Delek US Holdings, Inc. (NYSE: DK) (“Delek US”) today announced
financial results for its fourth quarter ended December 31,
2018. Delek US reported fourth quarter 2018 net income of $121.6
million, or $1.48 per diluted share, versus net income of $211.1
million, or $2.56 per diluted share, for the quarter ended
December 31, 2017. On an adjusted basis, Delek US
reported adjusted net income of $129.8 million, or $1.59 per
diluted share for the fourth quarter 2018. This compares to
adjusted net income of $47.6 million, or $0.58 per diluted share,
in the prior-year period. Adjusted earnings before interest, taxes,
depreciation and amortization ("Adjusted EBITDA") was $251.4
million compared to Adjusted EBITDA of $165.1 million in the
prior-year period. Reconciliations of net income reported under
U.S. GAAP to adjusted net income and Adjusted EBITDA are included
in the financial tables attached to this release.
Quarterly results improved year-over-year
primarily due to better performance in the refining segment. The
refining segment contribution margin increased to $235.3 million in
the fourth quarter 2018, compared to a contribution margin of
$185.8 million in the prior-year period. The improved results in
refining benefited from favorable crude oil differentials and lower
RINs expense, which more than offset a lower crack spread
environment. The logistics segment contribution margin improved to
$45.0 million during the quarter compared to $32.7 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. The retail segment contribution margin was $13.1
million during the quarter compared to $13.3 million in the prior
year period.
For the full year 2018, Delek US reported net
income of $345.6 million, or $4.02 per diluted share, compared to
net income of $288.8 million, or $4.00 per diluted share in 2017.
On an adjusted basis, net income was $406.3 million, or $4.80 per
diluted share in 2018, compared to net income of $95.4 million, or
$1.33 per diluted share in 2017. This increase in the adjusted
results on a year-over-year basis was primarily due to a full year
of contribution from the Alon USA operations acquired effective
July 1, 2017, and a larger Midland WTI to Cushing crude oil price
discount during 2018. Adjusted EBITDA was $854.4 million
compared to Adjusted EBITDA of $417.8 million in the prior year
period.
Uzi Yemin, Chairman, President and Chief
Executive Officer of Delek US, stated, "2018 was a great year for
Delek US. We achieved record EBITDA and strong cash flow allowing
us to invest $322 million in our business, while returning $445
million to shareholders, or approximately 16 percent of our current
market capitalization, through dividends and share repurchases. In
addition, we successfully integrated the Alon acquisition, captured
approximately $135 million of synergies, improved the Krotz Springs
refinery and simplified our corporate structure. We ended the year
with approximately $1.1 billion of cash, and we are well positioned
with the financial flexibility to execute our midstream growth
initiatives that are expected to support a projected $370 to $390
million of EBITDA from our midstream operations by 2022. We are
constructing our Big Spring Gathering system in the Permian Basin
and will manage our capital spending based on our producers'
acreage development plans during the year. We continue to develop
our long-haul crude oil pipeline strategy, and believe that a
potential combination with another pipeline could create a more
capital efficient and better utilized project for all partners. In
addition to investing in our business, our capital allocation
program includes returning excess cash flow to investors. To that
end, we increased our dividend and expect to repurchase $50 million
of Delek US stock during the first quarter 2019. We remain focused
on operating reliable and efficient operations, returning cash to
our shareholders, investing in our business and exploring
opportunities to provide future growth to create long term value
for our shareholders."
Regular Quarterly Dividend and Share
RepurchaseDelek US announced today its Board of Directors
declared a regular quarterly cash dividend of $0.27 per share. This
represents a 3.8 percent increase from our previous regular
quarterly dividend. Shareholders of record on March 5, 2019
will receive this cash dividend payable on March 19, 2019.
During the fourth quarter 2018, Delek US
repurchased approximately 4.2 million shares of Delek US common
stock for approximately $157.9 million, with an average price of
$37.81 per share. For the year ended December 31, 2018,
Delek US repurchased approximately 9.0 million shares for
approximately $365.3 million, with an average price of $40.49 per
share. At December 31, 2018, there was approximately
$409.7 million of total available authorization remaining to
repurchase shares. Delek US expects to repurchase
approximately $50 million of Delek US common stock during the first
quarter 2019.
LiquidityAs of
December 31, 2018, Delek US had a cash balance of $1,079.3
million and total consolidated debt of $1,783.3 million, resulting
in net debt of $704.0 million. As of December 31, 2018,
Delek US' subsidiary, Delek Logistics, had $700.4 million of total
debt and $4.5 million of cash, which is included in the
consolidated amounts on Delek US' balance sheet. Excluding Delek
Logistics, Delek US had approximately $1,074.8 million in cash and
$1,082.9 million of debt, or an $8.1 million net debt position.
Refining SegmentRefining
segment contribution margin was $235.3 million in the fourth
quarter 2018 compared to $185.8 million in the fourth 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. In the
fourth quarter 2018, results included an approximate $16.0 million
reduction in operating expenses related to environmental
indemnification proceeds at the idled Bakersfield, California
location. The Gulf Coast 5-3-2 crack spread decreased to $12.50 per
barrel for the fourth quarter 2018, compared to $14.66 per barrel
for the same period in 2017.
Results during the fourth quarter 2018 do not
fully reflect the Midland to Cushing market differential during the
period due to an inventory timing effect. The estimated realized
Midland to Cushing differential included in reported results was
approximately $10.68 per barrel during the fourth quarter 2018,
taking into consideration an inventory timing effect.
During the fourth quarter 2018, the Midland WTI
crude oil differential to Brent crude oil was an average discount
of $15.05 per barrel compared to $5.95 per barrel in the prior-year
period. The Midland WTI crude oil differential to Cushing WTI was
an average discount of $8.59 per barrel in fourth quarter 2018
compared to an average discount of $0.28 per barrel in the fourth
quarter 2017. Backwardation in the oil futures market was
$0.12 per barrel in the fourth quarter 2018, compared to contango
of $0.39 per barrel in the fourth quarter 2017.
Logistics SegmentThe logistics
segment contribution margin in the fourth quarter 2018 increased to
$45.0 million compared to $32.7 million in the fourth quarter 2017.
The primary factor that increased contribution margin was a benefit
from the drop down of the Big Spring refinery logistics assets that
was effective March 1, 2018, which was partially offset by a lower
gross margin in west Texas wholesale marketing.
Retail SegmentFor the fourth
quarter 2018, contribution margin was $13.1 million compared to
$13.3 million in the prior year period for the retail segment.
Merchandise sales were approximately $81.0 million with an average
retail margin of 30.2% in the fourth quarter 2018, compared to
merchandise sales of approximately $84.2 million with an average
retail margin of 31.5% in the prior year period. Approximately 53.3
million retail fuel gallons were sold at an average margin of $0.30
per gallon in the fourth quarter 2018 compared to 53.2 million
retail fuel gallons sold at an average margin of $0.17 per gallon
in the fourth quarter 2017. On a same store sales basis in the
fourth quarter 2018, merchandise sales decreased 0.7% and fuel
gallons sold increased 0.1% compared to the prior-year period.
Corporate/Other
SegmentContribution margin from the Corporate/Other
segment was a loss of $8.0 million in the fourth quarter 2018
compared to a loss of $17.5 million in the prior-year period. The
net hedging gain included in this segment in the fourth quarter
2018 was $11.3 million compared to a net hedging loss of $4.0
million in the prior-year period.
Fourth Quarter 2018 Results | Conference
Call InformationDelek US will hold a conference call to
discuss its fourth quarter and full-year 2018 results on Wednesday,
February 20, 2019 at 8:30 a.m. Central Time. Investors will have
the opportunity to listen to the conference call live by going to
www.DelekUS.com and clicking on the Investor Relations tab.
Participants are encouraged to register at least 15 minutes early
to download and install any necessary software. Presentation
materials accompanying the call will be available on the investor
relations tab of the Delek US website approximately five minutes
prior to the start of the call. For those who cannot listen to the
live broadcast, a telephonic replay will be available through May
21, 2019 by dialing (855) 859-2056, passcode 1587848. 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) fourth quarter and full-year 2018 earnings
conference call that will be held on Wednesday, February 20, 2019
at 7:30 a.m. Central Time and review Delek Logistics’ earnings
press release. Market trends and information disclosed by Delek
Logistics may be relevant to the logistics segment reported by
Delek US. Both a replay of the conference call and press release
for Delek Logistics are available online at
www.deleklogistics.com.
About Delek US Holdings,
Inc.Delek US Holdings, Inc. is a diversified downstream
energy company with assets in petroleum refining, logistics,
renewable fuels and convenience store retailing. The refining
assets consist of refineries operated in Tyler and Big Spring,
Texas, El Dorado, Arkansas and Krotz Springs, Louisiana with a
combined nameplate crude throughput capacity of 302,000 barrels per
day.
The logistics operations primarily consist of
Delek Logistics Partners, LP. 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 280 convenience stores in central and west Texas and
New Mexico.
Safe Harbor Provisions Regarding
Forward-Looking StatementsThis press release contains
forward-looking statements that are based upon current expectations
and involve a number of risks and uncertainties. Statements
concerning current estimates, expectations and projections about
future results, performance, prospects, opportunities, plans,
actions and events and other statements, concerns, or matters that
are not historical facts are “forward-looking statements,” as that
term is defined under the federal securities laws. These
statements contain words such as “possible,” “believe,” “should,”
“could,” “would,” “predict,” “plan,” “estimate,” “intend,” “may,”
“anticipate,” “will,” “if,” “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;
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; execution of our
midstream growth initiatives; RINs waivers and tax credits and the
value and benefit therefrom; cash and liquidity; opportunities and
anticipated performance and financial position.
