of the renewable
fuel standard for the 2018 calendar year. This waiver equated to a
benefit of approximately $7.4 million recognized in the third
quarter 2019. In March 2018, the El Dorado refinery received
approval from the Environmental Protection Agency for a small
refinery exemption from the requirements of the renewable fuel
standard for the 2017 calendar year. This waiver equated to a
benefit of approximately $59.3 million recognized in the first
quarter 2018.
Biodiesel tax
credit allocation - There was approximately $6.0 million
related to the biodiesel tax credit that was allocated to El Dorado
in the first quarter of 2018 that is included in the renewables
portion of the refining segment for the nine months ended September
30, 2018.
(4) Big Spring adjusted refining margins exclude the
following items.
Net inventory
valuation loss - There were approximately $1.7 million and
$0.3 million of valuation losses in the third quarter 2019 and
2018, respectively. There was approximately $4.7 million and
$0.5 million of valuation losses for the nine months ended
September 30, 2019 and 2018, respectively. These amounts resulted
from lower of cost or market adjustments on FIFO inventory in the
respective periods.
(5) Krotz Springs adjusted refining margins exclude
the following items.
Net inventory
valuation loss - There were $4.3 million and $0.1 million
of valuation losses in the third quarter 2019 and 2018,
respectively. There was approximately $11.0 million and $0.15
million of valuation losses for the nine months ended September 30,
2019 and 2018, respectively. These amounts resulted from lower of
cost or market adjustments on FIFO inventory in the periods.
RIN
waiver - In August 2019, the Krotz Springs, Louisiana
refinery received approval from the Environmental Protection Agency
for a small refinery exemption from the requirements of the
renewable fuel standard for the 2018 calendar year. This waiver
equated to a benefit of approximately $4.9 million recognized in
the third quarter 2019. In March 2018, the Krotz Springs refinery
received approval from the Environmental Protection Agency for a
small refinery exemption from the requirements of the renewable
fuel standard for the 2017 calendar year. This waiver equated to a
benefit of approximately $31.6 million recognized in the first
quarter 2018.
Logistics
Segment |
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
|
2019 |
|
2018 |
|
2019 |
|
2018 |
|
|
|
|
|
|
|
|
|
|
|
(Unaudited) |
|
(Unaudited) |
Pipelines &
Transportation: (average bpd) |
|
|
|
|
|
|
|
|
Lion Pipeline System: |
|
|
|
|
|
|
|
|
Crude pipelines (non-gathered) |
|
49,477 |
|
|
59,150 |
|
|
43,446 |
|
|
56,672 |
|
Refined products pipelines |
|
43,518 |
|
|
43,762 |
|
|
32,242 |
|
|
47,154 |
|
SALA Gathering System |
|
21,632 |
|
|
16,704 |
|
|
21,143 |
|
|
16,705 |
|
East Texas Crude Logistics System |
|
25,391 |
|
|
14,284 |
|
|
21,045 |
|
|
16,402 |
|
|
|
|
|
|
|
|
|
|
Wholesale Marketing
& Terminalling: |
|
|
|
|
|
|
|
|
East Texas - Tyler Refinery sales volumes (average bpd) (1) |
|
83,953 |
|
|
79,404 |
|
|
74,607 |
|
|
77,349 |
|
West Texas marketing throughputs (average bpd) |
|
9,535 |
|
|
12,197 |
|
|
11,446 |
|
|
13,453 |
|
West Texas gross margin per barrel |
|
$ |
4.82 |
|
|
$ |
4.65 |
|
|
$ |
4.83 |
|
|
$ |
5.88 |
|
Big Spring Marketing - Refinery sales volume (average bpd) (for
period owned) (2) |
|
80,203 |
|
|
80,687 |
|
|
83,608 |
|
|
79,819 |
|
Terminalling throughputs (average bpd) (3) |
|
170,727 |
|
|
167,491 |
|
|
160,621 |
|
|
159,457 |
|
(1) Excludes jet fuel and petroleum
coke.
(2) Throughputs for the nine months
ended September 30, 2018 are for the 214 days we marketed
certain finished products produced at or sold from the Big Spring
Refinery following the execution of the Big Spring Marketing
Agreement, effective March 1, 2018.
