Delek US Holdings, Inc. (NYSE: DK) (“Delek US”) today announced
financial results for its second quarter ended June 30, 2018.
Delek US reported second quarter 2018 net income of $79.1 million,
or $0.89 per diluted share, versus net loss of $(37.9) million, or
$(0.61) per basic share, for the quarter ended June 30,
2017. On an adjusted basis, Delek US reported net income of
$89.0 million, or $1.03 per diluted share for the second quarter
2018. This compares to adjusted net loss of $(25.0) million, or
$(0.40) per basic share, in the prior-year period. Adjusted
earnings before interest, taxes, depreciation and amortization
("Adjusted EBITDA") was $199.1 million compared to Adjusted EBITDA
of $4.2 million in the prior- year period. Reconciliations of net
income (loss) reported under U.S. GAAP to adjusted net income
(loss) and Adjusted EBITDA are included in the financial tables
attached to this release.
During the second quarter 2018, results were
affected by approximately $60.3 million, or $0.52 per share after
tax, of non-cash items which were not included as adjustments in
the adjusted results above. This amount consisted of approximately
$38.5 million, or $0.33 per share after tax, related to an
inventory timing effect between the price of Permian Basin crude
oil when it is purchased and when it is sold and realized as
finished products sales in the gross margin. Results during the
second quarter do not fully reflect the Midland to Cushing
differential as this inventory timing effect was magnified by the
large change in the differential that occurred over a short period
of time. In addition, results were reduced by a charge of
approximately $21.8 million, or $0.19 per share after tax, related
to a mark-to-market of the Renewable Identification Numbers
("RINs") inventory position. The inventory position is the result
of the previously announced waiver received for the El Dorado and
Krotz Springs refineries in March 2018.
Uzi Yemin, Chairman, President and Chief
Executive Officer of Delek US, stated, "We had a great quarter as
our refining system ran at 96 percent utilization and the
system-wide operating expense was below $4.00 per barrel. Also, our
refining margins began to feel the effect of a wider Permian crude
oil differential toward the end of the quarter. Activity in the
Permian Basin remains robust as crude oil production has continued
to increase and there is limited new pipeline takeaway capacity
expected in the near term. This is playing a role in the steep
discount between WTI Cushing and WTI Midland crude oil forecasted
for the remainder of 2018 and into 2019. Based on the forward curve
as of August 6, 2018, the discount is currently trading at an
average of $12.99 per barrel for the third quarter, $17.10 per
barrel for the fourth quarter of 2018 and $6.90 per barrel in 2019.
While we purchase the Midland barrels at the discount in the
market, the realized Midland differential in our reported results
in the second quarter was approximately $3.00 per barrel due to
inventory timing effects. As Permian Basin production increases,
our initiative to gather more crude oil barrels continues to grow,
providing better crude oil quality and lower costs to our refining
operations. With access to approximately 75.0 million barrels
annually of Permian Basin crude oil in our refining system, or
approximately 70 percent of our crude oil slate, we believe Delek
US is well positioned to benefit from this market environment."
Yemin concluded, "The team made further progress
in capturing synergies from the Alon USA acquisition and our
annualized synergy target has been increased to a range of $130.0
million to $140.0 million. Our cash balance at June 30, 2018 was
approximately $1.1 billion and $153.1 million of cash has been
returned to shareholders through a combination of dividends and
share repurchases on a year-to-date basis. We remain focused on
creating long term value for our shareholders as our capital
allocation program balances returning cash to our shareholders,
investing in our business and exploring opportunities to provide
future growth."
Results improved year-over-year primarily due to
better performance in the refining segment. The refining segment
contribution margin was $177.0 million in the second quarter 2018,
compared to a contribution margin of $16.9 million in the
prior-year period. The contribution from the Alon USA refineries
acquired on July 1, 2017, a higher crack spread environment and an
increased Midland WTI to Brent crude oil price discount all were
factors in the year-over-year increase. The logistics segment
contribution margin improved to $45.4 million during the quarter
compared to $31.7 million in the prior-year period, as it benefited
from the drop down of the Big Spring refinery logistics assets that
was effective March 1, 2018, a higher gross margin per barrel in
west Texas and improved performance from the Paline Pipeline.
The retail segment contribution margin was $18.6 million, which
related to the retail business acquired on July 1, 2017 and does
not have comparable prior-year period results.
Synergies UpdateSince the
completion of the Alon USA transaction on July 1, 2017, through the
second quarter 2018, Delek US captured approximately $131.0 million
of annualized synergies. Delek US is now targeting total annualized
synergies within a range of $130.0 million to $140.0 million, which
is an increase from the previous guidance of $115.0 million to
$130.0 million. On an annualized basis, these synergies are
expected to be captured during 2018.
Asset DivestituresIn May 2018,
Delek sold five asphalt terminals located on the West Coast for
$75.0 million, plus working capital. In July 2018, the Long Beach,
California location was sold for approximately $14.9 million.
Including Long Beach, non-core assets have been divested for
approximately $162.0 million so far in 2018. Evaluations are
ongoing for the Bakersfield, California location, which remained a
part of continuing operations in the second quarter 2018.
Regular Quarterly Dividend and Share
RepurchaseDelek US announced today that its Board of
Directors had declared its regular quarterly cash dividend of $0.25
per share. Shareholders of record on August 21, 2018 will
receive this cash dividend payable on September 4, 2018.
During the second quarter 2018, Delek US
repurchased 371,271 shares for approximately $20.0 million, with an
average price of $53.87 per share. For the six months ended
June 30, 2018, Delek US repurchased approximately 2.9 million
shares for approximately $115.3 million, with an average price of
$39.19 per share. At June 30, 2018, there was
approximately $159.7 million of total available authorization
remaining to repurchase shares.
LiquidityAs of June 30,
2018, Delek US had a cash balance of $1.1 billion and total
consolidated debt of $2.0 billion, resulting in net debt of $0.9
billion. As of June 30, 2018, Delek US' subsidiary,
Delek Logistics, had $737.1 million of total debt and $5.2 million
of cash, which is included in the consolidated amounts on Delek US'
balance sheet. Excluding Delek Logistics, Delek US had
approximately $1.1 billion in cash and $1.3 billion of debt, or a
$0.2 billion net debt position.
Refining SegmentRefining
segment contribution margin was $177.0 million in the second
quarter 2018 compared to $16.9 million in the second quarter 2017.
On a year-over-year basis, results benefited from a higher crack
spread environment, wider discount between Midland WTI crude oil
and Brent crude oil and the addition of the Big Spring and Krotz
Springs refineries acquired in the Alon USA transaction that closed
on July 1, 2017. The Gulf Coast 5-3-2 crack spread increased
to $14.37 per barrel for the second quarter 2018, compared to
$10.86 per barrel for the same period in 2017.
During the second quarter 2018, the Midland WTI
crude oil differential to Brent crude oil was an average discount
of $15.03 per barrel compared to $3.48 per barrel in the prior-year
period. The Midland WTI crude oil differential to Cushing WTI was
an average discount of $5.14 per barrel in second quarter 2018
compared to an average discount of $0.83 per barrel in the second
quarter 2017. Backwardation in the oil futures market was
$0.12 per barrel in the second quarter 2018, compared to contango
of $0.54 per barrel in the second quarter 2017.
As discussed above, there was approximately
$38.5 million related to an inventory timing effect between the
price of Permian Basin crude oil when it was purchased and when it
is sold and realized as finished products sales in the gross
margin. Results during the second quarter do not fully reflect the
Midland to Cushing differential as this inventory timing effect was
magnified by the large change in the differential that occurred
over a short period of time. The estimated realized Midland to
Cushing differential in reported results was approximately $3.00
per barrel during the second quarter 2018, taking into
consideration this inventory timing effect.
Logistics SegmentThe logistics
segment contribution margin in the second quarter 2018 increased to
$45.4 million compared to $31.7 million in the second quarter 2017.
