Delek US Holdings Reports Fourth Quarter 2022 Results and Raises Quarterly Regular Dividend by $0.01 to $0.22 per share
Delek US Holdings reported a net loss of $118.7 million or $1.73 per share for Q4 2022, while adjusted net income stood at $60.8 million or $0.88 per share. The company returned $104.1 million to shareholders through dividends and share repurchases. Total capital spending reached $343.1 million in 2022. Notably, the refining segment achieved an impressive adjusted EBITDA of $182 million, and logistics contributed a record $90.6 million. The board approved a 5% increase in the dividend to $0.22 per share, payable on March 17, 2023. The company is optimistic about future market opportunities, particularly in refining and logistics.
- Adjusted EBITDA of $220.9 million in Q4 2022, indicating strong operational performance.
- Successfully returned $104.1 million to shareholders through dividends and share repurchases in Q4.
- 5% increase in quarterly dividend to $0.22 per share, reflecting confidence in financial stability.
- Refining segment's adjusted EBITDA rose to $182.0 million, driven by higher crack spreads.
- Net loss of $118.7 million in Q4 2022, reflecting operational challenges.
- Higher administrative costs led to increased losses in corporate activities, at $(59.5) million.
Fourth Quarter
- Net loss of
$118.7 million for fourth quarter or$1.73 per share - Adjusted net income of
$60.8 million or$0.88 per share, and Adjusted EBITDA of$220.9 million - Returned
$104.1 million to shareholders through dividends and share repurchases - Refining impacted by unplanned downtime
- Record contributions from Logistics business
- Initiated sum of the parts valuation unlock initiative
- Launched cost reduction and process improvement efforts
Full-Year 2022
- Delivered
$257.1 million of net income and$1,185.8 million of Adjusted EBITDA - Returned
$236.4 million to shareholders through dividends and share repurchases,$172.4 million in the second half of 2022 - Capital spending of
$343.1 million , with$152.4 million for growth and$190.7 million for sustaining/regulatory - Achieved crude utilization rate of 93 percent in Refining
- Grew Logistics business through Delek Permian Gathering and acquisition of 3 Bear
BRENTWOOD, Tenn., Feb. 28, 2023 /PRNewswire/ -- Delek US Holdings, Inc. (NYSE: DK) ("Delek US", "Company") today announced financial results for its fourth quarter ended December 31, 2022.
"2022 was a record year for Delek US. Market conditions were strong for refining and midstream, and we were well positioned to capture opportunities throughout the year," said Avigal Soreq, President and Chief Executive Officer of Delek US. "Refining's crude utilization rate was 93 percent for 2022. This includes unplanned downtime at the Big Spring Refinery during the fourth quarter of 2022. Our Logistics segment ran extremely well all year, its record EBITDA reflects this, as well as the successful integration of the 3 Bear assets."
"During 2022, we returned to shareholder friendly pre-pandemic practices. We returned
"Looking ahead, the refining cracks remain elevated. We believe we are well positioned to capture opportunities in the market, given the successful turnaround at the Tyler Refinery, and no significant planned downtime scheduled until late 2024. With this, the board was very supportive and approved an additional 5 percent increase to the quarterly regular dividend, raising it to 22 cents per share," Mr. Soreq concluded.
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Delek US Holdings Results
Three Months Ended December 31, | Year Ended December 31, | |||||||
($ in millions, except per share data) | 2022 | 2021 As Adjusted (1) | 2022 | 2021 As Adjusted (1) | ||||
Net income (loss) attributable to Delek | $ (118.7) | $ (13.4) | $ 257.1 | $ (128.3) | ||||
Diluted income (loss) per share | $ (1.73) | $ (0.18) | $ 3.59 | $ (1.73) | ||||
Adjusted net income (loss) | $ 60.8 | $ (63.2) | $ 525.6 | $ (294.0) | ||||
Adjusted net income (loss) per share | $ 0.88 | $ (0.86) | $ 7.33 | $ (3.95) | ||||
Adjusted EBITDA | $ 220.9 | $ 32.8 | $ 1,185.8 | $ 37.7 | ||||
(1) Adjusted to reflect the retrospective change in accounting policy from LIFO to FIFO for certain inventories. |
Refining Segment
The refining segment Adjusted EBITDA was
Logistics Segment
The logistics segment Adjusted EBITDA in the fourth quarter 2022 was
Retail Segment
For the fourth quarter 2022, Adjusted EBITDA was
Corporate and Other Activity
Adjusted EBITDA from Corporate, Other and Eliminations was a loss of
Shareholder Distributions
During the fourth quarter 2022, Delek US repurchased approximately 2.8 million shares of Delek US common stock for approximately
Liquidity
As of December 31, 2022, Delek US had a cash balance of
Fourth Quarter 2022 Results | Conference Call Information
Delek US will hold a conference call to discuss its fourth quarter 2022 results on Tuesday, February 28, 2023 at 2:00 p.m. Central Time. Investors will have the opportunity to listen to the conference call live by going to www.DelekUS.com and clicking on the Investor Relations tab. Participants are encouraged to register at least 15 minutes early to download and install any necessary software. Presentation materials accompanying the call will be available on the investor relations tab of the Delek US website approximately ten minutes prior to the start of the call. For those who cannot listen to the live broadcast, the online replay will be available on the website for 90 days.
Investors may also wish to listen to Delek Logistics' (NYSE: DKL) fourth quarter 2022 earnings conference call that will be held on Tuesday, February 28, 2022 at 3:30 p.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 will be available online at www.deleklogistics.com.
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About Delek US Holdings, Inc.
Delek US Holdings, Inc. is a diversified downstream energy company with assets in petroleum refining, logistics, pipelines, renewable fuels and convenience store retailing. The refining assets consist primarily 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. Pipeline assets include an ownership interest in the 650-mile Wink to Webster long-haul crude oil pipeline. The convenience store retail segment operates approximately 249 convenience stores in West Texas and New Mexico.
The logistics operations include Delek Logistics Partners, LP (NYSE: DKL). Delek Logistics Partners, LP is a growth-oriented master limited partnership focused on owning and operating midstream energy infrastructure assets. Delek US Holdings, Inc. and its affiliates owned approximately
Safe Harbor Provisions Regarding Forward-Looking Statements
This press release contains forward-looking statements that are based upon current expectations and involve a number of risks and uncertainties. Statements concerning current estimates, expectations and projections about future results, performance, prospects, opportunities, plans, actions and events and other statements, concerns, or matters that are not historical facts are "forward-looking statements," as that term is defined under the federal securities laws. These statements contain words such as "possible," "believe," "should," "could," "would," "predict," "plan," "estimate," "intend," "may," "anticipate," "will," "if", "potential," "expect" or similar expressions, as well as statements in the future tense. These forward-looking statements include, but are not limited to, statements regarding throughput at the Company's refineries; crude oil prices, discounts and quality and our ability to benefit therefrom; cost reductions; growth; scheduled turnaround activity; investments into our business; the performance and execution of our midstream growth initiatives, including the Permian Gathering System, the Red River joint venture and the Wink to Webster long-haul crude oil pipeline, and the flexibility, benefits and the expected returns therefrom; projected benefits of the 3 Bear Acquisition, renewable identification numbers ("RINs") waivers and tax credits and the value and benefit therefrom; cash and liquidity; emissions reductions; opportunities and anticipated performance and financial position.
