Delek US Holdings, Inc. (NYSE: DK) (“Delek US”) today announced
financial results for its first quarter ended March 31, 2019.
Delek US reported first quarter 2019 net income of $149.3 million,
or $1.90 per diluted share, versus a net loss of $(40.4) million,
or $(0.49) per basic share, for the quarter ended March 31,
2018. On an adjusted basis, Delek US reported adjusted net income
of $121.2 million, or $1.54 per diluted share for the first quarter
2019. This compares to adjusted net income of $21.5 million, or
$0.26 per diluted share, in the prior-year period. Adjusted
earnings before interest, taxes, depreciation and amortization
("Adjusted EBITDA") was $237.5 million compared to Adjusted EBITDA
of $104.9 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.
Quarterly results improved year-over-year
primarily due to better performance in the refining segment. The
refining segment contribution margin increased to $294.3 million in
the first quarter 2019, compared to $133.2 million in the
prior-year period. The improved results in refining benefited from
a more favorable Midland-Brent crude oil price differential, lower
RINs expense and an active inventory management strategy during a
period of rising prices. Included in our reported and adjusted
results on a pre-tax basis in the first quarter 2019, was
approximately $61.0 million of inventory valuation benefit
excluding the effect of a lower of cost or market gain. Reported
and adjusted results in the period also included a pre-tax expense
of approximately $9.0 million related to an asset disposal and
emission allowance cost in the refining segment. In the prior year
period, refining results included a benefit of approximately $115.5
million related to a combination of the 2017 RINs waivers and a
biodiesel tax credit, while the first quarter of 2019 did not
realize any benefit from either RINs waivers or a biodiesel tax
credit.
Uzi Yemin, Chairman, President and Chief
Executive Officer of Delek US, stated, "This was a great start to
2019. Performance benefited from our WTI-linked crude slate through
the widening of the Midland-Brent crude oil differential and solid
commercial execution as market conditions improved. The capture
rates in our refining operations have continued to improve as
sustainable commercial initiatives have been implemented by our
team. These initiatives should benefit us going forward, along with
a wider Midland-Brent crude oil differential that has averaged
$11.60 per barrel so far in the second quarter. Our commitment to
return cash to shareholders continued in the first quarter as $67
million was returned through dividends and share repurchases. We
expect to repurchase $60 million of our stock in the second quarter
and announced an increase in our dividend for the first quarter
2019. Through our repurchase program, we have reduced our weighted
average share count by 13 percent since the peak in the second
quarter 2018."
Mr. Yemin continued, "We remain focused on
developing our midstream operations. During the first quarter, we
exited the proposed PGC Partnership allowing us to explore more
favorable options to participate in one of the announced long haul
crude oil pipelines. The Big Spring Gathering System continues to
develop which, when combined with our potential participation in a
long haul pipeline, should support our target to achieve $350 to
$370 million of EBITDA from our midstream operations by 2023."
Alkylation Project Completed
The alkylation unit at the Krotz Springs
refinery was completed in early April providing additional
flexibility to the refinery. The total cost was approximately
$138.0 million. This project is expected to generate an annualized
incremental net income of approximately $33.2 million and
incremental EBITDA of approximately $50.0 million based on current
market prices. This unit should improve the ability to convert low
value products into gasoline, enable the refinery to produce
multiple summer gasoline grades and increase octane, allowing the
refinery to produce premium gasoline. Because of the conversion
improvement at the refinery from this project, its returns are
expected to be less dependent on the crack spread environment over
time.
Regular Quarterly Dividend and Share
RepurchaseDelek US announced today its Board of Directors
declared a regular quarterly cash dividend of $0.28 per share. This
represents a 3.7 percent increase from our previous regular
quarterly dividend. Shareholders of record on May 20, 2019
will receive this cash dividend payable on June 3, 2019.
Based on settlement dates during the first
quarter 2019, Delek US repurchased approximately 1.3 million shares
of Delek US common stock for approximately $46.2 million, with an
average price of $35.73 per share. At March 31, 2019, there
was approximately $363.6 million of total available authorization
remaining to repurchase shares. Based on settlement date,
approximately $3.8 million of repurchases were completed in early
April as part of the first quarter 2019 program. Delek US expects
additional repurchases of approximately $60.0 million of Delek US
common stock during the second quarter 2019.
LiquidityAs of March 31,
2019, Delek US had a cash balance of $989.7 million and total
consolidated debt of $1,761.1 million, resulting in net debt of
$771.4 million. As of March 31, 2019, Delek US' subsidiary,
Delek Logistics Partners, LP ("Delek Logistics"), had $705.2
million of total debt and $5.4 million of cash, which is included
in the consolidated amounts on Delek US' balance sheet. Excluding
Delek Logistics, Delek US had approximately $984.3 million in cash
and $1,055.9 million of debt, or a $71.6 million net debt
position.
Refining SegmentRefining
segment contribution margin was $294.3 million in the first quarter
2019 compared to $133.2 million in the first quarter 2018. On a
year-over-year basis, results benefited from a wider discount for
the Midland to Brent differential, lower RINs expense and a higher
crack spread. In addition, as discussed earlier, results in the
first quarter 2019 benefited from a rising price environment during
the period. Performance at the Krotz Springs, Louisiana refinery
continued to improve as it benefited from a crude slate with
increased amounts of Midland crude oil and better net-backs as a
result of lower RINs prices. The first quarter 2018 results
included a benefit from RINs waivers and a biodiesel tax credit
that were not present in the first quarter 2019. The Gulf Coast
5-3-2 crack spread increased to $13.02 per barrel for the first
quarter 2019, compared to $11.53 per barrel for the same period in
2018.
Results during the first quarter 2019 include a
Midland to Cushing market differential during the period that was
higher than the average market differential due to an inventory
timing effect. The estimated realized Midland to Cushing
differential included in reported results was approximately $4.26
per barrel during the first quarter 2019, taking into consideration
this inventory timing effect. During the El Dorado refinery
turnaround, our refining system continued to process all of our
available Midland crude oil.