The primary factors that increased contribution margin were a
benefit from the drop down of the Big Spring refinery logistics
assets that was effective March 1, 2018, a higher gross margin per
barrel in west Texas and improved performance from the Paline
Pipeline, which were partially offset by higher operating expenses
on a year-over-year basis.
Retail SegmentAs a result of
the Alon USA transaction on July 1, 2017, Delek US acquired
approximately 300 convenience store locations operating primarily
in west Texas and New Mexico. For the second quarter 2018, net
sales for the retail segment were $244.8 million and contribution
margin was $18.6 million. Merchandise sales were approximately
$90.2 million with an average retail margin of 31.7% and
approximately 54.1 million retail fuel gallons were sold at an
average margin of $0.24 per gallon. Operating expenses for the
retail segment were $25.3 million in the second quarter 2018.
Corporate/Other
SegmentContribution margin from the Corporate/Other
segment was a loss of $(11.8) million in the second quarter 2018
compared to $(37.8) million in the prior-year period. This segment
also includes the asphalt business acquired in the Alon USA
transaction on July 1, 2017 (some of the asphalt terminals were
sold on May 21, 2018 as discussed above). The net hedging loss in
the second quarter 2018 was $(0.4) million compared to a net
hedging loss of $(30.9) million in the prior-year period. The
prior-year period includes a hedging loss of approximately $31.7
million related to a realized loss on a crude oil inventory hedging
strategy associated with Delek US' supply and offtake
agreement.
Second Quarter 2018 Results | Conference
Call InformationDelek US will hold a conference call to
discuss its second quarter 2018 results on Wednesday, August 8,
2018 at 9:00 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. For those who cannot listen to the
live broadcast, a telephonic replay will be available through
November 8, 2018 by dialing (855) 859-2056, passcode 6869787. 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) second quarter earnings conference call that
will be held on Wednesday, August 8, 2018 at 8:00 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. 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 (NYSE: DKL) 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 300 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
forward-looking statements include, but are not limited to,
statements regarding throughput at the Company’s refineries;
expiration of offtake agreements; crude oil prices and discounts
and our ability to benefit therefrom; share repurchases; synergies
resulting from the Alon USA transaction including the amount and
timing thereof; our ability to execute initiatives related to West
Coast assets successfully or at all and the amount and timing of
any such transactions; returning cash to shareholders; payments of
dividends; growth; investments into our business; 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: risks
and uncertainties related to the ability to successfully integrate
the businesses of Delek US and Alon USA Energy, Inc.; risks related
to disruption of management time from ongoing business operations
due to the integration implementation; the risk that the combined
company may be unable to fully achieve anticipated cost-cutting
synergies or it may take longer than expected to achieve those
synergies; 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; 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, except as required by applicable law or
regulation.
Non-GAAP Disclosures:
This earnings release includes references to
financial measures that are not defined under U.S. generally
accepted accounting principles ("GAAP"). These non-GAAP measures
include adjusted net income (loss), adjusted net income (loss) per
share, earnings before interest, taxes, depreciation and
amortization ("EBITDA") and adjusted EBITDA. Delek US believes that
the presentation of these non-GAAP measures reflects operating
results that are more indicative of Delek US' ongoing operating
performance while improving comparability to prior periods, and, as
such, may provide investors with an enhanced understanding of the
Company's past financial performance and prospects for the future
when viewed together with GAAP results. Adjusted income or
loss, adjusted net income or loss per share, EBITDA and adjusted
EBITDA should not be considered in isolation or as alternatives to
net income or loss, net income or loss per share, or any other
measure of financial performance presented in accordance with U.S.
GAAP. Additionally, because adjusted net income or loss, adjusted
net income or loss per share, EBITDA and adjusted EBITDA 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.Consolidated Balance Sheets
(Unaudited) |
|
|
|
|
|
|
|
June 30, 2018 |
|
December 31, 2017 |
|
|
(In millions, except share and per share
data) |
ASSETS |
|
|
|
|
Current assets: |
|
|
|
|
Cash and
cash equivalents |
|
$ |
1,132.8 |
|
|
$ |
931.8 |
|
Accounts
receivable, net |
|
785.1 |
|
|
579.6 |
|
Accounts
receivable from related parties |
|
17.0 |
|
|
2.1 |
|
Inventories, net of inventory valuation reserves |
|
881.5 |
|
|
808.4 |
|
Assets
held for sale |
|
25.2 |
|
|
160.0 |
|
Other
current assets |
|
107.7 |
|
|
129.9 |
|
Total
current assets |
|
2,949.3 |
|
|
2,611.8 |
|
Property, plant and
equipment: |
|
|
|
|
Property,
plant and equipment |
|
2,812.4 |
|
|
2,772.5 |
|
Less:
accumulated depreciation |
|
(708.8 |
) |
|
(631.7 |
) |
Property,
plant and equipment, net |
|
2,103.6 |
|
|
2,140.8 |
|
Goodwill |
|
857.8 |
|
|
816.6 |
|
Other intangibles,
