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What changed in Delek US Holdings, Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Delek US Holdings, Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+438 added−415 removedSource: 10-K (2025-02-26) vs 10-K (2024-02-28)

Top changes in Delek US Holdings, Inc.'s 2024 10-K

438 paragraphs added · 415 removed · 289 edited across 7 sections

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

108 edited+21 added−52 removed319 unchanged
Biggest changeAny regional or global disease outbreak may result in modifications to our business practices, including limiting employee and contractor presence at certain work locations, limiting travel and reducing capital expenditures. We may take further actions as required by government authorities or that we determine are in the best interests of our employees, contractors, customers, suppliers and communities.
Biggest changeWe may take further actions as required by government authorities or that we determine are in the best interests of our employees, contractors, customers, suppliers and communities. However, there is no assurance that such measures will be sufficient to mitigate the risks posed by any outbreak, and our ability to successfully execute our business operations could be adversely impacted.
The market price of our common stock may be influenced by many factors, some of which may be beyond our control, including: • our quarterly or annual earnings, or those of other companies in our industry; • inaccuracies in, and changes to, our previously published quarterly or annual earnings; • changes in accounting standards, policies, guidance, interpretations or principles; • economic conditions within our industry, as well as general economic and stock market conditions; • the failure of securities analysts to cover our common stock, or the cessation of such coverage; • changes in financial estimates by securities analysts and the frequency and accuracy of such reports; • future issuance or sales of our common stock; • announcements by us or our competitors of significant contracts or acquisitions; • sales of common stock by our senior officers or our affiliates; and • the other factors described in these "Risk Factors." In recent years, the stock market in general, and the market for energy companies in particular, has experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of those companies.
The market price of our common stock may be influenced by many factors, some of which may be beyond our control, including: • our quarterly or annual earnings, or those of other companies in our industry; • inaccuracies in, and changes to, our previously published quarterly or annual earnings; • changes in accounting standards, policies, guidance, interpretations or principles; • economic conditions within our industry, as well as general economic and stock market conditions; • the failure of securities analysts to cover our common stock, or the cessation of such coverage; • changes in financial estimates by securities analysts and the frequency and accuracy of such reports; • future issuance or sales of our common stock; • announcements by us or our competitors of significant contracts or acquisitions; • sales of common stock by our senior officers or our affiliates; and • the other factors described in these "Risk Factors." 45 | Risk Factors In recent years, the stock market in general, and the market for energy companies in particular, has experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of those companies.
Under RCRA, CERCLA and other federal, state and local environmental laws, as the owner or operator of refineries, biodiesel plants, bulk terminals, pipelines, tank farms, rail cars, trucks and retail locations, we may be liable for the costs of removal or remediation of contamination at our existing or former locations, whether we knew of, or were responsible for, the presence of such contamination.
Under RCRA, CERCLA and other federal, state and local environmental laws, as the owner or operator of refineries, biodiesel plants, bulk terminals, pipelines, tank farms, rail cars and trucks, we may be liable for the costs of removal or remediation of contamination at our existing or former locations, whether we knew of, or were responsible for, the presence of such contamination.
District Court for the Northern District of Texas in June 2019 resolving alleged historical violations of the CAA at our Big Spring refinery. In addition to a civil penalty of $0.5 million that we paid in June 2019, we will be required to expend capital for pollution control equipment that may be significant over the next 5 years.
District Court for the Northern District of Texas in June 2019 resolving alleged historical violations of the CAA at our Big Spring refinery. In addition to a civil penalty of $0.5 million that we paid in June 2019, we will be required to expend capital for pollution control equipment that may be significant over the next 3 years.
Though we have applied reasonable interpretations and assumptions in determining our tax liabilities, it is possible that the Internal Revenue Service ("IRS") could issue subsequent guidance or take positions on audit that differ from our prior interpretations and assumptions, which could adversely impact our cash tax liabilities, results of operations, and financial condition.
Though we believe we have applied reasonable interpretations and assumptions in determining our tax liabilities, it is possible that the Internal Revenue Service ("IRS") could issue subsequent guidance or take positions on audit that differ from our prior interpretations and assumptions, which could adversely impact our cash tax liabilities, results of operations, and financial condition.
In addition, major modifications of our operations could require modifications to our existing permits or upgrades to our existing pollution control equipment. Any, or all, of these matters could have a negative effect on our business, results of operations and cash flows. Our Tyler refinery currently primarily distributes refined petroleum products via truck or rail.
In addition, major modifications of our operations could require modifications to our existing permits or upgrades to our existing pollution control equipment. Any, or all, of these matters could have a negative effect on our business, results of operations and cash flows. Our Tyler refinery primarily distributes refined petroleum products via truck or rail.
S.; • excess capacity and utilization rates of refineries worldwide; • development and marketing of alternative and competing fuels, such as ethanol and biodiesel; • changes in fuel specifications required by environmental and other laws, particularly with respect to oxygenates and sulfur content; • local factors, including market conditions, adverse weather conditions and the level of operations of other refineries and pipelines in our markets; • volatility in the costs of natural gas and electricity used by our refineries; • accidents, interruptions in transportation, inclement weather, earthquakes, or other events, including cyber-attacks, that can cause unscheduled shutdowns or otherwise adversely affect our refineries or the supply and delivery of crude oil from third parties; and • U.S. government regulations.
S.; • excess capacity and utilization rates of refineries worldwide; • development and marketing of alternative and competing fuels, such as ethanol and biodiesel; • changes in fuel specifications required by environmental and other laws, particularly with respect to oxygenates and sulfur content; • local factors, including market conditions, adverse weather conditions and the level of operations of other refineries and pipelines in our markets; • volatility in the costs of natural gas and electricity used by our refineries; 29 | Risk Factors • accidents, interruptions in transportation, inclement weather, earthquakes, or other events, including cyber-attacks, that can cause unscheduled shutdowns or otherwise adversely affect our refineries or the supply and delivery of crude oil from third parties; and • U.S. government regulations.
In the past we have acquired refineries, and we have developed our logistics segment through the acquisition of transportation and marketing assets. We expect to continue to acquire assets that complement our existing assets and/or broaden our geographic presence as a major element of our growth strategy.
In the past we have acquired refineries, and we have developed our logistics segment through the acquisition of transportation, marketing and water assets. We expect to continue to acquire assets that complement our existing assets and/or broaden our geographic presence as a major element of our growth strategy.
For example, it could: • increase our vulnerability to general adverse economic and industry conditions; • require us to dedicate a substantial portion of our cash flow from operations to service our debt and lease obligations, thereby reducing the availability of our cash flow to fund working capital, capital expenditures and other general corporate purposes; • limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate; • place us at a disadvantage relative to our competitors that have less indebtedness or better access to capital by, for example, limiting our ability to enter into new markets, upgrade our fixed assets or pursue acquisitions or other business opportunities; • limit our ability to borrow additional funds in the future; and • increase interest costs for our borrowed funds and letters of credit.
For example, it could: 48 | Risk Factors • increase our vulnerability to general adverse economic and industry conditions; • require us to dedicate a substantial portion of our cash flow from operations to service our debt and lease obligations, thereby reducing the availability of our cash flow to fund working capital, capital expenditures and other general corporate purposes; • limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate; • place us at a disadvantage relative to our competitors that have less indebtedness or better access to capital by, for example, limiting our ability to enter into new markets, upgrade our fixed assets or pursue acquisitions or other business opportunities; • limit our ability to borrow additional funds in the future; and • increase interest costs for our borrowed funds and letters of credit.
Due to our emphasis on growth through acquisitions, we are particularly susceptible to transactional risks that could cause our actual growth or operating results to differ adversely compared with our expectations.
Acquisitions involve risks that could cause our actual growth or operating results to differ adversely compared with our expectations. Due to our emphasis on growth through acquisitions, we are particularly susceptible to transactional risks that could cause our actual growth or operating results to differ adversely compared with our expectations.
Failure, or any perceived failure to provide such benefits, could impact our competitive position, which could in turn negatively affect our liquidity, business, financial condition and results of operations. 42 | Risk Factors We have capital needs to finance our crude oil and refined products inventory for which our internally generated cash flows or other sources of liquidity may not be adequate.
Failure, or any perceived failure to provide such benefits, could impact our competitive position, which could in turn negatively affect our liquidity, business, financial condition and results of operations. 39 | Risk Factors We have capital needs to finance our crude oil and refined products inventory for which our internally generated cash flows or other sources of liquidity may not be adequate.
Also, in connection with such derivative transactions, we may be required to make cash payments or provide letters of credit to maintain margin accounts and to settle the contracts at their value upon termination. Finally, this activity exposes us to potential risk of counterparties to our derivative contracts failing to perform under the contracts.
Also, in connection with such derivative transactions, we may be required to make cash payments or provide letters of credit to maintain margin accounts and to settle the contracts at their value upon 47 | Risk Factors termination. Finally, this activity exposes us to potential risk of counterparties to our derivative contracts failing to perform under the contracts.
The specific impact of laws and regulations or other actions may vary depending on a number of factors, including the age and location of operating facilities, marketing areas, crude oil and feedstock sources and production processes. Environmental regulations are becoming more stringent, and new environmental and safety laws and regulations are continuously being enacted or proposed.
The specific impact of laws and regulations or other actions may vary depending on a number of factors, including the age and location of operating facilities, marketing areas, crude oil and feedstock sources and production processes. 30 | Risk Factors Environmental regulations are becoming more stringent, and new environmental and safety laws and regulations are continuously being enacted or proposed.
Termination of our Inventory Intermediation Agreement with Citi, which is scheduled to expire in January 2026, would require us to finance the products covered by the agreement at terms that may not be favorable. The availability of capital will depend upon several factors, some of which are beyond our control.
Termination of our Inventory Intermediation Agreement with Citi, which is scheduled to expire in January 2027, would require us to finance the products covered by the agreement at terms that may not be favorable. The availability of capital will depend upon several factors, some of which are beyond our control.
The unavailability of full insurance coverage to cover events in which we suffer significant losses could have a material adverse effect on our business, financial condition and results of operations. Our ongoing study of strategic options to unlock and enhance stockholder value pose additional risks to our business.
The unavailability of full insurance coverage to cover events in which we suffer significant losses could have a material adverse effect on our business, financial condition and results of operations. Our ongoing study of strategic options to unlock and enhance stockholder value poses additional risks to our business.
Quantitative and Qualitative Disclosures about Market Risk, and Note 11 of our consolidated financial statements included in Item 8. Financial Statements and Supplementary Data, of this Annual Report on Form 10-K. We are exposed to certain counterparty risks which may adversely impact our results of operations.
Quantitative and Qualitative Disclosures about Market Risk, and Note 12 of our consolidated financial statements included in Item 8. Financial Statements and Supplementary Data, of this Annual Report on Form 10-K. We are exposed to certain counterparty risks which may adversely impact our results of operations.
Our business is subject to complex and evolving laws, regulations and security standards regarding privacy, cybersecurity and data protection (“data protection laws”). Many of these data protection laws are subject to change and uncertain interpretation, and could result in claims, changes to our business practices, monetary penalties, increased cost of operations or other harm to our business.
Our business is subject to complex and evolving laws, regulations and security standards regarding privacy, cybersecurity and data protection. Many of these data protection laws are subject to change and uncertain interpretation, and could result in claims, changes to our business practices, monetary penalties, increased cost of operations or other harm to our business.
A deterioration in our operating results or overall economic conditions could result in an impairment of goodwill and / or additional long-lived asset impairments at some point in the future. Future impairment charges could be material to our results of operations. 54 | ITEM 1B. UNRESOLVED STAFF COMMENTS None.
A deterioration in our operating results or overall economic conditions could result in an impairment of goodwill and / or additional long-lived asset impairments at some point in the future. Future impairment charges could be material to our results of operations. 50 | ITEM 1B. UNRESOLVED STAFF COMMENTS None.
Various permits, licenses, registrations and other authorizations are required under these laws for the operation of our refineries, biodiesel facilities, terminals, pipelines, retail locations and related operations, and these permits are subject to renewal and modification that may require operational changes involving significant costs.
Various permits, licenses, registrations and other authorizations are required under these laws for the operation of our refineries, biodiesel facilities, terminals, pipelines and related operations, and these permits are subject to renewal and modification that may require operational changes involving significant costs.
A strike or work stoppage could have a material adverse effect on our business, financial condition and results of operations. 47 | Risk Factors We rely on information technology in our operations, and any material failure, inadequacy, interruption, cyber-attack or security failure of that technology could harm our business.
A strike or work stoppage could have a material adverse effect on our business, financial condition and results of operations. 43 | Risk Factors We rely on information technology in our operations, and any material failure, inadequacy, interruption, cyber-attack or security failure of that technology could harm our business.
For example, in February 2021, our El Dorado refinery experienced a fire in its Penex unit and in November 2022, our Big Spring refinery experienced a fire in its diesel hydrotreater unit. For additional information, refer to Note 13 - Commitments and Contingencies in the Notes to Consolidated Financial Statements.
For example, in February 2021, our El Dorado refinery experienced a fire in its Penex unit and in November 2022, our Big Spring refinery experienced a fire in its diesel hydrotreater unit. For additional information, refer to Note 14 - Commitments and Contingencies in the Notes to Consolidated Financial Statements.
Our business is capital intensive and asset heavy. Our refineries, logistics assets, including pipelines, distribution terminals, tractors, trailers and tankage, and retail locations require us to make significant capital expenditures and to incur substantial costs maintaining and improving such assets.
Our business is capital intensive and asset heavy. Our refineries and logistics assets, including pipelines, distribution terminals, tractors, trailers and tankage require us to make significant capital expenditures and to incur substantial costs maintaining and improving such assets.
The loss of major customers, or a reduction in amounts purchased by major customers, for any reason including, but not limited to, a desire to purchase competing products with lower emissions, could have a material adverse effect on us to the extent that we are not able to correspondingly increase sales to other purchasers.
The loss of major customers, or a reduction in amounts purchased by major customers, for any reason including, but not limited to, a desire to 42 | Risk Factors purchase competing products with lower emissions, could have a material adverse effect on us to the extent that we are not able to correspondingly increase sales to other purchasers.
At times, we have also experienced declines in the supply of inputs thought to be associated with supply chain issues and disruptions in the labor market. There can be no assurance as to how long such uncertainty will persist or that a recurrence of price weakness will not arise in the future.
At times, we have also experienced declines in the supply of inputs thought to be associated with supply chain issues and 28 | Risk Factors disruptions in the labor market. There can be no assurance as to how long such uncertainty will persist or that a recurrence of price weakness will not arise in the future.
Subsequent changes to our tax liabilities as a result of these audits may also subject us to interest and penalties, and could have a material adverse effect on our business, financial condition and results of operations. 46 | Risk Factors For example, the tax treatment of our logistics segment depends on its status as a partnership for federal income tax purposes.
Subsequent changes to our tax liabilities as a result of these audits may also subject us to interest and penalties, and could have a material adverse effect on our business, financial condition and results of operations. For example, the tax treatment of our logistics segment depends on its status as a partnership for federal income tax purposes.
In general, we would be a USRPHC if the fair market value of our "U.S. real property 48 | Risk Factors interests," as such term is defined for U.S. federal income tax purposes, equals or exceeds 50% of the sum of the fair market value of our worldwide real property interests and our other assets used or held for use in a trade or business.
In general, we would be a USRPHC if the fair market value of our "U.S. real property interests," as such term is defined for U.S. federal income tax purposes, equals or exceeds 50% of the sum of the fair market value of our worldwide real property interests and our other assets used or held for use in a trade or business.
Instability in the financial markets as a result of terrorism, sabotage or war could also affect our ability to raise capital, including our ability to repay or refinance debt. 36 | Risk Factors Legislative and regulatory measures to address climate change and GHG emissions could increase our operating costs or decrease demand for our refined products.
Instability in the financial markets as a result of terrorism, sabotage or war could also affect our ability to raise capital, including our ability to repay or refinance debt. Legislative and regulatory measures to address climate change and GHG emissions could increase our operating costs or decrease demand for our refined products.