Investors are cautioned that the following
important factors, among others, may affect these forward-looking
statements. These factors include, but are not limited to:
uncertainty related to timing and amount of future share
repurchases and dividend payments; risks and uncertainties with
respect to the quantities and costs of crude oil we are able to
obtain and the price of the refined petroleum products we
ultimately sell; risks related to Delek US’ exposure to Permian
Basin crude oil, such as supply, pricing, gathering, production and
transportation capacity; gains and losses from derivative
instruments; management's ability to execute its strategy of growth
through acquisitions and the transactional risks associated with
acquisitions and dispositions; acquired assets may suffer a
diminishment in fair value as a result of which we may need to
record a write-down or impairment in carrying value of the asset;
changes in the scope, costs, and/or timing of capital and
maintenance projects; the ability to 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 to reflect events or circumstances that
occur, or which Delek US becomes aware of, after the date hereof,
except as required by applicable law or regulation.
Non-GAAP Disclosures:
Our management uses certain “non-GAAP”
operational measures to evaluate our operating segment performance
and non-GAAP financial measures to evaluate past performance and
prospects for the future to supplement our GAAP financial
information presented in accordance with U.S. GAAP. These financial
and operational non-GAAP measures are important factors in
assessing our operating results and profitability and include:
- Adjusted net income (loss) -
calculated as net income attributable to Delek adjusted for certain
identified infrequently occurring items, non-cash items and items
that are not attributable to our on-going operations (collectively,
"Adjusting Items") recorded during the period;
- Adjusted unrealized hedging (gains)
losses - calculated as GAAP unrealized (gains) losses on commodity
derivatives that are economic hedges but not designated as hedging
instruments adjusted to exclude unrealized (gains) losses where the
instrument has matured but where it has not cash settled as of the
balance sheet date. This adjustment more appropriately aligns
matured commodity derivatives gains and losses with the recognition
of the related cost of materials and other. There are no premiums
paid or received at the inception of the derivative contracts, and
upon settlement there is no cost recovery associated with these
contracts;
- Adjusted net income (loss) per
share - calculated as adjusted net income (loss) divided by
weighted average shares outstanding, assuming dilution, as adjusted
for any anti-dilutive instruments that may not be permitted for
consideration in GAAP earnings per share calculations but that
nonetheless favorably impact dilution;
- Earnings before interest, taxes,
depreciation and amortization ("EBITDA") - calculated as net income
attributable to Delek adjusted to add back interest expense, income
tax expense, depreciation and amortization;
- Adjusted EBITDA - calculated as
EBITDA adjusted for the identified Adjusting Items in adjusted net
income (loss) that do not relate to interest expense, income tax
expense, depreciation or amortization, and adjusted to include
income (loss) attributable to non-controlling interests;
- Refining margin - calculated as the
difference between total refining revenues and total cost of
materials and other; and
- Refining margin per 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)
|
|
December 31, 2018 |
|
December 31, 2017 |
|
|
|
|
|
|
|
(In millions,
except share and per share data) |
ASSETS |
|
|
|
|
Current assets: |
|
|
|
|
Cash and
cash equivalents |
|
$ |
1,079.3 |
|
|
$ |
931.8 |
|
Accounts
receivable, net |
|
514.4 |
|
|
579.6 |
|
Accounts
receivable from related parties |
|
— |
|
|
2.1 |
|
Inventories, net of inventory valuation reserves |
|
690.9 |
|
|
808.4 |
|
Assets
held for sale |
|
— |
|
|
160.0 |
|
Other
current assets |
|
135.7 |
|
|
129.9 |
|
Total
current assets |
|
2,420.3 |
|
|
2,611.8 |
|
Property, plant and
equipment: |
|
|
|
|
Property,
plant and equipment |
|
2,999.6 |
|
|
2,772.5 |
|
Less:
accumulated depreciation |
|
(804.7 |
) |
|
(631.7 |
) |
Property,
plant and equipment, net |
|
2,194.9 |
|
|
2,140.8 |
|
Goodwill |
|
857.8 |
|
|
816.6 |
|
Other intangibles,
net |
|
104.4 |
|
|
101.1 |
|
Equity method
investments |
|
130.3 |
|
|
138.1 |
|
Other non-current
assets |
|
52.9 |
|
|
126.8 |
|
Total
assets |
|
$ |
5,760.6 |
|
|
$ |
5,935.2 |
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
Current
liabilities: |
|
|
|
|
Accounts
payable |
|
$ |
1,009.7 |
|
|
$ |
973.4 |
|
Accounts
payable to related parties |
|
1.5 |
|
|
1.7 |
|
Current
portion of long-term debt |
|
32.0 |
|
|
590.2 |
|
Obligation under Supply and Offtake Agreements |
|
312.6 |
|
|
435.6 |
|
Liabilities associated with assets held for sale |
|
— |
|
|
105.9 |
|
Accrued
expenses and other current liabilities |
|
307.7 |
|
|
564.9 |
|
Total
current liabilities |
|
1,663.5 |
|
|
2,671.7 |
|
Non-current
liabilities: |
|
|
|
|
Long-term
debt, net of current portion |
|
1,751.3 |
|
|
875.4 |
|
Obligation under Supply and Offtake Agreements |
|
49.6 |
|
|
— |
|
Environmental liabilities, net of current portion |
|
139.5 |
|
|
68.9 |
|
Asset
retirement obligations |
|
75.5 |
|
|
72.1 |
|
Deferred
tax liabilities |
|
190.2 |
|
|
199.9 |
|
Other
non-current liabilities |
|
62.9 |
|
|
83.0 |
|
Total
non-current liabilities |
|
2,269.0 |
|
|
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, 90,478,075
shares and 81,533,548 shares issued at December 31, 2018 and
December 31, 2017, respectively |
|
0.9 |
|
|
0.8 |
|
Additional paid-in capital |
|
1,135.4 |
|
|
900.1 |
|
Accumulated other comprehensive income |
|
28.6 |
|
|
6.9 |
|
Treasury
stock, 12,477,780 shares and 762,623 shares, at cost, as of
December 31, 2018 and 2017, respectively |
|
(514.1 |
) |
|
(25.0 |
) |
Retained
earnings |
|
1,001.8 |
|
|
767.8 |
|
Non-controlling interests in subsidiaries |
|
175.5 |
|
|
313.6 |
|
Total
stockholders’ equity |
|
1,828.1 |
|
|
1,964.2 |
|
Total
liabilities and stockholders’ equity |
|
$ |
5,760.6 |
|
|
$ |
5,935.2 |
|
|
|
|
|
|
|
|
|
|
Delek US Holdings,
Inc.Consolidated Statements of Income (Unaudited)
(1)
|
|
Three Months
Ended December 31, |
|
Year Ended
December 31, |
(In millions, except
share and per share data) |
|
2018 |
|
2017
(1) |
|
2018
(2) |
|
2017
(1) |
|
|
|
|
|
|
|
|
|
Net revenues |
|
$ |
2,413.4 |
|
|
$ |
2,483.7 |
|
|
$ |
10,172.4 |
|
|
$ |
7,267.1 |
|
Cost of sales: |
|
|
|
|
|
|
|
|
Cost of
materials and other |
|
1,962.6 |
|
|
2,116.9 |
|
|
8,499.8 |
|
|
6,327.6 |
|
Operating
expenses (excluding depreciation and amortization presented
below) |
|
137.8 |
|
|
127.8 |
|
|
538.5 |
|
|
375.7 |
|
Depreciation and amortization |
|
42.0 |
|
|
38.9 |
|
|
161.3 |
|
|
132.1 |
|
Total
cost of sales |
|
2,142.4 |
|
|
2,283.6 |
|
|
9,199.6 |
|
|
6,835.4 |
|
Operating
expenses related to retail and wholesale business (excluding
depreciation and amortization presented below) |
|
27.6 |
|
|
24.7 |
|
|
106.5 |
|
|
53.3 |
|
General
and administrative expenses |
|
71.5 |
|
|
53.9 |
|
|