net |
|
106.1 |
|
|
101.1 |
|
Equity method
investments |
|
130.5 |
|
|
138.1 |
|
Other non-current
assets |
|
64.5 |
|
|
126.8 |
|
Total
assets |
|
$ |
6,211.8 |
|
|
$ |
5,935.2 |
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
Current
liabilities: |
|
|
|
|
Accounts
payable |
|
$ |
1,050.6 |
|
|
$ |
973.4 |
|
Accounts
payable to related parties |
|
1.8 |
|
|
1.7 |
|
Current
portion of long-term debt |
|
180.8 |
|
|
590.2 |
|
Obligation under Supply and Offtake Agreements |
|
471.2 |
|
|
435.6 |
|
Liabilities associated with assets held for sale |
|
12.0 |
|
|
105.9 |
|
Accrued
expenses and other current liabilities |
|
445.0 |
|
|
564.9 |
|
Total
current liabilities |
|
2,161.4 |
|
|
2,671.7 |
|
Non-current
liabilities: |
|
|
|
|
Long-term
debt, net of current portion |
|
1,861.7 |
|
|
875.4 |
|
Environmental liabilities, net of current portion |
|
135.7 |
|
|
68.9 |
|
Asset
retirement obligations |
|
71.8 |
|
|
72.1 |
|
Deferred
tax liabilities |
|
127.2 |
|
|
199.9 |
|
Other
non-current liabilities |
|
74.7 |
|
|
83.0 |
|
Total
non-current liabilities |
|
2,271.1 |
|
|
1,299.3 |
|
Stockholders’
equity: |
|
|
|
|
Preferred
stock, $0.01 par value, 10,000,000 shares authorized, no shares
issued and outstanding |
|
— |
|
|
— |
|
Common
stock, $0.01 par value, 110,000,000 shares authorized, 87,631,115
shares and 81,533,548 shares issued at June 30, 2018 and
December 31, 2017, respectively |
|
0.9 |
|
|
0.8 |
|
Additional paid-in capital |
|
1,041.8 |
|
|
900.1 |
|
Accumulated other comprehensive (loss) income |
|
(42.4 |
) |
|
6.9 |
|
Treasury
stock, 3,703,826 shares and 762,623 shares, at cost, as of June 30,
2018 and December 31, 2017, respectively |
|
(140.3 |
) |
|
(25.0 |
) |
Retained
earnings |
|
742.8 |
|
|
767.8 |
|
Non-controlling interests in subsidiaries |
|
176.5 |
|
|
313.6 |
|
Total
stockholders’ equity |
|
1,779.3 |
|
|
1,964.2 |
|
Total
liabilities and stockholders’ equity |
|
$ |
6,211.8 |
|
|
$ |
5,935.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Delek US Holdings,
Inc.Consolidated Statements of Income
(Unaudited) |
|
|
|
|
|
|
|
Three Months Ended June
30, |
|
Six Months Ended June
30, |
|
|
|
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
|
|
(In millions, except share and per share
data) |
Net revenues |
|
$ |
2,563.5 |
|
|
$ |
1,230.7 |
|
|
$ |
4,916.7 |
|
|
$ |
2,412.8 |
|
Operating costs and
expenses: |
|
|
|
|
|
|
|
|
Cost of
goods sold |
|
2,176.8 |
|
|
1,157.8 |
|
|
4,219.6 |
|
|
2,193.5 |
|
Operating
expenses |
|
157.5 |
|
|
62.1 |
|
|
315.6 |
|
|
123.3 |
|
General
and administrative expenses |
|
52.9 |
|
|
27.5 |
|
|
118.1 |
|
|
54.0 |
|
Depreciation and amortization |
|
49.2 |
|
|
29.5 |
|
|
97.2 |
|
|
58.5 |
|
Other
operating (income) expense, net |
|
(8.0 |
) |
|
0.3 |
|
|
(7.7 |
) |
|
0.3 |
|
Total
operating costs and expenses |
|
2,428.4 |
|
|
1,277.2 |
|
|
4,742.8 |
|
|
2,429.6 |
|
Operating
income (loss) |
|
135.1 |
|
|
(46.5 |
) |
|
173.9 |
|
|
(16.8 |
) |
Interest expense |
|
31.5 |
|
|
14.9 |
|
|
64.0 |
|
|
28.4 |
|
Interest income |
|
(0.9 |
) |
|
(0.8 |
) |
|
(1.6 |
) |
|
(1.8 |
) |
Income from equity
method investments |
|
(2.9 |
) |
|
(1.5 |
) |
|
(2.9 |
) |
|
(4.6 |
) |
Gain on sale of
business |
|
(13.2 |
) |
|
— |
|
|
(13.2 |
) |
|
— |
|
Impairment loss on
assets held for sale |
|
— |
|
|
— |
|
|
27.5 |
|
|
— |
|
Loss on extinguishment
of debt |
|
— |
|
|
— |
|
|
9.0 |
|
|
— |
|
Other expense (income),
net |
|
0.3 |
|
|
0.1 |
|
|
(0.4 |
) |
|
0.1 |
|
Total
non-operating expenses, net |
|
14.8 |
|
|
12.7 |
|
|
82.4 |
|
|
22.1 |
|
Income (loss) from
continuing operations before income tax expense (benefit) |
|
120.3 |
|
|
(59.2 |
) |
|
91.5 |
|
|
(38.9 |
) |
Income tax expense
(benefit) |
|
32.8 |
|
|
(27.0 |
) |
|
15.8 |
|
|
(22.0 |
) |
Income (loss) from
continuing operations, net of tax |
|
87.5 |
|
|
(32.2 |
) |
|
75.7 |
|
|
(16.9 |
) |
Discontinued
operations: |
|
|
|
|
|
|
|
|
Loss from
discontinued operations, including loss on sale of discontinued
operations |
|
(1.0 |
) |
|
— |
|
|
(11.5 |
) |
|
— |
|
Income
tax benefit |
|
(0.2 |
) |
|
— |
|
|
(2.5 |
) |
|
— |
|
Loss from discontinued
operations, net of tax |
|
(0.8 |
) |
|
— |
|
|
(9.0 |
) |
|
— |
|
Net income (loss) |
|
86.7 |
|
|
(32.2 |
) |
|
66.7 |
|
|
(16.9 |
) |
Net income attributed
to non-controlling interests |
|
7.6 |
|
|
5.7 |
|
|
22.5 |
|
|
9.8 |
|
Net income (loss)
attributable to Delek |
|
$ |
79.1 |
|
|
$ |
(37.9 |
) |
|
$ |
44.2 |
|
|
$ |
(26.7 |
) |
|
|
|
|
|
|
|
|
|
Basic income (loss) per
share: |
|
|
|
|
|
|
|
|
Income (loss) from
continuing operations |
|
$ |
0.95 |
|
|
$ |
(0.61 |
) |
|
$ |
0.74 |
|
|
$ |
(0.43 |
) |
Loss from discontinued
operations |
|
(0.01 |
) |
|
— |
|
|
$ |
(0.21 |
) |
|
$ |
— |
|
Total basic income
(loss) per share |
|
$ |
0.94 |
|
|
$ |
(0.61 |
) |
|
$ |
0.53 |
|
|
$ |
(0.43 |
) |
|
|
|
|
|
|
|
|
|
Diluted income (loss)
per share: |
|
|
|
|
|
|
|
|
Income (loss) from
continuing operations |
|
$ |
0.90 |
|
|
$ |
(0.61 |
) |
|
$ |
0.71 |
|
|
$ |
(0.43 |
) |
Loss from discontinued
operations |
|
(0.01 |
) |
|
— |
|
|
$ |
(0.20 |
) |
|
$ |
— |
|
Total diluted income
(loss) per share |
|
$ |
0.89 |
|
|
$ |
(0.61 |
) |
|
$ |
0.51 |
|
|
$ |
(0.43 |
) |
Weighted average common
shares outstanding: |
|
|
|
|
|
|
|
|
Basic |
|
84,041,358 |
|
|
62,054,485 |
|
|
83,151,823 |
|
|
62,016,489 |
|
Dilutive
effect of convertible debt |
|
2,635,399 |
|
|
— |
|
|
— |
|
|
— |
|
Dilutive
effect of warrants |
|
1,685,053 |
|
|
— |
|
|
1,061,053 |
|
|
— |
|
Dilutive
effect of stock-based awards |
|
1,882,547 |
|
|
— |
|
|
1,560,711 |
|
|
— |
|
Diluted |
|
90,244,357 |
|
|
62,054,485 |
|
|
85,773,587 |
|
|
62,016,489 |
|
Dividends declared per
