Delek US Holdings, Inc. (NYSE: DK) (“Delek US”) today announced
financial results for its third quarter ended September 30,
2018. Delek US reported third quarter 2018 net income of $179.8
million, or $2.03 per diluted share, versus net income of $104.4
million, or $1.29 per diluted share, for the quarter ended
September 30, 2017. On an adjusted basis, Delek US
reported adjusted net income of $174.8 million, or $2.02 per
diluted share for the third quarter 2018. This compares to adjusted
net income of $60.9 million, or $0.77 per diluted share, in the
prior-year period. Adjusted earnings before interest, taxes,
depreciation and amortization ("Adjusted EBITDA") was $310.6
million compared to Adjusted EBITDA of $186.7 million in the prior-
year period. Reconciliations of net income reported under U.S. GAAP
to adjusted net income and Adjusted EBITDA are included in the
financial tables attached to this release.
Results improved year-over-year primarily due to
better performance in the refining segment. The refining segment
contribution margin was $319.5 million in the third quarter 2018,
compared to a contribution margin of $180.1 million in the
prior-year period. The improved results in refining were driven
primarily by a wider discount for the Midland to Cushing
differential that more than offset a lower crack spread
environment. The logistics segment contribution margin improved to
$43.1 million during the quarter compared to $30.9 million in the
prior-year period, as it primarily 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 $15.3 million during the quarter
compared to $13.5 million in the prior-year period.
Uzi Yemin, Chairman, President and Chief
Executive Officer of Delek US, stated, "We had a great quarter as
we generated $368 million of cash from continuing operations,
invested in our business and returned cash to shareholders, while
reducing net debt by approximately $157 million compared to June
30, 2018. Our focus to grow in the Permian Basin, where we
are currently working with over half of the producers, continues to
move forward with the announcement today of our Big Spring
Gathering System. The combination of gathering and our proposed
interest in a long-haul pipeline should support our strategy
to increase the amount of stable EBITDA generation in our business
model as we grow our midstream operations with a target to achieve
approximately $370 to $390 million of total annualized midstream
EBITDA by 2022. As we develop these projects, it should
further enhance the ability of our consolidated operations to
generate approximately $1.0 billion of EBITDA on a consistent
basis. We believe our financial flexibility and strong
balance sheet should give us the ability to fund our midstream
growth plans with a mix of 60 percent to 70 percent debt and the
remainder in cash during the construction period, while also
returning cash to shareholders. Currently we believe our stock is a
very attractive investment relative to other opportunities.
We intend to repurchase $150 million of Delek US stock, or 30
percent of our new $500 million authorization, in the fourth
quarter 2018. In addition, our Board of Directors approved a 4
percent increase in our regular quarterly dividend. This would
bring our expected 2018 total cash returned to shareholders,
including dividends and repurchases, to approximately $445 million
or 14 percent of our current market capitalization. We remain
focused on our rigorous capital allocation program that balances
returning cash to our shareholders, investing in our business and
exploring opportunities to provide future growth in order to create
long term value for our shareholders."
Big Spring Gathering System
The Big Spring Crude Oil Gathering System has
received commitments totaling more than 200,000 dedicated acres
that will help support further development of this system by Delek
US. The system will transport high quality Permian crude oil from
points of origin in Howard, Borden, Martin and Midland counties in
the Midland Basin to Delek US’ Big Spring terminal in Howard
County. It will have approximately 250 miles of gathering and
transmission pipelines, 650,000 barrels of storage and a throughput
capacity of approximately 300,000 barrels per day, which may be
expanded in the future. This system will allow customers to access
Delek US' refining system. In 2018, the expected spending on
this project is approximately $75.0 million to $80.0 million, with
approximately $125.0 million to $130.0 million to be spent in 2019
to complete the project for an expected total capital cost of
approximately $205.0 million. Parts of this system became
operational in May 2018 and by 2022 the expected annualized EBITDA,
including the crude oil quality benefit in the refining system, is
approximately $40.0 million to $50.0 million. The system
complements the previously announced PGC long haul crude oil
pipeline, which is subject to the receipt of customary regulatory
and Board approval by the partners.
Regular Quarterly Dividend and Share
RepurchaseDelek US announced today its Board of Directors
declared its regular quarterly cash dividend of $0.26 per share.
This represents a 4 percent increase from our previous regular
quarterly dividend. Shareholders of record on November 20,
2018 will receive this cash dividend payable on December 4,
2018.
Based on settlement date during the third
quarter 2018, Delek US repurchased approximately 1.9 million shares
of Delek US common stock for approximately $92.1 million, with an
average price of $48.33 per share. For the nine months ended
September 30, 2018, Delek US repurchased approximately 4.8
million shares for approximately $207.4 million, with an average
price of $42.79 per share. At September 30, 2018, there
was approximately $67.6 million of total available authorization
remaining to repurchase shares. Based on settlement date,
approximately $7.9 million of repurchases were completed in early
October.
The Board of Directors approved a new $500.0
million share repurchase authorization in November 2018, which has
no expiration date. Including the amounts remaining on the
previously approved authorizations, Delek US has approximately
$560.0 million of total authorization to repurchase shares as of
November 6, 2018. Delek US expects to repurchase approximately
$150.0 million during the fourth quarter 2018.
LiquidityAs of
September 30, 2018, Delek US had a cash balance of $1,109.1
million and total consolidated debt of $1,862.0 million, resulting
in net debt of $752.9 million. This compares to a net debt
position of $909.7 million at June 30, 2018. As of
September 30, 2018, Delek US' subsidiary, Delek Logistics, had
$776.7 million of total debt and $19.0 million of cash, which is
included in the consolidated amounts on Delek US' balance sheet.
Excluding Delek Logistics, Delek US had approximately $1,090.1
million in cash and $1,085.3 million of debt, or a $4.8 million net
cash position. This compares to a net debt position, excluding
Delek Logistics, of $177.8 million at June 30, 2018.
Refining SegmentRefining
segment contribution margin was $319.5 million in the third quarter
2018 compared to $180.1 million in the third quarter 2017. On a
year-over-year basis, results benefited from a wider discount for
the Midland to Cushing differential, and lower RINs expense, which
more than offset a lower crack spread environment. The Gulf Coast
5-3-2 crack spread decreased to $14.33 per barrel for the third
quarter 2018, compared to $15.92 per barrel for the same period in
2017 which was positively impacted from Hurricane Harvey related
outages in the Gulf Coast refining system.
Results during the third quarter 2018 do not
fully reflect the Midland to Cushing differential due to an
inventory timing effect. The estimated realized Midland to Cushing
differential included in reported results was approximately $10.40
per barrel during the third quarter 2018, taking into consideration
the inventory timing effect.
During the third quarter 2018, the Midland WTI
crude oil differential to Brent crude oil was an average discount
of $20.48 per barrel compared to $4.84 per barrel in the prior-year
period. The Midland WTI crude oil differential to Cushing WTI was
an average discount of $12.67 per barrel in third quarter 2018
compared to an average discount of $0.76 per barrel in the third
quarter 2017. Backwardation in the oil futures market was
$1.27 per barrel in the third quarter 2018, compared to contango of
$0.24 per barrel in the third quarter 2017.
Logistics SegmentThe logistics
segment contribution margin in the third quarter 2018 increased to
$43.1 million compared to $30.9 million in the third 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 SegmentFor the third
quarter 2018, contribution margin was $15.3 million compared to
$13.5 million in the prior year period for the retail segment. This
improvement was primarily due to improved fuel margins.
Merchandise sales were approximately $89.7 million with an average
retail margin of 31.3% in the third quarter 2018, compared to
merchandise sales of approximately $91.3 million with an average
retail margin of 31.4% in the prior year period. Approximately 56.0
million retail fuel gallons were sold at an average margin of $0.23
per gallon in the third quarter 2018 compared to 54.4 million
retail fuel gallons sold at an average margin of $0.20 per gallon
in the third quarter 2017. On a same store sales basis in the third
quarter 2018, merchandise sales increased 3.7% and fuel gallons
sold increased 4.4%.
Corporate/Other
SegmentContribution margin from the Corporate/Other
segment was a loss of $17.2 million in the third quarter 2018
compared to a loss of $24.3 million in the prior-year period. The
net hedging loss in the third quarter 2018 was $13.0 million
compared to a net hedging loss of $17.0 million in the prior-year
period.
Third Quarter 2018 Results | Conference
Call InformationDelek US will hold a conference call to
discuss its third quarter 2018 results on Wednesday, November 7,
2018 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 today's call will be available on the
investor relations tab of the Delek US' website approximately five
minutes prior to the start of the call. For those who cannot listen
to the live broadcast, a telephonic replay will be available
through February 7, 2019 by dialing (866) 326-3086, passcode
8782573. An archived version of the replay will also be available
at www.DelekUS.com for 90 days.