There can be no assurance that we will be successful, or that we will realize the expected economies of scale, synergies and other benefits anticipated from any additional acquisitions or strategic transactions. We may incur significant costs and liabilities with respect to investigation and remediation of environmental conditions at our facilities.
There can be no assurance that we will be successful, or that we will realize the expected economies of scale, synergies and other benefits anticipated from any additional acquisitions or strategic transactions. 41 | Risk Factors We may incur significant costs and liabilities with respect to investigation and remediation of environmental conditions at our facilities.
If we are unable to pass the costs of compliance with the RFS-2 regulations on to our customers, if sufficient RINs are unavailable for purchase, if we have to pay a significantly higher price for RINs or if we are otherwise unable to meet the RFS-2 mandates, our financial condition and results of operations could be adversely affected.
If we are unable to pass the costs of compliance with the RFS-2 regulations on to our customers, if 32 | Risk Factors sufficient RINs are unavailable for purchase, if we have to pay a significantly higher price for RINs or if we are otherwise unable to meet the RFS-2 mandates, our financial condition and results of operations could be adversely affected.
We are also subject to unscheduled down time for unanticipated maintenance or repairs. Refinery operations may also be disrupted by external factors, such as a suspension of feedstock deliveries, cyber-attacks, or an interruption of electricity, natural gas, water treatment or other utilities or a global pandemic such as the outbreak of the COVID-Pandemic.
We are also subject to unscheduled down time for unanticipated maintenance or repairs. Refinery operations may also be disrupted by external factors, such as a suspension of feedstock deliveries, cyber-attacks, or an interruption of electricity, natural gas, water treatment or other utilities or a global pandemic.
Our compliance with emerging privacy/security laws, as well as any associated inquiries or investigations or any other government actions related to these laws, may increase our operating costs. In the second quarter of 2021, the Department of Homeland Security’s Transportation Security Administration (“TSA”) announced two new security directives.
Our compliance with emerging privacy/security laws, as well as any associated inquiries or investigations or any other government actions related to these laws, may increase our operating costs. In the second quarter of 2021, the U.S. Department of Homeland Security’s ("DHS") Transportation Security Administration (“TSA”) announced two new security directives.
Finally, depending on the severity and duration of any extreme weather events or climate conditions, our operations may need to be modified and material costs incurred, which could materially and adversely affect our business, financial condition and results of operations. 38 | Risk Factors Our operations are subject to business interruptions and casualty losses.
Finally, depending on the severity and duration of any extreme weather events or climate conditions, our operations may need to be modified and material costs incurred, which could materially and adversely affect our business, financial condition and results of operations. Our operations are subject to business interruptions and casualty losses.
For example, in August 2022, the U.S. Senate passed the Inflation Reduction Act, which imposes a charge on methane emissions from certain petroleum system facilities and could have an indirect impact on demand for the goods and services of our business.
For example, in August 2022, the U.S. Senate passed the Inflation Reduction Act, which 34 | Risk Factors imposes a charge on methane emissions from certain petroleum system facilities and could have an indirect impact on demand for the goods and services of our business.
As a result, any such event could have a material adverse effect on our business, financial condition, results of operations and cash flows. There are certain environmental hazards and risks inherent in our operations that could adversely affect those operations and our financial results.
As a result, any such event could have a material adverse effect on our business, financial condition, results of operations and cash flows. 36 | Risk Factors There are certain environmental hazards and risks inherent in our operations that could adversely affect those operations and our financial results.
Any of these outcomes could have a material adverse effect on our business, financial condition and results of operations. 53 | Risk Factors Fluctuations in interest rates could materially affect our financial results. Because a significant portion of our debt bears interest at variable rates, increases in interest rates could materially increase our interest expense.
Any of these outcomes could have a material adverse effect on our business, financial condition and results of operations. Fluctuations in interest rates could materially affect our financial results. Because a significant portion of our debt bears interest at variable rates, increases in interest rates could materially increase our interest expense.
Our industry is subject to extensive laws, regulations, permits and other requirements including, but not limited to, those relating to the environment, fuel composition, safety, transportation, pipeline tariffs, employment, labor, immigration, minimum wages, overtime pay, health care benefits, working conditions, public accessibility, retail fuel pricing, the sale of alcohol and tobacco and other requirements.
Our industry is subject to extensive laws, regulations, permits and other requirements including, but not limited to, those relating to the environment, fuel composition, safety, transportation, pipeline tariffs, employment, labor, immigration, minimum wages, overtime pay, health care benefits, working conditions, public accessibility, retail fuel pricing and other requirements.
In addition, a compromise of our internal data network at any of our refining or terminal locations may have disruptive impacts similar to that of our retail operations. These disruptions could range from inconvenience in accessing business information to a disruption in our refining operations.
In addition, a compromise of our internal data network at any of our refining or terminal locations may have disruptive impacts. These disruptions could range from inconvenience in accessing business information to a disruption in our refining operations.
A reduction in the volume of refined products supplied to our West Texas terminals could adversely affect our sales and earnings. 40 | Risk Factors We are subject to risks associated with significant investments in the Permian Basin.
A reduction in the volume of refined products supplied to our West Texas terminals could adversely affect our sales and earnings. We are subject to risks associated with significant investments in the Permian Basin.
These processing units undergo periodic shutdowns, known as turnarounds, during which routine maintenance is performed to restore the operation of the equipment to a higher level of performance. Depending on which units are affected, all or a portion of a refinery's production may be halted or disrupted during a maintenance turnaround.
These processing units undergo periodic shutdowns, known as turnarounds, during which maintenance is performed to restore the operation of the equipment to a higher level 35 | Risk Factors of performance. Depending on which units are affected, all or a portion of a refinery's production may be halted or disrupted during a maintenance turnaround.
A significant part of our growth strategy is to acquire assets, such as refineries, pipelines, terminals, and retail fuel and convenience stores that complement our existing assets and/or broaden our geographic presence. If attractive opportunities arise, we may also acquire assets in new lines of business that are complementary to our existing businesses.
A significant part of our growth strategy is to acquire assets, such as refineries, pipelines, and terminals that complement our existing assets and/or broaden our geographic presence. If attractive opportunities arise, we may also acquire assets in new lines of business that are complementary to our existing businesses.
Such impairment charges could be material. It is difficult to predict how significant the impact of any regional or global disease outbreak and any responses to such events will be on the U.S. and global economies and our business or for how long disruptions are likely to continue.
It is difficult to predict how significant the impact of any regional or global disease outbreak and any responses to such events will be on the U.S. and global economies and our business or for how long disruptions are likely to continue.
Specifically, these covenants limit the payment, in the form of cash or other assets, of dividends or other cash payments to us. We are not obligated to declare or pay any dividend.
Specifically, these covenants limit the payment, in the form of cash or other assets, of dividends or other cash payments to 46 | Risk Factors us. We are not obligated to declare or pay any dividend.
With respect to our business, we have experienced periodic declines in demand thought to be associated with slowing economic growth in certain markets, including the effects of the COVID-19 Pandemic, coupled with new oil and gas supplies coming on line and other circumstances beyond our control that resulted in oil and gas supply exceeding global demand which, in turn, resulted in steep declines in prices of oil and natural gas.
With respect to our business, we have experienced periodic declines in demand thought to be associated with slowing economic growth in certain markets coupled with new oil and gas supplies coming on line and other circumstances beyond our control that resulted in oil and gas supply exceeding global demand which, in turn, resulted in steep declines in prices of oil and natural gas.
Our Tyler, El Dorado and Big Spring refineries are substantially dependent upon Delek Logistics' assets and services under several long-term pipeline and terminal, tankage and throughput agreements expiring in 2024 through 2033.
Our Tyler, El Dorado and Big Spring refineries are substantially dependent upon Delek Logistics' assets and services under several long-term pipeline and terminal, tankage and throughput agreements expiring in 2025 through 2036.
However, the occurrence of any of the following factors could adversely affect our growth strategy: • We may not be able to identify suitable acquisition candidates or acquire additional assets on favorable terms; • We usually compete with others to acquire assets, which competition may increase, and any level of competition could result in decreased availability or increased prices for acquisition candidates; • We may experience difficulty in anticipating the timing and availability of acquisition candidates; • We may not be able to obtain the necessary financing, on favorable terms or at all, to finance any of our potential acquisitions; and • As a public company, we are subject to reporting obligations, internal controls and other accounting requirements with respect to any business we acquire, which may prevent or negatively affect the valuation of some acquisitions we might otherwise deem favorable or increase our acquisition costs. 44 | Risk Factors Acquisitions involve risks that could cause our actual growth or operating results to differ adversely compared with our expectations.
However, the occurrence of any of the following factors could adversely affect our growth strategy: • We may not be able to identify suitable acquisition candidates or acquire additional assets on favorable terms; • We usually compete with others to acquire assets, which competition may increase, and any level of competition could result in decreased availability or increased prices for acquisition candidates; • We may experience difficulty in anticipating the timing and availability of acquisition candidates; • We may not be able to obtain the necessary financing, on favorable terms or at all, to finance any of our potential acquisitions; and • As a public company, we are subject to reporting obligations, internal controls and other accounting requirements with respect to any business we acquire, which may prevent or negatively affect the valuation of some acquisitions we might otherwise deem favorable or increase our acquisition costs.
Any compromise or breach of our information and payment technology systems could cause interruptions in our operations, damage our reputation, reduce our customers' willingness to visit our sites and conduct business with them, or expose us to litigation from customers or sanctions for violations of the PCI-DSS.
Any compromise or breach of our information and payment technology systems could cause interruptions in our operations, damage our reputation, reduce our customers' willingness to visit our sites and conduct business with them, or expose us to litigation from customers or sanctions for violations of the Payment Card Industry Data Security Standards ("PCI-DSS').
The ultimate extent of the impact of volatile conditions in the oil and gas industry on our business, financial condition, results of operation and liquidity will depend largely on future developments which are outside of our control, including the extent and duration of any price reductions, any additional decisions by OPEC and disputes between the members of OPEC+.
The ultimate extent of the impact of volatile conditions in the oil and gas industry on our business, financial condition, results of operation and liquidity will depend largely on future developments which are outside of our control, including the extent and duration of any price reductions, any additional decisions by OPEC and disputes between the members of other leading oil producing countries (together with OPEC, “OPEC+”).
Our financial condition and operating results may be significantly impacted from both the impairment and the underlying trends in the business that triggered the impairment. We recorded no goodwill impairment during the years ended December 31, 2022 and 2021 and $14.8 million during the year ended December 31, 2023, respectively.
Our financial condition and operating results may be significantly impacted from both the impairment and the underlying trends in the business that triggered the impairment. We recorded a $212.2 million and a $14.8 million goodwill impairment during the years ended December 31, 2024 and 2023, respectively, and none during the year ended December 31, 2022.
As a result, our logistics segment would pay federal income tax on all of its taxable income at regular corporate income tax rates (subject to corporate alternative minimum tax for years ended prior to 2018), would likely pay additional state and local income taxes at varying rates, and distributions to unitholders, including us, would be generally treated as taxable dividends from a corporation.
As a result, our logistics segment would pay federal income tax on all of its taxable income at regular corporate income tax rates, would likely pay additional state and local income taxes at varying rates, and distributions to unitholders, including us, would be generally treated as taxable dividends from a corporation.
As of December 31, 2023, approximately 15.1% of our employees were represented by unions and/or covered by a collective bargaining agreement. None of our employees in our logistics segment, retail segment or in our corporate office are represented by a union. We consider our relations with our employees to be satisfactory.
As of December 31, 2024, approximately 24.9% of our employees were represented by unions and/or covered by a collective bargaining agreement. None of our employees in our logistics segment or in our corporate office are represented by a union. We consider our relations with our employees to be satisfactory.
Our borrowing availability under our various credit facilities as of December 31, 2023 was $1,084.0 million. Our level of debt could have important consequences for us.
Our borrowing availability under our various credit facilities as of December 31, 2024 was $1,509.1 million. Our level of debt could have important consequences for us.
We rely on information technology across our operations, including the control of our refinery processes, monitoring the movement of petroleum through our pipelines and terminals, the point of sale processing at our retail sites and various other processes and transactions.
We rely on information technology across our operations, including the control of our refinery processes, monitoring the movement of petroleum through our pipelines and terminals, and various other processes and transactions.
Our debt levels may limit our flexibility in obtaining additional financing and in pursuing other business opportunities. As of December 31, 2023, we had total debt of $2,657.3 million, including current maturities of $44.5 million. In addition to our outstanding debt, as of December 31, 2023, our letters of credit issued under our various credit facilities were $305.5 million.
Our debt levels may limit our flexibility in obtaining additional financing and in pursuing other business opportunities. As of December 31, 2024, we had total debt of $2,816.4 million, including current maturities of $9.5 million. In addition to our outstanding debt, as of December 31, 2024, our letters of credit issued under our various credit facilities were $330.5 million.
We depend on favorable weather conditions in the spring and summer months. Demand for gasoline, convenience merchandise and asphalt products are generally higher during the summer months than during the winter months due to seasonal increases in motor vehicle traffic and road and home construction. Varying vapor pressure requirements between the summer and winter months also tighten summer gasoline supply.
Demand for gasoline and asphalt products are generally higher during the summer months than during the winter months due to seasonal increases in motor vehicle traffic and road and home construction. Varying vapor pressure requirements between the summer and winter months also tighten summer gasoline supply.
Additionally, if any of these risks affect Delek Logistics' viability, its ability to serve our supply and distribution needs may be jeopardized. For additional information about Delek Logistics, see "Logistics Segment" under Item 1 & 2. Business and Properties, of this Annual Report on Form 10-K.
Additionally, if any of these risks affect Delek Logistics' viability, its ability to serve our supply and distribution needs may be jeopardized. For additional information about Delek Logistics, see "Logistics Segment" under Item 1 & 2.
From time to time, our joint ventures may be involved in disputes or legal proceedings which may negatively affect our investments. Accordingly, any such occurrences could adversely affect our financial condition, results of operations or cash flows.
From time to time, our joint ventures may be involved in disputes or legal proceedings which may negatively affect our investments. Accordingly, any such occurrences could adversely affect our financial condition, results of operations or cash flows. 38 | Risk Factors General economic conditions may adversely affect our business, operating results and financial condition.
Our business could be adversely impacted as a result of our failure to retain or attract key talent. Our failure to retain or attract key talent with specific capabilities could interfere with our ability to execute on strategic transformation implementations, and could diminish our ability to execute and integrate strategic transactions.
Our failure to retain or attract key talent with specific capabilities could interfere with our ability to execute on strategic transformation implementations, and could diminish our ability to execute and integrate strategic transactions. As a result, our ability to remain competitive in our industry sector and/or to operate effectively could be adversely impacted.
If we are or become a USRPHC, so long as our common stock is regularly traded on an established securities market such as the NYSE, only a non-U.S. holder who, actually or constructively, holds or held during the lookback period more than five percent of our common stock will be subject to U.S. federal income tax on the disposition of our common stock.
If we are or become a USRPHC, so long as our common stock is regularly traded on an established securities market such as the NYSE, only a non-U.S. holder who, actually or constructively, holds or held during the lookback period more than five percent of our common stock will be subject to U.S. federal income tax on the disposition of our common stock. 44 | Risk Factors Our business requires us to make significant capital expenditures and to maintain and improve our refineries and logistics assets.
In addition, we may continue to expand our size and operations through additional acquisitions or other strategic transactions.
The size and scope of operations of our business have increased. In addition, we may continue to expand our size and operations through additional acquisitions or other strategic transactions.
Sales of a large number of shares of our common stock, or the possibility that these sales may occur, also might make it more difficult for us to sell equity securities in the future at a time and at a price that we deem appropriate. 50 | Risk Factors Our stockholders will suffer dilution if we issue currently unissued shares of our stock or sell our treasury holdings in the future.
Sales of a large number of shares of our common stock, or the possibility that these sales may occur, also might make it more difficult for us to sell equity securities in the future at a time and at a price that we deem appropriate.
We have instituted security measures and procedures in accordance with such guidelines to enhance the protection of certain of our facilities. We cannot provide any assurance that these security measures would fully protect our facilities from an attack.