Investors are cautioned that the following important factors, among others, may affect these forward-looking statements. These factors include, but are not limited to: uncertainty related to timing and amount of future share repurchases and dividend payments; risks and uncertainties with respect to the quantities and costs of crude oil we are able to obtain and the price of the refined petroleum products we ultimately sell, uncertainties regarding future decisions by OPEC regarding production and pricing disputes between OPEC members and Russia; risks and uncertainties related to the integration by Delek Logistics of the 3 Bear business following the recent acquisition; risks and uncertainties related to the Covid-19 pandemic; Delek US' ability to realize cost reductions; 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; risks associated with acquisitions and dispositions; acquired assets may suffer a diminishment in fair value as a result of which we may need to record a write-down or impairment in carrying value of the asset; the possibility of litigation challenging renewable fuel standard waivers; changes in the scope, costs, and/or timing of capital and maintenance projects; the ability to grow the Permian Gathering System; the ability of the Red River joint venture to complete the expansion project to increase the Red River pipeline capacity; the ability of the joint venture to construct the Wink to Webster long haul crude oil pipeline; operating hazards inherent in transporting, storing and processing crude oil and intermediate and finished petroleum products; our competitive position and the effects of competition; the projected growth of the industries in which we operate; general economic and business conditions affecting the geographic areas in which we operate; and other risks described in Delek US' filings with the United States Securities and Exchange Commission (the "SEC"), including risks disclosed in our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and other filings and reports with the SEC.
Forward-looking statements should not be read as a guarantee of future performance or results and will not be accurate indications of the times at, or by, which such performance or results will be achieved. Forward-looking information is based on information available at the time and/or management's good faith belief with respect to future events, and is subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in the statements. Delek US undertakes no obligation to update or revise any such forward-looking statements to reflect events or circumstances that occur, or which Delek US becomes aware of, after the date hereof, except as required by applicable law or regulation.
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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:
- Adjusting items - certain identified infrequently occurring items, non-cash items, and items that are not attributable to or indicative of our on-going operations or that may obscure our underlying results and trends;
- Adjusted net income (loss) - calculated as net income (loss) attributable to Delek US adjusted for relevant Adjusting items recorded during the period;
- Adjusted net income (loss) per share - calculated as Adjusted net income (loss) divided by weighted average shares outstanding, assuming dilution, as adjusted for any anti-dilutive instruments that may not be permitted for consideration in GAAP earnings per share calculations but that nonetheless favorably impact dilution;
- Earnings before interest, taxes, depreciation and amortization ("EBITDA") - calculated as net income (loss) attributable to Delek adjusted to add back interest expense, income tax expense, depreciation and amortization;
- Adjusted EBITDA - calculated as EBITDA adjusted for the relevant identified Adjusting items in Adjusted net income (loss) that do not relate to interest expense, income tax expense, depreciation or amortization, and adjusted to include income (loss) attributable to non-controlling interests;
- Refining margin - calculated as gross margin (which we define as sales minus cost of sales) adjusted for operating expenses and depreciation and amortization included in cost of sales;
- Adjusted refining margin - calculated as refining margin adjusted for other inventory impacts, net inventory LCM valuation loss (benefit), unrealized hedging (gain) loss, and non-cash changes in fair value of the S&O obligation associated with hedging activities;
- Refining production margin - calculated based on the regional market sales price of refined products produced, less allocated transportation, RFS renewable volume obligation and associated feedstock costs. This measure reflects the economics of each refinery exclusive of the financial impact of inventory price risk mitigation programs and marketing uplift strategies;
- Refining production margin per sales barrel - calculated as refining margin divided by our average refining sales in barrels per day (excluding purchased barrels) multiplied by 1,000 and multiplied by the number of days in the period; and
- Net debt - calculated as long-term debt including both current and non-current portions (the most comparable GAAP measure) less cash and cash equivalents as of a specific balance sheet date.
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 relevant comparability between periods, to peers or to market metrics through the inclusion of retroactive regulatory or other adjustments as if they had occurred in the prior periods they relate to, or through the exclusion of certain items that we believe are not indicative of our core operating performance and that may obscure our underlying results and trends. "Net debt," also a non-GAAP financial measure, is an important measure to monitor leverage and evaluate the balance sheet.
Non-GAAP measures have important limitations as analytical tools, because they exclude some, but not all, items that affect net earnings and operating income. These measures should not be considered substitutes for their most directly comparable U.S. GAAP financial measures. Additionally, because Adjusted net income or loss, Adjusted net income or loss per share, EBITDA and adjusted EBITDA, and Adjusted Refining Segment Margin or any of our other identified non-GAAP measures may be defined differently by other companies in its industry, Delek US' definition may not be comparable to similarly titled measures of other companies. See the accompanying tables in this earnings release for a reconciliation of these non-GAAP measures to the most directly comparable GAAP measures.
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Delek US Holdings, Inc. | ||||
Condensed Consolidated Balance Sheets (Unaudited) | ||||
($ in millions, except share and per share data) | ||||
December 31, 2022 | December 31, 2021 As Adjusted (1) | |||
ASSETS | ||||
Current assets: | ||||
Cash and cash equivalents | $ 841.3 | $ 856.5 | ||
Accounts receivable, net | 1,234.4 | 776.6 | ||
Inventories, net of inventory valuation reserves | 1,518.5 | 1,260.7 | ||
Other current assets | 122.7 | 126.0 | ||
Total current assets | 3,716.9 | 3,019.8 | ||
Property, plant and equipment: | ||||
Property, plant and equipment | 4,349.0 | 3,645.4 | ||
Less: accumulated depreciation | (1,572.6) | (1,338.1) | ||
Property, plant and equipment, net | 2,776.4 | 2,307.3 | ||
Operating lease right-of-use assets | 179.5 | 208.5 | ||
Goodwill | 744.3 | 729.7 | ||
Other intangibles, net | 315.6 | 102.7 | ||
Equity method investments | 359.7 | 344.1 | ||
Other non-current assets | 100.4 | 100.5 | ||
Total assets | $ 8,192.8 | $ 6,812.6 | ||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||
Current liabilities: | ||||
Accounts payable | $ 1,745.6 | $ 1,695.3 | ||
Current portion of long-term debt | 74.5 | 92.2 | ||
Current portion of obligation under Inventory Intermediation Agreements | 49.9 | 487.5 | ||
Current portion of operating lease liabilities | 49.6 | 53.9 | ||
Accrued expenses and other current liabilities | 1,166.8 | 797.8 | ||
Total current liabilities | 3,086.4 | 3,126.7 | ||