(3) Consists of terminalling throughputs
at our Tyler, Big Spring, Big Sandy and Mount Pleasant, Texas, our
El Dorado and North Little Rock, Arkansas and our Memphis and
Nashville, Tennessee terminals. Throughputs for the Big Spring
terminal are for the 214 days we operated the terminal following
its acquisition effective March 1, 2018. Barrels per day are
calculated for only the days we operated each terminal. Total
throughput for the nine months ended September 30, 2018 was
41.4 million barrels, which averaged 151,646 barrels per day for
the period.
|
|
|
|
|
Retail
Segment |
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
|
2019 |
|
2018 |
|
2019 |
|
2018 |
|
|
(Unaudited) |
|
(Unaudited) |
Number of stores (end of
period) |
|
263 |
|
|
295 |
|
|
263 |
|
|
295 |
|
Average number of stores |
|
263 |
|
|
295 |
|
|
263 |
|
|
295 |
|
Retail fuel sales (thousands
of gallons) |
|
54,943 |
|
|
55,996 |
|
|
162,576 |
|
|
163,809 |
|
Average retail gallons per
average number of stores (in thousands) |
|
215 |
|
|
196 |
|
|
638 |
|
|
573 |
|
Retail fuel margin ($ per gallon) (1) |
|
$ |
0.31 |
|
|
$ |
0.23 |
|
|
$ |
0.27 |
|
|
$ |
0.22 |
|
Merchandise sales (in
millions) |
|
$ |
81.5 |
|
|
$ |
89.7 |
|
|
$ |
240.2 |
|
|
$ |
258.0 |
|
Merchandise sales per average
number of stores (in millions) |
|
$ |
0.3 |
|
|
$ |
0.3 |
|
|
$ |
0.9 |
|
|
$ |
0.9 |
|
Merchandise margin % |
|
30.5 |
% |
|
31.3 |
% |
|
30.9 |
% |
|
31.1 |
% |
Change in same-store fuel
gallons sold (2) |
|
3.0 |
% |
|
4.4 |
% |
|
3.1 |
% |
|
— |
% |
Change in same-store
merchandise sales(2) |
|
(1.5 |
)% |
|
3.7 |
% |
|
(1.3 |
)% |
|
— |
% |
(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 September 30, |
|
Nine Months Ended September 30, |
Reconciliation of Net Income (Loss) attributable to Delek
to Adjusted Net Income |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
|
|
|
|
|
|
|
|
|
|
|
(Unaudited) |
|
(Unaudited) |
Reported net income attributable to Delek |
|
$ |
51.3 |
|
|
$ |
179.8 |
|
|
$ |
277.9 |
|
|
$ |
218.5 |
|
|
|
|
|
|
|
|
|
|
Adjustments |
|
|
|
|
|
|
|
|
Net inventory valuation loss
(benefit) |
|
21.4 |
|
|
0.1 |
|
|
(30.1 |
) |
|
(1.8 |
) |
Tax effect of inventory
valuation |
|
(4.6 |
) |
|
— |
|
|
6.5 |
|
|
0.4 |
|
Net after tax inventory
valuation loss (benefit) |
|
16.8 |
|
|
0.1 |
|
|
(23.6 |
) |
|
(1.4 |
) |
|
|
|
|
|
|
|
|
|
Adjusted unrealized hedging
loss (gain) |
|
(12.7 |
) |
|
7.6 |
|
|
9.1 |
|
|
(1.4 |
) |
Tax effect of adjusted
unrealized hedging |
|
2.9 |
|
|
(1.7 |
) |
|
(2.0 |
) |
|
0.3 |
|
Net after tax adjusted
unrealized hedging loss (gain) |
|
(9.8 |
) |
|
5.9 |
|
|
7.1 |
|
|
(1.1 |
) |
|
|
|
|
|
|
|
|
|
Transaction related
expenses |
|
0.5 |
|
|
1.9 |
|
|
4.2 |
|
|
15.1 |
|
Tax effect of transaction
related expenses |
|
(0.1 |
) |
|
(0.4 |
) |
|
(0.9 |
) |
|
(3.2 |
) |
Net after tax transaction
related expenses |
|
0.4 |
|
|
1.5 |
|
|
3.3 |
|
|
11.9 |
|
|
|
|
|
|
|
|