During the first quarter 2019, the Midland WTI
crude oil differential to Brent crude oil was an average discount
of $10.13 per barrel compared to $4.70 per barrel in the prior-year
period. The Midland WTI crude oil differential to Cushing WTI was
an average discount of $3.86 per barrel in first quarter 2019
compared to an average premium of $0.37 per barrel in the first
quarter 2018. Contango in the oil futures market was $0.36 per
barrel in the first quarter 2019, compared to backwardation of
$0.12 per barrel in the first quarter 2018.
During the first quarter 2019, the Environmental
Protection Agency did not finalize its decision related to small
refinery exemption from the requirements of the renewable fuel
standard for the 2018 calendar year. In the first quarter 2018, the
El Dorado, Arkansas and Krotz Springs, Louisiana refineries
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 resulted in
approximately $59.3 million of RINs expense reduction at El Dorado
and $31.6 million at Krotz Springs for the first quarter 2018.
The U.S. Congress did not approve a biodiesel
blenders tax credit during the first quarter 2019. In the first
quarter 2018, approximately $24.6 million of income was recognized
in the renewables business in the refining segment from a $1 per
gallon biodiesel blenders federal tax credit that was approved in
February 2018 on a retroactive basis for calendar year 2017.
Logistics SegmentThe logistics
segment contribution margin in the first quarter 2019 increased to
$40.1 million compared to $36.3 million in the first quarter 2018.
The primary factor that increased contribution margin was a benefit
from the drop down of the Big Spring refinery logistics assets that
was effective March 1, 2018, which was partially offset by a lower
gross margin in west Texas wholesale marketing.
Retail SegmentFor the first
quarter 2019, contribution margin was $10.2 million compared to
$11.9 million in the prior year period for the retail segment.
Merchandise sales were approximately $75.3 million with an average
retail margin of 31.0% in the first quarter 2019, compared to
merchandise sales of approximately $80.5 million with an average
retail margin of 30.2% in the prior year period. Approximately 53.9
million retail fuel gallons were sold at an average margin of $0.19
per gallon in the first quarter 2019 compared to 53.7 million
retail fuel gallons sold at an average margin of $0.19 per gallon
in the first quarter 2018. On a same store sales basis in the first
quarter 2019, merchandise sales increased 0.8% and fuel gallons
sold increased 4.1% compared to the prior-year period.
Corporate/Other
SegmentContribution margin from the Corporate/Other
segment was a loss of $10.8 million in the first quarter 2019
compared to a loss of $29.1 million in the prior-year period. The
net hedging gain included in this segment in the first quarter 2019
was $8.8 million compared to a net hedging loss of $17.8 million in
the prior-year period.
First Quarter 2019 Results | Conference
Call InformationDelek US will hold a conference call to
discuss its first quarter 2019 results on Monday, May 6, 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 August 6, 2019 by dialing (855)
859-2056, passcode 6275616. 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) first quarter 2019 earnings conference call
that will be held on Monday, May 6, 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 percent
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 281 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;
execution of our midstream growth initiatives, including the Big
Spring Gathering System and the long-haul crude oil pipeline; 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 to obtain commitments and construct a long-haul
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 they 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) |
|
|
|
|
|
|
March 31, 2019 |
|
December 31, 2018 |
ASSETS |
|
|
|
|
Current assets: |
|
|
|
|
Cash and cash
equivalents |
|
$ |
989.7 |
|
|
$ |
1,079.3 |
|
Accounts
receivable, net |
|
780.2 |
|
|
514.4 |
|
Accounts
receivable from related parties |
|
— |
|
|
— |
|
Inventories, net of inventory valuation reserves |
|
905.8 |
|
|
690.9 |
|
Other
current assets |
|
85.0 |
|
|
135.7 |
|
Total
current assets |
|
2,760.7 |
|
|
2,420.3 |
|
Property, plant and
equipment: |
|
|
|
|
Property,
plant and equipment |
|
3,121.4 |
|
|
2,999.6 |
|
Less:
accumulated depreciation |
|
(849.1 |
) |
|
(804.7 |
) |
Property,
plant and equipment, net |
|
2,272.3 |
|
|
2,194.9 |
|
Operating lease
right-of-use assets |
|
198.3 |
|
|
— |
|
Goodwill |
|
857.8 |
|
|
857.8 |
|
Other intangibles,
net |
|
94.9 |
|
|
104.4 |
|
Equity method
investments |
|
135.0 |
|
|
130.3 |
|
Other non-current
assets |
|
52.8 |
|
|
52.9 |
|
Total
assets |
|
$ |