Investors may also wish to listen to Delek
Logistics’ (NYSE: DKL) third quarter earnings conference call that
will be held on Wednesday, November 7, 2018 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. 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 295 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; 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; the ability to obtain commitments and
construct the 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, 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 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, and adjusted to include income
(loss) attributable to non-controlling interests;
- 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;
- Refining margin - calculated as the difference between total
refining revenues and total cost of materials and other; and
- Refining margin per throughput barrel - calculated as refining
margin divided by our average refining throughput in barrels per
day 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.Consolidated Balance Sheets
(Unaudited)
|
|
September 30,
2018 |
|
December 31,
2017 |
|
|
(In millions, except share
and per share data) |
ASSETS |
|
|
|
|
Current assets: |
|
|
|
|
Cash and cash equivalents |
|
$ |
1,109.1 |
|
|
$ |
931.8 |
|
Accounts receivable, net |
|
736.9 |
|
|
579.6 |
|
Accounts receivable from related parties |
|
3.1 |
|
|
2.1 |
|
Inventories, net of inventory valuation
reserves |
|
923.9 |
|
|
808.4 |
|
Assets held for sale |
|
— |
|
|
160.0 |
|
Other current assets |
|
88.4 |
|
|
129.9 |
|
Total current assets |
|
2,861.4 |
|
|
2,611.8 |
|
Property, plant and equipment: |
|
|
|
|
Property, plant and equipment |
|
2,897.2 |
|
|
2,772.5 |
|
Less: accumulated depreciation |
|
(754.8 |
) |
|
(631.7 |
) |
Property, plant and equipment, net |
|
2,142.4 |
|
|
2,140.8 |
|
Goodwill |
|
857.8 |
|
|
816.6 |
|
Other intangibles, net |
|
105.8 |
|
|
101.1 |
|
Equity method investments |
|
131.3 |
|
|
138.1 |
|
Other non-current assets |
|
60.0 |
|
|
126.8 |
|
Total assets |
|
$ |
6,158.7 |
|
|
$ |
5,935.2 |
|
LIABILITIES AND STOCKHOLDERS’
EQUITY |
|
|
|
|
Current liabilities: |
|
|
|
|
Accounts payable |
|
$ |
1,108.1 |
|
|
$ |
973.4 |
|
Accounts payable to related parties |
|
2.2 |
|
|
1.7 |
|
Current portion of long-term debt |
|
32.0 |
|
|
590.2 |
|
Obligation under Supply and Offtake Agreements |
|
478.7 |
|
|
435.6 |
|
Liabilities associated with assets held for
sale |
|
— |
|
|
105.9 |
|
Accrued expenses and other current liabilities |
|
384.6 |
|
|
564.9 |
|
Total current liabilities |
|
2,005.6 |
|
|
2,671.7 |
|
Non-current liabilities: |
|
|
|
|
Long-term debt, net of current portion |
|
1,830.0 |
|
|
875.4 |
|
Environmental liabilities, net of current
portion |
|
136.1 |
|
|
68.9 |
|
Asset retirement obligations |
|
76.9 |
|
|
72.1 |
|
Deferred tax liabilities |
|
175.2 |
|
|
199.9 |
|
Other non-current liabilities |
|
37.8 |
|
|
83.0 |
|
Total non-current liabilities |
|
2,256.0 |
|
|
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, 90,432,492 shares and 81,533,548 shares issued at
September 30, 2018 and December 31, 2017, respectively |
|
0.9 |
|
|
0.8 |
|
Additional paid-in capital |
|
1,168.8 |
|
|
900.1 |
|
Accumulated other comprehensive income |
|
6.4 |
|
|
6.9 |
|
Treasury stock, 8,302,905 shares and 762,623 shares,
at cost, as of September 30, 2018 and December 31, 2017,
respectively |
|
(356.3 |
) |
|
(25.0 |
) |
Retained earnings |
|
901.5 |
|
|
767.8 |
|
Non-controlling interests in subsidiaries |
|
175.8 |
|
|
313.6 |
|
Total stockholders’ equity |
|
1,897.1 |
|
|
1,964.2 |
|
Total liabilities and stockholders’ equity |
|
$ |
6,158.7 |
|
|
$ |
5,935.2 |
|
Delek US Holdings,
Inc.Consolidated Statements of Income (Unaudited)
(1)
|
|
Three Months
Ended September 30, |
|
Nine Months
Ended September 30, |
|
|
|
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
|
|
(In millions, except share
and per share data) |
Net revenues |
|
$ |
2,495.2 |
|
|
$ |
2,370.6 |
|
|
$ |
7,411.9 |
|
|
$ |
4,783.4 |
|
Cost of sales: |
|
|
|
|
|
|
|
|
Cost of materials and other |
|
1,970.5 |
|
|
2,017.2 |
|
|
6,190.1 |
|
|
4,210.7 |
|
Operating expenses (excluding depreciation and
amortization presented below) |
|
136.4 |
|
|
126.7 |
|
|
400.7 |
|
|
248.5 |
|
Depreciation and amortization |
|
41.2 |
|
|
40.1 |
|
|
119.3 |
|
|
93.2 |
|
Total cost of sales |
|
2,148.1 |
|
|
2,184.0 |
|
|
6,710.1 |
|
|
4,552.4 |
|
Operating expenses related to retail and wholesale
business (excluding depreciation and amortization presented
below) |
|
27.6 |
|
|
26.5 |
|
|
78.9 |
|
|
28.0 |
|
General and administrative expenses |
|
58.0 |
|
|
55.6 |
|
|
176.1 |
|
|
109.6 |
|
Depreciation and amortization |
|
8.0 |
|
|
6.8 |
|
|
27.1 |
|
|
12.2 |
|
Other operating (income) expense, net |
|
(1.7 |
) |
|
0.7 |
|
|
(9.4 |
) |
|
1.0 |
|
Total operating costs and expenses |
|
2,240.0 |
|
|
2,273.6 |
|
|
6,982.8 |
|
|
4,703.2 |
|
Operating income |
|
255.2 |
|
|
97.0 |
|
|
429.1 |
|
|
80.2 |
|
Interest expense |
|
31.2 |
|
|
34.1 |
|
|
95.2 |
|
|
62.5 |
|
Interest income |
|
(1.4 |
) |
|
(0.9 |
) |
|
(3.0 |
) |
|
(2.7 |
) |
Income from equity method investments |
|
(4.0 |
) |
|
(5.1 |
) |
|
(6.9 |
) |
|
(9.7 |
) |
Gain on remeasurement of equity method investment |
|
— |
|
|
(190.1 |
) |
|
— |
|
|
(190.1 |
) |
Gain on sale of business |
|
— |
|
|
— |
|
|
(13.2 |
) |
|
— |
|
Impairment loss on assets held for sale |
|
— |
|
|
— |
|
|
27.5 |
|
|
— |
|
Loss on extinguishment of debt |
|
0.1 |
|
|
— |
|
|
9.1 |
|
|
— |
|
Other (income) expense, net |
|
(7.5 |
) |
|
7.0 |
|
|
(7.9 |
) |
|
7.1 |
|
Total non-operating expenses (income), net |
|
18.4 |
|
|
(155.0 |
) |
|
100.8 |
|
|
(132.9 |
) |
Income from continuing operations before income tax
expense |
|
236.8 |
|
|
252.0 |
|
|
328.3 |
|
|
213.1 |
|
Income tax expense |
|
51.0 |
|
|
133.5 |
|
|
66.8 |
|
|
111.5 |
|
Income from continuing operations, net of tax |
|
185.8 |
|
|
118.5 |
|
|
261.5 |
|
|
101.6 |
|
Discontinued operations: |
|
|
|
|
|
|
|
|
Income (loss) from discontinued operations,
including gain (loss) on sale of discontinued operations |
|
0.8 |
|
|
(6.4 |
) |
|
(10.7 |
) |
|
(6.4 |
) |
Income tax expense (benefit) |
|
0.3 |
|
|
(2.3 |
) |
|
(2.2 |
) |
|
(2.3 |
) |
Income (loss) from discontinued operations, net of
tax |
|
0.5 |
|
|
(4.1 |
) |
|
(8.5 |
) |
|
(4.1 |
) |
Net income |
|
186.3 |
|
|
114.4 |
|
|
253.0 |
|
|
97.5 |
|
Net income attributed to non-controlling interests |
|
6.5 |
|
|
10.0 |
|
|
29.0 |
|
|
19.8 |
|
Net income attributable to Delek |
|
$ |
179.8 |
|
|
$ |
104.4 |
|
|
$ |
224.0 |
|
|
$ |
77.7 |
|
|
|
|
|
|
|
|
|
|
Basic income per share: |
|
|
|
|
|
|
|
|
Income from continuing operations |
|
$ |
2.15 |
|
|
$ |
1.35 |
|
|
$ |
2.89 |
|
|
$ |
1.20 |
|
Income (loss) from discontinued operations |
|
0.01 |
|
|
(0.05 |
) |
|
$ |
(0.20 |
) |
|
$ |
(0.06 |
) |
Total basic income per share |
|
$ |
2.16 |
|
|
$ |
1.30 |
|
|
$ |
2.69 |
|
|
$ |
1.14 |
|
|
|
|
|
|
|
|
|
|
Diluted income per share: |
|
|
|
|
|
|
|
|
Income from continuing operations |
|
$ |
2.02 |
|
|
$ |
1.34 |
|
|
$ |
2.75 |
|
|
$ |
1.19 |
|
Income (loss) from discontinued operations |
|
0.01 |
|
|
(0.05 |
) |
|
$ |
(0.19 |
) |
|
$ |
(0.06 |
) |
Total diluted income per share |
|
$ |
2.03 |
|
|
$ |
1.29 |
|
|
$ |
2.56 |
|
|
$ |
1.13 |
|
Weighted average common shares outstanding: |
|
|
|
|
|
|
|
|
Basic |
|
83,575,122 |
|
|
80,581,762 |
|
|
83,294,473 |
|
|
68,272,918 |
|
Diluted |
|
89,021,260 |
|
|
81,245,405 |
|
|
88,369,113 |
|
|
68,975,974 |
|
Dividends declared per common share outstanding |
|
$ |
0.25 |
|
|
$ |
0.15 |
|
|
$ |
0.70 |
|
|
$ |
0.45 |
|
(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.