247.6 |
|
|
175.9 |
|
Depreciation and amortization |
|
11.0 |
|
|
9.0 |
|
|
38.1 |
|
|
21.2 |
|
Other
operating (income) expense, net |
|
(21.9 |
) |
|
— |
|
|
(31.3 |
) |
|
1.0 |
|
Total
operating costs and expenses |
|
2,230.6 |
|
|
2,371.2 |
|
|
9,560.5 |
|
|
7,086.8 |
|
Operating
income (loss) |
|
182.8 |
|
|
112.5 |
|
|
611.9 |
|
|
180.3 |
|
Interest expense |
|
30.7 |
|
|
31.3 |
|
|
125.9 |
|
|
93.8 |
|
Interest income |
|
(2.8 |
) |
|
(1.3 |
) |
|
(5.8 |
) |
|
(4.0 |
) |
(Income) loss from
equity method investments |
|
(2.8 |
) |
|
(2.9 |
) |
|
(9.7 |
) |
|
(12.6 |
) |
Gain on remeasurement
of equity method investment |
|
— |
|
|
— |
|
|
— |
|
|
(190.1 |
) |
Gain on sale of
business |
|
(0.1 |
) |
|
— |
|
|
(13.3 |
) |
|
— |
|
Impairment loss on
assets held for sale |
|
— |
|
|
— |
|
|
27.5 |
|
|
— |
|
(Gain) loss on
extinguishment of debt |
|
— |
|
|
— |
|
|
9.1 |
|
|
— |
|
Other (income) expense,
net |
|
0.6 |
|
|
(0.8 |
) |
|
(7.3 |
) |
|
(6.1 |
) |
Total
non-operating expenses (income), net |
|
25.6 |
|
|
26.3 |
|
|
126.4 |
|
|
(119.0 |
) |
Income
(loss) from continuing operations before income tax expense |
|
157.2 |
|
|
86.2 |
|
|
485.5 |
|
|
299.3 |
|
Income tax expense
(benefit) |
|
29.6 |
|
|
(140.7 |
) |
|
96.4 |
|
|
(29.2 |
) |
Income
(loss) from continuing operations, net of tax |
|
127.6 |
|
|
226.9 |
|
|
389.1 |
|
|
328.5 |
|
Discontinued
operations: |
|
|
|
|
|
|
|
|
(Loss)
income from discontinued operations, including gain (loss) on sale
of discontinued operations |
|
(0.2 |
) |
|
(2.2 |
) |
|
(10.9 |
) |
|
(8.6 |
) |
Income
tax (benefit) expense |
|
— |
|
|
(0.4 |
) |
|
(2.2 |
) |
|
(2.7 |
) |
(Loss)
income from discontinued operations, net of tax |
|
(0.2 |
) |
|
(1.8 |
) |
|
(8.7 |
) |
|
(5.9 |
) |
Net income (loss) |
|
127.4 |
|
|
225.1 |
|
|
380.4 |
|
|
322.6 |
|
Net income attributed
to non-controlling interests |
|
5.8 |
|
|
14.0 |
|
|
34.8 |
|
|
33.8 |
|
Net income (loss)
attributable to Delek |
|
$ |
121.6 |
|
|
$ |
211.1 |
|
|
$ |
345.6 |
|
|
$ |
288.8 |
|
|
|
|
|
|
|
|
|
|
Basic
income (loss) per share: |
|
|
|
|
|
|
|
|
Income
(loss) from continuing operations |
|
$ |
1.50 |
|
|
$ |
2.62 |
|
|
$ |
4.38 |
|
|
$ |
4.12 |
|
(Loss)
income from discontinued operations |
|
— |
|
|
(0.02 |
) |
|
$ |
(0.20 |
) |
|
$ |
(0.08 |
) |
Total basic income
(loss) per share |
|
$ |
1.50 |
|
|
$ |
2.60 |
|
|
$ |
4.18 |
|
|
$ |
4.04 |
|
|
|
|
|
|
|
|
|
|
Diluted
income per share: |
|
|
|
|
|
|
|
|
Income
(loss) from continuing operations |
|
$ |
1.48 |
|
|
$ |
2.58 |
|
|
$ |
4.21 |
|
|
$ |
4.08 |
|
(Loss)
income from discontinued operations |
|
— |
|
|
(0.02 |
) |
|
$ |
(0.19 |
) |
|
$ |
(0.08 |
) |
Total diluted income
(loss) per share |
|
$ |
1.48 |
|
|
$ |
2.56 |
|
|
$ |
4.02 |
|
|
$ |
4.00 |
|
Weighted average common
shares outstanding: |
|
|
|
|
|
|
|
|
Basic |
|
81,321,240 |
|
|
81,338,755 |
|
|
82,797,110 |
|
|
71,566,225 |
|
Diluted |
|
82,528,339 |
|
|
82,645,060 |
|
|
86,768,401 |
|
|
72,303,083 |
|
Dividends declared per
common share outstanding |
|
$ |
0.26 |
|
|
$ |
0.15 |
|
|
$ |
0.96 |
|
|
$ |
0.60 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Certain changes to presentation of the
prior period statements of income have been made in order to
conform to the current period presentation, primarily relating to
the addition of a subtotal entitled 'cost of sales' which includes
all costs directly attributable to the generation of the related
revenue, as defined by GAAP, and the retitling of what was
previously referred to as 'cost of goods sold' to 'cost of
materials and other'. Operating expenses and depreciation and
amortization related to the wholesale business and the retail
business are excluded from cost of sales because they primarily
relate to costs associated with selling the products.
(2) Net revenues and cost of
materials and other for the year ended December 31, 2018
reflect a correction of an intercompany elimination related to the
nine months ended September 30, 2018, which resulted in an
increase in net revenues and cost of materials and other of $347.1
million not previously reflected on the unaudited consolidated
financial statements in our September 30, 2018 Quarterly
Report on Form 10-Q filed on November 9, 2018, of which $73.3
million related to the three and six months ended June 30, 2018 not
previously reflected on the unaudited consolidated financial
statements in our June 30, 2018 Quarterly Report on Form 10-Q filed
on August 9, 2018.
|
Delek US Holdings, Inc. |
Condensed Cash Flow Data
(Unaudited) |
(In millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
Months Ended December 31, |
|
Year Ended
December 31, |
|
|
|
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
Cash flows from operating activities: |
|
|
|
|
|
|
|
Cash provided
by operating activities - continuing operations |
|
$ |
359.1 |
|
|
$ |
242.2 |
|
|
$ |
590.4 |
|
|
$ |
321.8 |
|
|
Cash provided by (used in) operating activities - discontinued
operations |
|
— |
|
|
5.1 |
|
|
(30.1 |
) |
|
(2.1 |
) |
|
|
|
Net cash
provided by operating activities |
|
359.1 |
|
|
247.3 |
|
|
560.3 |
|
|
319.7 |
|
Cash flows from investing activities: |
|
|
|
|
|
|
|
|
|
Cash (used in) provided by investing activities - continuing
operations |
|
(88.1 |
) |
|
(67.3 |
) |
|
(145.3 |
) |
|
25.4 |
|
|
Cash used in (provided by) investing activities - discontinued
operations |
|
— |
|
|
(1.3 |
) |
|
20.0 |
|
|
12.2 |
|
|
|
|
Net cash
(used in) provided by investing activities |
|
(88.1 |
) |
|
(68.6 |
) |
|
(125.3 |
) |
|
37.6 |
|
Cash flows from financing activities: |
|
|
|
|
|
|
|
|
|
Cash used in financing activities - continuing operations |
|
(300.8 |
) |
|
(74.8 |
) |
|
(297.6 |
) |
|
(104.6 |
) |
|
Cash provided by (used in) financing activities - discontinued
operations |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
|
Net cash
used in financing activities |
|
(300.8 |
) |
|
(74.8 |
) |
|
(297.6 |
) |
|
(104.6 |
) |
Net
(decrease) increase in cash and cash equivalents |
|
(29.8 |
) |
|
103.9 |
|
|
137.4 |
|
|
252.7 |
|
Cash and
cash equivalents at the beginning of the period |
|
1,109.1 |
|
|
831.7 |
|
|
941.9 |
|
|
689.2 |
|
Cash and
cash equivalents at the end of the period |
|
1,079.3 |
|
|
935.6 |
|
|
1,079.3 |
|
|
941.9 |
|
Less cash
and cash equivalents of discontinued operations at the end of the
period |
|
— |
|
|
3.8 |
|
|
— |
|
|
10.1 |
|
Cash and
cash equivalents of continuing operations at the end of the
period |
|
$ |
1,079.3 |
|
|
$ |
931.8 |
|
|
$ |
1,079.3 |
|
|
$ |
931.8 |
|
|
|
|
|
|
|
|
|
|
(1) The condensed statements of cash flows
for the three months ended December 31, 2018 and 2017 have been
derived from taking the difference between the year-to-date
statements of cash flows for the year ended December 31, 2018
and 2017 compared to the nine months ended September 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 years ended
December 31, 2018 or 2017 are reflected in the three-month
periods then ended, as no retrospective changes in presentation to
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 December 31, 2018 |
|
|
Refining |
|
Logistics |
|
Retail |
|
Corporate,
Other and Eliminations |
|
Consolidated |
Net
revenues (excluding intercompany fees and sales) |
|
$ |
2,032.5 |
|
|
$ |
97.2 |
|
|