Non-current liabilities: | ||||
Long-term debt, net of current portion | 2,979.2 | 2,125.8 | ||
Obligation under Inventory Intermediation Agreements | 491.8 | — | ||
Environmental liabilities, net of current portion | 111.5 | 109.5 | ||
Asset retirement obligations | 41.8 | 38.3 | ||
Deferred tax liabilities | 266.5 | 214.5 | ||
Operating lease liabilities, net of current portion | 122.4 | 152.0 | ||
Other non-current liabilities | 23.7 | 31.8 | ||
Total non-current liabilities | 4,036.9 | 2,671.9 | ||
Stockholders' equity: | ||||
Preferred stock, | — | — | ||
Common stock, | 0.9 | 0.9 | ||
Additional paid-in capital | 1,134.1 | 1,206.5 | ||
Accumulated other comprehensive loss | (5.2) | (3.8) | ||
Treasury stock, 17,575,527 shares, at cost, as of December 31, 2022 and December 31, 2021 | (694.1) | (694.1) | ||
Retained earnings | 507.9 | 384.7 | ||
Non-controlling interests in subsidiaries | 125.9 | 119.8 | ||
Total stockholders' equity | 1,069.5 | 1,014.0 | ||
Total liabilities and stockholders' equity | $ 8,192.8 | $ 6,812.6 | ||
(1) Adjusted to reflect the retrospective change in accounting policy from LIFO to FIFO for certain inventories. |
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Delek US Holdings, Inc. | ||||||||
Condensed Consolidated Statements of Income (Unaudited) | ||||||||
($ in millions, except share and per share data) | Three Months Ended December 31, | Year Ended December 31, | ||||||
2022 | 2021 As Adjusted (1) | 2022 | 2021 As Adjusted (1) (2) | |||||
Net revenues | $ 4,479.2 | $ 3,108.0 | $ 20,245.8 | $ 10,648.2 | ||||
Cost of sales: | ||||||||
Cost of materials and other | 4,204.5 | 2,832.5 | 18,355.6 | 9,643.9 | ||||
Operating expenses (excluding depreciation and amortization | 175.6 | 138.9 | 701.8 | 502.0 | ||||
Depreciation and amortization | 71.8 | 61.2 | 263.8 | 239.6 | ||||
Total cost of sales | 4,451.9 | 3,032.6 | 19,321.2 | 10,385.5 | ||||
Insurance proceeds | (3.9) | (18.9) | (31.2) | (23.3) | ||||
Operating expenses related to retail and wholesale business | 17.2 | 23.5 | 106.8 | 110.4 | ||||
General and administrative expenses | 106.8 | 65.0 | 348.8 | 212.6 | ||||
Depreciation and amortization | 6.0 | 7.8 | 23.2 | 25.0 | ||||
Other operating income, net | 4.7 | (27.0) | (12.5) | (27.3) | ||||
Total operating costs and expenses | 4,582.7 | 3,083.0 | 19,756.3 | 10,682.9 | ||||
Operating income (loss) | (103.5) | 25.0 | 489.5 | (34.7) | ||||
Interest expense, net | 62.6 | 36.7 | 195.3 | 136.7 | ||||
Income from equity method investments | (13.3) | (3.8) | (57.7) | (18.3) | ||||
Other income, net | 0.5 | 0.2 | (2.5) | (15.8) | ||||
Total non-operating expense, net | 49.8 | 33.1 | 135.1 | 102.6 | ||||
Income (loss) before income tax expense (benefit) | (153.3) | (8.1) | 354.4 | (137.3) | ||||
Income tax expense (benefit) | (43.6) | (3.0) | 63.9 | (42.0) | ||||
Net income (loss) | (109.7) | (5.1) | 290.5 | (95.3) | ||||
Net income attributed to non-controlling interests | 9.0 | 8.3 | 33.4 | 33.0 | ||||
Net income (loss) attributable to Delek | $ (118.7) | $ (13.4) | $ 257.1 | $ (128.3) | ||||
Basic income (loss) per share | $ (1.73) | $ (0.18) | $ 3.63 | $ (1.73) | ||||
Diluted income (loss) per share | $ (1.73) | $ (0.18) | $ 3.59 | $ (1.73) | ||||
Weighted average common shares outstanding: | ||||||||
Basic | 68,697,820 | 74,141,908 | 70,789,458 | 73,984,104 | ||||
Diluted | 68,697,820 | 74,141,908 | 71,516,361 | 73,984,104 | ||||
(1) | Adjusted to reflect the retrospective change in accounting policy from LIFO to FIFO for certain inventories. |
(2) | In the current period, we reassessed the classification of certain expenses and made certain reclassification adjustments to better represent the nature of those |
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Condensed Cash Flow Data (Unaudited) | |||||||
($ in millions) | Three Months Ended December 31, | Year Ended December 31, | |||||
2022 | 2021 As Adjusted (1) | 2022 | 2021 As Adjusted (1) | ||||
Cash flows from operating activities: | |||||||
Net cash (used in) provided by operating activities | $ (290.8) | $ 161.2 | $ 425.3 | $ 371.4 | |||
Cash flows from investing activities: | |||||||
Net cash used in investing activities | (111.7) | (35.2) | (931.6) | (178.4) | |||
Cash flows from financing activities: | |||||||
Net cash provided by (used in) financing activities | 90.0 | (100.1) | 491.1 | (124.0) | |||
Net (decrease) increase in cash and cash equivalents | (312.5) | 25.9 | (15.2) | 69.0 | |||
Cash and cash equivalents at the beginning of the period | 1,153.8 | 830.6 | 856.5 | 787.5 | |||
Cash and cash equivalents at the end of the period | $ 841.3 | $ 856.5 | $ 841.3 | $ 856.5 | |||
(1) Adjusted to reflect the retrospective change in accounting policy from LIFO to FIFO for certain inventories. |
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Significant Transactions During the Quarter Impacting Results:
Insurance Recoveries
During the fourth quarter 2022, we received insurance recoveries related to the fire and freeze events that occurred during the first quarter 2021, which unfavorably impacted our results during the first two quarters of 2021. For the three months ended December 31, 2022, we have recognized an additional
Other Inventory Impact
"Other inventory impact" is primarily calculated by multiplying the number of barrels sold during the period by the difference between current period weighted average purchase cost per barrel and per barrel cost of materials and other for the period recognized on a FIFO basis. It assumes no beginning or ending inventory, so that the current period average purchase cost per barrel is a reasonable estimate of our market purchase cost for the current period, without giving effect to any build or draw on beginning inventory. These amounts are based on management estimates using a methodology including these assumptions. However, this analysis provides management with a means to compare hypothetical refining margins to current period average crack spreads, as well as provides a means to better compare our results to peers.
Segment Reporting
During the fourth quarter 2022, we realigned our reportable segments for financial reporting purposes to reflect changes in the manner in which our chief operating decision maker, or CODM, assesses financial information for decision-making purposes. The change primarily represents reporting the operating results of wholesale crude operations within the refining segment. Prior to this change, wholesale crude operations were reported as part of corporate, other and eliminations. Through September 30, 2022, the CODM believed that contribution margin was a meaningful measure of performance, and it was used by CODM to analyze the Company and stand-alone operating segment performance. During the fourth quarter 2022, the CODM determined that EBITDA is the key performance measure for planning and forecasting purposes and discontinued the use of contribution margin as a measure of performance. While these reporting changes did not change our consolidated results, segment data for previous years has been restated and is consistent with the current year presentation.
Inventory Intermediation Agreement
On December 22, 2022, Delek US entered into an inventory intermediation agreement (the "Inventory Intermediation Agreement") with Citigroup Energy Inc. ("Citi"). Pursuant to the Inventory Intermediation Agreement, Citi will (i) purchase from and sell to Delek US crude oil and other petroleum feedstocks in connection with processing operations at certain refineries, (ii) purchase from and sell to Delek US all refined products produced by such refineries other than certain excluded products and (iii) in connection with such purchases and sales, Delek US will enter into certain market risk hedges in each case, on the terms and subject to the conditions set forth therein.
On December 27, 2022, in connection with entry into the Inventory Intermediation Agreement, Delek US and J. Aron & Company LLC ("J. Aron") agreed to terminate the existing supply and offtake agreements, with each such termination effective as of December 30, 2022.