6,371.8 |
|
|
$ |
5,760.6 |
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS’ EQUITY |
|
|
|
|
Current
liabilities: |
|
|
|
|
Accounts
payable |
|
$ |
1,232.8 |
|
|
$ |
1,009.7 |
|
Accounts
payable to related parties |
|
1.3 |
|
|
1.5 |
|
Current
portion of long-term debt |
|
32.0 |
|
|
32.0 |
|
Obligation under Supply and Offtake Agreements |
|
158.9 |
|
|
312.6 |
|
Current
portion of operating lease liabilities |
|
43.3 |
|
|
— |
|
Accrued
expenses and other current liabilities |
|
392.6 |
|
|
307.7 |
|
Total
current liabilities |
|
1,860.9 |
|
|
1,663.5 |
|
Non-current
liabilities: |
|
|
|
|
Long-term
debt, net of current portion |
|
1,729.1 |
|
|
1,751.3 |
|
Obligation under Supply and Offtake Agreements |
|
225.9 |
|
|
49.6 |
|
Environmental liabilities, net of current portion |
|
139.5 |
|
|
139.5 |
|
Asset
retirement obligations |
|
74.7 |
|
|
75.5 |
|
Deferred
tax liabilities |
|
226.7 |
|
|
210.2 |
|
Operating
lease liabilities, net of current portion |
|
157.5 |
|
|
— |
|
Other
non-current liabilities |
|
59.0 |
|
|
62.9 |
|
Total
non-current liabilities |
|
2,612.4 |
|
|
2,289.0 |
|
Stockholders’
equity: |
|
|
|
|
Common
stock, $0.01 par value, 110,000,000 shares authorized, 90,722,641
shares and 90,478,075 shares issued at March 31, 2019 and December
31, 2018, respectively |
|
0.9 |
|
|
0.9 |
|
Additional paid-in capital |
|
1,135.5 |
|
|
1,135.4 |
|
Accumulated other comprehensive income |
|
39.3 |
|
|
28.6 |
|
Treasury
stock, 13,769,424 shares and 12,477,780 shares, at cost, as of
March 31, 2019 and December 31, 2018, respectively |
|
(560.3 |
) |
|
(514.1 |
) |
Retained
earnings |
|
1,110.1 |
|
|
981.8 |
|
Non-controlling interests in subsidiaries |
|
173.0 |
|
|
175.5 |
|
Total
stockholders’ equity |
|
1,898.5 |
|
|
1,808.1 |
|
Total
liabilities and stockholders’ equity |
|
$ |
6,371.8 |
|
|
$ |
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 March 31, |
|
2019 |
|
2018 (1) (2) |
|
|
|
|
Net revenues |
$ |
2,199.9 |
|
|
$ |
2,353.2 |
|
Cost of sales: |
|
|
|
Cost of
materials and other |
1,699.4 |
|
|
2,042.8 |
|
Operating
expenses (excluding depreciation and amortization presented
below) |
140.9 |
|
|
132.9 |
|
Depreciation and amortization |
39.3 |
|
|
37.8 |
|
Total
cost of sales |
1,879.6 |
|
|
2,213.5 |
|
Operating
expenses related to retail and wholesale business (excluding
depreciation and amortization presented below) |
25.8 |
|
|
25.2 |
|
General
and administrative expenses |
62.2 |
|
|
65.2 |
|
Depreciation and amortization |
7.5 |
|
|
10.2 |
|
Other
operating expense, net |
2.4 |
|
|
0.3 |
|
Total
operating costs and expenses |
1,977.5 |
|
|
2,314.4 |
|
Operating
income |
222.4 |
|
|
38.8 |
|
Interest expense |
28.7 |
|
|
32.5 |
|
Interest income |
(2.5 |
) |
|
(0.7 |
) |
Income from equity
method investments |
(2.6 |
) |
|
— |
|
Impairment loss on
assets held for sale |
— |
|
|
27.5 |
|
Loss on extinguishment
of debt |
— |
|
|
9.0 |
|
Other income, net |
(1.4 |
) |
|
(0.7 |
) |
Total
non-operating expenses, net |
22.2 |
|
|
67.6 |
|
Income
(loss) from continuing operations before income tax expense
(benefit) |
200.2 |
|
|
(28.8 |
) |
Income tax expense
(benefit) |
45.8 |
|
|
(11.5 |
) |
Income
(loss) from continuing operations, net of tax |
154.4 |
|
|
(17.3 |
) |
Discontinued
operations: |
|
|
|
Loss from
discontinued operations, including gain (loss) on sale of
discontinued operations |
— |
|
|
(10.5 |
) |
Income
tax benefit |
— |
|
|
(2.3 |
) |
Loss from
discontinued operations, net of tax |
— |
|
|
(8.2 |
) |
Net income (loss) |
154.4 |
|
|
(25.5 |
) |
Net income attributed
to non-controlling interests |
5.1 |
|
|
14.9 |
|
Net income (loss)
attributable to Delek |
$ |
149.3 |
|
|
$ |
(40.4 |
) |
|
|
|
|
Basic
income (loss) per share: |
|
|
|
Income
(loss) from continuing operations |
$ |
1.92 |
|
|
$ |
(0.29 |
) |
Loss from
discontinued operations |
— |
|
|
(0.20 |
) |
Total basic income
(loss) per share |
$ |
1.92 |
|
|
$ |
(0.49 |
) |
|
|
|
|
Diluted
income (loss) per share: |
|
|
|
Income
(loss) from continuing operations |
$ |
1.90 |
|
|
$ |
(0.29 |
) |
(Loss)
from discontinued operations |
— |
|
|
(0.20 |
) |
Total diluted income
(loss) per share |
$ |
1.90 |
|
|
$ |
(0.49 |
) |
Weighted average common
shares outstanding: |
|
|
|
Basic |
77,793,278 |
|
|
82,252,405 |
|
Diluted |
78,446,690 |
|
|
82,252,405 |
|
Dividends declared per
common share outstanding |
$ |
0.27 |
|
|
$ |
0.20 |
|
(1) |
Certain
changes to presentation of the prior period statements of income
have been made in order to conform to the current period
presentation, primarily relating to the addition of a subtotal
entitled 'cost of sales' which includes all costs directly
attributable to the generation of the related revenue, as defined
by GAAP, and the retitling of what was previously referred to as
'cost of goods sold' to 'cost of materials and other'. Operating