$ |
214.6 |
|
|
$ |
69.1 |
|
|
$ |
2,413.4 |
|
Intercompany fees and sales |
|
198.8 |
|
|
62.1 |
|
|
— |
|
|
(260.9 |
) |
|
— |
|
Operating
costs and expenses: |
|
|
|
|
|
|
|
|
|
|
Cost of
materials and other |
|
1,877.3 |
|
|
98.5 |
|
|
177.3 |
|
|
(190.5 |
) |
|
1,962.6 |
|
Operating
expenses (excluding depreciation and amortization presented
below) |
|
118.7 |
|
|
15.8 |
|
|
24.2 |
|
|
6.7 |
|
|
165.4 |
|
Segment
contribution margin |
|
$ |
235.3 |
|
|
$ |
45.0 |
|
|
$ |
13.1 |
|
|
$ |
(8.0 |
) |
|
$ |
285.4 |
|
Depreciation and amortization |
|
34.6 |
|
|
6.3 |
|
|
7.8 |
|
|
4.3 |
|
|
53.0 |
|
General
and administrative expenses |
|
|
|
|
|
|
|
|
|
71.5 |
|
Other
operating income, net |
|
|
|
|
|
|
|
|
|
(21.9 |
) |
Operating
income |
|
|
|
|
|
|
|
|
|
$ |
182.8 |
|
Total assets |
|
$ |
5,430.1 |
|
|
$ |
624.7 |
|
|
$ |
310.6 |
|
|
$ |
(604.8 |
) |
|
$ |
5,760.6 |
|
Capital spending
(excluding business combinations) |
|
$ |
67.6 |
|
|
$ |
4.2 |
|
|
$ |
4.0 |
|
|
$ |
30.5 |
|
|
$ |
106.3 |
|
|
|
Three
Months Ended December 31, 2017 |
|
|
Refining |
|
Logistics |
|
Retail |
|
Corporate,
Other and Eliminations |
|
Consolidated |
Net
revenues (excluding intercompany fees and sales) |
|
$ |
2,123.8 |
|
|
$ |
111.8 |
|
|
$ |
212.8 |
|
|
$ |
35.3 |
|
|
$ |
2,483.7 |
|
Intercompany fees and sales |
|
130.5 |
|
|
39.4 |
|
|
— |
|
|
(169.9 |
) |
|
— |
|
Operating
costs and expenses: |
|
|
|
|
|
|
|
|
|
|
Cost of
materials and other |
|
1,963.7 |
|
|
106.2 |
|
|
175.7 |
|
|
(128.7 |
) |
|
2,116.9 |
|
Operating
expenses (excluding depreciation and amortization presented
below) |
|
104.8 |
|
|
12.3 |
|
|
23.8 |
|
|
11.6 |
|
|
152.5 |
|
Segment
contribution margin |
|
$ |
185.8 |
|
|
$ |
32.7 |
|
|
$ |
13.3 |
|
|
$ |
(17.5 |
) |
|
214.3 |
|
Depreciation and amortization |
|
32.3 |
|
|
5.5 |
|
|
3.3 |
|
|
6.8 |
|
|
47.9 |
|
General
and administrative expenses |
|
|
|
|
|
|
|
|
|
53.9 |
|
Other
operating expense, net |
|
|
|
|
|
|
|
|
|
— |
|
Operating income |
|
|
|
|
|
|
|
|
|
$ |
112.5 |
|
Total assets (1) |
|
$ |
4,846.5 |
|
|
$ |
443.5 |
|
|
$ |
331.4 |
|
|
$ |
313.8 |
|
|
$ |
5,935.2 |
|
Capital spending
(excluding business combinations) |
|
$ |
58.6 |
|
|
$ |
9.7 |
|
|
$ |
1.1 |
|
|
$ |
9.4 |
|
|
$ |
78.8 |
|
Delek US Holdings, Inc. |
Segment Data (Unaudited) |
(In millions) |
|
|
Year Ended
December 31, 2018 |
|
|
Refining
(2), (3) |
|
Logistics |
|
Retail |
|
Corporate,
Other and Eliminations (2) |
|
Consolidated (3) |
Net revenues (excluding
intercompany fees and sales) |
|
$ |
8,710.7 |
|
|
$ |
416.8 |
|
|
$ |
915.4 |
|
|
$ |
129.5 |
|
|
$ |
10,172.4 |
|
Intercompany fees and sales |
|
839.0 |
|
|
252.6 |
|
|
— |
|
|
(1,091.6 |
) |
|
— |
|
Operating
costs and expenses: |
|
|
|
|
|
|
|
|
|
|
Cost of
materials and other |
|
8,219.2 |
|
|
240.8 |
|
|
755.8 |
|
|
(1,079.8 |
) |
|
8,499.8 |
|
Operating
expenses (excluding depreciation and amortization presented
below) |
|
465.4 |
|
|
58.7 |
|
|
100.7 |
|
|
20.2 |
|
|
645.0 |
|
Segment
contribution margin |
|
$ |
865.1 |
|
|
$ |
169.8 |
|
|
$ |
58.9 |
|
|
$ |
(66.2 |
) |
|
$ |
1,027.6 |
|
Depreciation and amortization |
|
133.7 |
|
|
26 |
|
|
24.6 |
|
|
15.1 |
|
|
199.4 |
|
General
and administrative expenses |
|
|
|
|
|
|
|
|
|
247.6 |
|
Other
operating income, net |
|
|
|
|
|
|
|
|
|
(31.3 |
) |
Operating
income |
|
|
|
|
|
|
|
|
|
$ |
611.9 |
|
Capital spending
(excluding business combinations) (4) |
|
$ |
203.9 |
|
|
$ |
11.6 |
|
|
$ |
10.0 |
|
|
$ |
91.7 |
|
|
$ |
317.2 |
|
|
|
Year Ended
December 31, 2017 |
|
|
Refining |
|
Logistics |
|
Retail |
|
Corporate,
Other and Eliminations |
|
Consolidated |
Net
revenues (excluding intercompany fees and sales) |
|
$ |
6,364.5 |
|
|
$ |
382.3 |
|
|
$ |
426.7 |
|
|
$ |
93.6 |
|
|
$ |
7,267.1 |
|
Intercompany fees and sales |
|
256.1 |
|
|
155.8 |
|
|
— |
|
|
(411.9 |
) |
|
— |
|
Operating
costs and expenses: |
|
|
|
|
|
|
|
|
|
|
Cost of
materials and other |
|
5,852.2 |
|
|
372.9 |
|
|
350.3 |
|
|
(247.8 |
) |
|
6,327.6 |
|
Operating
expenses (excluding depreciation and amortization presented
below) |
|
317.7 |
|
|
43.3 |
|
|
49.6 |
|
|
18.4 |
|
|
429.0 |
|
Segment
contribution margin |
|
$ |
450.7 |
|
|
$ |
121.9 |
|
|
$ |
26.8 |
|
|
$ |
(88.9 |
) |
|
$ |
510.5 |
|
Depreciation and amortization |
|
109.2 |
|
|
21.9 |
|
|
7.0 |
|
|
15.2 |
|
|
153.3 |
|
General
and administrative expenses |
|
|
|
|
|
|
|
|
|
175.9 |
|
Other
operating expense, net |
|
|
|
|
|
|
|
|
|
1.0 |
|
Operating
Income |
|
|
|
|
|
|
|
|
|
$ |
180.3 |
|
Capital spending
(excluding business combinations) |
|
$ |
128.2 |
|
|
$ |
18.4 |
|
|
$ |
11.7 |
|
|
$ |
19.2 |
|
|
$ |
177.5 |
|
(1) Assets held for sale of $160.0 million are included in
the corporate, other and eliminations segment as of
December 31, 2017.
(2) The corporate, other and eliminations
segment results of operations for the year ended December 31,
2018 includes Canada trading activity which was previously included
and reported in the refining segment for the three months ended
March 31, 2018.
(3) Net revenues and cost of materials and
other for the year ended December 31, 2018 reflect a
correction of an intercompany elimination in the refining segment
related to the nine months ended September 30, 2018, which
resulted in an increase in net revenues and cost of materials and
other of $347.1 million not previously reflected on the unaudited
consolidated financial statements in our September 30, 2018
Quarterly Report on Form 10-Q filed on November 9, 2018, of which
$73.3 million related to the three and six months ended June 30,
2018 not previously reflected on the unaudited consolidated
financial statements in our June 30, 2018 Quarterly Report on Form
10-Q filed on August 9, 2018.
(4) Capital spending excludes transaction
costs capitalized in the amount of $0.4 million during the year
ended December 31, 2018, that relate to the Big Spring
logistics assets acquisition.
Refining
Segment |
|
Three
Months Ended December 31, |
|
Year Ended
December 31, |
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tyler, TX
Refinery |
|
(Unaudited) |
|
(Unaudited) |
Days in period |
|
92 |
|
|
92 |
|
|
365 |
|
|
365 |
|
Total sales volume -
refined (average barrels per day)(1) |
|
79,137 |
|
|
82,500 |
|
|
78,658 |
|
|
76,041 |
|
Products manufactured
(average barrels per day): |
|
|
|
|
|
|
|
|
Gasoline |
|
44,280 |
|
|
45,750 |
|
|
42,138 |
|
|
40,936 |
|
Diesel/Jet |
|
27,936 |
|
|
31,330 |
|
|
30,035 |
|
|
29,194 |
|
Petrochemicals, LPG, NGLs |
|
2,094 |
|
|
2,216 |
|
|
2,564 |
|
|
2,522 |
|
Other |
|
1,508 |
|
|
1,704 |
|
|
1,665 |
|
|
1,677 |
|
Total
production |
|
75,818 |
|
|
81,000 |
|
|
76,402 |
|
|
74,329 |
|
Throughput (average
barrels per day): |
|
|
|
|
|
|
|
|
Crude oil |
|
66,719 |
|
|
74,652 |
|
|
70,041 |
|
|
69,088 |
|
Other
feedstocks |
|
9,448 |
|
|
8,951 |
|
|
6,770 |
|
|
6,729 |
|
Total
throughput |
|
76,167 |
|
|
83,603 |
|
|
76,811 |
|
|
75,817 |
|
Per barrel of
sales: |
|
|
|
|
|
|
|
|
Tyler refining
margin |
|
$ |
7.19 |
|
|
$ |
11.84 |
|
|
$ |
11.88 |
|
|
$ |
9.10 |
|
Tyler
adjusted refining margin |
|
$ |
12.52 |
|
|
$ |
9.88 |
|
|
$ |
12.66 |
|
|
$ |
8.58 |
|
Direct
operating expenses |
|
$ |
4.21 |
|
|
$ |
2.89 |
|
|
$ |
3.64 |
|
|
$ |
3.42 |
|
Crude Slate: (% based
on amount received in period) |
|
|
|
|
|
|
|