In addition, the DOT has issued guidelines with respect to securing regulated facilities such as our bulk terminals against terrorist attack. We have instituted security measures and procedures in accordance with such guidelines to enhance the protection of certain of our facilities. We cannot provide any assurance that these security measures would fully protect our facilities from an attack.
Therefore, we may be liable for removal or remediation costs associated with releases of these substances at third party 32 | Risk Factors locations, as well as other related costs, including fines, penalties and damages resulting from injuries to persons, property and natural resources.
We typically arrange for the treatment or disposal of hazardous substances generated by our refining and other operations. Therefore, we may be liable for removal or remediation costs associated with releases of these substances at third party locations, as well as other related costs, including fines, penalties and damages resulting from injuries to persons, property and natural resources.
Global economic growth drives demand for energy from all sources, including fossil fuels. Should the U.S. or global economies experience weakness, demand for energy may decline. Should growth in global energy production outstrip demand, excess supplies may arise.
Should the U.S. or global economies experience weakness, demand for energy may decline. Should growth in global energy production outstrip demand, excess supplies may arise.
We could also be subject to resulting investigation and remediation costs as well as regulatory enforcement of private litigation and related costs, which could have a material adverse impact on our cash flow and results of operations.
We could also be subject to resulting investigation and remediation costs as well as regulatory enforcement of private litigation and related costs, which could have a material adverse impact on our cash flow and results of operations. In recent years, several companies have experienced data breaches, resulting in the exposure of sensitive customer data.
Under the acquisition method of accounting, the assets and liabilities of Alon and its subsidiaries have been recorded, as of the completion of the Delek/Alon Merger, at their respective fair values.
The Delek/Alon Merger has been accounted for as an acquisition, by us, of Alon in accordance with GAAP. Under the acquisition method of accounting, the assets and liabilities of Alon and its subsidiaries have been recorded, as of the completion of the Delek/Alon Merger, at their respective fair values.
Adverse weather conditions or other unforeseen developments could damage our facilities, reduce customer traffic and impair our ability to produce and deliver refined petroleum products or receive supplies for our retail fuel and convenience stores.
Adverse weather conditions or other unforeseen developments could damage our facilities, reduce demand for our products and services and impair our ability to produce and deliver refined petroleum products.
In recent years, the outbreak of COVID-19 and its development into a pandemic in early 2020 (the "COVID-19 Pandemic" or the "Pandemic"), the war between Russia and Ukraine ("the Russia-Ukraine War"), Organization of Petroleum Exporting Countries ("OPEC")-Russia relationship, and the conflict between Israel and Hamas have been sources of uncertainty in the global oil markets, substantial global supply chain issues, and significant disruptions in the labor market.
In recent years, the outbreak of a pandemic, the Russia-Ukraine War, Organization of Petroleum Exporting Countries ("OPEC")-Russia relationship, and the conflict between Israel and Hamas have been sources of uncertainty in the global oil markets, substantial global supply chain issues, and significant disruptions in the labor market. Global economic growth drives demand for energy from all sources, including fossil fuels.
In addition to the substantial remediation costs that could be caused by leaks or spills from our pipelines, regulators could prohibit our use of affected portions of the pipeline for extended periods, thereby interrupting the delivery of crude oil to, or the distribution of refined products from, our refineries. 33 | Risk Factors In addition, the DOT has issued guidelines with respect to securing regulated facilities such as our bulk terminals against terrorist attack.
In addition to the substantial remediation costs that could be caused by leaks or spills from our pipelines, regulators could prohibit our use of affected portions of the pipeline for extended periods, thereby interrupting the delivery of crude oil to, or the distribution of refined products from, our refineries.
Our ability to purchase and process favorably priced crude oil has allowed us to achieve higher net income and cash flow in certain years; however, we cannot assure that these favorable conditions will continue.
Our ability to purchase and process favorably priced crude oil has allowed us to achieve higher net income and cash flow in certain years; however, we cannot assure that these favorable conditions will continue. The narrowing, and in some cases inversion, in the price differential between WTI and Brent benchmarks has negatively impacted our results of operations in the past.
While the EPA promulgated a rule in June 2019 aiming to improve transparency in the market for RINs, we cannot predict with certainty our exposure to increased RINs costs in the future, nor can we predict the extent by which costs associated with RFS-2 regulations will impact our future results of operations. 34 | Risk Factors Increased supply of and demand for alternative transportation fuels, increased fuel economy standards and increased use of alternative means of transportation could lead to a decrease in transportation fuel prices and/or a reduction in demand for petroleum-based transportation fuels.
While the EPA promulgated a rule in June 2019 aiming to improve transparency in the market for RINs, we cannot predict with certainty our exposure to increased RINs costs in the future, nor can we predict the extent by which costs associated with RFS-2 regulations will impact our future results of operations.
A number of advocacy groups, both domestically and internationally, have campaigned for governmental and private action to promote change at public companies related to ESG matters, including through the investment and voting practices of investment advisers, public pension funds, universities and other members of the investing community. 37 | Risk Factors These activities include increasing attention and demands for action related to climate change, promoting the use of substitutes to fossil fuel products, litigation and encouraging the divestment of companies in the fossil fuel industry.
A number of advocacy groups, both domestically and internationally, have campaigned for governmental and private action to promote change at public companies related to ESG matters, including through the investment and voting practices of investment advisers, public pension funds, universities and other members of the investing community.
Environmental Protection Agency narrowed federal jurisdiction over wetlands under the CWA, which could reduce the level of regulation of our activities under the CWA. However, it is expected that further clarifications and changes may arise through implementing federal regulations, additional litigation over application of the Court’s decision, and/or state laws and regulations.
However, it is expected that further clarifications and changes may arise through implementing federal regulations, additional litigation over application of the Court’s decision, and/or state laws and regulations.
Extended periods of such disruption could have an adverse effect on our results of operations. We could also incur substantial costs to prevent or repair damage to these facilities.
For additional information, refer to Note 14 - Commitments and Contingencies in the Notes to Consolidated Financial Statements. Extended periods of such disruption could have an adverse effect on our results of operations. We could also incur substantial costs to prevent or repair damage to these facilities.
Decreases in commodity prices may lessen our borrowing capacities, increase collateral requirements for derivative instruments or cause a write-down of inventory. The nature of our business requires us to maintain substantial quantities of crude oil, refined petroleum product and blendstock inventories. Because these inventories are commodities, we have no control over their changing market value.
The nature of our business requires us to maintain substantial quantities of crude oil, refined petroleum product and blendstock inventories. Because these inventories are commodities, we have no control over their changing market value.
Changes in our credit profile could affect the way crude oil, feedstock and refined product suppliers view our ability to make payments. As a result, suppliers could shorten the payment terms of their invoices with us, or require us to provide significant collateral to them that we do not currently provide.
As a result, suppliers could shorten the payment terms of their invoices with us, or require us to provide significant collateral to them that we do not currently provide.
As a result of our purchase of Alon, if we are forced to incur costs or pay liabilities in connection with these indemnification obligations, such costs and payments could be significant. 45 | Risk Factors In the future, we may incur substantial expenditures for investigation or remediation of contamination that has not been discovered at our current or former locations or locations that we may acquire, or at third party sites where hazardous substances from these locations may have been treated or disposed.
In the future, we may incur substantial expenditures for investigation or remediation of contamination that has not been discovered at our current or former locations or locations that we may acquire, or at third party sites where hazardous substances from these locations may have been treated or disposed.
In April 2016, the U.S. became a signatory to the 2015 United Nations Conference on Climate Change, which led to the creation of the Paris Agreement. In addition, a number of state and local governments in the U.S. have expressed intentions to take, or have taken, action to reduce GHG emissions.
In addition, a number of state and local governments in the U.S. have expressed intentions to take, or have taken, action to reduce GHG emissions.
S. or actual or perceived reductions in Mid-Continent crude oil inventories, could further negatively impact our earnings and cash flows, which could have a material adverse effect on our business, financial condition and results of operations.
Narrowing or inversion in the price differential between the WTI and Brent benchmarks for any reason, including, without limitation, increased crude oil distribution capacity from the Permian Basin, crude oil exports from the U.S. or actual or perceived reductions in Mid-Continent crude oil inventories, could further negatively impact our earnings and cash flows, which could have a material adverse effect on our business, financial condition and results of operations.
There can be no assurance that this process will result in the pursuit or consummation of any potential transaction or strategy, or that any such potential transaction or strategy, if implemented, will provide greater value to our stockholders than that reflected in the price of our common stock.
Such disruptions could cause concern to our customers, strategic partners or other constituencies and may have a material impact on our business and operating results and volatility in our share price. 40 | Risk Factors There can be no assurance that this process will result in the pursuit or consummation of any potential transaction or strategy, or that any such potential transaction or strategy, if implemented, will provide greater value to our stockholders than that reflected in the price of our common stock.
We utilize information technology systems and controls throughout our operations to capture accounting, technical and regulatory data for subsequent archiving, analysis and reporting. Disruption, failure, or cyber security breaches affecting or targeting our computer and telecommunications, our infrastructure, or the infrastructure of our cloud-based IT service providers may materially impact our business and operations.
Disruption, failure, or cyber security breaches affecting or targeting our computer and telecommunications, our infrastructure, or the infrastructure of our cloud-based IT service providers may materially impact our business and operations.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeRecognizing that humans are often the most vulnerable element of even the most secure computer architectures, Delek has increased the frequency and sophistication of the mandatory training and phishing campaign program for our employees. Delek also conducts monthly reviews of global cybersecurity incidents to ensure that appropriate mitigation measures are in place to guard against similar threats.
Biggest changeDelek also conducts monthly reviews of global cybersecurity incidents to ensure that appropriate mitigation measures are in place to guard against similar threats. Delek is committed to enhancing its organizational resilience through a multiyear, comprehensive incident response tabletop drill program.
To assist in these efforts, the Board of Directors has assigned a number of cybersecurity related responsibilities to its standing committees while retaining overall responsibility for the oversight of Delek's cybersecurity activities. 55 | In overseeing cybersecurity risks, the Board of Directors follows the principles identified by the National Association of Corporate Directors in the oversight of cybersecurity risks.
To assist in these efforts, the Board of Directors has assigned a number of cybersecurity related responsibilities to its standing committees while retaining overall responsibility for the oversight of Delek's cybersecurity activities. 51 | In overseeing cybersecurity risks, the Board of Directors follows the principles identified by the National Association of Corporate Directors in the oversight of cybersecurity risks.
Our Chief Technology & Digital Officer oversees a team of security professionals and regularly updates the Board of Directors on any potential risks and threats to the Company. Senior leadership including our Chief Technology & Digital Officer/Chief Information Officer and the Chief Information Security Officer brief the Board on information security matters multiple times throughout the year.
Our Chief Technology & Data Officer oversees a team of security professionals and regularly updates the Board of Directors on any potential risks and threats to the Company. Senior leadership including our Chief Technology & Data Officer and the Chief Information Security Officer brief the Board on information security matters multiple times throughout the year. 52 |
Our Chief Technology & Digital Officer/Chief Information Officer reports to the Chief Executive Officer, dedicating a substantial amount of their efforts to ensure the safety and security of our networks and systems.
Our Chief Technology & Data Officer reports to the Chief Executive Officer, dedicating a substantial amount of their efforts to ensure the safety and security of our networks and systems.
The Technology Committee’s designated focus on these areas of the Company’s digitalization, information and operational security policies help ensure strategic alignment of the Company’s strategies with information security and risk management. Management Oversight Our senior leadership team is actively involved in cybersecurity governance, ensuring the highest level of oversight of cybersecurity risks.
The Technology Committee’s designated focus on these areas of the Company’s digitalization, information and operational security policies help ensure strategic alignment of the Company’s strategies with information security and risk management. Management Oversight Our senior leadership team is actively involved in cybersecurity governance, providing oversight of cybersecurity risks at the highest levels of our organization.
Cybersecurity risks and Company programs are discussed with the Board of Directors by the Chief Technology & Digital Officer Chief Information Officer and others.
Cybersecurity risks and Company programs are discussed with the Board of Directors by the Chief Technology & Data Officer and others.
Our Chief Technology & Digital Officer/Chief Information Officer has nearly 20 years of IT experience including areas of technology, cybersecurity, data, analytics, and digital transformation as well as being an Adjunct Lecturer at Tel-Aviv University and the Technion for Big Data Technologies, Data Science and Data Visualization. Representing the state of Israel at MIT’s CDOIQ forum.
Our Chief Technology & Data Officer has nearly 20 years of IT experience including areas of technology, cybersecurity, data, analytics, and digital transformation as well as being an Adjunct Lecturer at Tel-Aviv University and the Technion for Big Data Technologies, Data Science and Data Visualization.
Board of Directors Oversight The Board of Directors and executive leadership team at Delek are committed to investing the attention and resources necessary to maintain the privacy, security and integrity of our information, systems and networks and enhance the company’s resiliency against cyber threats.
Delek continuously assesses and enhances the confidentiality, integrity, and availability of its IT and OT assets. Board of Directors Oversight The Board of Directors and executive leadership team at Delek are committed to investing the attention and resources necessary to maintain the privacy, security and integrity of our information, systems and networks and enhance the company’s resiliency against cyber threats.
ITEM 1C. CYBERSECURITY Cybersecurity Related Matters Risk Management and Strategy We depend on IT and OT for various operations, including refinery processes, petroleum movement monitoring in pipelines and terminals, point-of-sale processing at our retail sites, and other critical processes and transactions.
ITEM 1C. CYBERSECURITY Cybersecurity Related Matters Risk Management and Strategy We depend on IT and OT for various operations, including refinery processes, petroleum movement monitoring in pipelines and terminals, and other critical processes and transactions. We utilize IT and OT systems across our operations to capture accounting, technical and regulatory data for archiving, analysis, and reporting.
We established a thorough, risk-based cybersecurity program aimed at safeguarding our data, along with the data of our customers and partners. The identification, assessment, and management of cyber risks fall under our Enterprise Risk Management (“ERM”) program, overseen by the Board of Directors. Our Chief Technology Officer & Digital Officer/Chief Information Officer holds overall responsibility for IT, OT, and cybersecurity.
The identification, assessment, and management of cyber risks fall under our Enterprise Risk Management (“ERM”) program, overseen by the Board of Directors. Our Chief Technology & Data Officer holds overall responsibility for IT, OT, and cybersecurity. Delek follows recognized cybersecurity frameworks with a Chief Information Security Officer dedicated to overseeing cybersecurity initiatives throughout the entire enterprise.
We utilize IT and OT systems across our operations to capture accounting, technical and regulatory data for archiving, analysis, and reporting. Our primary business systems mostly consist of purchased and licensed software programs that integrate with our internal solutions. Additionally, our technology encompasses a company-wide network through which employees have access to key business applications.
Our primary business systems mostly consist of purchased and licensed software programs that integrate with our internal solutions. Additionally, our technology encompasses a company-wide network through which employees have access to key business applications. We maintain and continually enhance a comprehensive, risk-based cybersecurity program aimed at safeguarding our data, along with the data of our customers and partners.
Delek collaborates with third-party vendors to leverage managed security services, enhancing Delek’s cybersecurity capabilities. Delek possesses monitoring capabilities for both its IT and OT infrastructure. To identify material cybersecurity risks, we use a combination of technical assessments, risk analysis, vulnerability scanning, incident and event monitoring, threat intelligence and third-party assessments along with ongoing monitoring and management.
To identify material cybersecurity risks, we use a combination of technical assessments, risk analysis, vulnerability scanning, incident and event monitoring, threat intelligence and third-party assessments along with ongoing monitoring and management. We manage our material cybersecurity risks through a combination of security measures, audits, training, planning, and testing.
Delek follows well-organized cybersecurity frameworks with a Chief Information Security Officer dedicated to overseeing cybersecurity initiatives throughout the entire enterprise. Our risk assessment process related to cybersecurity includes identifying threats and conducting vulnerability assessments, likelihood and impact assessments related to our own information and OT systems as well as our third-party service providers.