expenses and depreciation and amortization related to the wholesale
business and the retail business are excluded from cost of sales
because they primarily relate to costs associated with selling the
products. |
|
|
(2) |
Income
tax benefit for the quarter ended March 31, 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 not previously reported in our March
31, 2018 Quarterly Report on Form 10-Q filed on May 10, 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 filed on March 1, 2019 for
further discussion. |
Delek US
Holdings, Inc. |
|
|
|
|
Condensed Cash
Flow Data (Unaudited) |
|
|
|
|
(In
millions) |
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, |
|
|
2019 |
|
2018 |
Cash flows from
operating activities: |
|
|
|
|
Cash provided by (used
in) operating activities - continuing operations |
|
$ |
133.4 |
|
|
$ |
(175.1 |
) |
Cash used
in operating activities - discontinued operations |
|
— |
|
|
(15.6 |
) |
Net cash
provided by (used in) operating activities |
|
133.4 |
|
|
(190.7 |
) |
Cash flows from
investing activities: |
|
|
|
|
Cash used
in investing activities - continuing operations |
|
(127.0 |
) |
|
(32.1 |
) |
Cash
provided by investing activities - discontinued operations |
|
— |
|
|
5.5 |
|
Net cash
used in investing activities |
|
(127.0 |
) |
|
(26.6 |
) |
Cash flows from
financing activities: |
|
|
|
|
Cash
(used in) provided by financing activities - continuing
operations |
|
(96.0 |
) |
|
293.4 |
|
Cash
provided by (used in) financing activities - discontinued
operations |
|
— |
|
|
— |
|
Net cash
(used in) provided by financing activities |
|
(96.0 |
) |
|
293.4 |
|
Net (decrease) increase
in cash and cash equivalents |
|
(89.6 |
) |
|
76.1 |
|
Cash and cash
equivalents at the beginning of the period |
|
1,079.3 |
|
|
941.9 |
|
Cash and cash
equivalents at the end of the period |
|
989.7 |
|
|
1,018.0 |
|
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 |
|
$ |
989.7 |
|
|
$ |
1,018.0 |
|
Delek US
Holdings, Inc. |
|
|
|
|
|
|
|
|
|
|
Segment Data
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
(In
millions) |
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31,
2019 |
|
|
Refining |
|
Logistics |
|
Retail |
|
Corporate, Other and Eliminations |
|
Consolidated |
Net revenues (excluding
intercompany fees and sales) |
|
$ |
1,907.4 |
|
|
$ |
89.6 |
|
|
$ |
197.2 |
|
|
$ |
5.7 |
|
|
$ |
2,199.9 |
|
Intercompany fees and sales |
|
184.6 |
|
|
62.9 |
|
|
— |
|
|
(247.5 |
) |
|
— |
|
Operating
costs and expenses: |
|
|
|
|
|
|
|
|
|
|
Cost of
materials and other |
|
1,676.7 |
|
|
96.3 |
|
|
163.4 |
|
|
(237.0 |
) |
|
1,699.4 |
|
Operating
expenses (excluding depreciation and amortization presented
below) |
|
121.0 |
|
|
16.1 |
|
|
23.6 |
|
|
6.0 |
|
|
166.7 |
|
Segment
contribution margin |
|
$ |
294.3 |
|
|
$ |
40.1 |
|
|
$ |
10.2 |
|
|
$ |
(10.8 |
) |
|
$ |
333.8 |
|
Depreciation and amortization |
|
31.1 |
|
|
6.5 |
|
|
4.3 |
|
|
4.9 |
|
|
46.8 |
|
General
and administrative expenses |
|
|
|
|
|
|
|
|
|
62.2 |
|
Other
operating expense, net |
|
|
|
|
|
|
|
|
|
2.4 |
|
Operating
income |
|
|
|
|
|
|
|
|
|
$ |
222.4 |
|
Total assets |
|
$ |
6,607.2 |
|
|
$ |
640.2 |
|
|
$ |
339.0 |
|
|
$ |
(1,214.6 |
) |
|
$ |
6,371.8 |
|
Capital spending
(excluding business combinations) |
|
$ |
81.7 |
|
|
$ |
0.9 |
|
|
$ |
5.1 |
|
|
$ |
40.7 |
|
|
$ |
128.4 |
|
|
|
Three Months Ended March 31,
2018 |
|
|
Refining |
|
Logistics |
|
Retail |
|
Corporate, Other and Eliminations |
|
Consolidated |
Net revenues (excluding
intercompany fees and sales) |
|
$ |
1,942.8 |
|
|
$ |
106.3 |
|
|
$ |
209.6 |
|
|
$ |
94.5 |
|
|
$ |
2,353.2 |
|
Intercompany fees and sales |
|
183.1 |
|
|
61.6 |
|
|
— |
|
|
(244.7 |
) |
|
— |
|
Operating
costs and expenses: |
|
|
|
|
|
|
|
|
|
|
Cost of
materials and other |
|
1,878.0 |
|
|
119.0 |
|
|
173.2 |
|
|
(127.4 |
) |
|
2,042.8 |
|
Operating
expenses (excluding depreciation and amortization presented
below) |
|
114.7 |
|
|
12.6 |
|
|
24.5 |
|
|
6.3 |
|
|
158.1 |
|
Segment
contribution margin |
|
$ |
133.2 |
|
|
$ |
36.3 |
|
|
$ |
11.9 |
|
|
$ |
(29.1 |
) |
|
152.3 |
|
Depreciation and amortization |
|
32.2 |
|
|
6.0 |
|
|
6.9 |
|
|
2.9 |
|
|
48.0 |
|
General
and administrative expenses |
|
|
|
|
|
|
|
|
|
65.2 |
|
Other
operating expense, net |
|
|
|
|
|
|
|
|
|
0.3 |
|
Operating income |
|
|
|
|
|
|
|
|
|
$ |
38.8 |
|
Total assets (1) |
|
$ |
5,565.8 |
|
|
$ |
665.9 |
|
|
$ |
325.9 |
|
|
$ |
(472.9 |
) |
|
$ |
6,084.7 |
|
Capital spending
(excluding business combinations) (2) |
|
$ |
51.5 |
|
|
$ |
2.2 |
|
|
$ |
2.0 |
|
|
$ |
14.4 |
|
|
$ |
70.1 |
|
(1) |
Assets held
for sale of $120.7 million are included in the corporate, other and
eliminations segment as of March 31, 2018. |
|
|
(2) |
Capital
spending excludes transaction costs capitalized in the amount of