Delek US Holdings,
Inc. |
Consolidated Statements
of Cash Flows (Unaudited) |
(In
millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September
30, |
|
Nine Months Ended September
30, |
|
|
|
|
|
2018 (1) |
|
2017 (1) |
|
2018 |
|
2017 |
Cash flows from operating
activities: |
|
|
|
|
|
|
Net income |
|
$ |
186.3 |
|
|
$ |
114.4 |
|
|
$ |
253.0 |
|
|
$ |
97.5 |
|
Adjustments to reconcile net income to net cash
provided by operating activities: |
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
49.2 |
|
|
46.9 |
|
|
146.4 |
|
|
105.4 |
|
|
Amortization of above and below market leases,
net |
|
(1.1 |
) |
|
— |
|
|
(1.1 |
) |
|
— |
|
|
Amortization of deferred financing costs and debt
discount |
|
2.6 |
|
|
3.3 |
|
|
7.4 |
|
|
5.3 |
|
|
Accretion of environmental liabilities and asset
retirement obligations |
|
0.8 |
|
|
0.2 |
|
|
2.6 |
|
|
0.4 |
|
|
Amortization of unfavorable contract liability |
|
— |
|
|
(1.5 |
) |
|
(2.2 |
) |
|
(4.4 |
) |
|
Deferred income taxes |
|
36.1 |
|
|
110.2 |
|
|
(34.7 |
) |
|
97.8 |
|
|
Income from equity method investments |
|
(4.0 |
) |
|
(5.1 |
) |
|
(6.9 |
) |
|
(9.7 |
) |
|
Dividends from equity method investments |
|
2.9 |
|
|
0.9 |
|
|
5.2 |
|
|
1.1 |
|
|
Loss on disposal of assets |
|
— |
|
|
0.7 |
|
|
1.3 |
|
|
1.0 |
|
|
Gain on remeasurement of equity method
investment |
|
— |
|
|
(190.1 |
) |
|
— |
|
|
(190.1 |
) |
|
Loss on extinguishment of debt |
|
0.1 |
|
|
— |
|
|
9.1 |
|
|
— |
|
|
Gain on sale of business |
|
— |
|
|
— |
|
|
(13.2 |
) |
|
— |
|
|
Impairment of assets held for sale |
|
— |
|
|
— |
|
|
27.5 |
|
|
— |
|
|
Equity-based compensation expense |
|
5.2 |
|
|
4.7 |
|
|
15.6 |
|
|
12.6 |
|
|
(Income) loss from discontinued operations |
|
(0.5 |
) |
|
4.1 |
|
|
8.5 |
|
|
4.1 |
|
|
Changes in assets and liabilities, net of
acquisitions: |
|
|
|
|
|
|
|
|
|
|
Accounts receivable |
|
80.8 |
|
|
(35.5 |
) |
|
(96.9 |
) |
|
(57.5 |
) |
|
|
Inventories and other current assets |
|
(32.5 |
) |
|
(33.2 |
) |
|
(78.7 |
) |
|
(38.1 |
) |
|
|
Fair value of derivatives |
|
48.5 |
|
|
8.4 |
|
|
(64.1 |
) |
|
18.9 |
|
|
|
Accounts payable and other current liabilities |
|
6.9 |
|
|
79.0 |
|
|
50.5 |
|
|
6.6 |
|
|
|
Obligation under Supply and Offtake Agreement |
|
7.5 |
|
|
43.3 |
|
|
32.2 |
|
|
64.1 |
|
|
|
Non-current assets and liabilities, net |
|
(20.9 |
) |
|
(24.2 |
) |
|
(14.4 |
) |
|
(35.4 |
) |
|
Cash provided by operating activities -
continuing operations |
|
367.9 |
|
|
126.5 |
|
|
247.1 |
|
|
79.6 |
|
|
Cash used in operating activities -
discontinued operations |
|
(14.5 |
) |
|
(7.2 |
) |
|
(30.1 |
) |
|
(7.2 |
) |
|
|
|
Net cash provided by operating activities |
|
353.4 |
|
|
119.3 |
|
|
217.0 |
|
|
72.4 |
|
Cash flows from investing
activities: |
|
|
|
|
|
|
|
|
|
Business combinations, net of cash acquired |
|
— |
|
|
205.3 |
|
|
— |
|
|
200.5 |
|
|
Equity method investment contributions |
|
— |
|
|
(1.9 |
) |
|
(0.2 |
) |
|
(4.8 |
) |
|
Distributions from equity method investments |
|
0.3 |
|
|
0.3 |
|
|
1.0 |
|
|
10.9 |
|
|
Purchases of property, plant and equipment |
|
(85.5 |
) |
|
(73.4 |
) |
|
(228.0 |
) |
|
(108.4 |
) |
|
Purchase of intangible assets |
|
(1.2 |
) |
|
(5.5 |
) |
|
(1.7 |
) |
|
(5.5 |
) |
|
Proceeds from sale of property, plant and
equipment |
|
5.1 |
|
|
— |
|
|
5.4 |
|
|
— |
|
|
Proceeds from sale of business |
|
— |
|
|
— |
|
|
110.8 |
|
|
— |
|
|
Proceeds from sales of discontinued operations |
|
— |
|
|
— |
|
|
39.7 |
|
|
— |
|
|
Cash (used in) provided by investing
activities - continuing operations |
|
(81.3 |
) |
|
124.8 |
|
|
(73.0 |
) |
|
92.7 |
|
|
Cash provided by investing activities -
discontinued operations |
|
14.5 |
|
|
13.5 |
|
|
20.0 |
|
|
13.5 |
|
|
|
|
Net cash (used in) provided by investing
activities |
|
(66.8 |
) |
|
138.3 |
|
|
(53.0 |
) |
|
106.2 |
|
Cash flows from financing
activities: |
|
|
|
|
|
|
|
|
|
Proceeds from long-term revolvers |
|
179.5 |
|
|
347.2 |
|
|
1,749.1 |
|
|
781.7 |
|
|
Payments on long-term revolvers |
|
(210.2 |
) |
|
(292.9 |
) |
|
(1,227.8 |
) |
|
(920.5 |
) |
|
Proceeds from term debt |
|
— |
|
|
— |
|
|
690.6 |
|
|
248.1 |
|
|
Payments on term debt |
(151.7 |
) |
|
(19.5 |
) |
|
(824.6 |
) |
|
(79.9 |
) |
|
Proceeds from product financing agreements |
|
— |
|
|
— |
|
|
— |
|
|
21.0 |
|
|
Repayments of product financing agreements |
|
— |
|
|
(3.0 |
) |
|
(72.4 |
) |
|
(9.0 |
) |
|
Taxes paid due to the net settlement of equity-based
compensation |
|
(2.0 |
) |
|
(0.5 |
) |
|
(10.8 |
) |
|
(2.7 |
) |
|
Repurchase of common stock |
|
(92.1 |
) |
|
— |
|
|
(207.4 |
) |
|
— |
|
|
Repurchase of non-controlling interest |
|
— |
|
|
— |
|
|
— |
|
|
(7.3 |
) |
|
Distribution to non-controlling interest |
|
(7.4 |
) |
|
(10.6 |
) |
|
(21.5 |
) |
|
(23.8 |
) |
|
Dividends paid |
|
(21.0 |
) |
|
(12.3 |
) |
|
(58.8 |
) |
|
(31.3 |
) |
|
Deferred financing costs paid |
|
(5.4 |
) |
|
(0.3 |
) |
|
(13.2 |
) |
|
(6.1 |
) |
|
Cash provided by (used in) financing
activities - continuing operations |
|
(310.3 |
) |
|
8.1 |
|
|
3.2 |
|
|
(29.8 |
) |
|
Cash used in financing activities -
discontinued operations |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
|
Net cash provided by (used in) financing
activities |
|
(310.3 |
) |
|
8.1 |
|
|
3.2 |
|
|
(29.8 |
) |
Net increase in cash and cash equivalents |
|
(23.7 |
) |
|
265.7 |
|
|
167.2 |
|
|
148.8 |
|
Cash and cash equivalents at the beginning of the
period |
|
1,132.8 |
|
|
572.3 |
|
|
941.9 |
|
|
689.2 |
|
Cash and cash equivalents at the end of the
period |
|
1,109.1 |
|
|
838.0 |
|
|
1,109.1 |
|
|
838.0 |
|
Less cash and cash equivalents of discontinued
operations at the end of the period |
|
— |
|
|
6.3 |
|
|
— |
|
|
6.3 |
|
Cash and cash equivalents of continuing operations
at the end of the period |
|
$ |
1,109.1 |
|
|
$ |
831.7 |
|
|
$ |
1,109.1 |
|
|
$ |
831.7 |
|
(1) The statements of cash flows for the
three months ended September 30, 2018 and 2017 have been derived
from taking the difference between the year-to-date statements of
cash flows for the nine months ended September 30, 2018 and 2017
compared to the six months ended June 30, 2018 and 2017 (as
previously reported on our Quarterly Reports on Forms 10-Q),
respectively. Therefore, any changes in presentation that occurred
in year-to-date cash flow results for the nine months ended
September 30, 2018 or 2017 are reflected in the three-month periods
then ended, as no retrospective changes in presentation to June 30
statements previously reported on our Quarterly Reports on Forms
10-Q have been made.