Restructuring Costs
In November 2022, we announced that we are progressing a business transformation focused on enterprise-wide opportunities to improve the efficiency of our cost structure. For the three months ended December 31, 2022, we recorded restructuring costs totaling
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Reconciliation of Net Income (Loss) Attributable to Delek to Adjusted Net Income (Loss) | ||||||||
Three Months Ended December 31, | Year Ended December 31, | |||||||
$ in millions (unaudited) | 2022 | 2021 As Adjusted (1) | 2022 | 2021 As Adjusted (1) | ||||
(Unaudited) | (Unaudited) | |||||||
Reported net income (loss) attributable to Delek | $ (118.7) | $ (13.4) | $ 257.1 | $ (128.3) | ||||
Adjusting items (2) | ||||||||
Inventory LCM valuation (benefit) loss | (17.2) | 8.2 | 1.9 | 8.5 | ||||
Tax effect | 3.9 | (1.9) | (0.4) | (2.0) | ||||
Inventory LCM valuation (benefit) loss, net | (13.3) | 6.3 | 1.5 | 6.5 | ||||
Other inventory impact | 193.6 | (61.6) | 331.1 | (218.1) | ||||
Tax effect | (44.2) | 14.4 | (75.7) | 50.8 | ||||
Other inventory impact, net (3) | 149.4 | (47.2) | 255.4 | (167.3) | ||||
Business interruption insurance recoveries | (5.2) | (9.9) | (31.1) | (9.9) | ||||
Tax effect | 1.2 | 2.2 | 7.0 | 2.2 | ||||
Business interruption insurance recoveries, net (3) | (4.0) | (7.7) | (24.1) | (7.7) | ||||
Total El Dorado refinery fire net losses, net of related recoveries | — | 4.0 | — | 7.8 | ||||
Tax effect | — | (1.0) | — | (1.9) | ||||
El Dorado refinery fire losses, net of related recoveries, net | — | 3.0 | — | 5.9 | ||||
Total unrealized hedging (gain) loss where the hedged item is | 50.1 | (5.5) | 24.1 | 6.7 | ||||
Tax effect | (12.2) | 1.3 | (5.9) | (1.6) | ||||
Unrealized hedging (gain) loss where the hedged item is not yet | 37.9 | (4.2) | 18.2 | 5.1 | ||||
Non-cash change in fair value of Supply and Offtake ("S&O") | — | — | — | (6.9) | ||||
Tax effect | — | — | — | 1.5 | ||||
Non-cash change in fair value of S&O Obligation associated | — | — | — | (5.4) | ||||
Non-operating litigation accrual related to pre-Delek/Alon | — | — | — | 6.5 | ||||
Tax effect | — | — | — | (1.6) | ||||
Non-operating litigation accrual related to pre-Delek/Alon | — | — | — | 4.9 | ||||
In-substance indemnification recoveries from WTW Contract | — | — | — | (10.2) | ||||
Tax effect | — | — | — | 2.5 | ||||
Contract termination recoveries in excess of amounts that have or | — | — | — | (7.7) | ||||
Transaction related expenses | — | — | 10.6 | — | ||||
Tax effect | — | — | (2.6) | — | ||||
Transaction related expenses, net (3) | — | — | 8.0 | — | ||||
Restructuring costs | 12.5 | — | 12.5 | — | ||||
Tax effect | (3.0) | — | (3.0) | — | ||||
Restructuring costs, net (3) | 9.5 | — | 9.5 | — | ||||
Total adjusting items (2) | 179.5 | (49.8) | 268.5 | (165.7) | ||||
Adjusted net income (loss) | $ 60.8 | $ (63.2) | $ 525.6 | $ (294.0) | ||||
(1) Adjusted to reflect the retrospective change in accounting policy from LIFO to FIFO for certain inventories. |
(2) All adjustments have been tax effected using the estimated marginal income tax rate, as applicable. |
(3) See further discussion in the "Significant Transactions During the Quarter Impacting Results" section. |
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Reconciliation of U.S. GAAP Income (Loss) per share to Adjusted Net Income (Loss) per share: | ||||||||
Three Months Ended December 31, | Year Ended December 31, | |||||||
$ per share (unaudited) | 2022 | 2021 As Adjusted (1) | 2022 | 2021 As Adjusted (1) | ||||
(Unaudited) | (Unaudited) | |||||||
Reported diluted income (loss) per share | $ (1.73) | $ (0.18) | $ 3.59 | $ (1.73) | ||||
Adjusting items, after tax (per share) (2) (3) | ||||||||
Net inventory LCM valuation (benefit) loss | (0.19) | 0.08 | 0.02 | 0.09 | ||||
Other inventory impact (4) | 2.17 | (0.64) | 3.57 | (2.26) | ||||
El Dorado refinery fire net losses, net of related recoveries | — | 0.04 | — | 0.08 | ||||
Business interruption insurance recoveries (4) | (0.06) | (0.10) | (0.34) | (0.10) | ||||
Total unrealized hedging (gain) loss where the hedged item is | 0.55 | (0.06) | 0.25 | 0.07 | ||||
Non-cash change in fair value of S&O Obligation associated | — | — | — | (0.07) | ||||
Non-operating litigation accrual related to pre-Delek/Alon | — | — | — | 0.07 | ||||
Contract termination recoveries in excess of amounts that | — | — | — | (0.10) | ||||
Transaction related expenses (4) | — | — | 0.11 | — | ||||
Restructuring costs (4) | 0.14 | — | 0.13 | — | ||||
Total adjusting items (2) | 2.61 | (0.68) | 3.74 | (2.22) | ||||
Adjusted net income (loss) per share | $ 0.88 | $ (0.86) | $ 7.33 | $ (3.95) | ||||
(1) Adjusted to reflect the retrospective change in accounting policy from LIFO to FIFO for certain inventories. |
(2) The adjustments have been tax effected using the estimated marginal tax rate, as applicable. |
(3) For periods of Adjusted net loss, Adjustments (Adjusting Items) and Adjusted net loss per share are presented using basic weighted average shares outstanding. |
(4) See further discussion in the "Significant Transactions During the Quarter Impacting Results" section. |
________________________________________________________________________________________________________________________ |
9 |
Reconciliation of Net Income (Loss) attributable to Delek to Adjusted EBITDA | ||||||||
Three Months Ended December 31, | Year Ended December 31, | |||||||
$ in millions (unaudited) | 2022 | 2021 As Adjusted (1) | 2022 | 2021 As Adjusted (1) | ||||
Reported net (loss) income attributable to Delek | $ (118.7) | $ (13.4) | $ 257.1 | $ (128.3) | ||||
Interest expense, net | 62.6 | 36.7 | 195.3 | 136.7 | ||||
Income tax expense (benefit) | (43.6) | (3.0) | 63.9 | (42.0) | ||||
Depreciation and amortization | 77.8 | 69.0 | 287.0 | 264.6 | ||||
EBITDA attributable to Delek | (21.9) | 89.3 | 803.3 | 231.0 | ||||
Adjusting items | ||||||||
Net inventory LCM valuation (benefit) loss | (17.2) | 8.2 | 1.9 | 8.5 | ||||
Other inventory impact (2) | 193.6 | (61.6) | 331.1 | (218.1) | ||||