Our risk assessment process related to cybersecurity includes identifying threats and conducting vulnerability assessments, likelihood and impact assessments related to our own information and OT systems as well as our third-party service providers. Delek collaborates with third-party vendors to leverage managed security services, enhancing Delek’s cybersecurity capabilities. Delek possesses monitoring capabilities for both its IT and OT infrastructure.
We manage our material cybersecurity risks through a combination of security measures, audits, training, planning, and testing. Delek has established processes for regular disaster recovery planning and response readiness testing. Our security approach also includes multiple layers of defense and testing of controls.
Delek has established processes for regular disaster recovery planning and response readiness testing. Our security approach also includes multiple layers of defense and testing of controls. We have implemented security measures, including segmentation, firewalls, intrusion detection systems, encryption, multi-factor authentication and data loss prevention designed to safeguard our systems and data.
Delek has not experienced a significant cybersecurity breach or associated expenses, penalties, or settlements for years ended December 31, 2023, 2022 and 2021. Delek continuously assesses and enhances the confidentiality, integrity, and availability of our IT and OT assets.
Building upon the success of the drill conducted in 2024 and previous years, we remain committed to continuous improvement and proactive preparedness in addressing potential challenges and effectively managing incidents. Delek has not experienced a significant cybersecurity breach or associated expenses, penalties, or settlements for the years ended December 31, 2024, 2023 and 2022.
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We have implemented security measures, including segmentation, firewalls, intrusion detection systems, encryption, multi-factor authentication and data loss prevention to safeguard our systems and data. Furthermore, we have reinforced our data protection capabilities by investing in both hardware and software.
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Furthermore, we have reinforced our data protection capabilities by investing in both hardware and software. Recognizing that humans are often the most vulnerable element of even the most secure computer architectures, Delek conducts mandatory security awareness programs, including required training and phishing campaigns for our employees.
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Delek is committed to enhancing its organizational resilience through a multiyear, comprehensive incident response tabletop drill program. Building upon the success of the two drills conducted in 2023, we are dedicated to continuous improvement and proactive readiness in addressing potential challenges and ensuring the effective management of incidents.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeSee Note 13 to our consolidated financial statements included in Item 8. Financial Statements and Supplementary Data, of this Annual Report on Form 10-K, which is incorporated by reference in this Item 3, for additional information. 56 | ITEM 4. MINE SAFETY DISCLOSURES Not applicable. PART II
Biggest changeSee Note 14 to our consolidated financial statements included in Item 8. Financial Statements and Supplementary Data, of this Annual Report on Form 10-K for further information. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. PART II

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeItem 4. Mine Safety Disclosures 57 PART II Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 57 Item 6. Reserved 58 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 59 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 94
Biggest changeItem 4. Mine Safety Disclosures 53 PART II Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 53 Item 6. Reserved 54 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 55 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 94

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeOn August 1, 2022, the Board of Directors approved an approximately $170.3 million increase in the share repurchase authorization, bringing the total amount available for repurchases under current authorizations to $400.0 million. As of December 31, 2023, there was $185.1 million of authorization remaining under Delek's aggregate stock repurchase program. This authorization has no expiration.
Biggest changeOn August 1, 2022 and September 3, 2024, the Board of Directors approved an approximately $170.3 million and $400.0 million increase, respectively, in the share repurchase authorization, bringing the total amount available for repurchases under current authorizations to $562.0 million. As of December 31, 2024, there was $543.6 million of authorization remaining under Delek's aggregate stock repurchase program.
The repurchase program does not obligate us to acquire any particular amount of stock and does not expire. 57 | Market for Equity, Stockholder Matters, and Purchase of Equity Securities Performance Graph The Performance Graph and related information shall not be deemed "soliciting material" or to be "filed" with the SEC, nor shall such information be incorporated by reference into any future filing under the Securities Act of 1933 or Securities Exchange Act of 1934, each as amended, except to the extent that we specifically incorporate it by reference into such filing.
The repurchase program does not obligate us to acquire any particular amount of stock and does not expire. 53 | Market for Equity, Stockholder Matters, and Purchase of Equity Securities Performance Graph The Performance Graph and related information shall not be deemed "soliciting material" or to be "filed" with the SEC, nor shall such information be incorporated by reference into any future filing under the Securities Act of 1933 or Securities Exchange Act of 1934, each as amended, except to the extent that we specifically incorporate it by reference into such filing.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers The following table sets forth information with respect to the purchase of shares of our common stock made during the three months ended December 31, 2023 by or on behalf of us or any “affiliated purchaser,” as defined by Rule 10b-18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act") (inclusive of all purchases that have settled as of December 31, 2023).
Purchases of Equity Securities by the Issuer and Affiliated Purchasers The following table sets forth information with respect to the purchase of shares of our common stock made during the three months ended December 31, 2024 by or on behalf of us or any “affiliated purchaser,” as defined by Rule 10b-18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act") (inclusive of all purchases that have settled as of December 31, 2024).
Each of the three measures of cumulative total return assumes reinvestment of dividends. The 2023 peer group is comprised of Calumet Specialty Products Partners, L.P. (NASDAQ: CLMT), CVR Energy, Inc. (NYSE: CVI), HF Sinclair Corporation (NYSE: DINO) (formally HollyFrontier Corporation (NYSE: HFC)), Marathon Petroleum Corporation (NYSE: MPC), Par Pacific Holdings, Inc. (NYSE: PARR), PBF Energy, Inc.
Each of the three measures of cumulative total return assumes reinvestment of dividends. The 2024 peer group is comprised of Calumet, Inc. (formerly Calumet Specialty Products Partners, L.P. ) (NASDAQ: CLMT), CVR Energy, Inc. (NYSE: CVI), HF Sinclair Corporation (NYSE: DINO) (formerly HollyFrontier Corporation (NYSE: HFC)), Marathon Petroleum Corporation (NYSE: MPC), Par Pacific Holdings, Inc. (NYSE: PARR), PBF Energy Inc.
The adjacent graph compares cumulative total returns for our stockholders to the Standard and Poor's 500 Stock Index and a market capitalization weighted peer group selected by management for the five-year period commencing December 31, 2018 and ending December 31, 2023. The graph assumes a $100 investment made on December 31, 2018.
The adjacent graph compares cumulative total returns for our stockholders to the Standard and Poor's 500 Stock Index and a market capitalization weighted peer group selected by management for the five-year period commencing December 31, 2019 and ending December 31, 2024. The graph assumes a $100 investment made on December 31, 2019.
Any share repurchases under the repurchase program may be implemented through open market transactions or in privately negotiated transactions, in accordance with applicable securities laws. The timing, price, and size of repurchases will be made at the discretion of management and will depend on prevailing market prices, general economic and market conditions and other considerations.
This authorization has no expiration. Any share repurchases under the repurchase program may be implemented through open market transactions or in privately negotiated transactions, in accordance with applicable securities laws. The timing, price, and size of repurchases will be made at the discretion of management and will depend on prevailing market prices, general economic and market conditions and other considerations.
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information and Holders Our common stock is traded on the New York Stock Exchange under the symbol "DK." As of February 21, 2024, there were approximately 129 common stockholders of record.
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information and Holders Our common stock is traded on the New York Stock Exchange under the symbol "DK." As of February 20, 2025, there were approximately 127 common stockholders of record.
Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1) Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs October 1 - October 31, 2023 769,450 $ 25.99 769,450 $ 185,054,287 November 1 - November 30, 2023 — — — 185,054,287 December 1 - December 31, 2023 — — — 185,054,287 Total 769,450 $ 25.99 769,450 N/A (1) On November 6, 2018, our Board of Directors authorized a share repurchase program for up to $500.0 million of Delek common stock.
Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1) Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs October 1 - October 31, 2024 548,275 $ 18.24 548,275 $ 555,054,643 November 1 - November 30, 2024 — — — 555,054,643 December 1 - December 31, 2024 677,592 16.97 677,592 543,555,020 Total 1,225,867 $ 17.54 1,225,867 N/A (1) On November 6, 2018, our Board of Directors authorized a share repurchase program for up to $500.0 million of Delek common stock.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeIncome Taxes 2023 vs. 2022 For the year ended December 31, 2023, we recorded income tax expense of $5.1 million compared to $63.9 million for the year ended December 31, 2022, primarily driven by the following: • a decrease in pre-tax net income of $302.6 million, and • Our effective tax rates were 9.8% and 18.0% for the year ended December 31, 2023 and 2022, respectively, due to the impact of fixed dollar favorable permanent differences on the tax rate and changes in valuation allowance on state attributes. 76 | Management's Discussion and Analysis Refining Segment The tables and charts below set forth selected information concerning our refining segment operations ($ in millions, except per barrel amounts): Selected Refining Financial Information Year Ended December 31, 2023 2022 Revenues $ 16,406.9 $ 19,763.0 Cost of materials and other 15,242.3 18,412.8 Refining Margin $ 1,164.6 $ 1,350.2 Operating expenses (excluding depreciation and amortization) (1) $ 619.2 $ 622.5 Refining segment EBITDA $ 529.4 $ 719.1 (1) Reflects the prior period conforming reclassification adjustment between operating expenses and general and administrative expenses.
Biggest changeIncome Taxes 2024 vs. 2023 For the year ended December 31, 2024, we recorded an income tax benefit of $107.9 million from continuing operations compared to an income tax benefit of $3.0 million from continuing operations for the year ended December 31, 2023, primarily driven by the following: • a decrease in pre-tax net income of $722.6 million, and • our effective tax rates were 15.3% and (18.1)% for the year ended December 31, 2024 and 2023, respectively, due to the impact of fixed dollar favorable permanent differences on the tax rate, exclusion of goodwill impairment expense from taxable income and changes in valuation allowance on certain state attributes. 76 | Management's Discussion and Analysis 2023 vs. 2022 For the year ended December 31, 2023, we recorded an income tax benefit of $3.0 million from continuing operations compared to income tax expense of $56.4 million from continuing operations for the year ended December 31, 2022, primarily driven by the following: • a decrease in pre-tax net income of $305.2 million, and • our effective tax rates were (18.1)% and 17.5% for the year ended December 31, 2023 and 2022, respectively, due to the impact of fixed dollar favorable permanent differences on the tax rate and changes in valuation allowance on certain attributes.
As part of our annual assessment, we recorded a $14.8 million impairment charge in the fourth quarter of 2023 related to our Delaware Gathering reporting unit within the logistics segment, which brought the amount of goodwill recorded within this reporting unit to zero.
As part of our 2023 annual assessment, we recorded a $14.8 million impairment charge in the fourth quarter of 2023 related to our Delaware Gathering reporting unit within the logistics segment, which brought the amount of goodwill recorded within this reporting unit to zero.
(3) The Krotz Springs refinery has the capability to process substantial volumes of light sweet crude oil to produce a high percentage of refined light products. Our refining segment also owns and operates three biodiesel facilities involved in the production of biodiesel fuels and related activities, located in Crossett, Arkansas, Cleburne, Texas, and New Albany, Mississippi.
(3) The Krotz Springs refinery has the capability to process substantial volumes of light sweet crude oil to produce a high percentage of refined light products. Our refining segment also owns three biodiesel facilities involved in the production of biodiesel fuels and related activities, located in Crossett, Arkansas, Cleburne, Texas, and New Albany, Mississippi.
These prices largely depends on numerous factors beyond our control, including the supply of, and demand for, crude oil, gasoline and other refined petroleum products which, in turn, depend on, among other factors, changes in domestic and foreign economies, weather conditions, domestic and foreign political affairs, production levels, the availability of imports, the marketing of competitive fuels and government regulation.
These prices largely depend on numerous factors beyond our control, including the supply of, and demand for, crude oil, gasoline and other refined petroleum products which, in turn, depend on, among other factors, changes in domestic and foreign economies, weather conditions, domestic and foreign political affairs, production levels, the availability of imports, the marketing of competitive fuels and government regulation.
Refer to the 'Capital Spending' section for our capital expenditures for the year ended December 31, 2023 and our anticipated cash requirements for planned capital expenditures for the full year 2024. 92 | Management's Discussion and Analysis Critical Accounting Estimates The fundamental objective of financial reporting is to provide useful information that allows a reader to comprehend our business activities.
Refer to the 'Capital Spending' section for our capital expenditures for the year ended December 31, 2024 and our anticipated cash requirements for planned capital expenditures for the full year 2024. 92 | Management's Discussion and Analysis Critical Accounting Estimates The fundamental objective of financial reporting is to provide useful information that allows a reader to comprehend our business activities.
We were selected by the Department of Energy's ("DOE") Office of Clean Energy Demonstrations to negotiate a cost-sharing agreement in support of a carbon capture pilot project at the Big Spring refinery. The DOE Carbon Capture Large-Scale Pilot Project program provides 70% cost-share for up to $95 million of federal funding to support project development.
We were selected by the Department of Energy's ("DOE") Office of Clean Energy Demonstrations to negotiate a cost-sharing agreement in support of a carbon capture pilot project at the Big Spring, Texas refinery. The DOE Carbon Capture Large-Scale Pilot Project program provides 70% cost-share for up to $95 million of federal funding to support project development.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Forward-Looking Statements This Annual Report on Form 10-K contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS This Annual Report on Form 10-K contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act.
We enter into future commitments to purchase or sell RINs at fixed prices and quantities, which are used to manage our RINs Obligation. On a consolidated basis, we work to balance our RINs Obligation in order to minimize the effect of RINs prices on our results.
We enter into future commitments to purchase or sell RINs at fixed prices and quantities, which are used to manage our RINs Obligations. On a consolidated basis, we work to balance our RINs Obligation in order to minimize the effect of RINs prices on our results.
See Note 9 of the accompanying consolidated financial statements included in Item 8. Financial Statements and Supplementary Data, of this Annual Report on Form 10-K for additional information about our inventory intermediation agreement.
See Note 10 of the accompanying consolidated financial statements included in Item 8. Financial Statements and Supplementary Data, of this Annual Report on Form 10-K for additional information about our inventory intermediation agreement.
In the event that we are subject to these incremental restrictions, we believe that we have sufficient current and alternative sources of liquidity, including (but not limited to): available borrowings under our existing Delek Revolving Credit Facility, and for Delek Logistics, under its Delek Logistics Revolving Facility; the allowance to incur an additional $400.0 million of secured debt under the Delek Term Loan Credit Facility (see further discussion of these facilities in Note 10 of our consolidated financial statements included in Item 8.
In the event that we are subject to these incremental restrictions, we believe that we have sufficient current and alternative sources of liquidity, including (but not limited to): available borrowings under our existing Delek Revolving Credit Facility, and for Delek Logistics, under its Delek Logistics Revolving Facility; the allowance to incur an additional $400.0 million of secured debt under the Delek Term Loan Credit Facility (see further discussion of these facilities in Note 11 of our consolidated financial statements included in Item 8.
A high-level summary of the refinery activities is presented below: Tyler Refinery El Dorado Refinery Big Spring Refinery Krotz Springs Refinery Total Nameplate Capacity (bpd) 75,000 80,000 73,000 74,000 Primary Products Gasoline, jet fuel, ultra-low-sulfur diesel, liquefied petroleum gases, propylene, petroleum coke and sulfur Gasoline, ultra-low-sulfur diesel, liquefied petroleum gases, propylene, asphalt and sulfur Gasoline, jet fuel, ultra-low-sulfur diesel, liquefied petroleum gases, propylene, aromatics and sulfur Gasoline, jet fuel, high-sulfur diesel, light cycle oil, liquefied petroleum gases, propylene and ammonium thiosulfate Relevant Crack Spread Benchmark Gulf Coast 5-3-2 Gulf Coast 5-3-2 (1) Gulf Coast 3-2-1 (2) Gulf Coast 2-1-1 (3) Marketing and Distribution The refining segment's petroleum-based products are marketed primarily in the south central and southwestern regions of the United States, and the refining segment also ships and sells gasoline into wholesale markets in the southern and eastern United States.