$0.4 million during the three months ended March 31, 2018,
that relate to the Big Spring Logistic Assets Acquisition. |
Refining
Segment |
Three Months Ended March 31, |
|
2019 |
|
2018 |
Tyler, TX
Refinery |
(Unaudited) |
Days in period |
90 |
|
|
90 |
|
Total sales volume -
refined (average barrels per day)(1) |
70,028 |
|
|
73,984 |
|
Products manufactured
(average barrels per day): |
|
|
|
Gasoline |
39,341 |
|
|
40,670 |
|
Diesel/Jet |
27,383 |
|
|
27,622 |
|
Petrochemicals, LPG, NGLs |
2,056 |
|
|
2,077 |
|
Other |
1,166 |
|
|
1,770 |
|
Total
production |
69,946 |
|
|
72,139 |
|
Throughput (average
barrels per day): |
|
|
|
Crude
oil |
64,479 |
|
|
65,282 |
|
Other
feedstocks |
6,471 |
|
|
7,180 |
|
Total
throughput |
70,950 |
|
|
72,462 |
|
Per barrel of
sales: |
|
|
|
Tyler refining
margin |
$ |
22.26 |
|
|
$ |
8.33 |
|
Tyler
adjusted refining margin |
$ |
16.22 |
|
|
$ |
5.95 |
|
Direct
operating expenses |
$ |
4.70 |
|
|
$ |
3.42 |
|
Crude Slate: (% based
on amount received in period) |
|
|
|
WTI crude
oil |
89.6 |
% |
|
80.6 |
% |
East
Texas crude oil |
9.1 |
% |
|
16.9 |
% |
Other |
1.3 |
% |
|
2.5 |
% |
|
|
|
|
El Dorado, AR
Refinery |
|
|
|
Days in period |
90 |
|
|
90 |
|
Total sales volume -
refined (average barrels per day)(2) |
52,440 |
|
|
70,590 |
|
Products manufactured
(average barrels per day): |
|
|
|
Gasoline |
20,490 |
|
|
35,087 |
|
Diesel |
15,451 |
|
|
26,295 |
|
Petrochemicals, LPG, NGLs |
806 |
|
|
1,466 |
|
Asphalt |
4,825 |
|
|
5,132 |
|
Other |
639 |
|
|
838 |
|
Total
production |
42,211 |
|
|
68,818 |
|
Throughput (average
barrels per day): |
|
|
|
Crude
oil |
41,112 |
|
|
68,432 |
|
Other
feedstocks |
2,192 |
|
|
1,778 |
|
Total
throughput |
43,304 |
|
|
70,210 |
|
Per barrel of
sales: |
|
|
|
El Dorado
refining margin |
$ |
13.45 |
|
|
$ |
13.09 |
|
El Dorado
adjusted refining margin |
$ |
12.67 |
|
|
2.81 |
|
Direct
operating expenses |
$ |
6.69 |
|
|
$ |
5.16 |
|
Crude Slate: (% based
on amount received in period) |
|
|
|
WTI crude
oil |
41.3 |
% |
|
62.2 |
% |
Local
Arkansas crude oil |
27.7 |
% |
|
20.4 |
% |
Other |
31.0 |
% |
|
17.4 |
% |
Refining
Segment |
|
Three Months Ended March 31, |
|
|
2019 |
|
2018 |
Big Spring, TX
Refinery |
|
(Unaudited) |
Days in period - based
on date acquired |
|
90 |
|
|
90 |
|
Total sales volume -
refined (average barrels per day) (3) |
|
81,849 |
|
|
62,773 |
|
Products manufactured
(average barrels per day): |
|
|
|
|
Gasoline |
|
38,900 |
|
|
31,127 |
|
Diesel/Jet |
|
28,359 |
|
|
19,037 |
|
Petrochemicals, LPG, NGLs |
|
3,848 |
|
|
3,024 |
|
Asphalt |
|
1,512 |
|
|
1,856 |
|
Other |
|
1,237 |
|
|
1,112 |
|
Total
production |
|
73,856 |
|
|
56,156 |
|
Throughput (average
barrels per day): |
|
|
|
|
Crude
oil |
|
72,329 |
|
|
53,759 |
|
Other
feedstocks |
|
1,890 |
|
|
1,843 |
|
Total
throughput |
|
74,219 |
|
|
55,602 |
|
Per barrel of
sales: |
|
|
|
|
Big Spring refining
margin |
|
$ |
18.16 |
|
|
$ |
9.58 |
|
Big
Spring adjusted refining margin |
|
17.71 |
|
|
$ |
9.63 |
|
Direct
operating expenses |
|
$ |
3.81 |
|
|
$ |
5.22 |
|
Crude Slate: (% based
on amount received in period) |
|
|
|
|
WTI crude
oil |
|
79.5 |
% |
|
70.1 |
% |
WTS crude
oil |
|
20.5 |
% |
|
29.9 |
% |
|
|
|
|
|
Krotz Springs,
LA Refinery |
|
|
|
|
Days in period - based
on date acquired |
|
90 |
|
|
90 |
|
Total sales volume -
refined (average barrels per day) (4) |
|
78,231 |
|
|
79,898 |
|
Products manufactured
(average barrels per day): |
|
|
|
|
Gasoline |
|
38,062 |
|
|
39,071 |
|
Diesel/Jet |
|
30,391 |
|
|
31,054 |
|
Heavy
oils |
|
1,090 |
|
|
1,339 |
|
Petrochemicals, LPG, NGLs |
|
7,269 |
|
|
7,752 |
|
Other |
|
105 |
|
|
— |
|
Total
production |
|
76,917 |
|
|
79,216 |
|
Throughput (average
barrels per day): |
|
|
|
|
Crude
oil |
|
72,330 |
|
|
73,883 |
|
Other
feedstocks |
|
3,166 |
|
|
3,830 |
|
Total
throughput |
|
75,496 |
|
|
77,713 |
|
Per barrel of
sales: |
|
|
|
|
Krotz
Springs refining margin |
|
$ |
11.95 |
|
|
$ |
6.92 |
|
Krotz
Springs adjusted refining margin |
|
10.97 |
|
|
$ |
2.52 |
|
Direct
operating expenses |
|
$ |
3.89 |
|
|
$ |
3.56 |
|
Crude Slate: (% based
on amount received in period) |
|
|
|
|
WTI
Crude |
|
65.0 |
% |
|
59.4 |
% |
Gulf
Coast Sweet Crude |
|
35.0 |
% |
|
40.6 |
% |
Pricing
statistics |
|
|
(average for
the period presented) |
|
|
|
|
|
|
Three Months Ended March 31, |
|
|
2019 |
|
2018 |
|
|
(Unaudited) |
|
|
|
|
|
WTI — Cushing crude oil
(per barrel) |
|
$ |
54.87 |
|
|
$ |
62.89 |
|
WTI — Midland crude oil
(per barrel) |
|
$ |
53.70 |
|
|
$ |
62.51 |
|
WTS -- Midland crude
oil (per barrel) (5) |
|
$ |
53.93 |
|
|
$ |
61.46 |
|
LLS crude oil (per
barrel) (5) |
|
$ |
62.36 |
|
|
$ |
65.82 |
|
Brent crude oil (per
barrel) |
|
$ |
63.83 |
|
|
$ |
67.21 |
|
|
|
|
|
|
US Gulf Coast 5-3-2
crack spread (per barrel) (5) |
|
$ |
13.02 |
|
|
$ |
11.53 |
|
US Gulf Coast 3-2-1