Business Interruption insurance recoveries (2) | (5.2) | (9.9) | (31.1) | (9.9) | ||||
El Dorado refinery fire losses, net of related insurance recoveries | — | 4.0 | — | 7.8 | ||||
Unrealized hedging (gain) loss where the hedged item is not yet | 50.1 | (5.5) | 24.1 | 6.7 | ||||
Non-cash change in fair value of S&O Obligation associated | — | — | — | (6.9) | ||||
Non-operating litigation accrual related to pre-Delek/Alon | — | — | — | 6.5 | ||||
Contract termination recoveries in excess of amounts that have | — | — | — | (20.9) | ||||
Transaction related expenses (2) | — | — | 10.6 | — | ||||
Restructuring costs (2) | 12.5 | — | 12.5 | — | ||||
Net income attributable to non-controlling interest | 9.0 | 8.3 | 33.4 | 33.0 | ||||
Total Adjusting items | 242.8 | (56.5) | 382.5 | (193.3) | ||||
Adjusted EBITDA | $ 220.9 | $ 32.8 | $ 1,185.8 | $ 37.7 | ||||
(1) Adjusted to reflect the retrospective change in accounting policy from LIFO to FIFO for certain inventories. |
(2) See further discussion in the "Significant Transactions During the Quarter Impacting Results" section. |
_________________________________________________________________________________________________________________________ |
Reconciliation of Segment EBITDA Attributable to Delek to Adjusted Segment EBITDA: | ||||||||||
Three Months Ended December 31, 2022 | ||||||||||
$ in millions (unaudited) | Refining | Logistics | Retail | Corporate, | Consolidated | |||||
Segment EBITDA Attributable to Delek | $ (39.1) | $ 90.7 | $ 7.8 | $ (81.3) | $ (21.9) | |||||
Adjusting items | ||||||||||
Net inventory LCM valuation (benefit) loss | (17.1) | (0.1) | — | — | (17.2) | |||||
Other inventory impact (2) | 193.6 | — | — | — | 193.6 | |||||
Unrealized inventory/commodity hedging (gain) loss | 38.7 | — | — | 0.3 | 39.0 | |||||
Unrealized RINs and other hedging (gain) loss where | 11.1 | — | — | — | 11.1 | |||||
Total unrealized hedging (gain) loss where the hedged | 49.8 | — | — | 0.3 | 50.1 | |||||
Restructuring costs (2) | — | — | — | 12.5 | 12.5 | |||||
Business Interruption insurance recoveries (2) | (5.2) | — | — | — | (5.2) | |||||
Net income attributable to non-controlling interest | — | — | — | 9.0 | 9.0 | |||||
Total Adjusting items | 221.1 | (0.1) | — | 21.8 | 242.8 | |||||
Adjusted Segment EBITDA | $ 182.0 | $ 90.6 | $ 7.8 | $ (59.5) | $ 220.9 | |||||
10 |
Three Months Ended December 31, 2021, As Adjusted (1) | ||||||||||
$ in millions (unaudited) | Refining (1) | Logistics | Retail | Corporate, | Consolidated (1) | |||||
Segment EBITDA Attributable to Delek | $ 61.7 | $ 67.9 | $ 10.0 | $ (50.3) | $ 89.3 | |||||
Adjusting items | ||||||||||
Net inventory LCM valuation (benefit) loss | 8.0 | 0.2 | — | — | 8.2 | |||||
Other inventory impact (2) | (61.6) | — | — | — | (61.6) | |||||
Unrealized inventory/commodity hedging (gain) loss | (6.0) | — | — | — | (6.0) | |||||
Unrealized RINs and other hedging (gain) loss where | 0.5 | — | — | — | 0.5 | |||||
Total unrealized hedging (gain) loss where the hedged | (5.5) | — | — | — | (5.5) | |||||
El Dorado refinery fire losses | 4.0 | — | — | — | 4.0 | |||||
Business Interruption insurance recoveries (2) | (9.9) | — | — | — | (9.9) | |||||
Net income attributable to non-controlling interest | — | — | — | 8.3 | 8.3 | |||||
Total Adjusting items | (65.0) | 0.2 | — | 8.3 | (56.5) | |||||
Adjusted Segment EBITDA | $ (3.3) | $ 68.1 | $ 10.0 | $ (42.0) | $ 32.8 | |||||
Year Ended December 31, 2022 | ||||||||||
$ in millions (unaudited) | Refining | Logistics | Retail | Corporate, | Consolidated | |||||
Segment EBITDA Attributable to Delek | $ 719.1 | $ 304.8 | $ 44.1 | $ (264.7) | $ 803.3 | |||||
Adjusting items | ||||||||||
Net inventory LCM valuation (benefit) loss | 2.0 | (0.1) | — | — | 1.9 | |||||
Other inventory impact (2) | 331.1 | — | — | — | 331.1 | |||||
Unrealized inventory/commodity hedging (gain) loss | 8.1 | — | — | — | 8.1 | |||||
Unrealized RINs and other hedging (gain) loss where | 16.0 | — | — | — | 16.0 | |||||
Total unrealized hedging (gain) loss where the hedged | 24.1 | — | — | — | 24.1 | |||||
Restructuring costs (2) | — | — | — | 12.5 | 12.5 | |||||
Transaction related expenses | — | 10.6 | — | — | 10.6 | |||||
Business Interruption insurance recoveries (2) | (31.1) | — | — | — | (31.1) | |||||
Net income attributable to non-controlling interest | — | — | — | 33.4 | 33.4 | |||||
Total Adjusting items | 326.1 | 10.5 | — | 45.9 | 382.5 | |||||
Adjusted Segment EBITDA | $ 1,045.2 | $ 315.3 | $ 44.1 | $ (218.8) | $ 1,185.8 | |||||
11 |
Reconciliation of Segment EBITDA Attributable to Delek to Adjusted Segment EBITDA (continued) | ||||||||||
Year Ended December 31, 2021, As Adjusted (1) | ||||||||||
$ in millions (unaudited) | Refining (1) | Logistics | Retail | Corporate, | Consolidated (1) | |||||
Segment EBITDA Attributable to Delek | $ 69.2 | $ 258.0 | $ 51.1 | $ (147.3) | $ 231.0 | |||||
Adjusting items | ||||||||||
Net inventory LCM valuation (benefit) loss | 8.4 | 0.1 | — | — | 8.5 | |||||
Other inventory impact (2) | (218.1) | — | — | — | (218.1) | |||||
Unrealized inventory/commodity hedging (gain) loss | 6.7 | (0.3) | — | — | 6.4 | |||||
Unrealized RINs and other hedging (gain) loss where | 0.3 | — | — | — | 0.3 | |||||
Total unrealized hedging (gain) loss where the hedged | 7.0 | (0.3) | — | — | 6.7 | |||||
El Dorado refinery fire losses | 7.8 | 7.8 | ||||||||
Business Interruption insurance recoveries (2) | (9.9) | — | — | — | (9.9) | |||||
Non-cash change in fair value of S&O Obligation | (6.9) | — | — | — | (6.9) | |||||
Non-operating litigation accrual related to pre-Delek/Alon | — | — | — | 6.5 | 6.5 | |||||
Contract termination recoveries in excess of amounts that | — | — | — | (20.9) | (20.9) | |||||
Net income attributable to non-controlling interest | — | — | — | 33.0 | 33.0 | |||||
Total Adjusting items | (211.7) | (0.2) | — | 18.6 | (193.3) | |||||
Adjusted Segment EBITDA | $ (142.5) | $ 257.8 | $ 51.1 | $ (128.7) | $ 37.7 | |||||
(1) Adjusted to reflect the retrospective change in accounting policy from LIFO to FIFO for certain inventories. |