A high-level summary of the refinery activities is presented below: Tyler, Texas refinery El Dorado, Arkansas refinery Big Spring, Texas refinery Krotz Springs, Louisiana refinery Total Nameplate Capacity (bpd) 75,000 80,000 73,000 74,000 Primary Products Gasoline, jet fuel, ultra-low-sulfur diesel, liquefied petroleum gases, propylene, petroleum coke and sulfur Gasoline, jet fuel, ultra-low-sulfur diesel, liquefied petroleum gases, propylene, asphalt and sulfur Gasoline, jet fuel, ultra-low-sulfur diesel, liquefied petroleum gases, propylene, aromatics and sulfur Gasoline, jet fuel, high-sulfur diesel, light cycle oil, liquefied petroleum gases, propylene and ammonium thiosulfate Relevant Crack Spread Benchmark Gulf Coast 5-3-2 Gulf Coast 5-3-2 (1) Gulf Coast 3-2-1 (2) Gulf Coast 2-1-1 (3) Marketing and Distribution The refining segment's petroleum-based products are marketed primarily in the south central and southwestern regions of the United States, and the refining segment also ships and sells gasoline into wholesale markets in the southern and eastern United States.
We have estimated future payments under the market-based agreements using current market rates. Excludes purchase commitments in buy-sell transactions which have matching notional amounts with the same counterparty and are generally net settled in exchanges. (4) Balances consist of obligations under RINs product financing arrangements, as described in Note 13 to the consolidated financial statements included in Item 8.
We have estimated future payments under the market-based agreements using current market rates. Excludes purchase commitments in buy-sell transactions which have matching notional amounts with the same counterparty and are generally net settled in exchanges. (4) Balances consist of obligations under RINs product financing arrangements, as described in Note 14 to the consolidated financial statements included in Item 8.
(2) Our Big Spring refinery is capable of processing substantial volumes of sour crude oil, which has historically cost less than intermediate, and/or substantial volumes of sweet crude oil, and therefore the WTI Cushing/ West Texas Sour ("WTS") price differential, taking into account differences in production yield, is an important measure for helping us make strategic, market-respondent production decisions.
(2) Our Big Spring refinery is capable of processing substantial volumes of sour crude oil, which has historically cost less than intermediate, and/or substantial volumes of sweet crude oil, and therefore the WTI Cushing/ WTS price differential, taking into account differences in production yield, is an important measure for helping us make strategic, market-respondent production decisions.
Additionally, our corporate activities include certain of our commodity and other hedging activities. 62 | Management's Discussion and Analysis Strategic Objectives It is vitally important that our strategic objectives, especially in view of the evolutionary direction of our macroeconomic and geopolitical environment, involves a process of continuous evaluation of our business model in terms of cost structure, as well as long-term economic and operational sustainability.
Additionally, our corporate activities include certain of our commodity and other hedging activities. 61 | Management's Discussion and Analysis Strategic Objectives It is vitally important that our strategic objectives, especially in view of the evolutionary direction of our macroeconomic and geopolitical environment, involves a process of continuous evaluation of our business model in terms of cost structure, as well as long-term economic and operational sustainability.
For additional information, see Note 9 to the consolidated financial statements included in Item 8. Financial Statements and Supplementary Data, of this Annual Report on Form 10-K. Other Cash Requirements Our material short-term cash requirements under contractual obligations are presented above, and we expect to fund the majority of those requirements with cash flows from operations.
For additional information, see Note 5 to the consolidated financial statements included in Item 8. Financial Statements and Supplementary Data, of this Annual Report on Form 10-K. Other Cash Requirements Our material short-term cash requirements under contractual obligations are presented above, and we expect to fund the majority of those requirements with cash flows from operations.
(2) Amounts reflect future estimated lease payments under operating leases having remaining non-cancelable terms in excess of one year as of December 31, 2023. (3) We have purchase commitments to secure certain quantities of crude oil, finished product and other resources used in production at both fixed and market prices.
(2) Amounts reflect future estimated lease payments under operating leases having remaining non-cancelable terms in excess of one year as of December 31, 2024. (3) We have purchase commitments to secure certain quantities of crude oil, finished product and other resources used in production at both fixed and market prices.
The table below reflects the quarterly average Gulf Coast 5-3-2 ULSD, 3-2-1 ULSD and 2-1-1 HSD/LLS crack spreads for each of the quarterly periods over the past three years. 69 | Management's Discussion and Analysis RIN Volatility Environmental regulations and the political environment continue to affect our refining margins in the form of volatility in the price of RINs .
The table below reflects the quarterly average Gulf Coast 5-3-2 ULSD, 3-2-1 ULSD and 2-1-1 HSD/LLS crack spreads for each of the quarterly periods over the past three years. 67 | Management's Discussion and Analysis RIN Volatility Environmental regulations and the political environment continue to affect our refining margins in the form of volatility in the price of RINs .
A substantial majority of Delek Logistics' assets are currently integral to our refining and marketing operations. The logistics segment's gathering and processing business owns or leases capacity on approximately 398 miles of crude oil transportation pipelines, approximately 406 miles of refined product pipelines, and an approximately 1,400-mile crude oil gathering system of which 489 miles is decommissioned.
Majority of Delek Logistics' assets are currently integral to our refining and marketing operations. The logistics segment's gathering and processing business owns or leases capacity on approximately 398 miles of crude oil transportation pipelines, approximately 406 miles of refined product pipelines, and an approximately 1,400-mile crude oil gathering system of which 489 miles is decommissioned.
These increases were partially offset by the following: • increase in cost of materials and other as a result of our Delaware Gathering operations, which began in June 2022. Our logistics segment purchased product from our refining segment of $396.3 million and $496.6 million for the years ended December 31, 2023 and 2022, respectively.
These decreases were partially offset by the following: • increase in cost of materials and other as a result of our Delaware Gathering operations, which began in June 2022. Our logistics segment purchased product from our refining segment of $396.3 million and $496.6 million for the years ended December 31, 2023 and 2022, respectively.
Refer to the cash flow section for our operating activities spend during the year ended December 31, 2023. While many of the expenses related to the operating activities are variable in nature, some of the expenditures can be somewhat fixed in the short-term due to forward planning on our level of activity.
Refer to the cash flow section for our operating activities spend during the year ended December 31, 2024. While many of the expenses related to the operating activities are variable in nature, some of the expenditures can be somewhat fixed in the short-term due to forward planning on our level of activity.
Additionally, while our current Net RINs Obligation reflects current RINs market prices as of December 31, 2023, the financial statement impact, including both the income statement and net cash impact of future changes to enacted Renewable Volume Obligation rates, is not determinable because of the complexity of the Net RINs Obligation and related transactions, where such financial statement impact is dependent upon the following: (1) the composition of the specific Net RINs Obligation (in terms of the vintages of RINs we currently own versus the waived RINs Obligation) and the related market prices at the date each volumetric requirement change is enacted; (2) the composition of our RINs forward commitment contracts that may be settled or positions closed as a result of any enacted change and the related gains or losses; (3) the settlement requirements of related RINs product financing arrangements; and (4) the quantity of and dates at which excess RINs can be sold and the sales price (see also Note 11, Note 12 and Note 18 as well as our related accounting policies related to RINs included in Note 2 of our consolidated financial statements included in Item 8.
Additionally, while our current Net RINs Obligation reflects current RINs market prices as of December 31, 2024, the financial statement impact, including both the income statement and net cash impact of future changes to enacted Renewable Volume Obligation rates, is not determinable because of the complexity of the Net RINs Obligation and related transactions, where such financial statement impact is dependent upon the following: (1) the composition of the specific Net RINs Obligation (in terms of the vintages of RINs we currently own versus the waived RINs Obligation) and the related market prices at the date each volumetric requirement change is enacted; (2) the composition of our RINs forward commitment contracts that may be settled or positions closed as a result of any enacted change and the related gains or losses; (3) the settlement requirements of related RINs product financing arrangements; and (4) the quantity of and dates at which excess RINs can be sold and the sales price (see also Note 12, Note 13 and Note 19 as well as our related accounting policies related to RINs included in Note 2 of our consolidated financial statements included in Item 8.
These decreases were partially offset by the following: • increase in revenue as a result of our Delaware Gathering operations, which began in June 2022; and • increase in volumes associated with Midland Gathering operations primarily due to new connections finalized during 2022.
These decreases were partially offset by the following: • increase in revenue as a result of our Delaware Gathering operations, which acquired in June 2022; and • increase in volumes associated with Midland Gathering operations primarily due to new connections finalized during 2022.
These financial and operational non-GAAP measures are important factors in assessing our operating results and profitability and include: • 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; and • 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.
These financial and operational non-GAAP measures are important factors in assessing our operating results and profitability and include: • EBITDA - calculated as net income (loss) attributable to Delek adjusted to add back interest expense, income tax expense, depreciation and amortization; and • 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.
See below for further discussion on how certain key market trends impact our operating results. 66 | Management's Discussion and Analysis Crude Prices WTI crude oil represents the largest component of our crude slate at all of our refineries, and can be sourced through our gathering channels or optimization efforts from Midland, Texas or Cushing, Oklahoma or other locations.
See below for further discussion on how certain key market trends impact our operating results. Crude Prices WTI crude oil represents the largest component of our crude slate at all of our refineries, and can be sourced through our gathering channels or optimization efforts from Midland, Texas, Cushing, Oklahoma or other locations.
Important factors that, individually or in the aggregate, could cause such differences include, but are not limited to: • volatility in our refining margins or fuel gross profit as a result of changes in the prices of crude oil, other feedstocks and refined petroleum products; • reliability of our operating assets; • actions of our competitors and customers; • changes in, or the failure to comply with, the extensive government regulations applicable to our industry segments, including current and future restrictions on commercial and economic activities in response to future public health crises; • our ability to execute our long-term sustainability strategy and growth through acquisitions such as the Delaware Gathering Acquisition and joint ventures, including our ability to successfully integrate acquisitions, complete strategic transactions, safety initiatives and capital projects, realize expected synergies, cost savings and other benefits therefrom, return value to shareholders, or achieve operational efficiencies; • diminishment in value of long-lived assets may result in an impairment in the carrying value of the assets on our balance sheet and a resultant loss recognized in the statement of operations; • the impact on commercial activity and other economic effects of any widespread public health crisis, including uncertainty regarding the timing, pace and extent of economic recovery following any such crisis; • general economic and business conditions affecting the southern, southwestern and western U.S., particularly levels of spending related to travel and tourism; • volatility under our derivative instruments; • deterioration of creditworthiness or overall financial condition of a material counterparty (or counterparties); • unanticipated increases in cost or scope of, or significant delays in the completion of, our capital improvement safety initiative and periodic turnaround projects; • risks and uncertainties with respect to the quantities and costs of refined petroleum products supplied to our pipelines and/or held in our terminals; • operating hazards, natural disasters, weather related disruptions, casualty losses and other matters beyond our control; • increases in our debt levels or costs; • possibility of accelerated repayment on a portion of our Inventory Intermediation Agreement obligation if the purchase price adjustment feature triggers a change on the re-pricing dates; • changes in our ability to continue to access the credit markets; • compliance, or failure to comply, with restrictive and financial covenants in our various debt agreements; • changes in our ability to pay dividends; • seasonality; • earthquakes, hurricanes, tornadoes, and other weather events, which can unforeseeably affect the price or availability of electricity, natural gas, crude oil, and other feedstocks, critical supplies, refined petroleum products and ethanol; • increases in costs of compliance with, or liability for violation of, existing or future laws, regulations and other requirements; • societal, legislative and regulatory measures to address climate change and GHG; • our ability to execute our sustainability improvement plans, including greenhouse gas reduction targets; • acts of terrorism (including cyber-terrorism) aimed at either our facilities or other facilities; • impacts of global conflicts such as the war between Israel and Hamas and the Russia-Ukraine War; • future decisions by OPEC and OPEC + regarding production and pricing and disputes between OPEC+ members regarding the same; • disruption, failure, or cybersecurity breaches affecting or targeting our IT systems and controls, our infrastructure, or the infrastructure of our cloud-based IT service providers; • changes in the cost or availability of transportation for feedstocks and refined products; and • other factors discussed under Item 1A.
Important factors that, individually or in the aggregate, could cause such differences include, but are not limited to: • volatility in our refining margins or fuel gross profit as a result of changes in the prices of crude oil, other feedstocks and refined petroleum products; • reliability of our operating assets; • actions of our competitors and customers; • changes in, or the failure to comply with, the extensive government regulations applicable to our industry segments, including current and future restrictions on commercial and economic activities in response to future public health crises; • our ability to execute our long-term sustainability strategy and growth through acquisitions and dispositions such as the sale of our Retail Stores, the Gravity Acquisition, the H20 Midstream Acquisition, the Delaware Gathering Acquisition and joint ventures, including our ability to successfully integrate acquisitions, complete strategic transactions, safety initiatives and capital projects, realize expected synergies, cost savings and other benefits therefrom, return value to shareholders, or achieve operational efficiencies; • diminishment in value of long-lived assets may result in an impairment in the carrying value of the assets on our balance sheet and a resultant loss recognized in the statement of operations; • the impact on commercial activity and other economic effects of any widespread public health crisis, including uncertainty regarding the timing, pace and extent of economic recovery following any such crisis; • general economic and business conditions affecting the southern, southwestern and western U.S., particularly levels of spending related to travel and tourism; • volatility under our derivative instruments; • deterioration of creditworthiness or overall financial condition of a material counterparty (or counterparties); • unanticipated increases in cost or scope of, or significant delays in the completion of, our capital improvement safety initiative and periodic turnaround projects; • risks and uncertainties with respect to the quantities and costs of refined petroleum products supplied to our pipelines and/or held in our terminals; • operating hazards, natural disasters, weather related disruptions, casualty losses and other matters beyond our control; • increases in our debt levels or costs; • possibility of accelerated repayment on a portion of our Inventory Intermediation Agreement obligation if the purchase price adjustment feature triggers a change on the re-pricing dates; • changes in our ability to continue to access the credit markets; • compliance, or failure to comply, with restrictive and financial covenants in our various debt agreements; • changes in our ability to pay dividends; • seasonality; • the decline in margins impacting current results and forecasts could result in impairments in certain of our long-lived or indefinite-lived assets, including goodwill, or have other financial statement impacts that cannot currently be anticipated; • earthquakes, hurricanes, tornadoes, and other weather events, which can unforeseeably affect the price or availability of electricity, natural gas, crude oil, and other feedstocks, critical supplies, refined petroleum products and ethanol; • increases in costs of compliance with, or liability for violation of, existing or future laws, regulations and other requirements; • societal, legislative and regulatory measures to address climate change and GHG; • our ability to execute our sustainability improvement plans, including GHG reduction targets; • acts of terrorism (including cyber-terrorism) aimed at either our facilities or other facilities; • impacts of global conflicts such as the war between Israel and Hamas and the Russia-Ukraine War; • future decisions by OPEC regarding production and pricing and disputes between OPEC+ members regarding the same; • disruption, failure, or cybersecurity breaches affecting or targeting our IT systems and controls, our infrastructure, or the infrastructure of our cloud-based IT service providers; • changes in the cost or availability of transportation for feedstocks and refined products; and • other factors discussed under Item 1A.
Starting in Q1 2023, for our Krotz Springs refinery, we compare our per barrel refining margin to the Gulf Coast 2-1-1 crack spread consisting of (Argus pricing) LLS crude oil, (Argus pricing) U.S. Gulf Coast CBOB gasoline and 50% of (Argus pricing) U.S. Gulf Coast Pipeline No. 2 heating oil (high sulfur diesel) and 50% of (Platts pricing) U.S.
For 2023, for our Krotz Springs refinery, we compare our per barrel refining margin to the Gulf Coast 2-1-1 crack spread consisting of (Argus pricing) LLS crude oil, (Argus pricing) U.S. Gulf Coast CBOB gasoline and 50% of (Argus pricing) U.S. Gulf Coast Pipeline No. 2 heating oil (high sulfur diesel) and 50% of (Platts pricing) U.S.
Financial Statements and Supplementary Data, of this Annual Report on Form 10-K). Additionally, we were in compliance with covenants during the quarter ended December 31, 2023.
Financial Statements and Supplementary Data, of this Annual Report on Form 10-K). Additionally, we were in compliance with covenants during the quarter ended December 31, 2024.