Delek US Holdings,
Inc. |
Segment Data (Unaudited) |
(In millions) |
|
|
|
Three Months Ended
September 30, 2018 |
|
|
Refining |
|
Logistics |
|
Retail |
|
Corporate,
Other and Eliminations |
|
Consolidated |
Net revenues (excluding intercompany fees and
sales) |
|
$ |
2,146.8 |
|
|
$ |
100.3 |
|
|
$ |
246.4 |
|
|
$ |
1.7 |
|
|
$ |
2,495.2 |
|
Intercompany fees and sales |
|
228.8 |
|
|
63.8 |
|
|
— |
|
|
(292.6 |
) |
|
— |
|
Operating costs and expenses: |
|
|
|
|
|
|
|
|
|
|
Cost of materials and other |
|
1,937.3 |
|
|
105.6 |
|
|
204.4 |
|
|
(276.8 |
) |
|
1,970.5 |
|
Operating expenses (excluding depreciation and
amortization presented below) |
|
118.8 |
|
|
15.4 |
|
|
26.7 |
|
|
3.1 |
|
|
164.0 |
|
Segment contribution margin |
|
$ |
319.5 |
|
|
$ |
43.1 |
|
|
$ |
15.3 |
|
|
$ |
(17.2 |
) |
|
360.7 |
|
Depreciation and amortization |
|
33.8 |
|
|
6.7 |
|
|
5.3 |
|
|
3.4 |
|
|
49.2 |
|
General and administrative expenses |
|
|
|
|
|
|
|
|
|
58.0 |
|
Other operating income, net |
|
|
|
|
|
|
|
|
|
(1.7 |
) |
Operating income |
|
|
|
|
|
|
|
|
|
$ |
255.2 |
|
Total assets |
|
$ |
5,378.3 |
|
|
$ |
693.6 |
|
|
$ |
339.3 |
|
|
$ |
(252.5 |
) |
|
$ |
6,158.7 |
|
Capital spending (excluding business combinations) (1) |
|
$ |
51.1 |
|
|
$ |
2.9 |
|
|
$ |
1.9 |
|
|
$ |
30.2 |
|
|
$ |
86.1 |
|
|
|
Three Months Ended
September 30, 2017 |
|
|
Refining |
|
Logistics |
|
Retail |
|
Corporate,
Other and Eliminations |
|
Consolidated |
Net revenues (excluding intercompany fees and
sales) |
|
$ |
2,005.5 |
|
|
$ |
90.6 |
|
|
$ |
213.9 |
|
|
$ |
60.6 |
|
|
$ |
2,370.6 |
|
Intercompany fees and sales |
|
108.3 |
|
|
40.1 |
|
|
— |
|
|
(148.4 |
) |
|
— |
|
Operating costs and expenses: |
|
|
|
|
|
|
|
|
|
|
Cost of materials and other |
|
1,823.2 |
|
|
89.1 |
|
|
174.6 |
|
|
(69.7 |
) |
|
2,017.2 |
|
Operating expenses (excluding depreciation and
amortization presented below) |
|
110.5 |
|
|
10.7 |
|
|
25.8 |
|
|
6.2 |
|
|
153.2 |
|
Segment contribution margin |
|
$ |
180.1 |
|
|
$ |
30.9 |
|
|
$ |
13.5 |
|
|
$ |
(24.3 |
) |
|
200.2 |
|
Depreciation and amortization |
|
33.2 |
|
|
5.5 |
|
|
3.7 |
|
|
4.5 |
|
|
46.9 |
|
General and administrative expenses |
|
|
|
|
|
|
|
|
|
55.6 |
|
Other operating expense, net |
|
|
|
|
|
|
|
|
|
0.7 |
|
Operating loss |
|
|
|
|
|
|
|
|
|
$ |
97.0 |
|
Total assets (3) |
|
$ |
4,269.0 |
|
|
$ |
422.9 |
|
|
$ |
371.8 |
|
|
$ |
505.4 |
|
|
$ |
5,569.1 |
|
Capital spending (excluding business combinations) |
|
$ |
47.6 |
|
|
$ |
3.8 |
|
|
$ |
10.6 |
|
|
$ |
6.5 |
|
|
$ |
68.5 |
|
Delek US Holdings,
Inc. |
Segment Data (Unaudited) |
(In millions) |
|
|
|
|
|
Nine Months Ended
September 30, 2018 |
|
|
Refining
(2) |
|
Logistics |
|
Retail |
|
Corporate,
Other and Eliminations (2) |
|
Consolidated |
Net revenues (excluding intercompany fees and
sales) |
|
$ |
6,331.1 |
|
|
$ |
319.8 |
|
|
$ |
700.8 |
|
|
$ |
60.2 |
|
|
$ |
7,411.9 |
|
Intercompany fees and sales |
|
640.2 |
|
|
178.5 |
|
|
— |
|
|
(818.7 |
) |
|
— |
|
Operating costs and expenses: |
|
|
|
|
|
|
|
|
|
|
Cost of materials and other |
|
5,994.8 |
|
|
330.6 |
|
|
578.5 |
|
|
(713.8 |
) |
|
6,190.1 |
|
Operating expenses (excluding depreciation and
amortization presented below) |
|
346.7 |
|
|
42.9 |
|
|
76.5 |
|
|
13.5 |
|
|
479.6 |
|
Segment contribution margin |
|
$ |
629.8 |
|
|
$ |
124.8 |
|
|
$ |
45.8 |
|
|
$ |
(58.2 |
) |
|
$ |
742.2 |
|
Depreciation and amortization |
|
99.1 |
|
|
19.7 |
|
|
16.8 |
|
|
10.8 |
|
|
146.4 |
|
General and administrative expenses |
|
|
|
|
|
|
|
|
|
176.1 |
|
Other operating income, net |
|
|
|
|
|
|
|
|
|
(9.4 |
) |
Operating income |
|
|
|
|
|
|
|
|
|
$ |
429.1 |
|
Capital spending (excluding business combinations) (1) |
|
$ |
136.3 |
|
|
$ |
7.4 |
|
|
$ |
6.0 |
|
|
$ |
61.2 |
|
|
$ |
210.9 |
|
|
|
Nine Months Ended September
30, 2017 |
|
|
Refining |
|
Logistics |
|
Retail |
|
Corporate,
Other and Eliminations |
|
Consolidated |
Net revenues (excluding intercompany fees and
sales) |
|
$ |
4,240.9 |
|
|
$ |
270.5 |
|
|
$ |
213.9 |
|
|
$ |
58.1 |
|
|
$ |
4,783.4 |
|
Intercompany fees and sales |
|
125.4 |
|
|
116.4 |
|
|
— |
|
|
(241.8 |
) |
|
— |
|
Operating costs and expenses: |
|
|
|
|
|
|
|
|
|
|
Cost of materials and other |
|
3,888.5 |
|
|
266.7 |
|
|
174.6 |
|
|
(119.1 |
) |
|
4,210.7 |
|
Operating expenses (excluding depreciation and
amortization presented below) |
|
212.9 |
|
|
31.0 |
|
|
25.8 |
|
|
6.8 |
|
|
276.5 |
|
Segment contribution margin |
|
$ |
264.9 |
|
|
$ |
89.2 |
|
|
$ |
13.5 |
|
|
$ |
(71.4 |
) |
|
$ |
296.2 |
|
Depreciation and amortization |
|
76.9 |
|
|
16.4 |
|
|
3.7 |
|
|
8.4 |
|
|
105.4 |
|
General and administrative expenses |
|
|
|
|
|
|
|
|
|
109.6 |
|
Other operating expense, net |
|
|
|
|
|
|
|
|
|
1.0 |
|
Operating loss |
|
|
|
|
|
|
|
|
|
$ |
80.2 |
|
Capital spending (excluding business combinations) |
|
$ |
69.6 |
|
|
$ |
8.7 |
|
|
$ |
10.6 |
|
|
$ |
9.8 |
|
|
$ |
98.7 |
|
(1) Capital spending excludes transaction
costs capitalized in the amount of $0.4 million during the nine
months ended September 30, 2018, that relate to the Big Spring
logistics assets acquisition.(2) The corporate, other and
eliminations segment results of operations for the nine months
ended September 30, 2018 includes Canada trading activity
which was previously included and reported in the refining segment
for the three months ended March 31, 2018.(3) Assets held for
sale of $167.2 million are included in the corporate, other and
eliminations segment as of September 30, 2017.