(2) See further discussion in the "Significant Transactions During the Quarter Impacting Results" section. |
______________________________________________________________________________________________________________________________ |
12 |
Refining Segment Selected Financial Information | Three Months Ended December 31, | Year Ended December 31, | ||||||
2022 | 2021 As Adjusted (2) | 2022 | 2021 As Adjusted (2) | |||||
Total Refining Segment | (Unaudited) | (Unaudited) | ||||||
Days in period | 92 | 92 | 365 | 365 | ||||
Total sales volume - refined product (average barrels per day | 274,148 | 301,648 | 299,004 | 275,075 | ||||
Total production (average bpd) | 278,384 | 297,591 | 290,040 | 260,507 | ||||
Crude oil | 257,937 | 278,851 | 281,205 | 250,632 | ||||
Other feedstocks | 22,492 | 19,784 | 10,558 | 12,305 | ||||
Total throughput (average bpd): | 280,429 | 298,635 | 291,763 | 262,937 | ||||
Total refining production margin per bbl total throughput | $ 15.68 | $ 5.91 | $ 18.22 | $ 4.20 | ||||
Total refining operating expenses per bbl total throughput | $ 5.35 | $ 4.35 | $ 5.53 | $ 4.46 | ||||
Total refining production margin ($ in millions) | $ 404.7 | $ 162.2 | $ 1,940.1 | $ 403.3 | ||||
Trading & supply and other ($ millions) (3) | (62.4) | (80.1) | (232.7) | (59.6) | ||||
Total refining segment adjusted gross margin ($ in millions) (2) | $ 342.3 | $ 82.1 | $ 1,707.4 | $ 343.7 | ||||
Total crude slate details | ||||||||
Total crude slate: (% based on amount received in period) | ||||||||
WTI crude oil | 72.1 % | 68.4 % | 68.2 % | 69.6 % | ||||
Gulf Coast Sweet Crude | 5.9 % | 8.9 % | 7.8 % | 7.5 % | ||||
Local Arkansas crude oil | 4.2 % | 4.1 % | 4.1 % | 4.5 % | ||||
Other | 17.8 % | 18.6 % | 19.9 % | 18.4 % | ||||
Crude utilization (% based on nameplate capacity)(6) | 85.4 % | 92.3 % | 93.1 % | 83.0 % | ||||
Tyler, TX Refinery | ||||||||
Days in period | 92 | 92 | 365 | 365 | ||||
Products manufactured (average bpd): | ||||||||
Gasoline | 42,267 | 30,951 | 36,847 | 35,782 | ||||
Diesel/Jet | 32,487 | 23,606 | 31,419 | 27,553 | ||||
Petrochemicals, LPG, NGLs | 1,979 | 1,823 | 2,114 | 1,957 | ||||
Other | 1,771 | 1,288 | 1,825 | 1,503 | ||||
Total production | 78,504 | 57,668 | 72,205 | 66,795 | ||||
Throughput (average bpd): | ||||||||
Crude oil | 72,427 | 56,301 | 70,114 | 65,205 | ||||
Other feedstocks | 7,266 | 1,822 | 2,604 | 1,971 | ||||
Total throughput | 79,693 | 58,123 | 72,718 | 67,176 | ||||
Tyler refining production margin ($ in millions) | $ 144.6 | $ 35.1 | $ 586.4 | $ 116.6 | ||||
Per barrel of throughput: | ||||||||
Tyler refining production margin | $ 19.72 | $ 6.56 | $ 22.09 | $ 4.76 | ||||
Operating expenses (4) | $ 3.64 | $ 5.83 | $ 5.24 | $ 4.16 | ||||
Crude Slate: (% based on amount received in period) | ||||||||
WTI crude oil | 80.8 % | 95.1 % | 84.7 % | 90.8 % | ||||
East Texas crude oil | 18.0 % | 4.9 % | 15.0 % | 9.0 % | ||||
Other | 1.2 % | — % | 0.3 % | 0.2 % | ||||
Capture Rate (5) | 61.1 % | 37.5 % | 66.2 % | 28.6 % | ||||
El Dorado, AR Refinery | ||||||||
Days in period | 92 | 92 | 365 | 365 | ||||
Products manufactured (average bpd): | ||||||||
Gasoline | 38,119 | 43,834 | 38,738 | 32,004 | ||||
Diesel | 27,931 | 32,397 | 30,334 | 24,777 | ||||
Petrochemicals, LPG, NGLs | 1,102 | 1,506 | 1,255 | 1,078 | ||||
Asphalt | 7,310 | 8,083 | 7,782 | 6,352 | ||||
Other | 2,347 | 820 | 1,200 | 646 | ||||
Total production | 76,809 | 86,640 | 79,309 | 64,857 | ||||
Throughput (average bpd): | ||||||||
Crude oil | 72,862 | 79,994 | 76,806 | 62,067 | ||||
Other feedstocks | 5,106 | 7,022 | 3,646 | 3,580 | ||||
Total throughput | 77,968 | 87,016 | 80,452 | 65,647 | ||||
13 |
Refining Segment Selected Financial Information | Three Months Ended December 31, | Year Ended December 31, | ||||||
2022 | 2021 As Adjusted (2) | 2022 | 2021 As Adjusted (2) | |||||
El Dorado refining production margin ($ in millions) | $ 107.4 | $ 25.8 | $ 458.2 | $ 26.2 | ||||
Per barrel of throughput: | ||||||||
El Dorado refining production margin | $ 14.97 | $ 3.22 | $ 15.60 | $ 1.09 | ||||
Operating expenses (4) | $ 4.72 | $ 4.13 | $ 4.61 | $ 4.29 | ||||
Crude Slate: (% based on amount received in period) | ||||||||
WTI crude oil | 64.7 % | 43.3 % | 55.1 % | 49.0 % | ||||
Local Arkansas crude oil | 14.7 % | 14.7 % | 15.3 % | 18.5 % | ||||
Other | 20.6 % | 42.0 % | 29.6 % | 32.5 % | ||||
Capture Rate (5) | 46.4 % | 18.4 % | 46.8 % | 6.6 % | ||||
Big Spring, TX Refinery | ||||||||
Days in period | 92 | 92 | 365 | 365 | ||||
Products manufactured (average bpd): | ||||||||
Gasoline | 20,605 | 40,112 | 30,689 | 35,640 | ||||
Diesel/Jet | 12,815 | 27,580 | 22,125 | 25,284 | ||||
Petrochemicals, LPG, NGLs | 1,387 | 3,832 | 2,942 | 3,712 | ||||
Asphalt | 1,895 | 1,509 | 1,721 | 1,475 | ||||
Other | 1,887 | 1,369 | 1,481 | 1,404 | ||||
Total production | 38,589 | 74,402 | 58,958 | 67,515 | ||||
Throughput (average bpd): | ||||||||
Crude oil | 35,798 | 72,030 | 59,476 | 68,038 | ||||
Other feedstocks | 3,327 | 3,547 | 191 | 843 | ||||
Total throughput | 39,125 | 75,577 | 59,667 | 68,881 | ||||
Big Spring refining production margin ($ in millions) | $ 49.7 | $ 39.9 | $ 420.1 | $ 126.3 | ||||
Per barrel of throughput: | ||||||||
Big Spring refining production margin | $ 13.80 | $ 5.73 | $ 19.29 | $ 5.02 | ||||
Operating expenses (4) | $ 10.50 | $ 3.98 | $ 7.48 | $ 4.84 | ||||
Crude Slate: (% based on amount received in period) | ||||||||
WTI crude oil | 74.3 % | 77.3 % | 70.1 % | 71.0 % | ||||
WTS crude oil | 25.7 % | 22.7 % | 29.9 % | 29.0 % | ||||
Capture Rate (5) | 47.2 % | 33.3 % | 61.4 % | 30.2 % | ||||
Krotz Springs, LA Refinery | ||||||||
Days in period | 92 | 92 | 365 | 365 | ||||
Products manufactured (average bpd): | ||||||||
Gasoline | 41,073 | 33,679 | 34,370 | 26,170 | ||||
Diesel/Jet | 31,691 | 28,250 | 31,576 | 21,387 | ||||
Heavy oils | 5,323 | 599 | 2,418 | 719 | ||||
Petrochemicals, LPG, NGLs | 6,156 | 6,595 | 6,749 | 5,170 | ||||
Other | 238 | 9,759 | 4,458 | 7,895 | ||||
Total production | 84,481 | 78,882 | 79,571 | 61,341 | ||||
Throughput (average bpd): | ||||||||