crack spread (per barrel) (5) |
|
$ |
15.18 |
|
|
$ |
15.31 |
|
US Gulf Coast 2-1-1
crack spread (per barrel) (5) |
|
$ |
7.33 |
|
|
$ |
9.72 |
|
|
|
|
|
|
US Gulf Coast Unleaded
Gasoline (per gallon) |
|
$ |
1.52 |
|
|
$ |
1.77 |
|
Gulf Coast Ultra low
sulfur diesel (per gallon) |
|
$ |
1.88 |
|
|
$ |
1.93 |
|
US Gulf Coast high
sulfur diesel (per gallon) |
|
$ |
1.75 |
|
|
$ |
1.77 |
|
Natural gas (per
MMBTU) |
|
$ |
2.87 |
|
|
$ |
2.85 |
|
(1) |
Total
sales volume includes 101 bpd and 132 bpd sold to the El Dorado
refinery, 96 bpd and 490 bpd sold to the Big Spring refinery, no
bpd and 238 bpd sold to the Krotz Springs refinery and 540 bpd and
1,575 bpd sold to the logistics segment during the three months
ended March 31, 2019 and 2018, respectively. Total sales
volume excludes 4,578 bpd and 4,475 bpd of wholesale activity
during the three months ended March 31, 2019 and 2018,
respectively. |
|
|
(2) |
Total
sales volume includes 145 bpd and 52 bpd sold to the Tyler
refinery, 41,240 bpd and 4,899 bpd sold to the Krotz Springs
refinery, 221 bpd and 833 bpd sold to the Big Spring refinery, 52
bpd and no bpd sold to logistics segment and 201 bpd and 25 bpd
sold to Alon Asphalt Company during the three months ended
March 31, 2019 and 2018, respectively. Total sales volume
excludes 64,716 bpd and 53,157 bpd of wholesale activity during the
three months ended March 31, 2019 and 2018, respectively. |
|
|
(3) |
Total
sales volume includes 812 bpd and 219 bpd sold to the Tyler
refinery, 484 bpd and no bpd sold to the El Dorado refinery, 14,359
bpd and 14,216 bpd sold to the retail segment, 10,992 bpd and 5,328
bpd sold to the logistics segment and 1,512 bpd and 1,146 bpd sold
to Alon Asphalt Company during the three months ended
March 31, 2019 and 2018, respectively. Total sales volume
excludes 7,480 bpd and 10,303 bpd of wholesale activity during the
three months ended March 31, 2019 and 2018, respectively. |
|
|
(4) |
Sales
volume includes 605 bpd and 18,749 bpd sold to the El Dorado
refinery and 191 bpd and 222 bpd sold to the Tyler refinery during
the three months ended March 31, 2019 and 2018, respectively.
Total sales volume excludes 16,428 bpd and 4,239 bpd of wholesale
activity during the three months ended March 31, 2019 and
2018, respectively. |
|
|
(5) |
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 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. The Big Spring and Krotz Springs refineries were
acquired July 1, 2017 as part of the Delek US/Alon USA Merger, so
Gulf Coast 3-2-1 and 2-1-1 crack spreads, LLS and WTS statistics
are presented only for the period Delek US owned these
refineries. |
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 March 31, |
|
|
2019 |
|
2018 |
|
|
(Unaudited) |
Tyler
(2) |
|
|
|
|
Reported refining
margin, $ per barrel |
|
$ |
22.26 |
|
|
$ |
8.33 |
|
Adjustments: |
|
|
|
|
Net inventory valuation
(benefit) |
|
(6.04 |
) |
|
(0.07 |
) |
Renewable biofuels
credit allocated to refinery |
|
— |
|
|
(2.31 |
) |
|
|
|
|
|
Adjusted refining
margin $/bbl |
|
$ |
16.22 |
|
|
$ |
5.95 |
|
|
El Dorado
(3) |
|
|
|
|
Reported refining
margin, $ per barrel |
|
$ |
13.45 |
|
|
$ |
13.09 |
|
Adjustments: |
|
|
|
|
Net inventory valuation
(benefit) loss |
|
(0.78 |
) |
|
0.01 |
|
RIN waiver |
|
— |
|
|
(9.34 |
) |
Renewable biofuels
credit allocated to refinery |
|
— |
|
|
(0.95 |
) |
|
|
|
|
|
Adjusted refining
margin $/bbl |
|
$ |
12.67 |
|
|
$ |
2.81 |
|
|
|
|
|
|
Big Spring
(4) |
|
|
|
|
Reported refining
margin, $ per barrel |
|
$ |
18.16 |
|
|
$ |
9.58 |
|
Adjustments: |
|
|
|
|
Net inventory valuation
(benefit) loss |
|
(0.45 |
) |
|
0.05 |
|
|
|
|
|
|
Adjusted refining
margin $/bbl |
|
$ |
17.71 |
|
|
$ |
9.63 |
|
|
|
|
|
|
Krotz Springs
(5) |
|
|
|
|
Reported refining
margin, $ per barrel |
|
$ |
11.95 |
|
|
$ |
6.92 |
|
Adjustments: |
|
|
|
|
Net inventory valuation
(benefit) |
|
(0.98 |
) |
|
(0.01 |
) |
RIN waiver |
|
— |
|
|
(4.39 |
) |
|
|
|
|
|
Adjusted refining
margin $/bbl |
|
$ |
10.97 |
|
|
$ |
2.52 |
|
|
|
|
|
|
(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 - There was
approximately $38.1 million and $0.5 million of valuation benefit
in the first quarter 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. |
|
|
(3) |
El
Dorado adjusted refining margins exclude the following items. |
|
Net inventory valuation benefit (loss) - There
were $3.7 million and $(0.1) million of valuation benefit (loss) in
the first quarter 2019 and 2018, respectively. These amounts
resulted from lower of cost or market adjustments on FIFO inventory
in the respective periods.RIN waiver - During the
first quarter 2019, the Environmental Protection Agency did not
finalize its decision related to small refinery exemption from the
requirements of the renewable fuel standard for the 2018 calendar