Refining
Segment |
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
Tyler, TX
Refinery |
|
(Unaudited) |
|
(Unaudited) |
Days in period |
|
92 |
|
|
92 |
|
|
273 |
|
|
273 |
|
Total sales volume
(average barrels per day)(1) |
|
79,691 |
|
|
77,719 |
|
|
78,497 |
|
|
73,865 |
|
Products manufactured
(average barrels per day): |
|
|
|
|
|
|
|
|
Gasoline |
|
40,663 |
|
|
41,986 |
|
|
41,417 |
|
|
39,313 |
|
Diesel/Jet |
|
31,659 |
|
|
29,864 |
|
|
30,742 |
|
|
28,474 |
|
Petrochemicals, LPG, NGLs |
|
3,199 |
|
|
2,526 |
|
|
2,722 |
|
|
2,625 |
|
Other |
|
1,646 |
|
|
1,777 |
|
|
1,718 |
|
|
1,668 |
|
Total
production |
|
77,167 |
|
|
76,153 |
|
|
76,599 |
|
|
72,080 |
|
Throughput (average
barrels per day): |
|
|
|
|
|
|
|
|
Crude oil |
|
72,845 |
|
|
71,332 |
|
|
71,161 |
|
|
67,213 |
|
Other
feedstocks |
|
4,713 |
|
|
6,619 |
|
|
5,867 |
|
|
5,981 |
|
Total
throughput |
|
77,558 |
|
|
77,951 |
|
|
77,028 |
|
|
73,194 |
|
Per barrel of
sales: |
|
|
|
|
|
|
|
|
Tyler refining
margin |
|
$ |
19.84 |
|
|
$ |
13.63 |
|
|
$ |
13.47 |
|
|
$ |
8.07 |
|
Tyler
adjusted refining margin |
|
$ |
19.84 |
|
|
$ |
11.86 |
|
|
$ |
12.71 |
|
|
$ |
8.09 |
|
Direct
operating expenses |
|
$ |
3.57 |
|
|
$ |
3.39 |
|
|
$ |
3.45 |
|
|
$ |
3.62 |
|
Crude Slate: (% based
on amount received in period) |
|
|
|
|
|
|
|
|
WTI crude
oil |
|
82.2 |
% |
|
83.3 |
% |
|
80.7 |
% |
|
80.7 |
% |
East
Texas crude oil |
|
17.8 |
% |
|
16.7 |
% |
|
18.4 |
% |
|
18.4 |
% |
Other |
|
— |
% |
|
— |
% |
|
0.9 |
% |
|
0.9 |
% |
|
|
|
|
|
|
|
|
|
El Dorado, AR
Refinery |
|
|
|
|
|
|
|
|
Days in period |
|
92 |
|
|
92 |
|
|
273 |
|
|
273 |
|
Total sales volume
(average barrels per day)(2) |
|
76,196 |
|
|
84,610 |
|
|
74,400 |
|
|
81,679 |
|
Products manufactured
(average barrels per day): |
|
|
|
|
|
|
|
|
Gasoline |
|
30,522 |
|
|
37,471 |
|
|
33,948 |
|
|
37,922 |
|
Diesel |
|
24,734 |
|
|
28,610 |
|
|
25,423 |
|
|
27,373 |
|
Petrochemicals, LPG, NGLs |
|
1,012 |
|
|
1,776 |
|
|
1,236 |
|
|
1,728 |
|
Asphalt |
|
5,313 |
|
|
6,741 |
|
|
5,036 |
|
|
6,671 |
|
Other |
|
504 |
|
|
1,050 |
|
|
708 |
|
|
1,018 |
|
Total
production |
|
62,085 |
|
|
75,648 |
|
|
66,351 |
|
|
74,712 |
|
Throughput (average
barrels per day): |
|
|
|
|
|
|
|
|
Crude
oil |
|
65,975 |
|
|
74,733 |
|
|
67,688 |
|
|
74,098 |
|
Other
feedstocks |
|
(2,197 |
) |
|
2,755 |
|
|
237 |
|
|
1,915 |
|
Total
throughput |
|
63,778 |
|
|
77,488 |
|
|
67,925 |
|
|
76,013 |
|
Per barrel of
sales: |
|
|
|
|
|
|
|
|
El Dorado
refining margin |
|
$ |
9.21 |
|
|
$ |
7.48 |
|
|
$ |
8.89 |
|
|
$ |
7.94 |
|
El Dorado
adjusted refining margin |
|
$ |
9.21 |
|
|
$ |
7.54 |
|
|
$ |
6.70 |
|
|
$ |
5.85 |
|
Direct
operating expenses |
|
$ |
4.79 |
|
|
$ |
3.68 |
|
|
$ |
4.92 |
|
|
$ |
3.58 |
|
Crude Slate: (% based
on amount received in period) |
|
|
|
|
|
|
|
|
WTI crude
oil |
|
68.3 |
% |
|
62.3 |
% |
|
66.2 |
% |
|
63.4 |
% |
Local
Arkansas crude oil |
|
20.2 |
% |
|
19.0 |
% |
|
20.6 |
% |
|
18.9 |
% |
Other |
|
11.5 |
% |
|
18.7 |
% |
|
13.2 |
% |
|
17.7 |
% |
Refining
Segment |
|
Three Months Ended September 30, |
Nine Months Ended September 30, |
|
|
2018 |
|
|
2017 |
|
|
2018 |
|
|
2017 |
|
Big Spring, TX
Refinery (acquired on July 1, 2017) |
|
(Unaudited) |
|
(Unaudited) |
Days in period - based
on date acquired |
|
92 |
|
|
92 |
|
|
273 |
|
|
92 |
|
Total sales volume
(average barrels per day) (3) |
|
78,062 |
|
|
74,362 |
|
|
72,669 |
|
|
74,362 |
|
Products manufactured
(average barrels per day): |
|
|
|
|
|
|
|
|
Gasoline |
|
37,587 |
|
|
35,990 |
|
|
34,931 |
|
|
35,990 |
|
Diesel/Jet |
|
29,177 |
|
|
27,001 |
|
|
25,864 |
|
|
27,001 |
|
Petrochemicals, LPG, NGLs |
|
3,889 |
|
|
3,861 |
|
|
3,585 |
|
|
3,861 |
|
Asphalt |
|
1,713 |
|
|
1,213 |
|
|
1,808 |
|
|
1,213 |
|
Other |
|
1,504 |
|
|
1,291 |
|
|
1,366 |
|
|
1,291 |
|
Total
production |
|
73,870 |
|
|
69,356 |
|
|
67,554 |
|
|
69,356 |
|
Throughput (average
barrels per day): |
|
|
|
|
|
|
|
|
Crude
oil |
|
72,689 |
|
|
69,117 |
|
|
66,223 |
|
|
69,117 |
|
Other
feedstocks |
|
828 |
|
|
716 |
|
|
947 |
|
|
716 |
|
Total
throughput |
|
73,517 |
|
|
69,833 |
|
|
67,170 |
|
|
69,833 |
|
Per barrel of
sales: |
|
|
|
|
|
|
|
|
Big Spring refining
margin |
|
$ |
22.20 |
|
|
$ |
11.71 |
|
|
$ |
16.73 |
|
|
$ |
11.71 |
|
Big
Spring adjusted refining margin |
|
$ |
22.18 |
|
|
$ |
14.93 |
|
|
$ |
16.71 |
|
|
$ |
14.93 |
|
Direct
operating expenses |
|
$ |
3.78 |
|
|
$ |
3.88 |
|
|
$ |
4.12 |
|
|
$ |
3.88 |
|
Crude Slate: (% based
on amount received in period) |
|
|
|
|
|
|
|
|
WTI crude
oil |
|
75.4 |
% |
|
75.4 |
% |
|
72.7 |
% |
|
75.4 |
% |
WTS crude
oil |
|
24.6 |
% |
|
24.6 |
% |
|
27.3 |
% |
|
24.6 |
% |
|
|
|
|
|
|
|
|
|
Krotz Springs,
LA Refinery (acquired on July 1, 2017) |
|
|
|
|
|
|
|
|
Days in period - based
on date acquired |
|
92 |
|
|
92 |
|
|
273 |
|
|
92 |
|
Total sales volume
(average barrels per day) (4) |
|
76,353 |
|
|
71,129 |
|
|
77,667 |
|
|
71,129 |
|
Products manufactured
(average barrels per day): |
|
|
|
|
|
|
|
|
Gasoline |
|
33,103 |
|
|
32,383 |
|
|
36,028 |
|
|
32,383 |
|
Diesel/Jet |
|
30,428 |
|
|
27,994 |
|
|
31,161 |
|
|
27,994 |
|
Heavy
oils |
|
1,031 |
|
|
978 |
|
|
1,243 |
|
|
978 |
|
Petrochemicals, LPG, NGLs |
|
6,531 |
|
|
6,765 |
|
|
7,188 |
|
|
6,765 |
|
Total
production |
|
71,093 |
|
|
68,120 |
|
|
75,620 |
|
|
68,120 |
|
Throughput (average
barrels per day): |
|
|
|
|
|
|
|
|
Crude
oil |
|
71,746 |
|
|
68,998 |
|
|
73,410 |
|
|
68,998 |
|
Other
feedstocks |
|
(1,552 |
) |
|
(706 |
) |
|
1,072 |
|
|
(706 |
) |
Total
throughput |
|
70,194 |
|
|
68,292 |
|
|
74,482 |
|
|
68,292 |
|
Per barrel of
sales: |
|
|
|
|
|
|
|
|
Krotz
Springs refining margin |
|
$ |
10.41 |
|
|
$ |
8.18 |
|
|
$ |
8.70 |
|
|
$ |
8.18 |
|
Krotz
Springs adjusted refining margin |
|
$ |
10.41 |
|
|
$ |
9.43 |
|
|
$ |
7.49 |
|
|
$ |
9.43 |
|
Direct
operating expenses |
|
$ |
3.98 |
|
|
$ |
4.08 |
|
|
$ |
3.80 |
|
|
$ |
4.08 |
|
Crude Slate: (% based
on amount received in period) |
|
|
|
|
|
|
|
|
WTI
Crude |
|
71.6 |
% |
|
46.3 |
% |
|
62.1 |
% |
|
46.3 |
% |
Gulf
Coast Sweet Crude |
|
28.4 |
% |
|
53.7 |
% |
|
37.9 |
% |
|
53.7 |
% |
|
|
|
|
|
|
|
|
|
Pricing
statistics (average for the period presented): |
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
|
2018 |
|
|
2017 |
|
|
2018 |
|
|
2017 |
|
|
|
(Unaudited) |
|
(Unaudited) |
WTI — Cushing crude oil
(per barrel) |
|
$ |
69.63 |
|
|
$ |
48.16 |
|
|
$ |
66.90 |
|
|
$ |
49.31 |
|
WTI — Midland crude oil
(per barrel) |
|
$ |
55.28 |
|
|
$ |
47.37 |
|
|
$ |
59.21 |
|
|
$ |
48.78 |
|
WTS -- Midland crude
oil (per barrel) (5) |
|
$ |
55.36 |
|
|
$ |
47.19 |
|
|
$ |
58.76 |
|
|
$ |
48.16 |
|
LLS crude oil (per
barrel) (5) |
|
$ |
74.14 |
|
|
$ |
51.62 |
|
|
$ |
71.06 |
|
|
$ |
51.72 |
|
Brent crude oil (per
barrel) |
|
$ |
75.76 |
|
|
$ |
52.21 |
|
|
$ |
72.71 |
|
|
$ |
52.49 |
|
|
|
|
|
|
|
|
|
|
US Gulf Coast 5-3-2
crack spread (per barrel) (5) |
|
$ |
14.33 |
|
|
$ |
15.92 |
|
|
$ |
13.44 |
|
|
$ |
12.46 |
|
US Gulf Coast 3-2-1
crack spread (per barrel) (5) |
|
$ |
17.43 |
|
|
$ |
20.16 |
|
|
$ |
17.02 |
|
|
$ |
16.20 |
|
US Gulf Coast 2-1-1
crack spread (per barrel) (5) |
|
$ |
11.20 |
|
|
$ |
13.63 |
|
|
$ |
10.59 |
|
|
$ |
11.30 |
|
|
|
|
|
|
|
|
|
|
US Gulf Coast Unleaded
Gasoline (per gallon) |
|
$ |
1.98 |
|
|
$ |
1.58 |
|
|
$ |
1.91 |
|
|
$ |
1.52 |
|
Gulf Coast Ultra low
sulfur diesel (per gallon) |
|
$ |
2.14 |
|
|
$ |
1.62 |
|
|
$ |
2.06 |
|
|
$ |
1.55 |
|
US Gulf Coast high
sulfur diesel (per gallon) |
|
$ |
2.03 |
|
|
$ |
1.44 |
|
|
$ |
1.92 |
|
|
$ |
1.40 |
|
Natural gas (per
MMBTU) |
|
$ |
2.86 |
|
|
$ |
2.95 |
|
|
$ |
2.85 |
|
|
$ |
3.05 |
|
- Total sales volume includes 608 bpd sold to the logistics
segment during the nine months ended September 30, 2018 and
869 and 851 bpd during the three and nine months ended
September 30, 2017, respectively. Total sales volume
also includes sales of 365 and 203 bpd of intermediate and finished
products to the El Dorado refinery during the three and nine months
ended September 30, 2018, respectively, and 350 and 121 bpd
during the three and nine months ended September 30, 2017,
respectively. Total sales volume also includes 398 and 438
bpd of produced finished product sold to the Big Spring refinery
and 211 and 150 bpd sold to the Krotz Springs refinery during the
three and nine months ended September 30, 2018, respectively.