Crude oil | 76,850 | 70,525 | 74,808 | 55,321 | ||||
Other feedstocks | 6,793 | 7,392 | 4,118 | 5,912 | ||||
Total throughput | 83,643 | 77,917 | 78,926 | 61,233 | ||||
Krotz refining production margin ($ in millions) | $ 103.0 | $ 61.5 | $ 475.5 | $ 134.2 | ||||
Per barrel of throughput: | ||||||||
Krotz Springs refining production margin | $ 13.39 | $ 8.58 | $ 16.51 | $ 6.00 | ||||
Operating expenses (4) | $ 5.16 | $ 3.85 | $ 5.25 | $ 4.55 | ||||
Crude Slate: (% based on amount received in period) | ||||||||
WTI Crude | 70.3 % | 64.7 % | 63.4 % | 65.3 % | ||||
Gulf Coast Sweet Crude | 19.6 % | 35.3 % | 29.8 % | 34.3 % | ||||
Other | 10.1 % | — % | 6.8 % | 0.4 % | ||||
Capture Rate (5) | 70.1 % | 77.3 % | 74.3 % | 63.0 % | ||||
(1) | Includes sales to other segments which are eliminated in consolidation. |
(2) | Adjusted to reflect the retrospective change in accounting policy from LIFO to FIFO for certain inventories. |
(3) | Trading and supply activities include the employment of marketing uplift strategies and the execution of risk management programs to capture the physical and financial opportunities that extend from our refining operations. |
(4) | Reflects the prior period conforming reclassification adjustment between operating expenses and general and administrative expenses. |
(5) | Defined as refining production margin divided by the respective crack spread. See page 17 for crack spread information. |
(6) | Crude throughput as % of total nameplate capacity of 302,000 bpd |
_________________________________________________________________________________________________________________________ | |
14 |
Logistics Segment Selected Information | Three Months Ended December 31, | Year Ended December 31, | ||||||
2022 | 2021 | 2022 | 2021 | |||||
(Unaudited) | (Unaudited) | |||||||
Gathering & Processing: (average bpd) | ||||||||
Lion Pipeline System: | ||||||||
Crude pipelines (non-gathered) | 68,798 | 80,145 | 78,519 | 65,335 | ||||
Refined products pipelines | 35,585 | 66,632 | 56,382 | 48,757 | ||||
SALA Gathering System | 13,136 | 15,660 | 15,391 | 14,460 | ||||
East Texas Crude Logistics System | 25,154 | 18,499 | 21,310 | 22,647 | ||||
Permian Gathering Assets (1) | 191,119 | 83,353 | 128,725 | 80,285 | ||||
Plains Connection System | 234,164 | 133,281 | 183,827 | 124,025 | ||||
Delaware Gathering Assets: (2) | ||||||||
Natural Gas Gathering and Processing (Mcfd) (3) | 60,669 | — | 60,971 | — | ||||
Crude Oil Gathering (average bpd) | 91,526 | — | 87,519 | — | ||||
Water Disposal and Recycling (average bpd) | 80,028 | — | 72,056 | — | ||||
Wholesale Marketing & Terminalling: | ||||||||
East Texas - Tyler Refinery sales volumes (average bpd) (4) | 64,825 | 55,755 | 66,058 | 68,497 | ||||
Big Spring wholesale marketing throughputs (average | 58,061 | 83,385 | 71,580 | 78,370 | ||||
West Texas wholesale marketing throughputs (average | 10,835 | 10,007 | 10,206 | 10,026 | ||||
West Texas wholesale marketing margin per barrel | $ 3.62 | $ 3.97 | $ 4.15 | $ 3.72 | ||||
Terminalling throughputs (average bpd) (5) | 127,277 | 124,476 | 132,262 | 138,301 | ||||
(1) | Formerly known as the Big Spring Gathering System. Excludes volumes that are being temporarily transported via trucks while connectors are under construction. |
(2) | 2022 volumes include volumes from June 1, 2022 through December 31, 2022. |
(3) | Mcfd - average thousand cubic feet per day. |
(4) | Excludes jet fuel and petroleum coke. |
(5) | Consists of terminalling throughputs at our Tyler, Big Spring, Big Sandy and Mount Pleasant, Texas terminals, El Dorado and North Little Rock, Arkansas terminals and Memphis |
_____________________________________________________________________________________________________________________ | |
Retail Segment Selected Information | Three Months Ended December 31, | Year Ended December 31, | ||||||
2022 | 2021 | 2022 | 2021 | |||||
(Unaudited) | (Unaudited) | |||||||
Number of stores (end of period) | 249 | 248 | 249 | 248 | ||||
Average number of stores | 249 | 248 | 249 | 248 | ||||
Average number of fuel stores | 244 | 243 | 244 | 243 | ||||
Retail fuel sales (thousands of gallons) | 41,523 | 42,303 | 170,668 | 166,959 | ||||
Average retail gallons sold per average number of fuel stores (in | 171 | 174 | 701 | 688 | ||||
Average retail sales price per gallon sold | $ 3.37 | $ 3.11 | $ 3.76 | $ 2.88 | ||||
Retail fuel margin ($ per gallon) (1) | $ 0.32 | $ 0.30 | $ 0.33 | $ 0.34 | ||||
Merchandise sales (in millions) | $ 77.4 | $ 75.5 | $ 314.7 | $ 316.4 | ||||
Merchandise sales per average number of stores (in millions) | $ 0.3 | $ 0.3 | $ 1.3 | $ 1.3 | ||||
Merchandise margin % | 32.1 % | 33.6 % | 33.3 % | 33.2 % | ||||
Three Months Ended December 31, | Year Ended December 31, | |||||||
2022 | 2021 | 2022 | 2021 | |||||
Same-Store Comparison (2) | (Unaudited) | (Unaudited) | ||||||
Change in same-store fuel gallons sold | (1.8) % | 3.0 % | 2.5 % | (5.3) % | ||||
Change in same-store merchandise sales | 2.5 % | 0.7 % | 0.3 % | (1.8) % | ||||
(1) | Retail fuel margin represents gross margin on fuel sales in the retail segment, and is calculated as retail fuel sales revenue less retail fuel cost of sales. The retail fuel margin per |
(2) | Same-store comparisons include period-over-period changes in specified metrics for stores that were in service at both the beginning of the earliest period and the end of the most |
_______________________________________________________________________________________________ | |
15 |
Supplemental Information | ||||||
Schedule of Selected Segment Financial Data, Pricing Statistics Impacting our | ||||||
Selected Segment Financial Data | Three Months Ended December 31, 2022 | |||||||||
$ in millions (unaudited) | Refining | Logistics | Retail | Corporate, Other and | Consolidated | |||||
Net revenues (excluding | $ 4,096.6 | $ 164.9 | $ 217.2 | $ 0.5 | $ 4,479.2 | |||||
Inter-segment fees and revenues | 231.8 | 104.1 | — | (335.9) | — | |||||
Total revenues | $ 4,328.4 | $ 269.0 | $ 217.2 | $ (335.4) | $ 4,479.2 | |||||
Cost of sales | 4,413.7 | 203.4 | 179.2 | (344.4) | 4,451.9 | |||||