year. 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 $0.0 million and $6.0 million related to the
biodiesel tax credit that was allocated to El Dorado in the first
quarter 2019 and 2018, respectively, that is included in the
renewables portion of the refining segment. |
|
|
(4) |
Big
Spring adjusted refining margins exclude the following items. |
|
Net
inventory valuation benefit (loss) - There were
approximately $3.3 million and $(0.3) million of valuation benefit
(loss) in the first quarter 2019 and 2018, respectively. These
amounts resulted from lower of cost or market adjustments on FIFO
inventory in the respective period. |
|
|
(5) |
Krotz
Springs adjusted refining margins exclude the following items. |
|
Net inventory valuation (loss) - There were $6.9
million and $0.0 million of valuation benefit in the first quarter
2019 and 2018, respectively. These amounts resulted from lower of
cost or market adjustments on FIFO inventory in the
period.RIN waiver - During the first quarter 2019,
the Environmental Protection Agency did not finalize its decision
related to small refinery exemption from the requirements of the
renewable fuel standard for the 2018 calendar year. 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 March 31, |
|
|
2019 |
|
2018 |
|
|
(Unaudited) |
Pipelines &
Transportation: (average bpd) |
|
|
|
|
Lion
Pipeline System: |
|
|
|
|
Crude
pipelines (non-gathered) |
|
28,683 |
|
|
54,728 |
|
Refined
products pipelines |
|
23,092 |
|
|
49,754 |
|
SALA
Gathering System |
|
16,998 |
|
|
16,672 |
|
East
Texas Crude Logistics System |
|
18,113 |
|
|
18,062 |
|
|
|
|
|
|
Wholesale
Marketing & Terminalling: |
|
|
|
|
East
Texas - Tyler Refinery sales volumes (average bpd) (1) |
|
68,577 |
|
|
73,244 |
|
West
Texas marketing throughputs (average bpd) |
|
13,314 |
|
|
15,942 |
|
West Texas gross margin
per barrel |
|
$ |
3.56 |
|
|
$ |
5.16 |
|
Big
Spring Marketing - Refinery sales volume (average bpd) (for period
owned) (2) |
|
87,741 |
|
|
75,139 |
|
Terminalling throughputs (average bpd) (3) |
|
152,469 |
|
|
143,476 |
|
(1) |
Excludes
jet fuel and petroleum coke. |
|
|
(2) |
Throughputs for the three months ended March 31, 2018 are for
the 31 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 31, 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 31 days we
operated the terminal following its acquisition effective March 31,
2018. Barrels per day are calculated for only the days we operated
each terminal. Total throughput for the three months ended
March 31, 2018 was 11.3 million barrels, which averaged
125,639 barrels per day for the period. |
Retail
Segment |
|
Three Months Ended March 31, |
|
|
2019 |
|
2018 |
|
|
(Unaudited) |
Number of stores (end
of period) |
|
281 |
|
|
298 |
|
Average number of
stores |
|
281 |
|
|
299 |
|
Retail fuel sales
(thousands of gallons) |
|
53,890 |
|
|
53,699 |
|
Average retail gallons
per average number of stores (in thousands) |
|
199 |
|
|
185 |
|
Retail fuel margin ($
per gallon) |
|
$ |
0.19 |
|
|
$ |
0.19 |
|
Merchandise sales (in
millions) |
|
$ |
75.3 |
|
|
$ |
80.5 |
|
Merchandise sales per
average number of stores (in millions) |
|
$ |
0.3 |
|
|
$ |
0.3 |
|
Merchandise margin
% |
|
31.0 |
% |
|
30.2 |
% |
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, 2019 |
|
Change in
same-store fuel gallons sold |
|
4.1 |
% |
Change in
same-store merchandise sales |
|
0.8 |
% |
Delek US
Holdings, Inc. |
|
|
|
|
Reconciliation
of Amounts Reported Under U.S. GAAP |
|
|
|
|
$ in
millions |
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, |
Reconciliation of Net Income (Loss) attributable to Delek
to Adjusted Net Income |
|
2019 |
|
2018 |
|
|
(Unaudited) |
Reported net
income (loss) attributable to Delek |
|
$ |
149.3 |
|
|
$ |
(40.4 |
) |
|
|
|
|
|
Adjustments |
|
|
|
|
Net inventory valuation
(benefit) loss |
|
(52.1 |
) |
|
(0.9 |
) |
Tax effect of inventory
valuation |
|
11.3 |
|
|
0.2 |
|
Net after tax inventory
valuation (benefit) loss |
|
(40.8 |
) |
|
(0.7 |
) |
|
|
|
|
|
Adjusted unrealized
hedging loss |
|
13.4 |
|
|
7.8 |
|
Tax effect of adjusted
unrealized hedging |
|
(3.0 |
) |
|
(1.8 |
) |
Net after tax adjusted
unrealized hedging loss |
|
10.4 |
|
|
6.0 |
|
|
|
|
|
|
Transaction related
expenses |
|
3.0 |
|
|
10.5 |
|
Tax effect of
transaction related expenses |
|
(0.7 |
) |
|
(2.2 |
) |
Net after tax
transaction related expenses |
|
2.3 |
|
|
8.3 |
|
|
|
|
|
|
Tax Cuts and Jobs Act
adjustment (benefit) |
|
— |
|
|
(7.4 |
) |
Tax effect of Tax Cuts
and Jobs Act adjustment |
|
— |
|
|
— |
|
Net after tax Tax Cuts
and Jobs Act adjustment (benefit) |
|
— |
|
|
(7.4 |
) |
|
|
|
|
|
Loss on extinguishment
of debt |
|
— |
|
|
9.0 |
|
Tax effect of loss on
extinguishment of debt |
|
— |
|
|
(2.1 |
) |
Net after tax loss on
extinguishment of debt |
|
— |
|
|
6.9 |
|
|
|
|
|
|