Total sales volume excludes 5,218 and 4,589 bpd of wholesale
activity during the three and nine months ended September 30,
2018, respectively, and 3,038 and 4,536 bpd of wholesale activity
during the three and nine months ended September 30, 2017,
respectively.
- Total sales volume includes 6,939 and 7,114 bpd of produced
finished product sold to the Tyler refinery during the three and
nine months ended September 30, 2018, respectively, and 460
and 674 bpd during the three and nine months ended
September 30, 2017, respectively; 41,076 and 21,822 bpd of
produced finished product sold to the Krotz Springs refinery during
the three and nine months ended September 30, 2018,
respectively; 57 and 395 bpd of produced finished product sold to
the Big Spring refinery during the three and nine months ended
September 30, 2018, respectively; 194 bpd of produced finished
product sold to logistics segment during the nine months ended
September 30, 2018, and 1,191 and 415 bpd during the three and
nine months ended September 30, 2017, respectively; 167 and
273 bpd of produced finished product sold to the retail
segment during the three and nine months ended
September 30, 2018, respectively; and 51 and 112 bpd of
produced finished product sold to Alon Asphalt Company during the
three and nine months ended September 30, 2018,
respectively. Total sales volume excludes 45,928 and 49,098
bpd of wholesale activity during the three and nine months ended
September 30, 2018, respectively, and 23,917 and 19,726 bpd of
wholesale activity during the three and nine months ended
September 30, 2017, respectively.
- Total sales volume includes 14,457 and 14,171 bpd sold to the
retail segment, 871 and 3,103 bpd sold to the logistics segment and
1,706 and 1,584 bpd sold to Alon Asphalt Company during the three
and nine months ended September 30, 2018, respectively.
- Sales volume includes 38,766 and 32,671 bpd sold to the El
Dorado refinery and 2,356 and 867 bpd sold to the Tyler refinery
during the three and nine months ended September 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
September 30, |
|
Nine Months Ended September
30, |
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
|
|
(Unaudited) |
|
(Unaudited) |
Tyler (2) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported refining margin, $ per barrel |
|
$ |
19.84 |
|
|
$ |
13.63 |
|
|
$ |
13.47 |
|
|
$ |
8.07 |
|
Adjustments: |
|
|
|
|
|
|
|
|
Net inventory valuation (benefit) loss |
|
— |
|
|
(1.77 |
) |
|
(0.04 |
) |
|
0.02 |
|
Renewable bio credit allocated to refinery |
|
— |
|
|
— |
|
|
(0.72 |
) |
|
— |
|
|
|
|
|
|
|
|
|
|
Adjusted refining margin $/bbl |
|
$ |
19.84 |
|
|
$ |
11.86 |
|
|
$ |
12.71 |
|
|
$ |
8.09 |
|
|
El Dorado
(3) |
|
|
|
|
|
|
|
|
Reported refining margin, $ per barrel |
|
$ |
9.21 |
|
|
$ |
7.48 |
|
|
$ |
8.89 |
|
|
$ |
7.94 |
|
Adjustments: |
|
|
|
|
|
|
|
|
Net inventory valuation loss |
|
— |
|
|
0.06 |
|
|
— |
|
|
0.04 |
|
RIN waiver |
|
— |
|
|
— |
|
|
(2.92 |
) |
|
(2.13 |
) |
Renewable bio credit allocated to refinery |
|
— |
|
|
— |
|
|
(0.30 |
) |
|
— |
|
Non-cash RINs inventory mark-to-market |
|
— |
|
|
— |
|
|
1.03 |
|
|
— |
|
|
|
|
|
|
|
|
|
|
Adjusted refining margin $/bbl |
|
$ |
9.21 |
|
|
$ |
7.54 |
|
|
$ |
6.70 |
|
|
$ |
5.85 |
|
|
|
|
|
|
|
|
|
|
|
Big Spring (acquired July
1, 2017) (4) |
|
|
|
|
|
|
|
|
Reported refining margin, $ per barrel |
|
$ |
22.20 |
|
|
$ |
11.71 |
|
|
$ |
16.73 |
|
|
$ |
11.71 |
|
Adjustments: |
|
|
|
|
|
|
|
|
Net inventory valuation benefit |
|
(0.02 |
) |
|
— |
|
|
(0.02 |
) |
|
— |
|
Inventory fair value adjustment |
|
— |
|
|
3.22 |
|
|
— |
|
|
3.22 |
|
|
|
|
|
|
|
|
|
|
Adjusted refining margin $/bbl |
|
$ |
22.18 |
|
|
$ |
14.93 |
|
|
$ |
16.71 |
|
|
$ |
14.93 |
|
|
|
|
|
|
|
|
|
|
|
Krotz Springs (acquired
July 1, 2017) (5) |
|
|
|
|
|
|
|
|
Reported refining margin, $ per barrel |
|
$ |
10.41 |
|
|
$ |
8.18 |
|
|
$ |
8.70 |
|
|
$ |
8.18 |
|
Adjustments: |
|
|
|
|
|
|
|
|
Inventory fair value adjustment |
|
— |
|
|
1.25 |
|
|
— |
|
|
1.25 |
|
RIN waiver |
|
— |
|
|
— |
|
|
(1.49 |
) |
|
— |
|
Non-cash RINs inventory mark-to-market |
|
— |
|
|
— |
|
|
0.28 |
|
|
— |
|
|
|
|
|
|
|
|
|
|
Adjusted refining margin $/bbl |
|
$ |
10.41 |
|
|
$ |
9.43 |
|
|
$ |
7.49 |
|
|
$ |
9.43 |
|
|
|
|
|
|
|
|
|
|
|
(1) Adjusted refining margin per barrel is
presented to provide a measure to evaluate performance excluding
inventory valuation adjustments and other items at the individual
refinery level. Delek US believes that the presentation of adjusted
measures provides useful information to investors in assessing its
results of operations at each refinery. Because adjusted refining
margin per barrel may be defined differently by other companies in
its industry, Delek US' definition may not be comparable to
similarly titled measures of other companies.
(2) Tyler adjusted refining margins exclude the following
items.
Net inventory valuation benefit
(loss) - There was approximately $0.0 million and $12.7
million of valuation benefit (loss) in the third quarter 2018 and
2017, respectively. There was approximately $0.9 million and $(0.4)
million of valuation benefit (loss) in the nine months ended
September 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 was allocated to
Tyler.
(3) El Dorado adjusted refining margins exclude the
following items.
Net inventory valuation benefit
(loss) - There were $0.0 million and $(0.5) million of
valuation benefit (loss) in the third quarter 2018 and 2017,
respectively. There was approximately $0.1 million and $(0.8)
million of valuation benefit (loss) in the nine months ended
September 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 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 benefit
(loss) - There were approximately $0.2 million and $0.0
million of valuation benefit (loss) in the third quarter 2018 and
2017, respectively. There was approximately $0.4 million and $0.0
million of valuation benefit (loss) in the nine months ended
September 30, 2018 and 2017, respectively. These amounts
resulted from lower of cost or market adjustments on FIFO inventory
in the respective period.
Inventory Fair Value Adjustment
-- As a result of the acquisition of Alon on July 1, 2017, there
was a $22.0 million inventory fair value charge in the three months
ended September 30, 2017 that reduced margin.
(5) Krotz Springs adjusted refining margins exclude the
following items.
Inventory Fair Value Adjustment
-- As a result of the acquisition of Alon on July 1, 2017 there was
an $8.2 million inventory fair value charge in the three months
ended September 30, 2017 that reduced margin.
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
Krotz Springs refinery in March 2018.