common share outstanding |
|
$ |
0.25 |
|
|
$ |
0.15 |
|
|
$ |
0.45 |
|
|
$ |
0.30 |
|
|
Delek US Holdings, Inc. |
Consolidated Statements of Cash Flows |
(In millions) |
|
|
|
|
|
|
|
|
|
Six Months Ended June 30, |
|
|
|
2018 |
|
2017 |
Cash Flow Data |
|
(Unaudited) |
Operating
activities |
|
$ |
(136.4 |
) |
|
$ |
(46.9 |
) |
Investing
activities |
|
13.8 |
|
|
(32.1 |
) |
Financing
activities |
|
313.5 |
|
|
(37.9 |
) |
|
Net increase
(decrease) |
|
$ |
190.9 |
|
|
$ |
(116.9 |
) |
|
|
|
|
|
|
|
|
|
|
|
Delek US Holdings, Inc. |
Segment Data (Unaudited) |
(In millions) |
|
|
Three Months Ended June 30, 2018 |
|
|
Refining |
|
Logistics |
|
Retail |
|
Corporate, Other and Eliminations |
|
Consolidated |
Net sales
(excluding intercompany fees and sales) |
|
$ |
2,243.7 |
|
|
$ |
113.3 |
|
|
$ |
244.8 |
|
|
$ |
38.3 |
|
|
$ |
2,563.5 |
|
Intercompany fees and sales |
|
226.1 |
|
|
53.0 |
|
|
— |
|
|
(279.1 |
) |
|
— |
|
Operating
costs and expenses: |
|
|
|
|
|
|
|
|
|
|
Cost of
goods sold |
|
2,179.6 |
|
|
106.0 |
|
|
200.9 |
|
|
(309.7 |
) |
|
2,176.8 |
|
Operating
expenses |
|
113.2 |
|
|
14.9 |
|
|
25.3 |
|
|
4.1 |
|
|
157.5 |
|
Segment
contribution margin |
|
$ |
177.0 |
|
|
$ |
45.4 |
|
|
$ |
18.6 |
|
|
$ |
(11.8 |
) |
|
229.2 |
|
General
and administrative expenses |
|
|
|
|
|
|
|
|
|
52.9 |
|
Depreciation and amortization |
|
|
|
|
|
|
|
|
|
49.2 |
|
Other
operating expense, net |
|
|
|
|
|
|
|
|
|
(8.0 |
) |
Operating
income |
|
|
|
|
|
|
|
|
|
$ |
135.1 |
|
Total assets (1) |
|
$ |
5,101.7 |
|
|
$ |
650.3 |
|
|
$ |
332.8 |
|
|
$ |
127.0 |
|
|
$ |
6,211.8 |
|
Capital spending
(excluding business combinations (2) |
|
$ |
33.7 |
|
|
$ |
2.3 |
|
|
$ |
2.1 |
|
|
$ |
16.6 |
|
|
$ |
54.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, 2017 |
|
|
Refining |
|
Logistics |
|
Retail |
|
Corporate, Other and Eliminations |
|
Consolidated |
Net sales
(excluding intercompany fees and sales) |
|
$ |
1,144.8 |
|
|
$ |
87.1 |
|
|
$ |
— |
|
|
$ |
(1.2 |
) |
|
$ |
1,230.7 |
|
Intercompany fees and sales |
|
8.2 |
|
|
39.6 |
|
|
— |
|
|
(47.8 |
) |
|
— |
|
Operating
costs and expenses: |
|
|
|
|
|
|
|
|
|
|
Cost of
goods sold |
|
1,084.5 |
|
|
85.0 |
|
|
— |
|
|
(11.7 |
) |
|
1,157.8 |
|
Operating
expenses |
|
51.6 |
|
|
10.0 |
|
|
— |
|
|
0.5 |
|
|
62.1 |
|
Segment
contribution margin |
|
$ |
16.9 |
|
|
$ |
31.7 |
|
|
$ |
— |
|
|
$ |
(37.8 |
) |
|
10.8 |
|
General
and administrative expenses |
|
|
|
|
|
|
|
|
|
27.5 |
|
Depreciation and amortization |
|
|
|
|
|
|
|
|
|
29.5 |
|
Other
operating expense, net |
|
|
|
|
|
|
|
|
|
0.3 |
|
Operating
loss |
|
|
|
|
|
|
|
|
|
$ |
(46.5 |
) |
Total assets |
|
$ |
1,949.6 |
|
|
$ |
415.5 |
|
|
$ |
— |
|
|
$ |
511.4 |
|
|
$ |
2,876.5 |
|
Capital spending
(excluding business combinations) |
|
$ |
11.2 |
|
|
$ |
2.1 |
|
|
$ |
— |
|
|
$ |
1.7 |
|
|
$ |
15.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Delek US Holdings, Inc. |
Segment Data (Unaudited) |
(In millions) |
|
|
Six Months Ended June 30, 2018 |
|
|
Refining (3) |
|
Logistics |
|
Retail |
|
Corporate, Other and Eliminations
(3) |
|
Consolidated |
Net sales
(excluding intercompany fees and sales) |
|
$ |
4,184.4 |
|
|
$ |
219.5 |
|
|
$ |
454.4 |
|
|
$ |
58.4 |
|
|
$ |
4,916.7 |
|
Intercompany fees and sales |
|
411.3 |
|
|
114.7 |
|
|
— |
|
|
(526.0 |
) |
|
— |
|
Operating
costs and expenses: |
|
|
|
|
|
|
|
|
|
|
Cost of
goods sold |
|
4,057.5 |
|
|
225.0 |
|
|
374.1 |
|
|
(437.0 |
) |
|
4,219.6 |
|
Operating
expenses |
|
227.9 |
|
|
27.5 |
|
|
49.8 |
|
|
10.4 |
|
|
315.6 |
|
Segment
contribution margin |
|
$ |
310.3 |
|
|
$ |
81.7 |
|
|
$ |
30.5 |
|
|
$ |
(41.0 |
) |
|
$ |
381.5 |
|
General
and administrative expenses |
|
|
|
|
|
|
|
|
|
118.1 |
|
Depreciation and amortization |
|
|
|
|
|
|
|
|
|
97.2 |
|
Other
operating expense, net |
|
|
|
|
|
|
|
|
|
(7.7 |
) |
Operating
income |
|
|
|
|
|
|
|
|
|
$ |
173.9 |
|
|
|
|
|
|
|
|
|
|
|
|
Capital spending
(excluding business combinations) (2) |
|
$ |
85.2 |
|
|
$ |
4.5 |
|
|
$ |
4.1 |
|
|
$ |
31.0 |
|
|
$ |
124.8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30, 2017 |
|
|
Refining |
|
Logistics |
|
Retail |
|
Corporate, Other and Eliminations |
|
Consolidated |
Net sales
(excluding intercompany fees and sales) |
|
$ |
2,235.3 |
|
|
$ |
180.0 |
|
|
$ |
— |
|
|
$ |
(2.5 |
) |
|
$ |
2,412.8 |
|
Intercompany fees and sales |
|
17.2 |
|
|
76.2 |
|
|
— |
|
|
(93.4 |
) |
|
— |
|
Operating
costs and expenses: |
|
|
|
|
|
|
|
|
|
|
Cost of
goods sold |
|
2,065.3 |
|
|
177.6 |
|
|
— |
|
|
(49.4 |
) |
|
2,193.5 |
|
Operating
expenses |
|
102.4 |
|
|
20.3 |
|
|
— |
|
|
0.6 |
|
|
123.3 |
|
Segment
contribution margin |
|
$ |
84.8 |
|
|
$ |
58.3 |
|
|
$ |
— |
|
|
$ |
(47.1 |
) |
|
$ |
96.0 |
|
General
and administrative expenses |
|
|
|
|
|
|
|
|
|
54.0 |
|
Depreciation and amortization |
|
|
|
|
|
|
|
|
|
58.5 |
|
Other
operating expense, net |
|
|
|
|
|
|
|
|
|
0.3 |
|
Operating
loss |
|
|
|
|
|
|
|
|
|
$ |
(16.8 |
) |
Capital spending
(excluding business combinations) |
|
$ |
22.0 |
|
|
$ |
4.9 |
|
|
$ |
— |
|
|
$ |
3.3 |
|
|
$ |
30.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Assets held for sale of $25.2 million are included in
the corporate, other and eliminations segment as of June 30,
2018.
(2) Capital spending excludes transaction
costs capitalized in the amount of $0.4 million during the six
months ended June 30, 2018, that relate to the Big Spring
logistics assets acquisition.
(3) The corporate, other and eliminations
segment results of operations for the six months ended June 30,
2018 includes Canada trading activity which was previously included
and reported in the refining segment for the three months ended
March 31, 2018.