|
|
Tax Cuts and Jobs Act
adjustment |
|
— |
|
|
(0.5 |
) |
|
— |
|
|
2.1 |
|
Net after tax Tax Cuts and
Jobs Act adjustment |
|
— |
|
|
(0.5 |
) |
|
— |
|
|
2.1 |
|
|
|
|
|
|
|
|
|
|
Loss on extinguishment of
debt |
|
— |
|
|
0.1 |
|
|
— |
|
|
9.1 |
|
Tax effect of loss on
extinguishment of debt |
|
— |
|
|
— |
|
|
— |
|
|
(2.1 |
) |
Net after tax loss on
extinguishment of debt |
|
— |
|
|
0.1 |
|
|
— |
|
|
7.0 |
|
|
|
|
|
|
|
|
|
|
Impairment loss on assets held
for sale |
|
— |
|
|
— |
|
|
— |
|
|
27.5 |
|
Tax effect of impairment loss
on assets held for sale |
|
— |
|
|
— |
|
|
— |
|
|
(0.5 |
) |
Net after tax impairment loss
on assets held for sale |
|
— |
|
|
— |
|
|
— |
|
|
27.0 |
|
|
|
|
|
|
|
|
|
|
Gain on sale of the asphalt
business |
|
— |
|
|
— |
|
|
— |
|
|
(13.2 |
) |
Tax effect of gain on sale of
the asphalt business |
|
— |
|
|
— |
|
|
— |
|
|
2.9 |
|
Net after tax gain on sale of
the asphalt business |
|
— |
|
|
— |
|
|
— |
|
|
(10.3 |
) |
|
|
|
|
|
|
|
|
|
Non-operating, pre-acquisition
litigation contingent losses and related legal expenses |
|
— |
|
|
— |
|
|
6.7 |
|
|
— |
|
Tax effect of non-operating
pre-acquisition litigation contingent losses and related legal
expenses |
|
— |
|
|
— |
|
|
(1.5 |
) |
|
— |
|
Net after tax non-operating
pre-acquisition litigation contingent losses and related legal
expenses |
|
— |
|
|
— |
|
|
5.2 |
|
|
— |
|
|
|
|
|
|
|
|
|
|
Discontinued operations
(income) loss |
|
— |
|
|
(0.8 |
) |
|
1.0 |
|
|
10.7 |
|
Tax effect of discontinued
operations |
|
— |
|
|
0.3 |
|
|
(0.2 |
) |
|
(2.2 |
) |
Net after tax discontinued
operations (income) loss |
|
— |
|
|
(0.5 |
) |
|
0.8 |
|
|
8.5 |
|
|
|
|
|
|
|
|
|
|
Income attributable to
non-controlling interest of discontinued operations |
|
— |
|
|
— |
|
|
— |
|
|
(8.1 |
) |
Tax effect of income
attributable to non-controlling interest of discontinued
operations |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
Net after tax income
attributable to non-controlling interest of discontinued
operations |
|
— |
|
|
— |
|
|
— |
|
|
(8.1 |
) |
|
|
|
|
|
|
|
|
|
Tax adjustment related to
unrealizable deferred taxes created in Big Spring Asset
Acquisition |
|
— |
|
|
— |
|
|
— |
|
|
5.5 |
|
|
|
|
|
|
|
|
|
|
Total after tax
adjustments |
|
7.4 |
|
|
6.6 |
|
|
(7.2 |
) |
|
41.1 |
|
|
|
|
|
|
|
|
|
|
Adjusted net
income |
|
$ |
58.7 |
|
|
$ |
186.4 |
|
|
$ |
270.7 |
|
|
$ |
259.6 |
|
|
|
|
|
|
|
|
|
|
Delek US Holdings,
Inc. |
|
|
|
|
|
|
|
|
Reconciliation of
Amounts Reported Under U.S. GAAP |
|
|
|
|
|
|
|
|
per share
data |
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
Reconciliation of U.S. GAAP Income (Loss) per share to
Adjusted Net Income per share |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
|
|
|
|
|
|
|
|
|
|
|
(Unaudited) |
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
Reported diluted income per share |
|
$ |
0.68 |
|
|
$ |
2.03 |
|
|
$ |
3.60 |
|
|
$ |