|
WTI crude
oil |
|
90.8 |
% |
|
82.0 |
% |
|
83.0 |
% |
|
81.1 |
% |
East
Texas crude oil |
|
8.9 |
% |
|
16.4 |
% |
|
16.3 |
% |
|
17.8 |
% |
Other |
|
0.3 |
% |
|
1.6 |
% |
|
0.7 |
% |
|
1.1 |
% |
|
|
|
|
|
|
|
|
|
El Dorado, AR
Refinery |
|
|
|
|
|
|
|
|
Days in period |
|
92 |
|
|
92 |
|
|
365 |
|
|
365 |
|
Total sales volume -
refined (average barrels per day)(2) |
|
62,422 |
|
|
76,115 |
|
|
71,381 |
|
|
80,277 |
|
Products manufactured
(average barrels per day): |
|
|
|
|
|
|
|
|
Gasoline |
|
33,036 |
|
|
38,925 |
|
|
33,718 |
|
|
38,175 |
|
Diesel |
|
22,194 |
|
|
27,807 |
|
|
24,609 |
|
|
27,482 |
|
Petrochemicals, LPG, NGLs |
|
1,202 |
|
|
1,944 |
|
|
1,228 |
|
|
1,782 |
|
Asphalt |
|
5,601 |
|
|
6,020 |
|
|
5,179 |
|
|
6,507 |
|
Other |
|
806 |
|
|
887 |
|
|
732 |
|
|
985 |
|
Total
production |
|
62,839 |
|
|
75,583 |
|
|
65,466 |
|
|
74,931 |
|
Throughput (average
barrels per day): |
|
|
|
|
|
|
|
|
Crude
oil |
|
59,462 |
|
|
72,032 |
|
|
65,615 |
|
|
73,577 |
|
Other
feedstocks |
|
4,508 |
|
|
4,505 |
|
|
1,313 |
|
|
2,568 |
|
Total
throughput |
|
63,970 |
|
|
76,537 |
|
|
66,928 |
|
|
76,145 |
|
Per barrel of
sales: |
|
|
|
|
|
|
|
|
El Dorado
refining margin |
|
$ |
7.74 |
|
|
$ |
7.18 |
|
|
$ |
8.64 |
|
|
$ |
7.76 |
|
El Dorado
adjusted refining margin |
|
$ |
8.42 |
|
|
$ |
7.19 |
|
|
$ |
7.08 |
|
|
$ |
6.14 |
|
Direct
operating expenses |
|
$ |
6.26 |
|
|
$ |
3.71 |
|
|
$ |
5.22 |
|
|
$ |
3.61 |
|
Crude Slate: (% based
on amount received in period) |
|
|
|
|
|
|
|
|
WTI crude
oil |
|
29.2 |
% |
|
52.8 |
% |
|
58.6 |
% |
|
60.8 |
% |
Local
Arkansas crude oil |
|
23.7 |
% |
|
18.8 |
% |
|
21.2 |
% |
|
18.9 |
% |
Other |
|
47.1 |
% |
|
28.4 |
% |
|
20.2 |
% |
|
20.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Refining
Segment |
|
Three
Months Ended December 31, |
Year Ended
December 31, |
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Big Spring, TX
Refinery (acquired on July 1, 2017) |
|
(Unaudited) |
(Unaudited) |
Days in period - based
on date acquired |
|
92 |
|
|
92 |
|
|
365 |
|
|
184 |
|
Total sales volume -
refined (average barrels per day) (3) |
|
80,809 |
|
|
74,189 |
|
|
74,721 |
|
|
74,276 |
|
Products manufactured
(average barrels per day): |
|
|
|
|
|
|
|
|
Gasoline |
|
41,534 |
|
|
38,541 |
|
|
36,596 |
|
|
37,266 |
|
Diesel/Jet |
|
29,023 |
|
|
27,052 |
|
|
26,660 |
|
|
27,027 |
|
Petrochemicals, LPG, NGLs |
|
3,824 |
|
|
3,614 |
|
|
3,646 |
|
|
3,738 |
|
Asphalt |
|
1,997 |
|
|
1,404 |
|
|
1,855 |
|
|
1,308 |
|
Other |
|
1,263 |
|
|
1,418 |
|
|
1,339 |
|
|
1,354 |
|
Total
production |
|
77,641 |
|
|
72,029 |
|
|
70,096 |
|
|
70,693 |
|
Throughput (average
barrels per day): |
|
|
|
|
|
|
|
|
Crude
oil |
|
73,185 |
|
|
69,981 |
|
|
67,978 |
|
|
69,549 |
|
Other
feedstocks |
|
3,273 |
|
|
1,790 |
|
|
1,533 |
|
|
1,253 |
|
Total
throughput |
|
76,458 |
|
|
71,771 |
|
|
69,511 |
|
|
70,802 |
|
Per barrel of
sales: |
|
|
|
|
|
|
|
|
Big Spring refining
margin |
|
$ |
23.03 |
|
|
$ |
14.01 |
|
|
$ |
18.44 |
|
|
$ |
12.86 |
|
Big
Spring adjusted refining margin |
|
$ |
23.51 |
|
|
$ |
14.06 |
|
|
$ |
18.57 |
|
|
$ |
14.50 |
|
Direct
operating expenses |
|
$ |
4.44 |
|
|
$ |
4.20 |
|
|
$ |
4.20 |
|
|
$ |
4.04 |
|
Crude Slate: (% based
on amount received in period) |
|
|
|
|
|
|
|
|
WTI crude
oil |
|
76.8 |
% |
|
70.3 |
% |
|
73.8 |
% |
|
72.9 |
% |
WTS crude
oil |
|
23.2 |
% |
|
29.7 |
% |
|
26.2 |
% |
|
27.1 |
% |
|
|
|
|
|
|
|
|
|
Krotz Springs,
LA Refinery (acquired on July 1, 2017) |
|
|
|
|
|
|
|
|
Days in period - based
on date acquired |
|
92 |
|
|
92 |
|
|
365 |
|
|
184 |
|
Total sales volume -
refined (average barrels per day) (4) |
|
82,566 |
|
|
70,716 |
|
|
78,902 |
|
|
70,923 |
|
Products manufactured
(average barrels per day): |
|
|
|
|
|
|
|
|
Gasoline |
|
38,810 |
|
|
34,190 |
|
|
36,729 |
|
|
33,286 |
|
Diesel/Jet |
|
32,344 |
|
|
27,379 |
|
|
31,459 |
|
|
27,686 |
|
Heavy
oils |
|
1,136 |
|
|
1,070 |
|
|
1,216 |
|
|
1,024 |
|
Petrochemicals, LPG, NGLs |
|
7,328 |
|
|
7,269 |
|
|
7,224 |
|
|
7,018 |
|
Total
production |
|
79,618 |
|
|
69,908 |
|
|
76,628 |
|
|
69,014 |
|
Throughput (average
barrels per day): |
|
|
|
|
|
|
|
|
Crude
oil |
|
72,461 |
|
|
65,816 |
|
|
73,171 |
|
|
67,407 |
|
Other
feedstocks |
|
5,590 |
|
|
2,741 |
|
|
2,211 |
|
|
1,017 |
|
Total
throughput |
|
78,051 |
|
|
68,557 |
|
|
75,382 |
|
|
68,424 |
|
Per barrel of
sales: |
|
|
|
|
|
|
|
|
Krotz
Springs refining margin |
|
$ |
11.64 |
|
|
$ |
8.40 |
|
|
$ |
9.48 |
|
|
$ |
8.29 |
|
Krotz
Springs adjusted refining margin |
|
$ |
12.57 |
|
|
$ |
8.41 |
|
|
$ |
8.83 |
|
|
$ |
8.92 |
|
Direct
operating expenses |
|
$ |
3.94 |
|
|
$ |
3.53 |
|
|
$ |
3.84 |
|
|
$ |
3.80 |
|
Crude Slate: (% based
on amount received in period) |
|
|
|
|
|
|
|
|
WTI
Crude |
|
59.1 |
% |
|
60.1 |
% |
|
61.3 |
% |
|
52.9 |
% |
Gulf
Coast Sweet Crude |
|
40.9 |
% |
|
39.9 |
% |
|
38.7 |
% |
|
47.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Pricing
statistics (average for the period presented): |
|
Three
Months Ended December 31, |
|
Year Ended
December 31, |
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Unaudited) |
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
WTI — Cushing crude oil
(per barrel) |
|
$ |
59.97 |
|
|
$ |
55.23 |
|
|
$ |
65.20 |
|
|
$ |
50.78 |
|
WTI — Midland crude oil
(per barrel) |
|
$ |
53.64 |
|
|
$ |
55.47 |
|
|
$ |
57.84 |
|
|
$ |
50.44 |
|
WTS -- Midland crude
oil (per barrel) (5) |
|
$ |
53.34 |
|
|
$ |
54.81 |
|
|
$ |
57.43 |
|
|
$ |
49.81 |
|
LLS crude oil (per
barrel) (5) |
|
$ |
67.48 |
|
|
$ |
60.94 |
|
|
$ |
70.19 |
|
|
$ |
54.01 |
|
Brent crude oil (per
barrel) |
|
$ |
68.69 |
|
|
$ |
61.42 |
|
|
$ |
71.69 |
|
|
$ |
54.73 |
|
|
|
|
|
|
|
|
|
|
US Gulf Coast 5-3-2
crack spread (per barrel) (5) |
|
$ |
12.50 |
|
|
$ |
14.66 |
|
|
$ |
13.21 |
|
|
$ |
13.01 |
|
US Gulf Coast 3-2-1
crack spread (per barrel) (5) |
|
$ |
15.42 |
|
|
$ |
18.19 |
|
|
$ |
16.63 |
|
|
$ |
16.69 |
|
US Gulf Coast 2-1-1
crack spread (per barrel) (5) |
|
$ |
6.47 |
|
|
$ |
9.84 |
|
|
$ |
9.58 |
|
|
$ |
10.94 |
|
|
|
|
|
|
|
|
|
|
US Gulf Coast Unleaded
Gasoline (per gallon) |
|
$ |
1.59 |
|
|
$ |
1.66 |
|
|
$ |
1.83 |
|
|
$ |
1.55 |
|
Gulf Coast Ultra low
sulfur diesel (per gallon) |
|
$ |
2.01 |
|
|
$ |
1.82 |
|
|
$ |
2.05 |
|
|
$ |
1.62 |
|
US Gulf Coast high
sulfur diesel (per gallon) |
|
$ |
1.92 |
|
|
$ |
1.66 |
|
|
$ |
1.92 |
|
|
$ |
1.47 |
|
Natural gas (per
MMBTU) |
|
$ |
3.72 |
|
|
$ |
2.92 |
|
|
$ |
3.07 |
|
|
$ |
3.02 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Total sales volume includes 2,106
and 986 bpd sold to the logistics segment during the three months
and year ended December 31, 2018, respectively, and 3,792 and
1,592 bpd during the three months and year ended December 31,
2017, respectively. Total sales volume also includes sales of
164 and 193 bpd of intermediate and finished products to the El
Dorado refinery during the three months and year ended
December 31, 2018, respectively, and 154 and 129 bpd during
the three months and year ended December 31, 2017,
respectively. Total sales volume also includes 284 and 399
bpd of produced finished product sold to the Big Spring refinery
and 476 and 232 bpd sold to the Krotz Springs refinery during the
three months and year ended December 31, 2018, respectively.