Any excess or surplus of the purchase consideration when compared to the fair value of the net tangible assets acquired, if any, is recorded as goodwill or gain from a bargain purchase.
Any excess or deficiency of the purchase consideration when compared to the fair value of the net tangible assets acquired, if any, is recorded as goodwill or gain from a bargain purchase.
GAAP financial measures. 71 | Management's Discussion and Analysis Non-GAAP Reconciliations The following table provides a reconciliation of segment EBITDA to the most directly comparable U.S.
GAAP financial measures. 69 | Management's Discussion and Analysis Non-GAAP Reconciliations The following table provides a reconciliation of segment EBITDA to the most directly comparable U.S.
For this reason, unfavorable Gulf Coast (Henry Hub) differentials can impact our crack spread capture. 77 | Management's Discussion and Analysis The cost to acquire the refined fuel products we sell to our wholesale customers in our logistics segment and at our convenience stores in our retail segment largely depends on numerous factors beyond our control, including the supply of, and demand for, crude oil, gasoline and other refined petroleum products which, in turn, depend on, among other factors, changes in domestic and foreign economies, weather conditions, domestic and foreign political affairs, production levels, the availability of imports, the marketing of competitive fuels and government regulation.
For this reason, unfavorable Gulf Coast (Henry Hub) differentials can impact our crack spread capture. 78 | Management's Discussion and Analysis The cost to acquire the refined fuel products we sell to our wholesale customers in our logistics segment largely depends on numerous factors beyond our control, including the supply of, and demand for, crude oil, gasoline and other refined petroleum products which, in turn, depend on, among other factors, changes in domestic and foreign economies, weather conditions, domestic and foreign political affairs, production levels, the availability of imports, the marketing of competitive fuels and government regulation.
Floating interest rate debt is calculated using December 31, 2023 rates. For additional information, see Note 10 to the consolidated financial statements included in Item 8. Financial Statements and Supplementary Data, of this Annual Report on Form 10-K.
Floating interest rate debt is calculated using December 31, 2024 rates. For additional information, see Note 11 to the consolidated financial statements included in Item 8. Financial Statements and Supplementary Data, of this Annual Report on Form 10-K.
Gulf Coast high sulfur diesel (per gallon) $ 1.85 $ 2.90 Natural gas (per MMBtu) $ 2.66 $ 6.54 (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 (Argus pricing) WTI Cushing crude, U.S. Gulf Coast CBOB gasoline and U.S.
Gulf Coast high sulfur diesel (per gallon) $ 1.98 $ 1.85 $ 2.90 Natural gas (per MMBTU) $ 2.42 $ 2.66 $ 6.54 (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 (Argus pricing) WTI Cushing crude, U.S.
The project will deploy carbon capture technology at the Big Spring refinery's FCC unit, while maintaining existing production capabilities and turnaround schedule. Expectations for the project are to capture 145,000 metric tons of carbon dioxide per year, as well as reduce health-harming pollutants, such as sulfur oxide and particulate matter.
The project will deploy carbon capture technology at the Big Spring refinery's Fluid Catalytic Cracking unit, while maintaining existing production capabilities and turnaround schedule. Expectations for the project are to capture 145,000 metric tons of carbon dioxide per year, as well as reduce health-harming pollutants, such as sulfur oxide and particulate matter.
This decrease was primarily driven by the following: • decrease in costs of materials and other in our West Texas marketing operations primarily driven by decreases in the average cost per gallon and the average volumes of diesel sold in our West Texas marketing operations: ◦ the average cost per gallon of gasoline and diesel sold decreased by $0.49 per gallon and $0.74 per gallon, respectively; and ◦ the volumes of diesel sold decreased by 3.6 million gallons, partially offset by a 0.6 million increase in gallons of gasoline sold.
This decrease was primarily driven by the following: • decrease in costs of materials and other in our West Texas marketing operations primarily driven by decreases in the average cost per gallon and the average volumes of diesel sold in our West Texas marketing operations: 87 | Management's Discussion and Analysis ◦ the average cost per gallon of gasoline and diesel sold decreased by $0.49 per gallon and $0.74 per gallon, respectively; and ◦ the volumes of diesel sold decreased by 3.6 million gallons, partially offset by a 0.6 million increase in gallons of gasoline sold.
As of December 31, 2023, we believe we were in compliance with all of our debt maintenance covenants, where the most significant long-term obligation subject to such covenants was the Delek Term Loan Credit Facility (see further discussion in Note 10 of our consolidated financial statements included in Item 8.
As of December 31, 2024, we believe we were in compliance with all of our debt maintenance covenants, where the most significant long-term obligation subject to such covenants was the Delek Term Loan Credit Facility (see further discussion in Note 11 of our consolidated financial statements included in Item 8.
Our product financing liabilities consisted primarily of RIN financings as of December 31, 2023, and totaled $224.2 million, all of which is due in the next 12 months. See further description of these types of arrangements in the Environmental Credits and Related Regulatory Obligations accounting policy disclosed in Note 2 to our accompanying consolidated financial statements included in Item 8.
Our product financing liabilities consisted primarily of RIN financings as of December 31, 2024, and totaled $185.9 million, all of which is due in the next 12 months. See further description of these types of arrangements in the Environmental Credits and Related Regulatory Obligations accounting policy disclosed in Note 2 to our accompanying consolidated financial statements included in Item 8.
Logistics revenue is largely based on fixed-fee or tariff rates charged for throughput volumes running through our logistics network, where many of those volumes are contractually protected by MVCs.
Logistics revenue is largely based on fixed-fee or tariff rates charged for throughput volumes running through our logistics network, where many of those volumes are contractually protected by minimum volume commitments MVCs.
Gulf Coast unleaded gasoline (per gallon) $ 2.34 $ 2.77 Gulf Coast ultra-low sulfur diesel (per gallon) $ 2.72 $ 3.46 U.S.
Gulf Coast unleaded gasoline (per gallon) $ 2.13 $ 2.34 $ 2.77 Gulf Coast ultra-low sulfur diesel (per gallon) $ 2.36 $ 2.72 $ 3.46 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 (Argus pricing) WTI Cushing crude, U.S. Gulf Coast CBOB gasoline and Gulf Coast ultra-low sulfur diesel.
Gulf Coast CBOB gasoline and Gulf Coast 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 (Argus pricing) WTI Cushing crude, U.S. Gulf Coast CBOB gasoline and Gulf Coast ultra-low sulfur diesel.
Cash outlays in the first quarter of 2024 are planned to include incentive compensation payments that were earned and accrued in 2023. In line with our long-term sustainable strategy, future cash requirements will include initiatives to build on our long-term sustainable business model, ESG initiatives and sum of the parts initiatives.
Cash outlays in 2025 are planned to include incentive compensation payments that were earned and accrued in 2024. In line with our long-term sustainable strategy, future cash requirements will include initiatives to build on our long-term sustainable business model, ESG initiatives and sum of the parts initiatives.
We report operating results in three reportable segments: • Refining • Logistics • Retail Decisions concerning the allocation of resources and assessment of operating performance are made based on this segmentation.
We report operating results in two reportable segments: • Refining • Logistics Decisions concerning the allocation of resources and assessment of operating performance are made based on this segmentation.
In addition, the refining segment includes our wholesale crude operations. Logistics Overview Our logistics segment (or "Logistics") gathers, transports and stores crude oil and natural gas; markets, distributes, transports and stores refined products; and disposes and recycles water in select regions of the southeastern United States, West Texas and New Mexico for our refining segment and third parties.
Logistics Overview Our logistics segment gathers, transports and stores crude oil and natural gas; markets, distributes, transports and stores refined products; and disposes and recycles water in select regions of the southeastern United States, West Texas and New Mexico for our refining segment and third parties.
In addition, past financial and/or operating performance is not necessarily a reliable indicator of future performance, and you should not use our historical performance to anticipate future results or period trends.
In addition, past financial and/or operating performance is not necessarily a reliable indicator of future performance, and you should not use our 55 | Management's Discussion and Analysis historical performance to anticipate future results or period trends.
It is comprised of the consolidated balance sheet and results of operations of Delek Logistics (NYSE: DKL), where we owned a 78.7% interest at December 31, 2023. Delek Logistics was formed by Delek in 2012 to own, operate, acquire and construct crude oil and refined products logistics and marketing assets.
It is comprised of the consolidated balance sheet and results of operations of Delek Logistics (NYSE: DKL), where we owned a 66.3% interest at December 31, 2024. Delek Logistics was formed by Delek in 2012 to own, operate, acquire and construct crude oil and refined products logistics and marketing assets.
Refer to Note 13 of our consolidated financial statements included in Item 8.
Refer to Note 14 of our consolidated financial statements included in Item 8.
Total unused credit commitments or borrowing base availability, as applicable, under our revolving credit facilities was approximately $1,084.0 million.
Total unused credit commitments or borrowing base availability, as applicable, under our revolving credit facilities was approximately $1,509.1 million.
For the 2023 and 2022 annual impairment assessment, we performed a qualitative assessment on the reporting units in our refining and retail segments, as we determined it was more likely than not that the fair value of the reporting units exceeded the carrying value.
For the 2023 annual impairment assessment, we performed a qualitative assessment on the reporting units in our refining segment, as we determined it was more likely than not that the fair value of the reporting units exceeded the carrying value.
Our near-term focus is centered around the following: (1) operations excellence, (2) financial strength and flexibility and (3) strategic initiatives which includes unlocking the "sum of the parts" value of our existing business while identifying growth opportunities to enhance the Company's scale and diversify revenue streams. See further discussion in the "Strategic Objectives" section below.
Our near-term focus is centered around the following: (1) operations excellence, (2) financial strength and flexibility and (3) strategic initiatives which includes unlocking the "sum of the parts" value of our existing business while identifying growth opportunities to enhance the Company's scale and diversify revenue streams.
We undertake no obligation to revise or update any forward-looking statements as a result of new information, future events or otherwise. 59 | Management's Discussion and Analysis Executive Summary: Management's View of Our Business and Strategic Overview Management's View of Our Business We are an integrated downstream energy business focused on petroleum refining, the transportation, storage and wholesale distribution of crude oil, intermediate and refined products and convenience store retailing.
We undertake no obligation to revise or update any forward-looking statements as a result of new information, future events or otherwise. 56 | Management's Discussion and Analysis Executive Summary: Management's View of Our Business and Strategic Overview Management's View of Our Business We are an integrated downstream energy business focused on petroleum refining and the transportation, storage and wholesale distribution of crude oil, intermediate and refined products as well as wastewater processing and disposal.
Historically, we have generated adequate cash from operations to fund ongoing working capital requirements, pay quarterly cash dividends and fund operational capital expenditures. On February 20, 2024, our Board of Directors approved a quarterly cash dividend of $0.245 per share of our common stock.
Historically, we have generated adequate cash from operations to fund ongoing working capital requirements, pay quarterly cash dividends and fund operational capital expenditures. On February 18, 2025, our Board of Directors approved a quarterly cash dividend of $0.255 per share of our common stock.
The net decrease in cost of materials and other primarily related to the following: • a decrease in the cost of crude oil feedstocks at the refineries, including a 17.9% decrease in the average cost of WTI Cushing crude oil and a 17.8% decrease in the average cost of WTI Midland crude oil and decreased wholesale activity; • decreases in the average diesel volumes sold and average cost per gallon of gasoline and diesel sold, partially offset by incremental cost of materials and other from the Delaware Gathering Acquisition in our logistics segment; and • a decrease in retail cost of materials and other due to 14.0% decrease in average cost per gallon sold applied to higher fuel sales volumes.
The net decrease in cost of materials and other primarily related to the following: • a decrease in the cost of crude oil feedstocks at the refineries, including a 17.9% decrease in the average cost of WTI Cushing crude oil and a 17.8% decrease in the average cost of WTI Midland crude oil and decreased wholesale activity, and • decreases in the average cost per gallon of gasoline and diesel sold, partially offset by incremental cost of materials and other from the Delaware Gathering Acquisition in our logistics segment.
Management measures the operating performance of each of its reportable segments based on the segment EBITDA. 73 | Management's Discussion and Analysis Results of Operations Consolidated Results of Operations — Comparison of the Year Ended December 31, 2023 versus the Year Ended December 31, 2022 Net Income 2023 vs. 2022 Consolidated net income for the year ended December 31, 2023 was $46.7 million compared to a net income of $290.5 million for the year ended December 31, 2022.
Management measures the operating performance of each of its reportable segments based on the segment EBITDA. 71 | Management's Discussion and Analysis Results of Operations Consolidated Results of Operations — Comparison of the Year Ended December 31, 2024 versus the Year Ended December 31, 2023 and the Year Ended December 31, 2023 versus the Year Ended December 31, 2022 Net (Loss) Income 2024 vs. 2023 Consolidated net loss for the year ended December 31, 2024 was $520.9 million compared to a net income of $46.7 million for the year ended December 31, 2023.
Additionally, our refining margin profitability is impacted by regulatory factors, including the cost of RINs. We have positioned the Company to continue to run safely, reliably and environmentally responsibly at near or above nameplate capacity while leveraging our Delek Logistics and retail lines of business with an eye towards the One Delek vision.
Additionally, our refining margin profitability is impacted by regulatory factors, including the cost of RINs. We have positioned the Company to continue to run safely, reliably and environmentally responsibly while leveraging our Delek Logistics business with an eye towards the One Delek vision.
As of December 31, 2023, our total long-term indebtedness (as defined in Note 10 of the consolidated financial statements included in Item 8.
As of December 31, 2024, our total long-term indebtedness (as defined in Note 11 of the consolidated financial statements included in Item 8.
Because of the volatility in RINs prices, it is not possible to predict future RINs cost with certainty, and movements in RINs prices can have significant and unanticipated adverse effects on our refining margins that are outside of our control.
Because of the volatility in RINs prices, it is not possible to predict future RINs cost with certainty, and movements in RINs prices can have significant and unanticipated adverse effects on our refining margins that are outside of our control. The chart below illustrates the volatility in RINs over the past three years.
Revenues included sales to our retail segment of $432.5 million and $511.7 million, sales to our logistics segment of $396.3 million and $496.6 million and sales to the other segment of $0.0 million and $23.8 million for the year ended December 31, 2023 and 2022, respectively. We eliminate this intercompany revenue in consolidation.
Revenues included sales to our logistics segment of $396.3 million and $496.6 million and sales to our other segment of $0.0 million and $23.8 million for the years ended December 31, 2023 and 2022, respectively. We eliminate this intercompany revenue in consolidation.
Refining Margin 2023 vs. 2022 Refining margin decreased by $185.6 million, or 13.7%, for the year ended December 31, 2023 compared to the year ended December 31, 2022, with a refining margin percentage of 7.1% as compared to 6.8% for the years ended December 31, 2023 and 2022, respectively, primarily driven by the following: • a 19.0% decrease in the 5-3-2 crack spread (the primary measure for the Tyler refinery and El Dorado refinery), a 17.4% decrease in the average Gulf Coast 3-2-1 crack spread (the primary measure for the Big Spring refinery) and a 42.9% decrease in the average Gulf Coast 2-1-1 crack spread (the primary measure for the Krotz Springs refinery).
These finance leases have no impact to the Delek US consolidated results as these amounts eliminate in consolidation. 2023 vs. 2022 Refining margin decreased by $185.6 million, or 13.7%, for the year ended December 31, 2023 compared to the year ended December 31, 2022, with a refining margin percentage of 7.1% as compared to 6.8% for the years ended December 31, 2023 and 2022, respectively, primarily driven by the following: • a 19.0% decrease in the 5-3-2 crack spread (the primary measure for the Tyler refinery and El Dorado refinery), a 17.4% decrease in the average Gulf Coast 3-2-1 crack spread (the primary measure for the Big Spring refinery), and a 42.9% decrease in the average Gulf Coast 2-1-1 crack spread (the primary measure for the Krotz Springs refinery).
Cost of Materials and Other 2023 vs. 2022 Cost of materials and other for the logistics segment decreased by $108.8 million, or 17.0%, in the year ended December 31, 2023 compared to the year ended December 31, 2022.