2.50 |
|
|
|
|
|
|
|
|
|
|
Adjustments,
after tax (per share) (1) |
|
|
|
|
|
|
|
|
Net inventory valuation loss
(gain) |
|
0.22 |
|
|
— |
|
|
(0.31 |
) |
|
(0.02 |
) |
Adjusted unrealized hedging
loss (gain) |
|
(0.13 |
) |
|
0.07 |
|
|
0.09 |
|
|
(0.01 |
) |
Transaction related
expenses |
|
0.01 |
|
|
0.02 |
|
|
0.04 |
|
|
0.13 |
|
Tax Cuts and Jobs Act
adjustment |
|
— |
|
|
(0.01 |
) |
|
— |
|
|
0.02 |
|
Impairment loss on assets held
for sale |
|
— |
|
|
— |
|
|
— |
|
|
0.31 |
|
Gain on sale of the asphalt
business |
|
— |
|
|
— |
|
|
— |
|
|
(0.12 |
) |
Loss on extinguishment of
debt |
|
— |
|
|
— |
|
|
— |
|
|
0.08 |
|
Non-operating, pre-acquisition
litigation contingent losses and related legal expenses |
|
— |
|
|
— |
|
|
0.07 |
|
|
— |
|
Discontinued operations
(income) loss |
|
— |
|
|
(0.01 |
) |
|
0.01 |
|
|
0.10 |
|
Net income attributable to
non-controlling interest of discontinued operations |
|
— |
|
|
— |
|
|
— |
|
|
(0.09 |
) |
Tax adjustment related to
unrealizable deferred taxes created in Big Spring Asset
Acquisition |
|
— |
|
|
— |
|
|
— |
|
|
0.06 |
|
|
|
|
|
|
|
|
|
|
Total adjustments |
|
0.10 |
|
|
0.07 |
|
|
(0.10 |
) |
|
0.46 |
|
Adjustment for economic
benefit of note hedge related to Senior Convertible Notes (2) |
|
— |
|
|
0.05 |
|
|
— |
|
|
0.08 |
|
Adjusted net
income per share |
|
$ |
0.78 |
|
|
$ |
2.15 |
|
|
$ |
3.50 |
|
|
$ |
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) Delek US had a convertible note hedge
transaction in effect to offset the economic dilution of the
additional shares from the Convertible Notes that matured on
September 17, 2018.
|
|
|
|
|
|
|
|
|
Delek US Holdings,
Inc. |
|
|
|
|
|
|
|
|
Reconciliation of
Amounts Reported Under U.S. GAAP |
|
|
|
|
|
|
|
|
$ in
millions |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
Reconciliation of Net
Income attributable to Delek to Adjusted EBITDA |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
|
|
|
|
|
|
|
|
|
|
|
(Unaudited) |
|
(Unaudited) |
Reported net income attributable to Delek |
|
$ |
51.3 |
|
|
$ |
179.8 |
|
|
$ |
277.9 |
|
|
$ |
218.5 |
|
|
|
|
|
|
|
|
|
|
Add: |
|
|
|
|
|
|
|
|
Interest expense, net |
|
30.7 |
|
|
29.8 |
|
|
86.4 |
|
|
92.2 |
|
Loss on extinguishment of
debt |
|
— |
|
|
0.1 |
|
|
— |
|
|
9.1 |
|
Income tax expense -
continuing operations |
|
13.4 |
|
|
51.0 |
|
|
83.8 |
|
|
72.3 |
|
Depreciation and
amortization |
|
49.8 |
|
|
49.2 |
|
|
146.7 |
|
|
146.4 |
|
EBITDA |
|
145.2 |
|
|
309.9 |
|
|
594.8 |
|
|
538.5 |
|
|
|
|
|
|
|
|
|
|
Adjustments |
|
|
|
|
|
|
|
|
Net inventory valuation loss
(gain) |
|
21.4 |
|
|
0.1 |
|
|
(30.1 |
) |
|
(1.8 |
) |
Adjusted unrealized hedging
loss (gain) |
|
(12.7 |
) |
|
7.6 |
|
|
9.1 |
|
|
(1.4 |
) |
Transaction related
expenses |
|
0.5 |
|
|
1.9 |
|
|
4.2 |
|
|
15.1 |
|
Impairment loss on assets held
for sale |
|
— |
|
|
— |
|
|
— |
|
|
27.5 |
|
Gain on sale of the asphalt
business |
|
— |
|
|
— |
|
|