|
|
|
|
|
Refining
Segment |
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
Tyler, TX
Refinery |
|
(Unaudited) |
|
(Unaudited) |
Days in period |
|
91 |
|
|
91 |
|
|
181 |
|
|
181 |
|
Total sales volume
(average barrels per day)(1) |
|
81,088 |
|
|
79,404 |
|
|
77,555 |
|
|
71,906 |
|
Products manufactured
(average barrels per day): |
|
|
|
|
|
|
|
|
Gasoline |
|
42,918 |
|
|
41,817 |
|
|
41,800 |
|
|
37,955 |
|
Diesel/Jet |
|
32,899 |
|
|
30,810 |
|
|
30,275 |
|
|
27,767 |
|
Petrochemicals, LPG, NGLs |
|
2,877 |
|
|
3,316 |
|
|
2,479 |
|
|
2,676 |
|
Other |
|
1,742 |
|
|
1,678 |
|
|
1,756 |
|
|
1,613 |
|
Total
production |
|
80,436 |
|
|
77,621 |
|
|
76,310 |
|
|
70,011 |
|
Throughput (average
barrels per day): |
|
|
|
|
|
|
|
|
Crude oil |
|
75,272 |
|
|
73,047 |
|
|
70,305 |
|
|
65,120 |
|
Other
feedstocks |
|
5,902 |
|
|
5,298 |
|
|
6,537 |
|
|
5,656 |
|
Total
throughput |
|
81,174 |
|
|
78,345 |
|
|
76,842 |
|
|
70,776 |
|
Per barrel of
sales: |
|
|
|
|
|
|
|
|
Tyler
refining margin |
|
$ |
11.90 |
|
|
$ |
5.04 |
|
|
$ |
10.21 |
|
|
$ |
5.17 |
|
Direct
operating expenses |
|
$ |
3.38 |
|
|
$ |
3.37 |
|
|
$ |
3.40 |
|
|
$ |
3.75 |
|
Crude Slate: (% based
on amount received in period) |
|
|
|
|
|
|
|
|
WTI crude
oil |
|
77.5 |
% |
|
77.7 |
% |
|
79.2 |
% |
|
78.7 |
% |
East
Texas crude oil |
|
21.0 |
% |
|
18.2 |
% |
|
18.8 |
% |
|
19.3 |
% |
Other |
|
1.5 |
% |
|
4.1 |
% |
|
2.0 |
% |
|
2.0 |
% |
|
|
|
|
|
|
|
|
|
El Dorado, AR
Refinery |
|
|
|
|
|
|
|
|
Days in period |
|
91 |
|
|
91 |
|
|
181 |
|
|
181 |
|
Total sales volume
(average barrels per day)(2) |
|
76,353 |
|
|
76,826 |
|
|
73,488 |
|
|
80,190 |
|
Products manufactured
(average barrels per day): |
|
|
|
|
|
|
|
|
Gasoline |
|
36,285 |
|
|
36,446 |
|
|
35,689 |
|
|
38,151 |
|
Diesel |
|
25,256 |
|
|
27,396 |
|
|
25,773 |
|
|
26,744 |
|
Petrochemicals, LPG, NGLs |
|
1,236 |
|
|
1,751 |
|
|
1,350 |
|
|
1,703 |
|
Asphalt |
|
4,662 |
|
|
7,205 |
|
|
4,895 |
|
|
6,635 |
|
Other |
|
785 |
|
|
1,014 |
|
|
812 |
|
|
1,001 |
|
Total
production |
|
68,224 |
|
|
73,812 |
|
|
68,519 |
|
|
74,234 |
|
Throughput (average
barrels per day): |
|
|
|
|
|
|
|
|
Crude
oil |
|
68,685 |
|
|
74,342 |
|
|
68,559 |
|
|
73,775 |
|
Other
feedstocks |
|
1,175 |
|
|
612 |
|
|
1,475 |
|
|
1,488 |
|
Total
throughput |
|
69,860 |
|
|
74,954 |
|
|
70,034 |
|
|
75,263 |
|
Per barrel of
sales: |
|
|
|
|
|
|
|
|
El Dorado
refining margin |
|
$ |
4.74 |
|
|
$ |
4.44 |
|
|
$ |
8.73 |
|
|
$ |
8.19 |
|
Direct
operating expenses |
|
$ |
4.84 |
|
|
$ |
3.76 |
|
|
$ |
4.99 |
|
|
$ |
3.53 |
|
Crude Slate: (% based
on amount received in period) |
|
|
|
|
|
|
|
|
WTI crude
oil |
|
68.0 |
% |
|
58.7 |
% |
|
65.1 |
% |
|
63.9 |
% |
Local
Arkansas crude oil |
|
21.0 |
% |
|
18.9 |
% |
|
20.7 |
% |
|
18.8 |
% |
Other |
|
11.0 |
% |
|
22.4 |
% |
|
14.2 |
% |
|
17.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Refining Segment |
|
Three Months Ended June 30, |
Six Months Ended June 30, |
|
|
2018 |
|
2018 |
Big
Spring, TX Refinery (acquired on July 1, 2017) |
|
(Unaudited) |
(Unaudited) |
Days in
period - based on date acquired |
|
91 |
|
|
181 |
|
Total sales
volume (average barrels per day) (3) |
|
77,005 |
|
|
69,928 |
|
Products
manufactured (average barrels per day): |
|
|
|
|
Gasoline |
|
36,009 |
|
|
33,581 |
|
Diesel/Jet |
|
29,266 |
|
|
24,180 |
|
Petrochemicals, LPG, NGLs |
|
3,834 |
|
|
3,431 |
|
Asphalt |
|
1,856 |
|
|
1,856 |
|
Other |
|
1,476 |
|
|
1,295 |
|
Total production |
|
72,441 |
|
|
64,343 |
|
Throughput
(average barrels per day): |
|
|
|
|
Crude oil |
|
72,013 |
|
|
62,936 |
|
Other feedstocks |
|
171 |
|
|
1,007 |
|
Total throughput |
|
72,184 |
|
|
63,943 |
|
Per barrel
of sales: |
|
|
|
|
Big Spring refining margin |
|
$ |
16.88 |
|
|
$ |
13.62 |
|
Direct operating expenses |
|
$ |
3.57 |
|
|
$ |
4.31 |
|
Crude
Slate: (% based on amount received in period) |
|
|
|
|
WTI crude oil |
|
72.0 |
% |
|
71.2 |
% |
WTS crude oil |
|
28.0 |
% |
|
28.8 |
% |
|
|
|
|
|
Krotz Springs, LA Refinery (acquired on July 1,
2017) |
|
|
|
|
Days in
period - based on date acquired |
|
91 |
|
|
181 |
|
Total sales
volume (average barrels per day) (4) |
|
76,789 |
|
|
78,335 |
|
Products
manufactured (average barrels per day): |
|
|
|
|
Gasoline |
|
35,976 |
|
|
37,515 |
|
Diesel/Jet |
|
32,008 |
|
|
31,534 |
|
Heavy oils |
|
1,362 |
|
|
1,350 |
|
Other |
|
7,295 |
|
|
7,522 |
|
Total production |
|
76,641 |
|
|
77,921 |
|
Throughput
(average barrels per day): |
|
|
|
|
Crude oil |
|
74,625 |
|
|
74,256 |
|
Other feedstocks |
|
997 |
|
|
2,406 |
|
Total throughput |
|
75,622 |
|
|
76,662 |
|
Per barrel
of sales: |
|
|
|
|
Krotz Springs refining margin |
|
$ |
8.82 |
|
|
$ |
7.86 |
|
Direct operating expenses |
|
$ |
3.87 |
|
|
$ |
3.72 |
|
Crude
Slate: (% based on amount received in period) |
|
|
|
|
WTI Crude |
|
54.9 |
% |
|
57.2 |
% |
Gulf Coast Sweet Crude |
|
45.1 |
% |
|
42.8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Pricing
statistics (average for the period presented): |
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
|
|
(Unaudited) |
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
WTI — Cushing crude oil
(per barrel) |
|
$ |
68.03 |
|
|
$ |
48.11 |
|
|
$ |
65.52 |
|
|
$ |
49.89 |
|
WTI — Midland crude oil
(per barrel) |
|
$ |
59.93 |
|
|
$ |
47.29 |
|
|
$ |
61.19 |
|
|
$ |
49.49 |
|
WTS -- Midland crude
oil (per barrel) (5) |
|
$ |
59.53 |
|
|
$ |
47.05 |
|
|
$ |
60.47 |
|
|
$ |
48.65 |
|
LLS crude oil (per
barrel) (5) |
|
$ |
73.02 |
|
|
$ |
50.18 |
|
|
$ |
69.51 |
|
|
$ |
51.77 |
|
Brent crude oil (per
barrel) |
|
$ |
74.96 |
|
|
$ |
50.77 |
|
|
$ |
71.18 |
|
|
$ |
52.63 |
|
|
|
|
|
|
|
|
|
|
US Gulf Coast 5-3-2
crack spread (per barrel) (5) |
|
$ |
14.37 |
|
|
$ |
10.86 |
|
|
$ |
12.99 |
|
|
$ |
10.72 |
|
US Gulf Coast 3-2-1
crack spread (per barrel) (5) |
|
$ |
18.26 |
|
|
$ |
14.78 |
|
|
$ |
16.82 |
|
|
$ |
14.20 |
|
US Gulf Coast 2-1-1
crack spread (per barrel) (5) |
|
$ |
10.83 |
|
|
$ |
10.33 |
|
|
$ |
10.29 |
|
|
$ |
10.13 |
|
|
|
|
|
|
|
|
|
|
US Gulf Coast Unleaded
Gasoline (per gallon) |
|
$ |
1.96 |
|
|
$ |
1.45 |
|
|
$ |
1.87 |
|
|
$ |
1.48 |
|
Gulf Coast Ultra low
sulfur diesel (per gallon) |
|
$ |
2.11 |
|
|
$ |
1.47 |
|
|
$ |
2.02 |
|
|
$ |
1.52 |
|
US Gulf Coast high
sulfur diesel (per gallon) |
|
$ |
1.96 |
|
|
$ |
1.33 |
|
|
$ |
1.87 |
|
|
$ |
1.39 |
|
Natural gas (per
MMBTU) |
|
$ |
2.83 |
|
|
$ |
3.14 |
|
|
$ |
2.84 |
|
|
$ |
3.10 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- Total sales volume includes 267 and 917 bpd sold to the
logistics segment during the three and six months ended
June 30, 2018, respectively, and 743 and 842 bpd during the
three and six months ended June 30, 2017, respectively.