Total sales volume excludes 4,015 and 4,444 bpd of wholesale
activity during the three months and year ended December 31,
2018, respectively, and 3,238 and 4,209 bpd of wholesale activity
during the three months and year ended December 31, 2017,
respectively.
(2) Total sales volume includes 1,035
and 1,387 bpd of produced finished product sold to the Tyler
refinery during the three months and year ended December 31,
2018, respectively, and 189 and 514 bpd during the three months and
year ended December 31, 2017, respectively; 39,999 and 27,048
bpd of produced finished product sold to the Krotz Springs refinery
during the three months and year ended December 31, 2018,
respectively; 32 and 302 bpd of produced finished product sold to
the Big Spring refinery during the three months and year ended
December 31, 2018, respectively; 14 and 140 bpd of produced
finished product sold to logistics segment during the three months
and year ended December 31, 2018, and 0 and 0 bpd during the
year ended December 31, 2017, respectively; 0 and 17 bpd of
produced finished product sold to the retail segment during
the three months and year ended December 31, 2018,
respectively; and 617 and 406 bpd of produced finished product sold
to Alon Asphalt Company during the three months and year ended
December 31, 2018, respectively. Total sales volume
excludes 42,447 and 47,422 bpd of wholesale activity during the
three months and year ended December 31, 2018, respectively,
and 43,627 and 25,750 bpd of wholesale activity during the year
ended December 31, 2017, respectively.
(3) Total sales volume includes 728
and 554 bpd sold to the Tyler refinery, 13,647 and 13,967 bpd sold
to the retail segment, 9,099 and 10,005 bpd sold to the logistics
segment and 1,997 and 1,688 bpd sold to Alon Asphalt Company during
the three months and year ended December 31, 2018,
respectively.
(4) Sales volume includes 1,200 and
19,039 bpd sold to the El Dorado refinery and 0 and 606 bpd sold to
the Tyler refinery during the three months and year ended
December 31, 2018, respectively.
(5) For our Tyler and El Dorado
refineries, we compare our per barrel refining product margin to
the Gulf Coast 5-3-2 crack spread consisting of WTI Cushing crude,
U.S. Gulf Coast CBOB and U.S, Gulf Coast Pipeline No. 2 heating oil
(high sulfur diesel). For our Big Spring refinery, we compare
our per barrel refined product margin to the Gulf Coast 3-2-1 crack
spread consisting of WTI Cushing crude, Gulf Coast 87 Conventional
gasoline and Gulf Coast ultra low sulfur diesel, and for our Krotz
Springs refinery, we compare our per barrel refined product margin
to the Gulf Coast 2-1-1 crack spread consisting of LLS crude oil,
Gulf Coast 87 Conventional gasoline and U.S, Gulf Coast Pipeline
No. 2 heating oil (high sulfur diesel). The Tyler refinery's
crude oil input is primarily WTI Midland and east Texas, while the
El Dorado refinery's crude input is primarily combination of WTI
Midland, local Arkansas and other domestic inland crude oil. The
Big Spring refinery’s crude oil input is primarily comprised of WTS
and WTI Midland. The Krotz Springs refinery’s crude oil input is
primarily comprised of LLS and WTI Midland. The Big Spring
and Krotz Springs refineries were acquired July 1, 2017 as part of
the Delek US/Alon USA Merger, so Gulf Coast 3-2-1 and 2-1-1 crack
spreads, LLS and WTS statistics are presented only for the period
Delek US owned these refineries.
|
Delek US Holdings, Inc. |
Reconciliation of Refining Margin per barrel
to Adjusted Refining Margin per barrel (1) |
$ in millions, except per share data |
|
|
Three
Months Ended December 31, |
|
Year Ended
December 31, |
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Unaudited) |
|
(Unaudited) |
Tyler (2) |
|
|
|
|
|
|
|
|
Reported refining
margin, $ per barrel |
|
$ |
7.19 |
|
|
$ |
11.84 |
|
|
$ |
11.88 |
|
|
$ |
9.10 |
|
Adjustments: |
|
|
|
|
|
|
|
|
Net inventory valuation
loss (benefit) |
|
5.33 |
|
|
(1.96 |
) |
|
1.32 |
|
|
(0.52 |
) |
Renewable biofuels
credit allocated to refinery |
|
— |
|
|
— |
|
|
(0.54 |
) |
|
— |
|
|
|
|
|
|
|
|
|
|
Adjusted refining
margin $/bbl |
|
$ |
12.52 |
|
|
$ |
9.88 |
|
|
$ |
12.66 |
|
|
$ |
8.58 |
|
|
El Dorado (3) |
|
|
|
|
|
|
|
|
Reported refining
margin, $ per barrel |
|
$ |
7.74 |
|
|
$ |
7.18 |
|
|
$ |
8.64 |
|
|
$ |
7.76 |
|
Adjustments: |
|
|
|
|
|
|
|
|
Net inventory valuation
loss (benefit) |
|
0.68 |
|
|
0.01 |
|
|
0.15 |
|
|
— |
|
RIN waiver |
|
— |
|
|
— |
|
|
(2.28 |
) |
|
(1.62 |
) |
Renewable biofuels
credit allocated to refinery |
|
— |
|
|
— |
|
|
(0.23 |
) |
|
— |
|
Non-cash RINs inventory
mark-to-market |
|
— |
|
|
— |
|
|
0.80 |
|
|
— |
|
|
|
|
|
|
|
|
|
|
Adjusted refining
margin $/bbl |
|
$ |
8.42 |
|
|
$ |
7.19 |
|
|
$ |
7.08 |
|
|
$ |
6.14 |
|
|
|
|
|
|
|
|
|
|
Big Spring (acquired July 1, 2017) (4) |
|
|
|
|
|
|
|
|
Reported refining
margin, $ per barrel |
|
$ |
23.03 |
|
|
$ |
14.01 |
|
|
$ |
18.44 |
|
|
$ |
12.86 |
|
Adjustments: |
|
|
|
|
|
|
|
|
Net inventory valuation
loss |
|
0.48 |
|
|
0.05 |
|
|
0.13 |
|
|
0.03 |
|
Inventory fair value
adjustment |
|
— |
|
|
— |
|
|
— |
|
|
1.61 |
|
|
|
|
|
|
|
|
|
|
Adjusted refining
margin $/bbl |
|
$ |
23.51 |
|
|
$ |
14.06 |
|
|
$ |
18.57 |
|
|
$ |
14.50 |
|
|
|
|
|
|
|
|
|
|
Krotz Springs (acquired July 1, 2017) (5) |
|
|
|
|
|
|
|
|
Reported refining
margin, $ per barrel |
|
$ |
11.64 |
|
|
$ |
8.40 |
|
|
$ |
9.48 |
|
|
$ |
8.29 |
|
Adjustments: |
|
|
|
|
|
|
|
|
Net inventory valuation
loss |
|
0.93 |
|
|
0.01 |
|
|
0.24 |
|
|
— |
|
Inventory fair value
adjustment |
|
— |
|
|
— |
|
|
— |
|
|
0.63 |
|
RIN waiver |
|
— |
|
|
— |
|
|
(1.10 |
) |
|
— |
|
Non-cash RINs inventory
mark-to-market |
|
— |
|
|
— |
|
|
0.21 |
|
|
— |
|
|
|
|
|
|
|
|
|
|
Adjusted refining
margin $/bbl |
|
$ |
12.57 |
|
|
$ |
8.41 |
|
|
$ |
8.83 |
|
|
$ |
8.92 |
|
|
|
|
|
|
|
|
|
|
(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 $(38.8) million and $14.8 million of valuation
benefit (loss) in the fourth quarter 2018 and 2017, respectively.
There was approximately $(37.9) million and $14.5 million of
valuation benefit (loss) in the year ended December 31, 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 $(3.9) million and $(0.1) million of valuation benefit (loss)
in the fourth quarter 2018 and 2017, respectively. There was
approximately $(3.9) million and $(0.1) million of valuation
benefit (loss) in the year ended December 31, 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 in the amount of $21.0 million in the
second quarter 2018. 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 $(3.5) million and $(0.4) million of valuation
benefit (loss) in the fourth quarter 2018 and 2017, respectively.
There was approximately $(3.5) million and $(0.4) million of
valuation benefit (loss) in the year ended December 31, 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 year ended
December 31, 2017 that reduced margin.
(5) Krotz Springs adjusted refining margins exclude
the following items.
Net inventory valuation (loss) - There were
$(7.1) million of valuation losses in the fourth quarter 2018 and
the year ended December 31, 2018, respectively. These amounts
resulted from lower of cost or market adjustments on FIFO inventory
in the period.
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 year ended
December 31, 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 in the amount of $5.9 million in the
second quarter 2018. The inventory position was higher due to the
waiver received by the Krotz Springs refinery in March 2018.