— |
|
|
(13.2 |
) |
Non-operating, pre-acquisition
litigation contingent losses and related legal expenses |
|
— |
|
|
— |
|
|
6.7 |
|
|
— |
|
Discontinued operations
(income) loss, net of tax |
|
— |
|
|
(0.5 |
) |
|
0.8 |
|
|
8.5 |
|
Net income attributable to
non-controlling interest |
|
8.7 |
|
|
6.5 |
|
|
20.3 |
|
|
29.0 |
|
Total adjustments |
|
17.9 |
|
|
15.6 |
|
|
11.0 |
|
|
63.7 |
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA |
|
$ |
163.1 |
|
|
$ |
325.5 |
|
|
$ |
605.8 |
|
|
$ |
602.2 |
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
Reconciliation of Refining Segment Gross Margin to Refining
Margin |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
|
(Unaudited) |
(Unaudited) |
Net revenues |
|
$ |
2,176.8 |
|
|
$ |
2,649.3 |
|
|
$ |
6,636.6 |
|
|
$ |
7,318.4 |
|
Cost of sales |
|
2,083.9 |
|
|
2,363.6 |
|
|
6,135.4 |
|
|
6,787.7 |
|
Gross margin |
|
92.9 |
|
|
285.7 |
|
|
501.2 |
|
|
530.7 |
|
Add back (items included in
cost of sales): |
|
|
|
|
|
|
|
|
Operating expenses (excluding
depreciation and amortization) |
|
120.7 |
|
|
118.8 |
|
|
356.7 |
|
|
346.7 |
|
Depreciation and
amortization |
|
34.6 |
|
|
33.8 |
|
|
98.9 |
|
|
99.1 |
|
Refining margin |
|
$ |
248.2 |
|
|
$ |
438.3 |
|
|
$ |
956.8 |
|
|
$ |
976.5 |
|
Reconciliation of
Unrealized (Gains) Losses on Economic Hedge Commodity Derivatives
Not |
|
Three Months Ended September 30, |
|
Nine Months Ended
September 30, |
Designated as Hedges to Adjusted Unrealized Hedging (Gains)
Losses |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
|
|
|
|
|
|
|
|
|
|
|
(Unaudited) |
(Unaudited) |
Unrealized (gain) loss on economic hedge commodity derivatives not
designated as hedges |
|
$ |
(0.5 |
) |
|
$ |
(13.0 |
) |
|
$ |
30.1 |
|
|
$ |
(2.8 |
) |
Less: Net effect of settlement
timing differences |
|
|
|
|
|
|
|
|
Portion of current period unrealized (gain) loss where the
instrument has matured but has not cash settled as of period
end |
|
13.0 |
|
|
(5.9 |
) |
|
13.0 |
|
|
(5.9 |
) |
Less: Prior period unrealized (gain) loss where the instrument had
matured but had not cash settled as of prior period end |
|
0.8 |
|
|
14.7 |
|
|
(8.1 |
) |
|
(4.6 |
) |
Total net effect of settlement
timing differences |
|
12.2 |
|
|
(20.6 |
) |
|
21.1 |
|
|
(1.3 |
) |
Adjusted unrealized hedging
(gains) losses |
|
$ |
(12.7 |
) |
|
$ |
7.6 |
|
|
$ |
9.0 |
|
|
$ |
(1.5 |
) |
Investor/Media Relations Contacts:Blake
Fernandez, Senior Vice President of Investor Relations and Market
Intelligence, 615-224-1312Jeb Bachmann, Manager of Investor
Relations and Market Intelligence, 615-224-1118Lenny Raymond,
Manager of Investor Relations and Market Intelligence,
615-224-0828
Keith Johnson, Vice President of Investor Relations,
615-435-1366
Media/Public Affairs Contact:Michael P. Ralsky,
Vice President - Government Affairs, Public Affairs &
Communications, 615-435-1407
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