Logistics
Segment |
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
|
|
(Unaudited) |
|
(Unaudited) |
Pipelines &
Transportation: (average bpd) |
|
|
|
|
|
|
|
|
Lion
Pipeline System: |
|
|
|
|
|
|
|
|
Crude
pipelines (non-gathered) |
|
59,150 |
|
|
60,247 |
|
|
56,672 |
|
|
59,653 |
|
Refined
products pipelines |
|
43,762 |
|
|
51,623 |
|
|
47,154 |
|
|
50,933 |
|
SALA
Gathering System |
|
16,704 |
|
|
15,997 |
|
|
16,705 |
|
|
16,160 |
|
East
Texas Crude Logistics System |
|
14,284 |
|
|
15,260 |
|
|
16,402 |
|
|
15,006 |
|
|
|
|
|
|
|
|
|
|
Wholesale
Marketing & Terminalling: |
|
|
|
|
|
|
|
|
East
Texas - Tyler Refinery sales volumes (average bpd) (1) |
|
79,404 |
|
|
74,357 |
|
|
77,349 |
|
|
71,917 |
|
West
Texas marketing throughputs (average bpd) |
|
12,197 |
|
|
12,929 |
|
|
13,453 |
|
|
13,647 |
|
West Texas gross margin
per barrel |
|
$ |
4.65 |
|
|
$ |
4.00 |
|
|
$ |
5.88 |
|
|
$ |
3.62 |
|
Big
Spring Marketing - Refinery sales volume (average bpd) (for period
owned) (2) |
|
80,687 |
|
|
— |
|
|
79,819 |
|
|
— |
|
Terminalling throughputs (average bpd) (3) |
|
167,491 |
|
|
127,229 |
|
|
159,457 |
|
|
123,780 |
|
(1) Excludes jet fuel and petroleum coke.
(2) Throughputs for the nine months ended
September 30, 2018 are for the 214 days we marketed certain
finished products produced at or sold from the Big Spring Refinery
following the execution of the Big Spring Marketing Agreement,
effective March 1, 2018.
(3) Consists of terminalling throughputs at
our Tyler, Big Spring, Big Sandy and Mount Pleasant, Texas; our El
Dorado and North Little Rock, Arkansas; and our Memphis and
Nashville, Tennessee terminals. Throughputs for the nine months
ended September 30, 2018 for the Big Spring terminal are for
the 214 days we operated the terminal following its acquisition
effective March 1, 2018. Barrels per day are calculated
for only the days we operated each terminal. Total throughput
barrels for the nine months ended September 30, 2018 was 41.4
million barrels, which averaged 151,646 bpd for the period.
Retail
Segment |
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
(Operations
were acquired on July 1, 2017) |
|
2018 |
|
|
2017 |
|
|
2018 |
|
|
2017 |
|
|
|
(Unaudited) |
|
|
(Unaudited) |
|
Number of stores (end
of period) (1) |
|
295 |
|
|
302 |
|
|
295 |
|
|
302 |
|
Average number of
stores |
|
295 |
|
|
302 |
|
|
295 |
|
|
302 |
|
Retail fuel sales
(thousands of gallons) |
|
55,996 |
|
|
54,365 |
|
|
163,809 |
|
|
54,365 |
|
Average retail gallons
per average number of stores (in thousands) |
|
196 |
|
|
186 |
|
|
573 |
|
|
186 |
|
Retail fuel margin ($
per gallon) |
|
$ |
0.23 |
|
|
$ |
0.20 |
|
|
$ |
0.22 |
|
|
$ |
0.20 |
|
Merchandise sales (in
millions) |
|
$ |
89.7 |
|
|
$ |
91.3 |
|
|
$ |
258.0 |
|
|
$ |
91.3 |
|
Merchandise sales per
average number of stores (in millions) |
|
$ |
0.3 |
|
|
$ |
0.3 |
|
|
$ |
0.9 |
|
|
$ |
0.3 |
|
Merchandise margin
% |
|
31.3 |
% |
|
31.4 |
% |
|
31.1 |
% |
|
31.4 |
% |
|
Three Months Ended
September 30, 2018 |
Change in same-store fuel gallons sold |
4.4 |
% |
Change in same-store merchandise sales |
3.7 |
% |
(1) At September 30, 2018, there were 295
retail convenience stores of which 286 sold fuel.
Delek US Holdings,
Inc. |
Reconciliation of Amounts Reported
Under U.S. GAAP |
$ in millions |
|
Three Months Ended
September 30, |
|
Nine Months Ended September
30, |
Reconciliation of U.S.
GAAP Net Income attributable to Delek to Adjusted Net
Income |
2018 |
|
2017 |
|
2018 |
|
2017 |
|
(Unaudited) |
|
(Unaudited) |
Reported net income attributable to
Delek |
$ |
179.8 |
|
|
$ |
104.4 |
|
|
$ |
224.0 |
|
|
$ |
77.7 |
|
|
|
|
|
|
|
|
|
Adjustments |
|
|
|
|
|
|
|
Net inventory valuation (gain) loss |
(0.1 |
) |
|
(12.0 |
) |
|
(1.8 |
) |
|
1.5 |
|
Tax effect of inventory valuation |
— |
|
|
4.3 |
|
|
0.4 |
|
|
(0.5 |
) |
Net after tax inventory valuation (gain) loss |
(0.1 |
) |
|
(7.7 |
) |
|
(1.4 |
) |
|
1.0 |
|
|
|
|
|
|
|
|
|
Asset write offs |
— |
|
|
0.7 |
|
|
— |
|
|
0.7 |
|
Tax effect of asset write offs |
— |
|
|
(0.2 |
) |
|
— |
|
|
(0.2 |
) |
Net after tax asset write offs |
— |
|
|
0.5 |
|
|
— |
|
|
0.5 |
|
|
|
|
|
|
|
|
|
Adjusted unrealized hedging (gain) loss |
(7.1 |
) |
|
4.4 |
|
|
3.1 |
|
|
4.5 |
|
Tax effect of adjusted unrealized hedging |
1.6 |
|
|
(1.6 |
) |
|
(0.7 |
) |
|
(1.6 |
) |
Net after tax adjusted unrealized hedging (gain)
loss |
(5.5 |
) |
|
2.8 |
|
|
2.4 |
|
|
2.9 |
|
|
|
|
|
|
|
|
|
Inventory fair value adjustment |
— |
|
|
29.1 |
|
|
— |
|
|
29.1 |
|
Tax effect of inventory fair value adjustment |
— |
|
|
(10.5 |
) |
|
— |
|
|
(10.5 |
) |
Net after tax inventory fair value adjustment |
— |
|
|
18.6 |
|
|
— |
|
|
18.6 |
|
|
|
|
|
|
|
|
|
Transaction related expenses |
1.9 |
|
|
18.4 |
|
|
15.1 |
|
|
22.4 |
|
Tax effect of transaction related expenses |
(0.4 |
) |
|
(6.5 |
) |
|
(3.2 |
) |
|
(7.3 |
) |
Net after tax transaction related expenses |
1.5 |
|
|
11.9 |
|
|
11.9 |
|
|
15.1 |
|
|
|
|
|
|
|
|
|
Gain on remeasurement of equity method investment in
Alon |
— |
|
|
(190.1 |
) |
|
— |
|
|
(190.1 |
) |
Tax effect of gain on remeasurement of equity method
investment in Alon |
— |
|
|
69.5 |
|
|
— |
|
|
69.5 |
|
Net after tax gain on remeasurement of equity method
investment in Alon |
— |
|
|
(120.6 |
) |
|
— |
|
|
(120.6 |
) |
|
|
|
|
|
|
|
|
Deferred tax write-off |
— |
|
|
46.9 |
|
|
— |
|
|
46.9 |
|
Tax effect of deferred tax write-off |
— |
|
|
— |
|
|
— |
|
|
— |
|
Net after tax deferred tax write-off |
— |
|
|
46.9 |
|
|
— |
|
|
46.9 |
|
|
|
|
|
|
|
|
|
Tax Cuts and Jobs Act adjustment (benefit)
expense |
(0.5 |
) |
|
— |
|
|
2.1 |
|
|
— |
|
Tax effect of Tax Cuts and Jobs Act adjustment |
— |
|
|
— |
|
|
— |
|
|
— |
|
Net after tax Tax Cuts and Jobs Act adjustment
(benefit) expense |
(0.5 |
) |
|
— |
|
|
2.1 |
|
|
— |
|
|
|
|
|
|
|
|
|
Loss on extinguishment of debt |
0.1 |
|
|
— |
|
|
9.1 |
|
|
— |
|
Tax effect of loss on extinguishment of debt |
— |
|
|
— |
|
|
(2.1 |
) |
|
— |
|
Net after tax loss on extinguishment of debt |
0.1 |
|
|
— |
|
|
7.0 |
|
|
— |
|
|
|
|
|
|
|
|
|
Impairment loss on assets held for sale |
— |
|
|
— |
|
|
27.5 |
|
|
— |
|
Tax effect of impairment loss on assets held for
sale |
— |
|
|
— |
|
|
(0.5 |
) |
|
— |
|
Net after tax impairment loss on assets held for
sale |
— |
|
|
— |
|
|
27.0 |
|
|
— |
|
|
|
|
|
|
|
|
|
Gain on sale of the asphalt business |
— |
|
|
— |
|
|
(13.2 |
) |
|
— |
|
Tax effect of gain on sale of the asphalt
business |
— |
|
|
— |
|
|
2.9 |
|
|
— |
|
Net after tax gain on sale of the asphalt
business |
— |
|
|
— |
|
|
(10.3 |
) |
|
— |
|
|
|
|
|
|
|
|
|
Discontinued operations (income) loss |
(0.8 |
) |
|
6.4 |
|
|
10.7 |
|
|
6.4 |
|
Tax effect of discontinued operations |
0.3 |
|
|
(2.3 |
) |
|
(2.2 |
) |
|
(2.3 |
) |
Net after tax discontinued operations (income)
loss |
(0.5 |
) |
|
4.1 |
|
|
8.5 |
|
|
4.1 |
|
|
|
|
|
|
|
|
|
Net income attributable to non-controlling interest
of discontinued operations |
— |
|
|
— |
|
|
8.1 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
Net after tax income attributable to non-controlling
interest of discontinued operations |
— |
|
|
— |
|
|
8.1 |
|
|
— |
|
|
|
|
|
|
|
|
|
Total after tax adjustments |
(5.0 |
) |
|
(43.5 |
) |
|
55.3 |
|
|
(31.5 |
) |
|
|
|
|
|
|
|
|
Adjusted net income |
$ |
174.8 |
|
|
$ |
60.9 |
|
|
$ |
279.3 |
|
|
$ |
46.0 |
|
|
|
|
|
|
|
|
|
Delek US Holdings,
Inc. |
Reconciliation of Amounts Reported
Under U.S. GAAP |
per share data |
|
Three Months Ended
September 30, |
|
Nine Months Ended September
30, |
Reconciliation of U.S.