We eliminate these intercompany costs in consolidation. 2023 vs. 2022 Cost of materials and other for the logistics segment decreased by $108.8 million, or 17.0%, in the year ended December 31, 2023 compared to the year ended December 31, 2022.
These decreases were partially offset by the following: • lower natural gas prices. Operating Expenses 2023 vs. 2022 Operating expenses decreased by $3.3 million, or 0.5%, in the year ended December 31, 2023, compared to year ended December 31, 2022. The decrease in operating expenses was primarily driven by the following: • lower natural gas in 2023.
The decrease in operating expenses was primarily driven by the following: • lower outside services; and • lower natural gas costs. These decreases were partially offset by the following: • increased repairs and maintenance. 2023 vs. 2022 Operating expenses decreased $3.3 million, or 0.5%, in the year ended December 31, 2023, compared to year ended December 31, 2022.
Refinery Statistics Year Ended December 31, 2023 2022 Total Refining Segment Days in period 365 365 Total sales volume - refined product (average bpd) (1) 298,617 299,004 Total production (average bpd) 291,802 290,041 Crude oil 278,231 281,205 Other feedstocks 15,998 10,558 Total throughput (average bpd): 294,229 291,763 Crude Slate: (% based on amount received in period) WTI crude oil 73.0 % 68.2 % Gulf Coast Sweet Crude 4.3 % 7.8 % Local Arkansas crude oil 4.0 % 4.1 % Other 18.7 % 19.9 % Crude utilization (% based on nameplate capacity) 92.1 % 93.1 % 78 | Management's Discussion and Analysis Refinery Statistics (continued) Year Ended December 31, 2023 2022 Tyler, TX Refinery Days in period 365 365 Products manufactured (average bpd): Gasoline 33,442 36,847 Diesel/Jet 28,670 31,419 Petrochemicals, LPG, natural gas liquids ("NGLs") 2,341 2,114 Other 1,691 1,825 Total production 66,144 72,205 Throughput (average bpd): Crude Oil 63,210 70,114 Other feedstocks 3,617 2,604 Total throughput 66,827 72,718 Per barrel of throughput: Operating expenses (2) $ 5.08 $ 5.24 Crude Slate: (% based on amount received in period) WTI crude oil 79.5 % 84.7 % East Texas crude oil 20.5 % 15.0 % Other — % 0.3 % El Dorado, AR Refinery Days in period 365 365 Products manufactured (average bpd): Gasoline 38,868 38,738 Diesel 30,061 30,334 Petrochemicals, LPG, NGLs 1,495 1,255 Asphalt 7,711 7,782 Other 877 1,200 Total production 79,012 79,309 Throughput (average bpd): Crude Oil 77,423 76,806 Other feedstocks 3,262 3,646 Total throughput 80,685 80,452 Per barrel of throughput: Operating expenses (2) $ 4.59 $ 4.61 Crude Slate: (% based on amount received in period) WTI crude oil 67.3 % 55.1 % Local Arkansas crude oil 14.0 % 15.3 % Other 18.7 % 29.6 % 79 | Management's Discussion and Analysis Refinery Statistics (continued) Year Ended December 31, 2023 2022 Big Spring, TX Refinery Days in period 365 365 Products manufactured (average bpd): Gasoline 32,386 30,689 Diesel/Jet 22,390 22,125 Petrochemicals, LPG, NGLs 3,593 2,942 Asphalt 1,983 1,721 Other 3,129 1,481 Total production 63,481 58,958 Throughput (average bpd): Crude oil 60,236 59,476 Other feedstocks 4,223 191 Total throughput 64,459 59,667 Per barrel of refined throughput: Operating expenses (2) $ 7.92 $ 7.48 Crude Slate: (% based on amount received in period) WTI crude oil 68.5 % 70.1 % WTS crude oil 31.5 % 29.9 % Krotz Springs, LA Refinery Days in period 365 365 Products manufactured (average bpd): Gasoline 40,805 34,370 Diesel/Jet 31,589 31,576 Heavy Oils 3,785 2,418 Petrochemicals, LPG, NGLs 6,525 6,749 Other 460 4,458 Total production 83,164 79,571 Throughput (average bpd): Crude Oil 77,361 74,808 Other feedstocks 4,896 4,118 Total throughput 82,257 78,926 Per barrel of throughput: Operating expenses (2) $ 4.96 $ 5.25 Crude Slate: (% based on amount received in period) WTI Crude 77.4 % 63.4 % Gulf Coast Sweet Crude 15.1 % 29.8 % Other 7.5 % 6.8 % (1) Includes inter-refinery sales and sales to other segments which are eliminated in consolidation.
Refinery Statistics Year Ended December 31, 2024 2023 2022 Total Refining Segment Days in period 366 365 365 Total sales volume - refined product (average bpd) (1) 301,834 298,617 299,004 Total production (average bpd) 292,817 291,802 290,041 Crude oil 281,271 278,231 281,205 Other feedstocks 15,380 15,998 10,558 Total throughput (average bpd): 296,651 294,229 291,763 Crude Slate: (% based on amount received in period) WTI crude oil 69.9 % 73.0 % 68.2 % Gulf Coast Sweet Crude 7.3 % 4.3 % 7.8 % Local Arkansas crude oil 3.4 % 4.0 % 4.1 % Other 19.4 % 18.7 % 19.9 % Crude utilization (% based on nameplate capacity) 93.1 % 92.1 % 93.1 % 79 | Management's Discussion and Analysis Refinery Statistics (continued) Year Ended December 31, 2024 2023 2022 Tyler, TX Refinery Days in period 366 365 365 Products manufactured (average bpd): Gasoline 35,723 33,442 36,847 Diesel/Jet 31,755 28,670 31,419 Petrochemicals, LPG, NGLs 2,319 2,341 2,114 Other 849 1,691 1,825 Total production 70,646 66,144 72,205 Throughput (average bpd): Crude Oil 70,009 63,210 70,114 Other feedstocks 2,299 3,617 2,604 Total throughput 72,308 66,827 72,718 Per barrel of throughput: Operating expenses $ 5.04 $ 5.08 $ 5.24 Crude Slate: (% based on amount received in period) WTI crude oil 79.2 % 79.5 % 84.7 % East Texas crude oil 20.4 % 20.5 % 15.0 % Other 0.4 % — % 0.3 % El Dorado, AR Refinery Days in period 366 365 365 Products manufactured (average bpd): Gasoline 38,215 38,868 38,738 Diesel 29,843 30,061 30,334 Petrochemicals, LPG, NGLs 1,205 1,495 1,255 Asphalt 8,739 7,711 7,782 Other 1,237 877 1,200 Total production 79,239 79,012 79,309 Throughput (average bpd): Crude Oil 77,993 77,423 76,806 Other feedstocks 2,886 3,262 3,646 Total throughput 80,879 80,685 80,452 Per barrel of throughput: Operating expenses $ 4.65 $ 4.59 $ 4.61 Crude Slate: (% based on amount received in period) WTI crude oil 66.5 % 67.3 % 55.1 % Local Arkansas crude oil 12.2 % 14.0 % 15.3 % Other 21.3 % 18.7 % 29.6 % 80 | Management's Discussion and Analysis Refinery Statistics (continued) Year Ended December 31, 2024 2023 2022 Big Spring, TX Refinery Days in period 366 365 365 Products manufactured (average bpd): Gasoline 33,888 32,386 30,689 Diesel/Jet 25,157 22,390 22,125 Petrochemicals, LPG, NGLs 4,710 3,593 2,942 Asphalt 2,774 1,983 1,721 Other 3,883 3,129 1,481 Total production 70,412 63,481 58,958 Throughput (average bpd): Crude oil 66,123 60,236 59,476 Other feedstocks 4,975 4,223 191 Total throughput 71,098 64,459 59,667 Per barrel of refined throughput: Operating expenses $ 6.66 $ 7.92 $ 7.48 Crude Slate: (% based on amount received in period) WTI crude oil 70.4 % 68.5 % 70.1 % WTS crude oil 29.6 % 31.5 % 29.9 % Krotz Springs, LA Refinery Days in period 366 365 365 Products manufactured (average bpd): Gasoline 34,268 40,805 34,370 Diesel/Jet 28,125 31,589 31,576 Heavy Oils 3,641 3,785 2,418 Petrochemicals, LPG, NGLs 4,942 6,525 6,749 Other 1,544 460 4,458 Total production 72,520 83,164 79,571 Throughput (average bpd): Crude Oil 67,146 77,362 74,808 Other feedstocks 5,220 4,896 4,118 Total throughput 72,366 82,258 78,926 Per barrel of throughput: Operating expenses $ 5.23 $ 4.96 $ 5.25 Crude Slate: (% based on amount received in period) WTI Crude 63.7 % 77.4 % 63.4 % Gulf Coast Sweet Crude 29.7 % 15.1 % 29.8 % Other 6.6 % 7.5 % 6.8 % (1) Includes inter-refinery sales and sales to other segments which are eliminated in consolidation.
(4) Mcfd - average thousand cubic feet per day. (5) Excludes jet fuel and petroleum coke. (6) 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 and Nashville, Tennessee terminals.
(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 and Nashville, Tennessee terminals.
Gulf Coast 5-3-2 crack spread (per barrel) (1) $ 27.02 $ 33.36 U.S. Gulf Coast 3-2-1 crack spread (per barrel) (1) $ 25.93 $ 31.41 U.S. Gulf Coast 2-1-1 crack spread (per barrel) (1) $ 14.70 $ 25.73 U.S.
Gulf Coast 5-3-2 crack spread (per barrel) (1) $ 17.58 $ 27.02 $ 33.36 U.S. Gulf Coast 3-2-1 crack spread (per barrel) (1) $ 16.94 $ 25.93 $ 31.41 U.S. Gulf Coast 2-1-1 crack spread (per barrel) (1) $ 13.40 $ 14.70 $ 25.73 U.S.
Management Discussion and Analysis, of this Annual Report on Form 10-K. For further information, please refer to our discussion in Item 1A.
For further information, please refer to our discussion in Item 1A. Risk Factors, of this Annual Report on Form 10-K.
The decrease was primarily driven by the following: • a decrease in the average price of U.S. Gulf Coast gasoline of 15.5%, ULSD of 21.4%, and HSD of 36.2%; and • a decrease in wholesale activity. These decreases were partially offset by the following: • an increase in sales volumes (including purchased products).
The decrease was primarily driven by the following: • a decrease in the average price of U.S. Gulf Coast gasoline of 9.0% and ULSD of 13.2%; • a decrease in wholesale activity; and • a decrease in sales volumes (including purchased products). These decreases were partially offset by the following: • an increase in the average price of U.S.
The cost to purchase these additional RINs is a significant cash outflow for our business. Increases in the market prices of RINs generally adversely affect our results of operations through changes in fair value to our existing RINs Obligation, to the extent we do not have offsetting RINs inventory on hand or effective economic hedges through net forward purchase commitments.
Increases in the market prices of RINs generally adversely affect our results of operations through changes in fair value to our existing RINs Obligation, to the extent we do not have offsetting RINs inventory on hand or effective economic hedges through net forward purchase commitments.
Such arrangements include our inventory intermediation arrangement, which finances a significant portion of our first-in, first-out inventory at the refineries and, from time to time, RINs or other non-inventory product financing liabilities and funded letters of credit. Our inventory intermediation obligation with Citi was $407.6 million at December 31, 2023, $0.4 million of which was current.
Such arrangements include our inventory intermediation arrangement, which finances a significant portion of our first-in, first-out inventory at the refineries and, from time to time, RINs or other non-inventory product financing liabilities and funded letters of credit. Our inventory intermediation obligation with Citigroup Energy Inc. ("Citi") was $408.7 million at December 31, 2024.
At December 31, 2023 our total liquidity amounted to $1.9 billion comprised primarily of $1,084.0 million in unused credit commitments under our revolving credit facilities (as discussed in Note 10 of our consolidated financial statements included in Item 8. Financial Statements and Supplementary Data, of this Annual Report on Form 10-K) and $822.2 million in cash and cash equivalents.
At December 31, 2024 our total liquidity amounted to $2,244.7 million comprised primarily of $1,509.1 million in unused credit commitments under our revolving credit facilities (as discussed in Note 11 of our consolidated financial statements included in Item 8. Financial Statements and Supplementary Data, of this Annual Report on Form 10-K) and $735.6 million in cash and cash equivalents.
These decreases were partially offset by the following: • an increase in sales volumes (including purchased products).
These decreases were partially offset by the following: 83 | Management's Discussion and Analysis • an increase in sales volumes (including purchased products).
Cash Flows from Financing Activities Net cash used in financing activities was $624.7 million for the year ended December 31, 2023, compared to cash provided of $491.1 million in the comparable 2022 period.
Cash Flows from Financing Activities Continuing Operations Net cash provided by financing activities from continuing operations was $221.7 million for the year ended December 31, 2024, compared to cash used of $624.7 million in the comparable 2023 period.
The Krotz Springs refinery’s crude oil input is primarily comprised of LLS and WTI Midland. 81 | Management's Discussion and Analysis Refining Segment Operational Comparison of the Year Ended December 31, 2023 versus the Year Ended December 31, 2022 Revenues 2023 vs. 2022 Revenues for the refining segment decreased $3,356.1 million, or 17.0%, in the year ended December 31, 2023 compared to the year ended December 31, 2022.
The Krotz Springs refinery’s crude oil input is primarily comprised of LLS and WTI Midland. 82 | Management's Discussion and Analysis Refining Segment Operational Comparison of the Year Ended December 31, 2024 versus the Year Ended December 31, 2023 and the Year Ended December 31, 2023 versus the Year Ended December 31, 2022 Revenues 2024 vs. 2023 Revenues for the refining segment decreased $4,623.9 million, or 28.2%, in the year ended December 31, 2024 compared to the year ended December 31, 2023.
Forward-looking statements include, among other things, statements that refer to the acquisition of 3 Bear (subsequently renamed to Delek Delaware Gathering), including any statements regarding the expected benefits, synergies, growth opportunities, impact on liquidity and prospects, and other financial and operating benefits thereof, the information concerning possible future results of operations, business and growth strategies, including as the same may be impacted by any ongoing military conflict, such as the Russia-Ukraine War, financing plans, expectations that regulatory developments or other matters will or will not have a material adverse effect on our business or financial condition, our competitive position and the effects of competition, the projected growth of the industry in which we operate, and the benefits and synergies to be obtained from our completed and any future acquisitions, statements of management’s goals and objectives, and other similar expressions concerning matters that are not historical facts.
Forward-looking statements include, among other things, statements that refer to the Delaware Gathering Acquisition, the H2O Midstream Acquisition and the Gravity Acquisition, including any statements regarding the expected benefits, synergies, growth opportunities, impact on liquidity and prospects, and other financial and operating benefits thereof, statements regarding the effect, impact, potential duration or other implications of, or expectations expressed with respect to, the outbreak of a pandemic and its impact on oil production and pricing, and statements regarding our efforts and plans in response to such events, the information concerning possible future results of operations, business and growth strategies, including as the same may be impacted by the Russia-Ukraine War, financing plans, expectations that regulatory developments or other matters will or will not have a material adverse effect on our business or financial condition, our competitive position and the effects of competition, the projected growth of the industry in which we operate, and the benefits and synergies to be obtained from our completed and any future acquisitions or dispositions, including the sale of our Retail Stores, statements of management’s goals and objectives, and other similar expressions concerning matters that are not historical facts.
Results from Equity Method Investments 2023 vs. 2022 We recognized income from equity method investments of $86.2 million for the year ended December 31, 2023, compared to $57.7 million for the year ended December 31, 2022, an increase of $28.5 million.
Results from Equity Method Investments 2024 vs. 2023 We recognized income from equity method investments of $92.2 million for the year ended December 31, 2024, compared to $86.2 million for the year ended December 31, 2023, an increase of $6.0 million.
Cash Position and Indebtedness As of December 31, 2023, our total cash and cash equivalents were $822.2 million and we had total long-term indebtedness of approximately $2,599.8 million. The total long-term indebtedness is net of deferred financing costs and debt discount of $57.5 million. Additionally, we had letters of credit issued of approximately $305.5 million.