Total sales volume also includes sales of 109 and 120 bpd of
intermediate and finished products to the El Dorado refinery during
the three and six months ended June 30, 2018, respectively,
and 1 and 5 bpd during the three and six months ended June 30,
2017, respectively. Total sales volume also includes 428 and
459 bpd of produced finished product sold to the Big Spring
refinery and 0 and 118 bpd sold to the Krotz Springs refinery
during the three and six months ended June 30, 2018,
respectively. Total sales volume excludes 4,729 and 4,603 bpd of
wholesale activity during the three and six months ended
June 30, 2018, respectively, and 4,177 and 5,297 of wholesale
activity during the three and six months ended June 30, 2017,
respectively.
- Total sales volume includes 985 and 515 bpd of produced
finished product sold to the Tyler refinery during the three and
six months ended June 30, 2018, respectively, and 525 and 787
bpd during the three and six months ended June 30, 2017,
respectively; 21,648 and 11,407 bpd of produced finished product
sold to the Krotz Springs refinery during the three and six months
ended June 30, 2018, respectively; 302 and 566 bpd of produced
finished product sold to the Big Spring refinery during the three
and six months ended June 30, 2018, respectively; and 220 and
123 bpd of produced finished product sold to Alon Asphalt Company
during the three and six months ended June 30, 2018,
respectively. Total sales volume excludes 48,287 and 50,709
bpd of wholesale activity during the three and six months ended
June 30, 2018, respectively, and 19,219 and 18,880 bpd of
wholesale activity during the three and six months ended
June 30, 2017, respectively.
- Total sales volume includes 13,838 and 14,026 bpd sold to the
retail segment, 3,158 and 4,237 bpd sold to the logistics segment
and 1,895 and 1,522 bpd sold to Alon Asphalt Company during the
three and six months ended June 30, 2018, respectively.
- Sales volume includes 39,398 and 29,130 bpd sold to the El
Dorado refinery and 0 and 110 bpd sold to the Tyler refinery during
the three and six months ended June 30, 2018,
respectively.
- 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 June 30, |
|
Six Months Ended June 30, |
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
|
|
(Unaudited) |
|
(Unaudited) |
Tyler (2) |
|
|
|
|
|
|
|
|
Reported refining
margin, $ per barrel |
|
$ |
11.90 |
|
|
$ |
5.04 |
|
|
$ |
10.21 |
|
|
$ |
5.17 |
|
Adjustments: |
|
|
|
|
|
|
|
|
Net inventory valuation
(benefit) loss |
|
(0.07 |
) |
|
1.44 |
|
|
(0.07 |
) |
|
1.01 |
|
Renewable bio credit
allocated to refinery |
|
— |
|
|
— |
|
|
(1.10 |
) |
|
— |
|
|
|
|
|
|
|
|
|
|
Adjusted refining
margin $/bbl |
|
$ |
11.83 |
|
|
$ |
6.48 |
|
|
$ |
9.04 |
|
|
$ |
6.18 |
|
Note:
During the second quarter 2018, the Tyler Refinery inventory timing
effect between the purchase price of Permian Basin crude oil and
when it is sold and realized as finished products was approximately
$10,500,000, or $1.42/bbl. |
El Dorado (3) |
|
|
|
|
|
|
|
|
Reported refining
margin, $ per barrel |
|
$ |
4.74 |
|
|
$ |
4.44 |
|
|
$ |
8.73 |
|
|
$ |
8.19 |
|
Adjustments: |
|
|
|
|
|
|
|
|
Net inventory valuation
loss |
|
— |
|
|
0.05 |
|
|
— |
|
|
0.02 |
|
RIN waiver |
|
— |
|
|
— |
|
|
(4.46 |
) |
|
(3.27 |
) |
Renewable bio credit
allocated to refinery |
|
— |
|
|
— |
|
|
(0.45 |
) |
|
— |
|
Non-cash RINs inventory
mark-to-market |
|
2.47 |
|
|
— |
|
|
1.58 |
|
|
— |
|
|
|
|
|
|
|
|
|
|
Adjusted refining
margin $/bbl |
|
$ |
7.21 |
|
|
$ |
4.49 |
|
|
$ |
5.40 |
|
|
$ |
4.94 |
|
|
|
|
|
|
|
|
|
|
Note:
During the second quarter 2018, the El Dorado Refinery inventory
timing effect between the purchase price of Permian Basin crude oil
and when it is sold and realized as finished products was
approximately $7,000,000, or $1.01/bbl. |
Big Spring (acquired July 1, 2017) (4) |
|
|
|
|
|
|
|
|
Reported refining
margin, $ per barrel |
|
$ |
16.88 |
|
|
|
|
$ |
13.62 |
|
|
|
Adjustments: |
|
|
|
|
|
|
|
|
Net inventory valuation
loss |
|
0.02 |
|
|
|
|
0.01 |
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted refining
margin $/bbl |
|
$ |
16.90 |
|
|
|
|
$ |
13.63 |
|
|
|
|
|
|
|
|
|
|
|
|
Note:
During the second quarter 2018, the Big Spring Refinery inventory
timing effect between the purchase price of Permian Basin crude oil
and when it is sold and realized as finished products was
approximately $15,000,000, or $2.13/bbl. |
Krotz Springs (acquired July 1, 2017) (5) |
|
|
|
|
|
|
|
|
Reported refining
margin, $ per barrel |
|
$ |
8.82 |
|
|
|
|
$ |
7.86 |
|
|
|
Adjustments: |
|
|
|
|
|
|
|
|
Net inventory valuation
loss |
|
0.01 |
|
|
|
|
— |
|
|
|
RIN waiver |
|
— |
|
|
|
|
(2.23 |
) |
|
|
Non-cash RINs inventory
mark-to-market |
|
0.65 |
|
|
|
|
0.42 |
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted refining
margin $/bbl |
|
$ |
9.48 |
|
|
|
|
$ |
6.05 |
|
|
|
|
|
|
|
|
|
|
|
|
Note:
During the second quarter 2018, the Krotz Springs Refinery
inventory timing effect between the purchase price of Permian Basin
crude oil and when it is sold and realized as finished products was
approximately $6,000,000 or $0.87/bbl. |
|
(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 $0.5 million benefit and $(10.4) million
of valuation loss in the second quarter 2018 and 2017,
respectively. There was approximately $1.0 million benefit and
$(13.1) million of valuation loss in the six months ended
June 30, 2018 and 2017, respectively. These amounts resulted
from lower of cost or market adjustments on LIFO inventory in the
respective periods.