GAAP Income per share to Adjusted Net Income per
share |
2018 |
|
|
2017 |
|
|
2018 |
|
|
2017 |
|
|
(Unaudited) |
|
(Unaudited) |
|
|
|
|
Reported diluted income per
share |
$ |
2.03 |
|
|
$ |
1.29 |
|
|
$ |
2.56 |
|
|
$ |
1.13 |
|
|
|
|
|
|
|
|
|
Adjustments, after tax (per
share) (1) |
|
|
|
|
|
|
|
Net inventory valuation loss (gain) |
— |
|
|
(0.09 |
) |
|
(0.02 |
) |
|
0.01 |
|
Asset write offs |
— |
|
|
0.01 |
|
|
— |
|
|
0.01 |
|
Adjusted unrealized hedging (gain) loss |
(0.06 |
) |
|
0.03 |
|
|
0.03 |
|
|
0.04 |
|
Inventory fair value adjustment |
— |
|
|
0.23 |
|
|
— |
|
|
0.27 |
|
Transaction related expenses |
0.02 |
|
|
0.15 |
|
|
0.13 |
|
|
0.22 |
|
Gain on remeasurement of equity method investment in
Alon |
— |
|
|
(1.48 |
) |
|
— |
|
|
(1.75 |
) |
Deferred tax write-off |
— |
|
|
0.58 |
|
|
— |
|
|
0.68 |
|
Tax Cuts and Jobs Act adjustment (benefit)
expense |
(0.01 |
) |
|
— |
|
|
0.02 |
|
|
— |
|
Impairment loss on assets held for sale |
— |
|
|
— |
|
|
0.31 |
|
|
— |
|
Gain on sale of the asphalt business |
— |
|
|
— |
|
|
(0.12 |
) |
|
— |
|
Loss on extinguishment of debt |
— |
|
|
— |
|
|
0.08 |
|
|
— |
|
Discontinued operations (income) loss |
(0.01 |
) |
|
0.05 |
|
|
0.10 |
|
|
0.06 |
|
Net loss attributable to non-controlling interest of
discontinued operations |
— |
|
|
— |
|
|
0.09 |
|
|
— |
|
|
|
|
|
|
|
|
|
Total adjustments |
(0.06 |
) |
|
(0.52 |
) |
|
0.62 |
|
|
(0.46 |
) |
Adjustment for economic benefit of note hedge
related to Senior Convertible Notes (2) |
0.05 |
|
|
— |
|
|
0.08 |
|
|
— |
|
Adjusted net income per
share |
$ |
2.02 |
|
|
$ |
0.77 |
|
|
$ |
3.26 |
|
|
$ |
0.67 |
|
|
|
|
|
|
|
|
|
Shares used in computing Non-GAAP dilutive effect of
convertible debt (2): |
|
|
|
|
|
|
|
Diluted |
89,021,260 |
|
|
81,245,405 |
|
|
88,369,113 |
|
|
68,975,974 |
|
Less: Adjustment for economic benefit of note hedge
related to Senior Convertible Notes (2) |
2,176,140 |
|
|
— |
|
|
2,183,186 |
|
|
— |
|
Non-GAAP Adjusted Diluted Share Count |
86,845,120 |
|
|
81,245,405 |
|
|
86,185,927 |
|
|
68,975,974 |
|
(1) The tax calculation is based on the appropriate marginal
income tax rate related to each adjustment and for each respective
time period, which is applied to the adjusted items in the
calculation of adjusted net income in all periods.
(2) Delek US had a convertible note hedge transaction in effect
to offset the economic dilution of the additional shares from the
Convertible Notes that matured on September 17, 2018.
Delek US Holdings,
Inc. |
Reconciliation of Amounts
Reported Under U.S. GAAP |
$ in millions |
|
Three Months Ended
September 30, |
|
Nine Months Ended September
30, |
Reconciliation of Net
Income attributable to Delek to Adjusted EBITDA |
2018 |
|
2017 |
|
2018 |
|
2017 |
|
(Unaudited) |
|
(Unaudited) |
Reported net income attributable to
Delek |
$ |
179.8 |
|
|
$ |
104.4 |
|
|
$ |
224.0 |
|
|
$ |
77.7 |
|
|
|
|
|
|
|
|
|
Add: |
|
|
|
|
|
|
|
Interest expense, net |
29.8 |
|
|
33.2 |
|
|
92.2 |
|
|
59.8 |
|
Loss on extinguishment of debt |
0.1 |
|
|
— |
|
|
9.1 |
|
|
— |
|
Income tax expense - continuing operations |
51.0 |
|
|
133.5 |
|
|
66.8 |
|
|
111.5 |
|
Depreciation and amortization |
49.2 |
|
|
46.9 |
|
|
146.4 |
|
|
105.4 |
|
EBITDA |
309.9 |
|
|
318.0 |
|
|
538.5 |
|
|
354.4 |
|
|
|
|
|
|
|
|
|
Adjustments |
|
|
|
|
|
|
|
Net inventory valuation loss (gain) |
(0.1 |
) |
|
(12.0 |
) |
|
(1.8 |
) |
|
1.5 |
|
Asset write offs |
— |
|
|
0.7 |
|
|
— |
|
|
0.7 |
|
Adjusted unrealized hedging (gain) loss |
(7.1 |
) |
|
4.4 |
|
|
3.1 |
|
|
4.5 |
|
Inventory fair value adjustment |
— |
|
|
33.2 |
|
|
— |
|
|
33.2 |
|
Transaction related expenses |
1.9 |
|
|
18.4 |
|
|
15.1 |
|
|
22.4 |
|
Impairment loss on assets held for sale |
— |
|
|
— |
|
|
27.5 |
|
|
— |
|
Gain on sale of the asphalt business |
— |
|
|
— |
|
|
(13.2 |
) |
|
— |
|
Gain on remeasurement of equity method investment in
Alon |
— |
|
|
(190.1 |
) |
|
— |
|
|
(190.1 |
) |
Discontinued operations (income) loss, net of
tax |
(0.5 |
) |
|
4.1 |
|
|
8.5 |
|
|
4.1 |
|
Non-controlling interest income |
6.5 |
|
|
10.0 |
|
|
29.0 |
|
|
19.8 |
|
Total adjustments |
0.7 |
|
|
(131.3 |
) |
|
68.2 |
|
|
(103.9 |
) |
|
|
|
|
|
|
|
|
Adjusted EBITDA |
$ |
310.6 |
|
|
$ |
186.7 |
|
|
$ |
606.7 |
|
|
$ |
250.5 |
|
|
|
|
|
|
|
|
|
Reconciliation of Refining Segment Gross Margin to Refining
Margin |
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
|
2018 |
|
|
2017 |
|
|
2018 |
|
|
2017 |
|
Net revenues |
|
$ |
2,375.6 |
|
|
$ |
2,113.8 |
|
|
$ |
6,971.3 |
|
|
$ |
4,366.3 |
|
Cost of sales |
|
2,089.9 |
|
|
1,966.9 |
|
|
6,440.6 |
|
|
4,178.3 |
|
Gross
margin |
|
285.7 |
|
|
146.9 |
|
|
530.7 |
|
|
188.0 |
|
Add back (items
included in cost of sales): |
|
|
|
|
|
|
|
|
Operating expenses
(excluding depreciation and amortization) |
|
118.8 |
|
|
110.5 |
|
|
346.7 |
|
|
212.9 |
|
Depreciation and
amortization |
|
33.8 |
|
|
33.2 |
|
|
99.1 |
|
|
76.9 |
|
Refining
margin |
|
$ |
438.3 |
|
|
$ |
290.6 |
|
|
$ |
976.5 |
|
|
$ |
477.8 |
|
Reconciliation of Unrealized (Gains) Losses on Economic
Hedge Commodity Derivatives Not Designated as Hedges to Adjusted
Unrealized Hedging (Gains) Losses |
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
2018 |
|
2017 |
|
2018 |
|
2017 |
Unrealized (gain) loss
on economic hedge commodity derivatives not designated as
hedges |
$ |
(13.0 |
) |
|
$ |
10.9 |
|
|
$ |
(2.8 |
) |
|
$ |
11.0 |
|
Less: Portion of
unrealized (gain) loss where the instrument has matured but has not
cash settled |
5.9 |
|
|
(6.5 |
) |
|
5.9 |
|
|
(6.5 |
) |
Adjusted unrealized
hedging (gain) loss |
$ |
(7.1 |
) |
|
$ |
4.4 |
|
|
$ |
3.1 |
|
|
$ |
4.5 |
|
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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