Logistics
Segment |
|
Three
Months Ended December 31, |
|
Year Ended
December 31, |
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
|
|
(Unaudited) |
|
(Unaudited) |
Pipelines &
Transportation: (average bpd) |
|
|
|
|
|
|
|
|
Lion
Pipeline System: |
|
|
|
|
|
|
|
|
Crude
pipelines (non-gathered) |
|
45,416 |
|
|
58,497 |
|
|
51,992 |
|
|
59,362 |
|
Refined
products pipelines |
|
41,496 |
|
|
54,874 |
|
|
45,728 |
|
|
51,927 |
|
SALA
Gathering System |
|
15,536 |
|
|
15,013 |
|
|
16,571 |
|
|
15,871 |
|
East
Texas Crude Logistics System |
|
13,602 |
|
|
18,078 |
|
|
15,696 |
|
|
15,780 |
|
|
|
|
|
|
|
|
|
|
Wholesale
Marketing & Terminalling: |
|
|
|
|
|
|
|
|
East
Texas - Tyler Refinery sales volumes (average bpd) (1) |
|
77,896 |
|
|
78,810 |
|
|
77,487 |
|
|
73,655 |
|
West
Texas marketing throughputs (average bpd) |
|
12,938 |
|
|
14,322 |
|
|
13,323 |
|
|
13,817 |
|
West Texas gross margin
per barrel |
|
$ |
4.60 |
|
|
$ |
5.18 |
|
|
$ |
5.57 |
|
|
$ |
4.03 |
|
Big
Spring Marketing - Refinery sales volume (average bpd) (for period
owned) (2) |
|
84,135 |
|
|
— |
|
|
81,117 |
|
|
— |
|
Terminalling throughputs (average bpd) (3) |
|
164,028 |
|
|
130,547 |
|
|
155,193 |
|
|
124,488 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Excludes jet fuel and petroleum coke.
(2) Throughputs for the year ended
December 31, 2018 are for the 306 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
year ended December 31, 2018 for the Big Spring terminal are
for the 306 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 year ended December 31, 2018 was 56.6 million
barrels, which averaged 155,193 bpd for the period.
Retail
Segment |
|
Three
Months Ended December 31, |
|
Year Ended
December 31, |
(Operations
were acquired on July 1, 2017) |
|
2018 |
|
2017 |
|
2018 |
|
2017
(2) |
|
|
(Unaudited) |
|
(Unaudited) |
Number of stores (end
of period) (1) |
|
280 |
|
|
302 |
|
|
280 |
|
|
302 |
|
Average number of
stores |
|
280 |
|
|
302 |
|
|
280 |
|
|
302 |
|
Retail fuel sales
(thousands of gallons) |
|
53,309 |
|
|
53,234 |
|
|
217,118 |
|
|
107,599 |
|
Average retail gallons
per average number of stores (in thousands) |
|
197 |
|
|
182 |
|
|
801 |
|
|
367 |
|
Retail fuel margin ($
per gallon) |
|
$ |
0.30 |
|
|
$ |
0.17 |
|
|
$ |
0.24 |
|
|
$ |
0.19 |
|
Merchandise sales (in
millions) |
|
$ |
81.0 |
|
|
$ |
84.2 |
|
|
$ |
339.0 |
|
|
$ |
174.6 |
|
Merchandise sales per
average number of stores (in millions) |
|
$ |
0.3 |
|
|
$ |
0.3 |
|
|
$ |
1.2 |
|
|
$ |
0.6 |
|
Merchandise margin
% |
|
30.2 |
% |
|
31.5 |
% |
|
30.9 |
% |
|
30.7 |
% |
|
Three Months Ended December
31, 2018 |
Change in same-store fuel
gallons sold |
0.1% |
Change in same-store
merchandise sales |
(0.7)% |
|
|
(1) At December 31, 2018, there were
280 retail convenience stores of which 271 sold fuel.
(2) Amounts represent six months of
operations for the period July 1, 2017 to December 31, 2017.
|
Delek US Holdings, Inc. |
Reconciliation of Amounts Reported Under U.S.
GAAP |
$ in millions |
|
|
|
|
|
Three
Months Ended December 31, |
|
Year Ended
December 31, |
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 |
$ |
121.6 |
|
|
$ |
211.1 |
|
|
$ |
345.6 |
|
|
$ |
288.8 |
|
|
|
|
|
|
|
|
|
Adjustments |
|
|
|
|
|
|
|
Net inventory valuation
loss (benefit) |
53.4 |
|
|
(14.4 |
) |
|
52.5 |
|
|
(14.0 |
) |
Tax effect of inventory
valuation |
(11.6 |
) |
|
5.1 |
|
|
(11.4 |
) |
|
5.0 |
|
Net after tax inventory
valuation loss (benefit) |
41.8 |
|
|
(9.3 |
) |
|
41.1 |
|
|
(9.0 |
) |
|
|
|
|
|
|
|
|
Environmental
indemnification proceeds |
(20.0 |
) |
|
— |
|
|
(20.0 |
) |
|
— |
|
Tax effect of
environmental indemnification proceeds |
4.5 |
|
|
— |
|
|
4.5 |
|
|
— |
|
Net after tax
environmental indemnification proceeds |
(15.5 |
) |
|
— |
|
|
(15.5 |
) |
|
— |
|
|
|
|
|
|
|
|
|
Contract
termination/modification charges (1) |
6.2 |
|
|
— |
|
|
6.2 |
|
|
— |
|
Tax effect of contract
termination/modification charges |
(1.4 |
) |
|
— |
|
|
(1.4 |
) |
|
— |
|
Net after tax contract
termination/modification charges |
4.8 |
|
|
— |
|
|
4.8 |
|
|
— |
|
|
|
|
|
|
|
|
|
Asset write-offs |
— |
|
|
— |
|
|
— |
|
|
0.7 |
|
Tax effect of asset
write offs |
— |
|
|
— |
|
|
— |
|
|
(0.3 |
) |
Net after tax asset
write offs |
— |
|
|
— |
|
|
— |
|
|
0.4 |
|
|
|
|
|
|
|
|
|
Adjusted unrealized
hedging (gain) loss |
(27.1 |
) |
|
13.1 |
|
|
(28.5 |
) |
|
20.9 |
|
Tax effect of adjusted
unrealized hedging |
6.1 |
|
|
(4.8 |
) |
|
6.4 |
|
|
(7.3 |
) |
Net after tax adjusted
unrealized hedging (gain) loss |
(21.0 |
) |
|
8.3 |
|
|
(22.1 |
) |
|
13.6 |
|
|
|
|
|
|
|
|
|
Inventory fair value
adjustment |
— |
|
|
— |
|
|
— |
|
|
29.1 |
|
Tax effect of inventory
fair value adjustment |
— |
|
|
— |
|
|
— |
|
|
(10.5 |
) |
Net after tax inventory
fair value adjustment |
— |
|
|
— |
|
|
— |
|
|
18.6 |
|
|
|
|
|
|
|
|
|
Transaction related
expenses |
0.9 |
|
|
2.3 |
|
|
16.0 |
|
|
24.7 |
|
Tax effect of
transaction related expenses |
(0.2 |
) |
|
0.3 |
|
|
(3.4 |
) |
|
(7.0 |
) |
Net after tax
transaction related expenses |
0.7 |
|
|
2.6 |
|
|
12.6 |
|
|
17.7 |
|
|
|
|
|
|
|
|
|
Gain on remeasurement
of equity method investment in Alon |
— |
|
|
— |
|
|
— |
|
|
(190.1 |
) |
Tax effect of gain on
remeasurement of equity method investment in Alon |
— |
|
|
— |
|
|
— |
|
|
69.5 |
|
Net after tax gain on
remeasurement of equity method investment in Alon |
— |
|
|
— |
|
|
— |
|
|
(120.6 |
) |
|
|
|
|
|
|
|
|
Deferred tax
write-off |
— |
|
|
— |
|
|
— |
|
|
46.9 |
|
Tax effect of deferred
tax write-off |
— |
|
|
— |
|
|
— |
|
|
— |
|
Net after tax deferred
tax write-off |
— |
|
|
— |
|
|
— |
|
|
46.9 |
|
|
|
|
|
|
|
|
|
Tax Cuts and Jobs Act
adjustment (benefit) expense |
(2.7 |
) |
|
(166.9 |
) |
|
(0.6 |
) |
|
(166.9 |
) |
Tax effect of Tax Cuts
and Jobs Act adjustment |
— |
|
|
— |
|
|
— |
|
|
— |
|
Net after tax Tax Cuts
and Jobs Act adjustment (benefit) expense |
(2.7 |
) |
|
(166.9 |
) |
|
(0.6 |
) |
|
(166.9 |
) |
|
|
|
|
|
|
|
|
Loss on extinguishment
of debt |
— |
|
|
— |
|
|
9.1 |
|
|
— |
|
Tax effect of loss on
extinguishment of debt |
— |
|
|
— |
|
|
(2.1 |
) |
|
— |
|
Net after tax loss on
extinguishment of debt |
— |
|
|
— |
|
|
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 |
(0.1 |
) |
|
— |
|
|
(13.3 |
) |
|
— |
|
Tax effect of gain on
sale of the asphalt business |
— |
|
|
— |
|
|
2.9 |
|
|
— |
|
Net after tax gain on
sale of the asphalt business |
(0.1 |
) |
|
— |
|
|
(10.4 |
) |
|
— |
|
|
|
|
|
|
|
|
|
Discontinued operations
loss |
0.2 |
|
|
2.2 |
|
|
10.9 |
|
|
8.6 |
|
Tax effect of
discontinued operations |
— |
|
|
(0.4 |
) |
|
(2.2 |
) |
|
(2.7 |
) |
Net after tax
discontinued operations (income) loss |
0.2 |
|
|
1.8 |
|
|
8.7 |
|
|
5.9 |
|
|
|
|
|
|
|
|
|
Net income attributable
to non-controlling interest of discontinued operations |
— |
|
|
— |
|
|
10.5 |
|
|
— |
|
Tax effect of net
income attributable to non-controlling interest of discontinued
operations |
— |
|
|
— |
|
|
(2.4 |
) |
|
— |
|
Net after tax income
attributable to non-controlling interest of discontinued
operations |
— |
|
|
— |
|
|
8.1 |
|
|
— |
|
|
|
|
|
|
|
|
|
Total after tax
adjustments |
8.2 |
|
|
(163.5 |
) |
|
60.7 |
|
|
(193.4 |
) |
|
|
|
|
|
|
|
|
Adjusted
net income |
$ |
129.8 |
|
|
$ |
47.6 |
|
|
$ |
406.3 |
|
|
$ |
95.4 |
|
|
|
|
|
|
|
|
|
(1) Contract termination/modification charges
are related to the termination of the licensing agreement with
7-Eleven which will require the removal of 7-Eleven branding on a
store-by-store basis over a period of time not to extend past
December 31, 2021, as well as fees incurred in connection with the
Big Spring refinery portion of the J. Aron Supply and Offtake
Agreement amendments where such fees were required to be charged to
expense because the underlying obligation is accounted for pursuant
to the fair value election provided by Accounting Standards
Codification 820, Fair Value Measurements and Disclosure.