Biodiesel tax credit allocation
- In the first quarter 2018, approximately $15.4 million related to
the biodiesel tax credit for 2017 that is included in the
renewables portion of the refining segment, which was allocated to
Tyler.
(3) El Dorado adjusted refining margins exclude the
following items.
Net inventory valuation (loss)
- There were $0.0 million and a $(0.3) million of valuation losses
in the second quarter 2018 and 2017, respectively. There was
approximately $0.0 million and $(0.3) million of valuation losses
in the six months ended June 30, 2018 and 2017,
respectively. These amounts resulted from lower of cost or
market adjustments on FIFO inventory in the respective periods.
RIN waiver - In March 2018, 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 2017
calendar year. This waiver equated to a benefit of approximately
$59.3 million recognized in the first quarter 2018 compared to
$47.5 million recognized in the first quarter 2017 for a similar
exemption received for the 2016 calendar year.
Biodiesel tax credit allocation
- In the first quarter 2018, approximately $6.0 million related to
the biodiesel tax credit for 2017 that is included in the
renewables portion of the refining segment, which was allocated to
El Dorado.
Non-cash RINs inventory
mark-to-market - Relates to a mark-to-market of the
Renewable Identification Numbers ("RINs") inventory position. The
inventory position was higher due to the waiver received by the El
Dorado refinery in March 2018.
(4) Big Spring adjusted refining margins exclude the
following items.
Net inventory valuation (loss)
- There were $(0.2) million and $(0.2) million of valuation losses
in the second quarter 2018 and in the six months ended
June 30, 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 $(0.05) million and $(0.05) million of valuation
losses in the second quarter 2018 and in the six months ended
June 30, 2018, respectively. These amounts resulted from lower
of cost or market adjustments on FIFO inventory in the respective
period.
RIN waiver - In March 2018, 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 2017
calendar year. This waiver equated to a benefit of approximately
$31.6 million recognized in the first quarter 2018.
Non-cash RINs inventory
mark-to-market - Relates to a mark-to-market of the
Renewable Identification Numbers ("RINs") inventory position. The
inventory position was higher due to the waiver received by the El
Dorado refinery in March 2018.
|
|
|
|
|
Logistics
Segment |
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
|
|
(Unaudited) |
|
(Unaudited) |
Pipelines &
Transportation: (average bpd) |
|
|
|
|
|
|
|
|
Lion
Pipeline System: |
|
|
|
|
|
|
|
|
Crude
pipelines (non-gathered) |
|
56,088 |
|
|
59,953 |
|
|
55,412 |
|
|
59,351 |
|
Refined
products pipelines to Enterprise Systems |
|
48,013 |
|
|
49,820 |
|
|
48,879 |
|
|
50,583 |
|
SALA
Gathering System |
|
16,738 |
|
|
15,957 |
|
|
16,705 |
|
|
16,242 |
|
East
Texas Crude Logistics System |
|
16,902 |
|
|
13,591 |
|
|
17,478 |
|
|
14,876 |
|
|
|
|
|
|
|
|
|
|
Wholesale
Marketing & Terminalling: |
|
|
|
|
|
|
|
|
East
Texas - Tyler Refinery sales volumes (average bpd) (1) |
|
79,330 |
|
|
77,878 |
|
|
76,304 |
|
|
70,677 |
|
West
Texas wholesale marketing throughputs (average bpd) |
|
12,261 |
|
|
13,422 |
|
|
14,091 |
|
|
13,942 |
|
West
Texas wholesale marketing margin per barrel |
|
$ |
8.06 |
|
|
$ |
4.26 |
|
|
$ |
6.43 |
|
|
$ |
3.44 |
|
Big
Spring Marketing - Refinery sales volume (average bpd) (2) |
|
80,536 |
|
|
— |
|
|
79,165 |
|
|
— |
|
Terminalling throughputs (average bpd) (3) |
|
162,383 |
|
|
128,111 |
|
|
154,917 |
|
|
122,026 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Excludes jet fuel and petroleum coke.
(2) Throughputs for the six months ended
June 30, 2018 are for the 122 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 six months
ended June 30, 2018 for the Big Spring terminal are for the
122 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
barrels for the six months ended June 30, 2018 was 26.0
million barrels, which averaged 143,593 bpd for the period.
|
|
|
|
|
Retail
Segment |
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
(Operations
were acquired on July 1, 2017) |
|
2018 |
|
2018 |
|
|
(Unaudited) |
(Unaudited) |
Number of stores (end
of period) (1) |
|
297 |
|
|
297 |
|
Average number of
stores |
|
297 |
|
|
298 |
|
Retail fuel sales
(thousands of gallons) |
|
54,114 |
|
|
107,813 |
|
Average retail gallons
per average number of stores (in thousands) |
|
188 |
|
|
373 |
|
Retail fuel margin ($
per gallon) |
|
$ |
0.24 |
|
|
$ |
0.21 |
|
Merchandise sales (in
thousands) |
|
$ |
90,200 |
|
|
$ |
168,300 |
|
Merchandise sales per
average number of stores (in thousands) |
|
$ |
304 |
|
|
$ |
565 |
|
Merchandise margin
% |
|
31.7 |
% |
|
31.0 |
% |
|
|
|
|
|
|
|
(1) At June 30, 2018, there were 297 retail
convenience stores of which 288 sold fuel.