Gross margin | $ (85.3) | $ 65.6 | $ 38.0 | $ 9.0 | $ 27.3 | |||||
Three Months Ended December 31, 2021 | ||||||||||
$ in millions (unaudited) | Refining | Logistics | Retail | Corporate, Other and | Consolidated | |||||
Net revenues (excluding | $ 2,820.8 | $ 79.5 | $ 207.1 | $ 0.6 | $ 3,108.0 | |||||
Inter-segment fees and revenues | 200.1 | 110.4 | — | (310.5) | — | |||||
Total revenues | $ 3,020.9 | $ 189.9 | $ 207.1 | $ (309.9) | $ 3,108.0 | |||||
Cost of sales | 3,053.3 | 134.1 | 169.2 | (324.0) | 3,032.6 | |||||
Gross margin | $ (32.4) | $ 55.8 | $ 37.9 | $ 14.1 | $ 75.4 | |||||
Year Ended December 31, 2022 | ||||||||||
$ in millions (unaudited) | Refining | Logistics | Retail | Corporate, Other and | Consolidated | |||||
Net revenues (excluding | $ 18,730.9 | $ 557.0 | $ 956.9 | $ 1.0 | $ 20,245.8 | |||||
Inter-segment fees and revenues | 1,032.1 | 479.4 | — | (1,511.5) | — | |||||
Total revenues | $ 19,763.0 | $ 1,036.4 | $ 956.9 | $ (1,510.5) | $ 20,245.8 | |||||
Cost of sales | 19,222.6 | 787.0 | 796.3 | (1,484.7) | 19,321.2 | |||||
Gross margin | $ 540.4 | $ 249.4 | $ 160.6 | $ (25.8) | $ 924.6 | |||||
Year Ended December 31, 2021 | ||||||||||
$ in millions (unaudited) | Refining | Logistics | Retail | Corporate, Other and | Consolidated | |||||
Net revenues (excluding | $ 9,564.9 | $ 282.1 | $ 797.4 | $ 3.8 | $ 10,648.2 | |||||
Inter-segment fees and revenues | 702.9 | 418.8 | — | (1,121.7) | — | |||||
Total revenues | $ 10,267.8 | $ 700.9 | $ 797.4 | $ (1,117.9) | $ 10,648.2 | |||||
Cost of sales | 10,351.0 | 484.8 | 635.6 | (1,085.9) | 10,385.5 | |||||
Gross margin | $ (83.2) | $ 216.1 | $ 161.8 | $ (32.0) | $ 262.7 | |||||
16 |
Pricing Statistics | Three Months Ended December 31, | Year Ended December 31, | ||||||
(average for the period presented) | 2022 | 2021 | 2022 | 2021 | ||||
WTI — Cushing crude oil (per barrel) | $ 82.82 | $ 77.33 | $ 94.62 | $ 68.11 | ||||
WTI — Midland crude oil (per barrel) | $ 82.64 | $ 77.82 | $ 94.38 | $ 68.55 | ||||
WTS -- Midland crude oil (per barrel) | $ 81.55 | $ 76.86 | $ 94.29 | $ 68.29 | ||||
LLS (per barrel) | $ 85.47 | $ 78.38 | $ 96.85 | $ 69.60 | ||||
Brent crude oil (per barrel) | $ 88.63 | $ 79.65 | $ 99.06 | $ 70.96 | ||||
U.S. Gulf Coast 5-3-2 crack spread (per barrel) (1) | $ 32.25 | $ 17.51 | $ 33.36 | $ 16.62 | ||||
U.S. Gulf Coast 3-2-1 crack spread (per barrel) (1) | $ 29.27 | $ 17.21 | $ 31.41 | $ 16.62 | ||||
U.S. Gulf Coast 2-1-1 crack spread (per barrel) (1) | $ 19.11 | $ 11.10 | $ 22.21 | $ 9.53 | ||||
U.S. Gulf Coast Unleaded Gasoline (per gallon) | $ 2.32 | $ 2.22 | $ 2.77 | $ 2.02 | ||||
Gulf Coast Ultra low sulfur diesel (per gallon) | $ 3.37 | $ 2.32 | $ 3.46 | $ 2.02 | ||||
U.S. Gulf Coast high sulfur diesel (per gallon) | $ 2.66 | $ 2.05 | $ 2.90 | $ 1.75 | ||||
Natural gas (per MMBTU) | $ 6.09 | $ 4.84 | $ 6.54 | $ 3.73 | ||||
(1) | For our Tyler and El Dorado refineries, we compare our per barrel refining product margin to the Gulf Coast 5-3-2 crack spread consisting of WTI Cushing crude, U.S. Gulf Coast CBOB gasoline and U.S, Gulf Coast Pipeline No. 2 heating oil (ultra low sulfur diesel). For our Big Spring refinery, we compare our per barrel refining margin to the Gulf Coast 3-2-1 crack spread consisting of WTI Cushing crude, Gulf Coast CBOB gasoline and Gulf Coast ultra-low sulfur diesel, and for our Krotz Springs refinery, we compare our per barrel refining margin to the Gulf Coast 2-1-1 crack spread consisting of LLS crude oil, Gulf Coast CBOB gasoline and U.S, Gulf Coast Pipeline No. 2 heating oil (high sulfur diesel). The Tyler refinery's crude oil input is primarily WTI Midland and East Texas, while the El Dorado refinery's crude input is primarily a combination of WTI Midland, local Arkansas and other domestic inland crude oil. The Big Spring refinery's crude oil input is primarily comprised of WTS and WTI Midland. The Krotz Springs refinery's crude oil input is primarily comprised of LLS and WTI Midland. |
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Other Reconciliation of Amounts Reported Under U.S. GAAP | ||||||||
$ in millions (unaudited) | ||||||||
Three Months Ended December 31, | Year Ended December 31, | |||||||
Reconciliation of gross margin to Refining margin to | 2022 | 2021 As Adjusted (1) | 2022 | 2021 As Adjusted (1) | ||||
Gross margin | $ (85.3) | $ (32.4) | $ 540.4 | $ (83.2) | ||||
Add back (items included in cost of sales): | ||||||||
Operating expenses (excluding depreciation and | 147.8 | 123.9 | 604.7 | 437.8 | ||||
Depreciation and amortization | 53.5 | 49.7 | 205.1 | 198.7 | ||||
Refining Margin | $ 116.0 | $ 141.2 | $ 1,350.2 | $ 553.3 | ||||
Adjusting items, after tax | ||||||||
Net inventory LCM valuation loss (benefit) | (17.1) | 8.0 | 2.0 | 8.4 | ||||
Other inventory impact | 193.6 | (61.6) | 331.1 | (218.1) | ||||
Total unrealized hedging (gain) loss where the hedged | 49.8 | (5.5) | 24.1 | 7.0 | ||||
Non-cash change in fair value of S&O Obligation | — | — | — | (6.9) | ||||
Total adjusting items | 226.3 | (59.1) | 357.2 | (209.6) | ||||
Adjusted Refining Margin | $ 342.3 | $ 82.1 | $ 1,707.4 | $ 343.7 | ||||
(1) Adjusted to reflect the retrospective change in accounting policy from LIFO to FIFO for certain inventories. |
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Calculation of Net Debt | December 31, 2022 | December 31, 2021 | ||
Long-term debt - current portion | $ 74.5 | $ 92.2 | ||
Long-term debt - non-current portion | 2,979.2 | 2,125.8 | ||
Total long-term debt | 3,053.7 | 2,218.0 | ||
Less: Cash and cash equivalents | 841.3 | 856.5 | ||
Net debt - consolidated | 2,212.4 | 1,361.5 | ||
Less: DKL net debt | 1,653.6 | 894.7 | ||
Net debt, excluding DKL | $ 558.8 | $ 466.8 | ||
Information about Delek US Holdings, Inc. can be found on its website (www.delekus.com), investor relations webpage (ir.delekus.com), news webpage (www.delekus.com/news) and its Twitter account (@DelekUSHoldings).
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SOURCE Delek US Holdings, Inc.
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