Delek US Holdings, Inc. |
Reconciliation of Amounts Reported Under U.S.
GAAP |
per share data |
|
Three
Months Ended December 31, |
|
Year Ended
December 31, |
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 |
$ |
1.48 |
|
|
$ |
2.56 |
|
|
$ |
4.02 |
|
|
$ |
4.00 |
|
|
|
|
|
|
|
|
|
Adjustments, after tax (per share)
(1) |
|
|
|
|
|
|
|
Net inventory valuation
loss (gain) |
0.51 |
|
|
(0.11 |
) |
|
0.47 |
|
|
(0.12 |
) |
Environmental
indemnification proceeds |
(0.19 |
) |
|
— |
|
|
(0.18 |
) |
|
— |
|
Contract
termination/modification charges |
0.06 |
|
|
— |
|
|
0.06 |
|
|
— |
|
Asset write offs |
— |
|
|
— |
|
|
— |
|
|
0.01 |
|
Adjusted unrealized
hedging (gain) loss |
(0.25 |
) |
|
0.10 |
|
|
(0.25 |
) |
|
0.19 |
|
Inventory fair value
adjustment |
— |
|
|
— |
|
|
— |
|
|
0.26 |
|
Transaction related
expenses |
0.01 |
|
|
0.03 |
|
|
0.15 |
|
|
0.24 |
|
Gain on remeasurement
of equity method investment in Alon |
— |
|
|
— |
|
|
— |
|
|
(1.67 |
) |
Deferred tax
write-off |
— |
|
|
— |
|
|
— |
|
|
0.65 |
|
Tax Cuts and Jobs Act
adjustment (benefit) expense |
(0.03 |
) |
|
(2.02 |
) |
|
(0.01 |
) |
|
(2.31 |
) |
Impairment loss on
assets held for sale |
— |
|
|
— |
|
|
0.31 |
|
|
— |
|
Gain on sale of the
asphalt business |
— |
|
|
— |
|
|
(0.12 |
) |
|
— |
|
(Gain) loss on
extinguishment of debt |
— |
|
|
— |
|
|
0.08 |
|
|
— |
|
Discontinued operations
loss |
— |
|
|
0.02 |
|
|
0.10 |
|
|
0.08 |
|
Net loss attributable
to non-controlling interest of discontinued operations |
— |
|
|
— |
|
|
0.09 |
|
|
— |
|
|
|
|
|
|
|
|
|
Total adjustments |
0.11 |
|
|
(1.98 |
) |
|
0.70 |
|
|
(2.67 |
) |
Adjustment for economic
benefit of note hedge related to Senior Convertible Notes (2) |
— |
|
|
— |
|
|
0.08 |
|
|
— |
|
Adjusted
net income per share |
$ |
1.59 |
|
|
$ |
0.58 |
|
|
$ |
4.80 |
|
|
$ |
1.33 |
|
|
|
|
|
|
|
|
|
Shares used in
computing Non-GAAP dilutive effect of convertible debt (2): |
|
|
|
|
|
|
|
Diluted |
82,528,339 |
|
|
82,645,060 |
|
|
86,768,401 |
|
|
72,303,083 |
|
Less: Adjustment for
economic benefit of note hedge related to Senior Convertible Notes
(2) |
— |
|
|
526,464 |
|
|
1,525,846 |
|
|
— |
|
Non-GAAP Adjusted
Diluted Share Count |
82,528,339 |
|
|
82,118,596 |
|
|
85,242,555 |
|
|
72,303,083 |
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 December 31, |
|
Year Ended
December 31, |
Reconciliation of Net
Income attributable to Delek to Adjusted EBITDA |
2018 |
|
2017 |
|
2018 |
|
2017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Unaudited) |
|
(Unaudited) |
Reported net
income attributable to Delek |
$ |
121.6 |
|
|
$ |
211.1 |
|
|
$ |
345.6 |
|
|
$ |
288.8 |
|
|
|
|
|
|
|
|
|
Add: |
|
|
|
|
|
|
|
Interest expense,
net |
27.9 |
|
|
30.0 |
|
|
120.1 |
|
|
89.8 |
|
(Gain) loss on
extinguishment of debt |
— |
|
|
— |
|
|
9.1 |
|
|
— |
|
Income tax expense
(benefit) - continuing operations |
29.6 |
|
|
(140.7 |
) |
|
96.4 |
|
|
(29.2 |
) |
Depreciation and
amortization |
53.0 |
|
|
47.9 |
|
|
199.4 |
|
|
153.3 |
|
EBITDA |
232.1 |
|
|
148.3 |
|
|
770.6 |
|
|
502.7 |
|
|
|
|
|
|
|
|
|
Adjustments |
|
|
|
|
|
|
|
Net inventory valuation
loss (gain) |
53.4 |
|
|
(14.4 |
) |
|
52.5 |
|
|
(14.0 |
) |
Environmental
indemnification proceeds |
(20.0 |
) |
|
— |
|
|
(20.0 |
) |
|
— |
|
Contract termination
charges |
6.2 |
|
|
— |
|
|
6.2 |
|
|
— |
|
Asset write offs |
— |
|
|
— |
|
|
— |
|
|
0.7 |
|
Adjusted unrealized
hedging (gain) loss |
(27.1 |
) |
|
13.1 |
|
|
(28.6 |
) |
|
20.9 |
|
Inventory fair value
adjustment |
— |
|
|
— |
|
|
— |
|
|
33.2 |
|
Transaction related
expenses |
0.9 |
|
|
2.3 |
|
|
16.0 |
|
|
24.7 |
|
Impairment loss on
assets held for sale |
— |
|
|
— |
|
|
27.5 |
|
|
— |
|
Gain on sale of the
asphalt business |
(0.1 |
) |
|
— |
|
|
(13.3 |
) |
|
— |
|
Gain on remeasurement
of equity method investment in Alon |
— |
|
|
— |
|
|
— |
|
|
(190.1 |
) |
Discontinued operations
loss, net of tax |
0.2 |
|
|
1.8 |
|
|
8.7 |
|
|
5.9 |
|
Non-controlling
interest income |
5.8 |
|
|
14.0 |
|
|
34.8 |
|
|
33.8 |
|
Total adjustments |
19.3 |
|
|
16.8 |
|
|
83.8 |
|
|
(84.9 |
) |
|
|
|
|
|
|
|
|
Adjusted EBITDA |
$ |
251.4 |
|
|
$ |
165.1 |
|
|
$ |
854.4 |
|
|
$ |
417.8 |
|
|
|
|
|
|
|
|
|
|
|
Three
Months Ended December 31, |
|
Year Ended
December 31, |
Reconciliation of Refining Segment Gross Margin to Refining
Margin |
|
2018 |
|
2017 |
|
2018 |
|
2017 |
|
(Unaudited) |
(Unaudited) |
Net revenues |
|
$ |
2,231.3 |
|
|
$ |
2,254.3 |
|
|
$ |
9,549.7 |
|
|
$ |
6,620.6 |
|
Cost of sales |
|
2,030.6 |
|
|
2,100.8 |
|
|
8,818.3 |
|
|
6,279.1 |
|
Gross
margin |
|
200.7 |
|
|
153.5 |
|
|
731.4 |
|
|
341.5 |
|
Add back (items
included in cost of sales): |
|
|
|
|
|
|
|
|
Operating expenses
(excluding depreciation and amortization) |
|
118.7 |
|
|
104.8 |
|
|
465.4 |
|
|
317.7 |
|
Depreciation and
amortization |
|
34.6 |
|
|
32.3 |
|
|
133.7 |
|
|
109.2 |
|
Refining
margin |
|
$ |
354.0 |
|
|
$ |
290.6 |
|
|
$ |
1,330.5 |
|
|
$ |
768.4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
Months Ended December 31, |
|
Year Ended
December 31, |
Reconciliation of Unrealized (Gains) Losses on Economic
Hedge Commodity Derivatives Not Designated as Hedges to Adjusted
Unrealized Hedging (Gains) Losses |
2018 |
|
2017 |
|
2018 |
|
2017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Unaudited) |
(Unaudited) |
Unrealized (gain) loss
on economic hedge commodity derivatives not designated as
hedges |
$ |
(29.3 |
) |
|
$ |
2.0 |
|
|
$ |
(32.1 |
) |
|
$ |
13.0 |
|
Add: Reversal of prior
period unrealized (gain) loss where the instrument has matured but
has not cash settled as of period end |
(5.9 |
) |
|
6.5 |
|
|
(4.6 |
) |
|
3.3 |
|
Less: Portion of
unrealized gain (loss) where the instrument has matured but has not
cash settled as of period end |
8.1 |
|
|
4.6 |
|
|
8.1 |
|
|
4.6 |
|
Adjusted unrealized
hedging (gain) loss |
$ |
(27.1 |
) |
|
$ |
13.1 |
|
|
$ |
(28.6 |
) |
|
$ |
20.9 |
|
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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