|
|
|
|
|
Delek US Holdings, Inc. |
|
|
|
|
Reconciliation of Amounts Reported Under U.S. GAAP |
|
|
|
|
$ in millions |
|
|
|
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
Reconciliation of U.S. GAAP Net Income (Loss) to Adjusted
Net Income (Loss) |
2018 |
|
2017 |
|
2018 |
|
2017 |
|
(Unaudited) |
|
(Unaudited) |
Reported net
income (loss) attributable to Delek |
$ |
79.1 |
|
|
$ |
(37.9 |
) |
|
$ |
44.2 |
|
|
$ |
(26.7 |
) |
|
|
|
|
|
|
|
|
Adjustments |
|
|
|
|
|
|
|
Net inventory valuation
(gain) loss |
(0.3 |
) |
|
10.7 |
|
|
(0.7 |
) |
|
13.4 |
|
Tax effect of inventory
valuation |
0.1 |
|
|
(3.8 |
) |
|
0.2 |
|
|
(4.8 |
) |
Net after tax inventory
valuation (gain) loss |
(0.2 |
) |
|
6.9 |
|
|
(0.6 |
) |
|
8.7 |
|
|
|
|
|
|
|
|
|
Unrealized hedging
loss |
9.9 |
|
|
6.6 |
|
|
24.7 |
|
|
0.1 |
|
Tax effect of
unrealized hedging |
(2.3 |
) |
|
(2.2 |
) |
|
(5.6 |
) |
|
0.2 |
|
Net after tax
unrealized hedging loss |
7.7 |
|
|
4.3 |
|
|
19.0 |
|
|
0.2 |
|
|
|
|
|
|
|
|
|
Transaction related
expenses |
2.6 |
|
|
2.5 |
|
|
13.2 |
|
|
$ |
4.2 |
|
Tax effect of
transaction related expenses |
(0.6 |
) |
|
(0.9 |
) |
|
(2.8 |
) |
|
$ |
(1.5 |
) |
Net after tax
transaction related expenses |
2.0 |
|
|
1.6 |
|
|
10.4 |
|
|
$ |
2.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax Cuts and Jobs Act
adjustment |
10.0 |
|
|
— |
|
|
2.6 |
|
|
— |
|
Tax effect of Tax Cuts
and Jobs Act adjustment |
— |
|
|
— |
|
|
— |
|
|
— |
|
Net after tax Tax Cuts
and Jobs Act adjustment |
10.0 |
|
|
— |
|
|
2.6 |
|
|
— |
|
|
|
|
|
|
|
|
|
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 |
|
|
— |
|
|
|
|
|
|
|
|
|
Gain on sale of the
asphalt business |
(13.2 |
) |
|
— |
|
|
(13.2 |
) |
|
— |
|
Tax effect of gain on
sale of the asphalt business |
2.9 |
|
|
— |
|
|
2.9 |
|
|
— |
|
Net after tax gain on
sale of the asphalt business |
(10.3 |
) |
|
— |
|
|
(10.3 |
) |
|
— |
|
|
|
|
|
|
|
|
|
Discontinued operations
loss |
1.0 |
|
|
— |
|
|
11.5 |
|
|
— |
|
Tax effect of
discontinued operations |
(0.2 |
) |
|
— |
|
|
(2.5 |
) |
|
— |
|
Net after tax
discontinued operations loss |
0.8 |
|
|
— |
|
|
9.0 |
|
|
— |
|
|
|
|
|
|
|
|
|
Net loss attributable
to non-controlling interest of discontinued operations |
— |
|
|
— |
|
|
8.1 |
|
|
— |
|
Tax effect of net loss
attributable to non-controlling interest of discontinued
operations |
— |
|
|
— |
|
|
— |
|
|
— |
|
Net after tax income
attributable to non-controlling interest of discontinued
operations |
— |
|
|
— |
|
|
8.1 |
|
|
— |
|
|
|
|
|
|
|
|
|
Total after tax
adjustments |
10.0 |
|
|
12.8 |
|
|
72.1 |
|
|
11.6 |
|
|
|
|
|
|
|
|
|
Adjusted
net income (loss) |
$ |
89.0 |
|
|
$ |
(25.0 |
) |
|
$ |
116.4 |
|
|
$ |
(15.1 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Delek US Holdings, Inc. |
|
|
|
|
Reconciliation of Amounts Reported Under U.S. GAAP |
|
|
|
|
per share data |
|
|
|
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
Reconciliation of U.S. GAAP Net Income (Loss) per share to
Adjusted Net Income (Loss) per share |
2018 |
|
2017 |
|
2018 |
|
2017 |
|
(Unaudited) |
|
(Unaudited) |
|
|
|
|
|
|
|
|
Reported income
(loss) per share |
$ |
0.89 |
|
|
$ |
(0.61 |
) |
|
$ |
0.51 |
|
|
$ |
(0.43 |
) |
|
|
|
|
|
|
|
|
Adjustments, after tax (per share)
(1) |
|
|
|
|
|
|
|
Net inventory valuation
loss (gain) |
— |
|
|
0.11 |
|
|
(0.01 |
) |
|
0.14 |
|
Unrealized hedging
loss |
0.08 |
|
|
0.07 |
|
|
0.22 |
|
|
— |
|
Transaction related
expenses |
0.02 |
|
|
0.03 |
|
|
0.12 |
|
|
0.04 |
|
Tax Cuts and Jobs Act
adjustment |
0.11 |
|
|
— |
|
|
0.03 |
|
|
— |
|
Impairment loss on
assets held for sale |
— |
|
|
— |
|
|
0.31 |
|
|
— |
|
Gain on sale of the
asphalt business |
(0.11 |
) |
|
— |
|
|
(0.12 |
) |
|
— |
|
Loss on extinguishment
of debt |
— |
|
|
— |
|
|
0.08 |
|
|
— |
|
Discontinued operations
loss |
0.01 |
|
|
— |
|
|
0.10 |
|
|
— |
|
Net loss attributable
to non-controlling interest of discontinued operations |
— |
|
|
— |
|
|
0.09 |
|
|
— |
|
|
|
|
|
|
|
|
|
Total
adjustments |
0.11 |
|
|
0.21 |
|
|
0.82 |
|
|
0.19 |
|
Dilutive effect of
convertible debt on adjusted results (2) |
0.03 |
|
|
— |
|
|
— |
|
|
— |
|
Adjusted
net income (loss) per share |
$ |
1.03 |
|
|
$ |
(0.40 |
) |
|
$ |
1.33 |
|
|
$ |
(0.24 |
) |
|
|
|
|
|
|
|
|
Shares used in
computing Non-GAAP dilutive effect of convertible debt (2): |
|
|
|
|
|
|
|
Diluted |
90,244,357 |
|
|
62,054,485 |
|
|
85,773,587 |
|
|
62,016,489 |
|
Adjustment for economic
benefit of note hedge related to Senior Convertible Notes |
2,635,399 |
|
|
— |
|
|
— |
|
|
— |
|
Non-GAAP Adjusted
Diluted Share Count |
87,608,958 |
|
|
62,054,485 |
|
|
85,773,587 |
|
|
62,016,489 |
|
(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 has a convertible note hedge transaction in effect
to offset the economic dilution of the additional shares from the
convertible note that matures in September 2018.
|
|
|
|
|
Delek US Holdings, Inc. |
|
|
|
|
Reconciliation of Amounts Reported Under U.S. GAAP |
|
|
|
|
$ in millions |
|
|
|
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
Reconciliation
of Net Income (Loss) to Adjusted EBITDA |
2018 |
|
2017 |
|
2018 |
|
2017 |
|
(Unaudited) |
|
(Unaudited) |
Reported net
income (loss) attributable to Delek |
$ |
79.1 |
|
|
$ |
(37.9 |
) |
|
$ |
44.2 |
|
|
$ |
(26.7 |
) |
|
|
|
|
|
|
|
|
Add: |
|
|
|
|
|
|
|
Interest expense,
net |
30.6 |
|
|
14.1 |
|
|
62.4 |
|
|
26.6 |
|
Loss on extinguishment
of debt |
— |
|
|
— |
|
|
9.0 |
|
|
— |
|
Income tax expense
(benefit) - continuing operations |
32.8 |
|
|
(27.0 |
) |
|
15.8 |
|
|
(22.0 |
) |
Depreciation and
amortization |
49.2 |
|
|
29.5 |
|
|
97.2 |
|
|
58.5 |
|
EBITDA |
191.7 |
|
|
(21.3 |
) |
|
228.6 |
|
|
36.4 |
|
|
|
|
|
|
|
|
|
Adjustments |
|
|
|
|
|
|
|
Net inventory valuation
(gain) loss |
(0.3 |
) |
|
10.7 |
|
|
(0.7 |
) |
|
13.4 |
|
Unrealized hedging
loss |
9.9 |
|
|
6.6 |
|
|
24.7 |
|
|
0.1 |
|
Transaction related
expenses |
2.6 |
|
|
2.5 |
|
|
13.2 |
|
|
4.2 |
|
Impairment loss on
assets held for sale |
— |
|
|
— |
|
|
27.5 |
|
|
— |
|
Gain on sale of the
asphalt business |
(13.2 |
) |
|
— |
|
|
(13.2 |
) |
|
— |
|
Discontinued operations
loss, net of tax |
0.8 |
|
|
— |
|
|
9.0 |
|
|
— |
|
Non controlling
interest loss |
7.6 |
|
|
5.7 |
|
|
22.5 |
|
|
9.8 |
|
Total
adjustments |
7.4 |
|
|
25.5 |
|
|
83.0 |
|
|
27.5 |
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA |
$ |
199.1 |
|
|
$ |
4.2 |
|
|
$ |
311.6 |
|
|
$ |
63.9 |
|
|
|
|
|
|
|
|
|
Investor / Media Relations Contact:Keith
JohnsonDelek US Holdings, Inc.Vice President of Investor
Relations615-435-1366
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