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 |
|
|
|
|
|
|
Discontinued operations
loss |
|
— |
|
|
10.5 |
|
Tax effect of
discontinued operations |
|
— |
|
|
(2.3 |
) |
Net after tax
discontinued operations loss |
|
— |
|
|
8.2 |
|
|
|
|
|
|
Income attributable to
non-controlling interest of discontinued operations |
|
— |
|
|
10.5 |
|
Tax effect of income
attributable to non-controlling interest of discontinued
operations |
|
— |
|
|
(2.4 |
) |
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 |
|
(28.1 |
) |
|
61.9 |
|
|
|
|
|
|
Adjusted net
income |
|
$ |
121.2 |
|
|
$ |
21.5 |
|
|
|
|
|
|
Delek US
Holdings, Inc. |
|
|
|
|
Reconciliation
of Amounts Reported Under U.S. GAAP |
|
|
|
|
per share
data |
|
|
|
|
|
|
Three Months Ended March 31, |
Reconciliation of U.S. GAAP Income (Loss) per share to
Adjusted Net Income per share |
|
2019 |
|
2018 |
|
|
(Unaudited) |
|
|
|
|
|
Reported diluted
income per share |
|
$ |
1.90 |
|
|
$ |
(0.49 |
) |
|
|
|
|
|
Adjustments,
after tax (per share) (1) |
|
|
|
|
Net inventory valuation
gain |
|
(0.52 |
) |
|
(0.01 |
) |
Adjusted unrealized
hedging loss |
|
0.13 |
|
|
0.07 |
|
Transaction related
expenses |
|
0.03 |
|
|
0.10 |
|
Tax Cuts and Jobs Act
adjustment (benefit) |
|
— |
|
|
(0.09 |
) |
Impairment loss on
assets held for sale |
|
— |
|
|
0.33 |
|
Loss on extinguishment
of debt |
|
— |
|
|
0.08 |
|
Discontinued operations
loss |
|
— |
|
|
0.10 |
|
Net income attributable
to non-controlling interest of discontinued operations |
|
— |
|
|
0.10 |
|
Tax adjustment related
to unrealizable deferred taxes created in Big Spring Asset
Acquisition |
|
— |
|
|
0.07 |
|
|
|
|
|
|
Total adjustments |
|
(0.36 |
) |
|
0.75 |
|
Adjusted net
income per share |
|
$ |
1.54 |
|
|
$ |
0.26 |
|
(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. |
Delek US
Holdings, Inc. |
|
|
|
|
Reconciliation
of Amounts Reported Under U.S. GAAP |
|
|
|
|
$ in
millions |
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, |
Reconciliation
of Net Income (Loss) attributable to Delek to Adjusted
EBITDA |
|
2019 |
|
2018 |
|
|
(Unaudited) |
Reported net
income (loss) attributable to Delek |
|
$ |
149.3 |
|
|
$ |
(40.4 |
) |
|
|
|
|
|
Add: |
|
|
|
|
Interest expense,
net |
|
26.2 |
|
|
31.8 |
|
Loss on extinguishment
of debt |
|
— |
|
|
9.0 |
|
Income tax expense
(benefit) - continuing operations |
|
45.8 |
|
|
(11.5 |
) |
Depreciation and
amortization |
|
46.8 |
|
|
48.0 |
|
EBITDA |
|
268.1 |
|
|
36.9 |
|
|
|
|
|
|
Adjustments |
|
|
|
|
Net inventory valuation
(gain) loss |
|
(52.1 |
) |
|
(0.9 |
) |
Adjusted unrealized
hedging loss |
|
13.4 |
|
|
7.8 |
|
Transaction related
expenses |
|
3.0 |
|
|
10.5 |
|
Impairment loss on
assets held for sale |
|
— |
|
|
27.5 |
|
Discontinued operations
loss, net of tax |
|
— |
|
|
8.2 |
|
Net income attributable
to non-controlling interest |
|
5.1 |
|
|
14.9 |
|
Total adjustments |
|
(30.6 |
) |
|
68.0 |
|
Adjusted EBITDA |
|
$ |
237.5 |
|
|
$ |
104.9 |
|
|
|
Three Months Ended March 31, |
Reconciliation of Refining Segment Gross Margin to Refining
Margin |
|
2019 |
|
2018 |
|
(Unaudited) |
Net revenues |
|
$ |
2,092.0 |
|
|
$ |
2,125.9 |
|
Cost of sales |
|
1,828.8 |
|
|
2,024.9 |
|
Gross
margin |
|
263.2 |
|
|
101.0 |
|
Add back (items
included in cost of sales): |
|
|
|
|
Operating expenses
(excluding depreciation and amortization) |
|
121.0 |
|
|
114.7 |
|
Depreciation and
amortization |
|
31.1 |
|
|
32.2 |
|
Refining
margin |
|
$ |
415.3 |
|
|
$ |
247.9 |
|
|
|
Three Months Ended March 31, |
Reconciliation of Unrealized (Gains) Losses on Economic
Hedge Commodity Derivatives Not Designated as Hedges to Adjusted
Unrealized Hedging (Gains) Losses |
|
2019 |
|
2018 |
|
|
(Unaudited) |
Unrealized loss on
economic hedge commodity derivatives not designated as hedges |
|
$ |
27.1 |
|
|
$ |
14.8 |
|
Reversal of prior
period unrealized gain where the instrument has matured but has not
cash settled as of period end |
|
(8.1 |
) |
|
(4.6 |
) |
Removal of portion of
unrealized loss where the instrument has matured but has not cash
settled as of period end |
|
(5.6 |
) |
|
(2.4 |
) |
Adjusted unrealized
hedging loss |
|
$ |
13.4 |
|
|
$ |
7.8 |
|
|
|
|
Reconciliation of Forecast Incremental U.S. GAAP Net Income
(Loss) to Forecast Incremental EBITDA for Alkylation
Project |
|
Annual Forecast |
|
|
|
Forecasted Incremental
Net Income |
|
$ |
33.2 |
|
Add Forecasted
Incremental Amounts for: |
|
|
Interest
Expense, net |
|
— |
|
Income
tax expense |
|
9.9 |
|
Depreciation and amortization |
|
6.9 |
|
Forecasted Incremental
EBITDA |
|
$ |
50.0 |
|
Investor Relations Contact:Keith JohnsonVice
President of Investor Relations615-435-1366
Media/Public Affairs Contact:Michael P.
RalskyVice President - Government Affairs, Public Affairs &
Communications615-435-1407
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