Cash Position and Indebtedness As of December 31, 2024, our total cash and cash equivalents were $735.6 million and we had total long-term indebtedness of approximately $2,765.2 million. The total long-term indebtedness is net of deferred financing costs and debt discount of $51.2 million. Additionally, we had letters of credit issued of approximately $330.5 million.
(2) Reflects the prior period conforming reclassification adjustment between operating expenses and general and administrative expenses. 80 | Management's Discussion and Analysis Included in the refinery statistics above are the following sales to other segments: Refinery Sales to Other Segments Year Ended December 31, (in barrels per day) 2023 2022 El Dorado refined product sales to other Delek segments — 4 Big Spring refined product sales to other Delek segments 21,165 19,828 Pricing Statistics (average for the period presented) Year Ended December 31, 2023 2022 WTI — Cushing crude oil (per barrel) $ 77.69 $ 94.62 WTI — Midland crude oil (per barrel) $ 78.90 $ 95.93 WTS — Midland crude oil (per barrel) $ 77.61 $ 94.29 LLS (per barrel) $ 80.18 $ 96.85 Brent (per barrel) $ 82.21 $ 99.06 U.S.
See tables below. 81 | Management's Discussion and Analysis Included in the refinery statistics above are the following sales to other segments: Refinery Sales to Other Segments Year Ended December 31, (in barrels per day) 2024 2023 2022 Big Spring refined product sales to other Delek segments 18,053 21,165 19,828 Pricing Statistics (average for the period presented) Year Ended December 31, 2024 2023 2022 WTI — Cushing crude oil (per barrel) $ 75.88 $ 77.69 $ 94.62 WTI — Midland crude oil (per barrel) $ 76.85 $ 78.90 $ 95.93 WTS — Midland crude oil (per barrel) $ 75.95 $ 77.61 $ 94.29 LLS (per barrel) $ 78.30 $ 80.18 $ 96.85 Brent (per barrel) $ 79.84 $ 82.21 $ 99.06 U.S.
Consolidated net income attributable to Delek for the year ended December 31, 2023 was $19.8 million, or $0.30 per basic share, compared to income of $257.1 million, or $3.63 per basic share, for the year ended December 31, 2022.
Consolidated net loss attributable to Delek for the year ended December 31, 2024 was $560.4 million, or $(8.77) per basic share, compared to income of $19.8 million, or $0.30 per basic share, for the year ended December 31, 2023.
These decreases were partially offset by the following: • higher employee, outside service and maintenance costs including costs related to our Safety Action Plan. 82 | Management's Discussion and Analysis EBITDA 2023 vs. 2022 EBITDA decreased by $189.7 million, for the year ended December 31, 2023 compared to the year ended December 31, 2022, primarily due to a decrease in refining margin driven by decreased crack spreads. 83 | Management's Discussion and Analysis Logistics Segment The table below sets forth certain information concerning our logistics segment operations ($ in millions, except per barrel amounts): Selected Logistics Financial and Operating Information Year Ended December 31, 2023 2022 Revenues $ 1,020.4 $ 1,036.4 Cost of materials and other $ 532.6 $ 641.4 Operating expenses (excluding depreciation and amortization) $ 118.1 $ 88.3 EBITDA (1) $ 363.0 $ 304.8 Operating Information: Gathering & Processing: (average bpd) Lion Pipeline System: Crude pipelines (non-gathered) 67,003 78,519 Refined products pipelines 58,181 56,382 SALA Gathering System 13,782 15,391 East Texas Crude Logistics System 32,668 21,310 Midland Gathering Assets (2) 230,471 128,725 Plains Connection System 250,140 183,827 Delaware Gathering Assets: (3) Natural gas gathering and processing (Mcfd) (4) 71,239 60,971 Crude oil gathering (average bpd) 111,335 87,519 Water disposal and recycling (average bpd) 102,340 72,056 Wholesale Marketing & Terminalling: East Texas - Tyler refinery sales volumes (average bpd) (5) 60,626 66,058 Big Spring wholesale marketing throughputs (average bpd) 77,897 71,580 West Texas wholesale marketing throughputs (average bpd) 10,032 10,206 West Texas wholesale marketing margin per barrel $ 5.18 $ 4.45 Terminalling throughputs (average bpd) (6) 113,803 132,262 (1) Includes a $14.8 million goodwill impairment charge for the year ended December 31, 2023.
These finance leases have no impact to the Delek US consolidated results as these amounts eliminate in consolidation. 2023 vs. 2022 EBITDA decreased by $175.9 million for the year ended December 31, 2023 compared to the year ended December 31, 2022, primarily due to a decrease in refining margin primarily driven by decreased crack spreads. 85 | Management's Discussion and Analysis Logistics Segment The table below sets forth certain information concerning our logistics segment operations ($ in millions, except per barrel amounts): Selected Logistics Financial and Operating Information Year Ended December 31, 2024 2023 2022 Revenues $ 940.6 $ 1,020.4 $ 1,036.4 Cost of materials and other $ 483.7 $ 532.6 $ 641.4 Operating expenses (excluding depreciation and amortization) $ 122.7 $ 118.1 $ 88.3 EBITDA (1) $ 342.7 $ 363.0 $ 304.8 Operating Information: Gathering & Processing: (average bpd) Lion Pipeline System: Crude pipelines (non-gathered) 69,903 67,003 78,519 Refined products pipelines 59,136 58,181 56,382 SALA Gathering System 11,568 13,782 15,391 East Texas Crude Logistics System 34,711 32,668 21,310 Midland Gathering Assets 217,847 230,471 128,725 Plains Connection System 333,405 250,140 183,827 Delaware Gathering Assets: (2) Natural gas gathering and processing (Mcfd) (3) 74,831 71,239 60,971 Crude oil gathering (average bpd) 123,978 111,335 87,519 Water disposal and recycling (average bpd) 128,539 108,907 72,056 Midland Water Gathering System: (3) Water disposal and recycling (average bpd) 280,955 — — Wholesale Marketing & Terminalling: East Texas - Tyler refinery sales volumes (average bpd) (4) 67,682 60,626 66,058 Big Spring wholesale marketing throughputs (average bpd) 44,999 77,897 71,580 West Texas wholesale marketing throughputs (average bpd) 5,828 10,032 10,206 West Texas wholesale marketing margin per barrel $ 3.18 $ 5.18 $ 4.45 Terminalling throughputs (average bpd) (5) 154,217 113,803 132,262 (1) Includes a $14.8 million goodwill impairment charge for the year ended December 31, 2023.
Financial Statements and Supplementary Data, of this Annual Report on Form 10-K for further information. 74 | Management's Discussion and Analysis Operating Expenses 2023 vs. 2022 Operating expenses (included in both cost of sales and other operating expenses) were $877.1 million for the year ended December 31, 2023 compared to $824.9 million in year ended December 31, 2022, an increase of $52.2 million, or 6.3%.
Financial Statements and Supplementary Data, of this Annual Report on Form 10-K for further information. 73 | Management's Discussion and Analysis Operating Expenses 2024 vs. 2023 Operating expenses (included in both cost of sales and other operating expenses) were $767.2 million for the year ended December 31, 2024 compared to $775.0 million in year ended December 31, 2023, a decrease of $7.8 million, or 1.0%.
Strategic Initiatives Operational Excellence We are committed to operational excellence which includes maintaining safe, reliable, and environmentally responsible operations. It also encompasses the dedication and drive for constant improvement across our operations in reliability, safety, and efficiency.
With that in mind, we have identified the following overarching key objectives: I. Operational Excellence II. Financial Strength and Flexibility III. Strategic Initiatives Operational Excellence We are committed to operational excellence which includes maintaining safe, reliable, and environmentally responsible operations. It also encompasses the dedication and drive for constant improvement across our operations in reliability, safety, and efficiency.
Our refineries produce the following products: Tyler Refinery El Dorado Refinery Big Spring Refinery Krotz Springs Refinery Primary Products Gasoline, jet fuel, ultra-low-sulfur diesel, liquefied petroleum gases, propylene, petroleum coke and sulfur Gasoline, ultra-low-sulfur diesel, liquefied petroleum gases, propylene, asphalt and sulfur Gasoline, jet fuel, ultra-low-sulfur diesel, liquefied petroleum gases, propylene, aromatics and sulfur Gasoline, jet fuel, high-sulfur diesel, light cycle oil, liquefied petroleum gases, propylene and ammonium thiosulfate The charts below illustrate the quarterly average prices of CBOB, HSD and ULSD over the past three years. 68 | Management's Discussion and Analysis Crack Spreads Crack spreads are used as benchmarks for predicting and evaluating a refinery's product margins by measuring the difference between the market price of feedstocks/crude oil and the resultant refined products.
Our refineries produce the following products: Tyler Refinery El Dorado Refinery Big Spring Refinery Krotz Springs Refinery Primary Products Gasoline, jet fuel, ultra-low-sulfur diesel, liquefied petroleum gases, propylene, petroleum coke and sulfur Gasoline, jet fuel, ultra-low-sulfur diesel, liquefied petroleum gases, propylene, asphalt and sulfur Gasoline, jet fuel, ultra-low-sulfur diesel, liquefied petroleum gases, propylene, aromatics and sulfur Gasoline, jet fuel, high-sulfur diesel, light cycle oil, liquefied petroleum gases, propylene and ammonium thiosulfate 66 | Management's Discussion and Analysis The charts below illustrate the quarterly average prices of CBOB, HSD and ULSD over the past three years.
These increases were partially offset by the following: • lower natural gas prices in 2023. General and Administrative Expenses 2023 vs. 2022 General and administrative expenses were $286.4 million for the year ended December 31, 2023 compared to $332.5 million in year ended December 31, 2022, a decrease of $46.1 million, or 13.9%.
These increases were partially offset by the following: • lower natural gas prices. General and Administrative Expenses 2024 vs. 2023 General and administrative expenses were $252.8 million for the year ended December 31, 2024 compared to $272.0 million in year ended December 31, 2023, a decrease of $19.2 million, or 7.1%.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeGains or losses on commodity derivative contracts accounted for as cash flow hedges are recognized in other comprehensive income on the consolidated balance sheets and, ultimately, when the forecasted transactions are completed in net revenues or cost of materials and other in the consolidated statements of income. 94 | Management's Discussion and Analysis The following table sets forth information relating to our open commodity derivative contracts, excluding our trading derivative contracts (which are presented separately below), as of December 31, 2023 ($ in millions): Total Outstanding Notional Contract Volume by Year of Maturity Contract Description Fair Value Notional Contract Volume 2024 Contracts not designated as hedging instruments: Crude oil price swaps - long (1) $ 1.2 26,530,000 26,530,000 Crude oil price swaps - short (1) (2.5) 26,479,000 26,479,000 Inventory, refined product and crack spread swaps - long (1) (1.2) 784,000 784,000 Inventory, refined product and crack spread swaps - short (1) 1.2 1,306,000 1,306,000 RINs commitment contracts - long (2) (3.1) 41,521,206 41,521,206 RINs commitment contracts - short (2) — 115,255 115,255 Total $ (4.4) (1) Volume in barrels.
Biggest changeThe following table sets forth information relating to our open commodity derivative contracts, excluding our trading derivative contracts (which are discussed separately below), as of December 31, 2024 ($ in millions): Total Outstanding Notional Contract Volume by Year of Maturity Contract Description Fair Value Notional Contract Volume 2025 Contracts not designated as hedging instruments: Crude oil price swaps - long (1) $ 9.4 4,590,000 4,590,000 Crude oil price swaps - short (1) (9.8) 4,230,000 4,230,000 Inventory, refined product and crack spread swaps - long (1) 6.8 4,593,350 4,593,350 Inventory, refined product and crack spread swaps - short (1) (8.9) 5,058,350 5,058,350 Natural gas swaps - long (3) — 747,500 747,500 Natural gas swaps - short (3) — 747,500 747,500 RINs commitment contracts - long (2) (5.3) 36,000,000 36,000,000 Total $ (7.8) (1) Volume in barrels.
(2) Volume in RINs. Interest Rate Risk We have market exposure to changes in interest rates relating to our outstanding floating rate borrowings, which totaled approximately $2,007.3 million as of December 31, 2023.
(2) Volume in RINs. (3) Volume in MMBtu. 94 | Management's Discussion and Analysis Interest Rate Risk We have market exposure to changes in interest rates relating to our outstanding floating rate borrowings, which totaled approximately $1,366.4 million as of December 31, 2024.
When we make the decision to manage our market exposure, our objective is generally to avoid losses from adverse price changes, realizing we will not obtain the gains of beneficial price changes. Impact of Changing Prices Our revenues and cash flows, as well as estimates of future cash flows, are sensitive to changes in energy prices.
When we make the decision to manage our market exposure, our objective is generally to avoid losses from adverse price changes, realizing we will not obtain the gains of beneficial price changes.
The annualized impact of a hypothetical one percent change in interest rates on our floating rate debt outstanding as of December 31, 2023 would be to change interest expense by approximately $20.1 million.
The estimated fair value of our interest rate derivative asset was $3.2 million as of December 31, 2024. The annualized impact of a hypothetical one percent change in interest rates on our floating rate debt, after considering the interest rate swap, outstanding as of December 31, 2024 would be to change interest expense by approximately $8.7 million.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA The information required by Item 8 is incorporated by reference to the section beginning on page F-1.
We had no outstanding trading commodity derivative contracts as of December 31, 2024. ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA The information required by Item 8 is incorporated by reference to the section beginning on page F-1.
Commodity Derivatives Trading Activities We enter into active trading positions in a variety of commodity derivatives, which include forward physical contracts, swap contracts, and futures contracts. These trading activities are undertaken by using a range of contract types in combination to create incremental gains by capitalizing on crude oil supply and pricing seasonality.
These trading activities are undertaken by using a range of contract types in combination to create incremental gains by capitalizing on crude oil supply and pricing seasonality. These contracts are classified as held for trading and are recognized at fair value with changes in fair value recognized in the income statement.
We also have interest rate exposure in connection with our Inventory Intermediation Agreement under which we pay a time value of money charge based on Secured Overnight Financing Rate ("SOFR"). Inflation Inflationary factors, such as increases in the costs of our inputs, operating expenses, and interest rates may adversely affect our operating results.
We also have interest rate exposure in connection with our Inventory Intermediation Agreement under which we pay a time value of money charge based on Secured Overnight Financing Rate. Commodity Derivatives Trading Activities From time to time, we enter into active trading positions in a variety of commodity derivatives, which include forward physical contracts, swap contracts, and futures contracts.
Removed
Major shifts in the cost of crude oil, the prices of refined products and the cost of ethanol can generate large changes in the operating margin in each of our segments.
Added
Gains or losses on commodity derivative contracts accounted for as cash flow hedges are recognized in other comprehensive income on the consolidated balance sheets and, ultimately, when the forecasted transactions are completed in net revenues or cost of materials and other in the consolidated statements of income.
Removed
We maintain, at both company-owned and third-party facilities, inventories of crude oil, feedstocks and refined petroleum products, the values of which are subject to wide fluctuations in market prices driven by world economic conditions, regional and global inventory levels and seasonal conditions.
Added
We help manage this risk through interest rate swap agreements that we may periodically enter into in order to modify the interest rate characteristics of our outstanding long-term debt. In accordance with ASC 815, all interest rate hedging instruments are recorded at fair value and any changes in the fair value between periods are recognized in earnings.
Removed
At December 31, 2023 and December 31, 2022, we held approximately 10.0 million and 15.0 million, respectively, barrels of crude and product inventories associated with the Tyler, El Dorado, Big Spring and Krotz Springs refineries valued under FIFO, with an average cost of $76.37 and $81.88, respectively, per barrel.
Added
We expect that any interest rate derivatives held would reduce our exposure to short-term interest rate movements. As of December 31, 2024, we had one floating-to-fixed interest rate derivative agreement in place for a notional amount of $500.0 million, which matures in November 2027.
Removed
For the years ended December 31, 2023, 2022 and 2021, we recognized net inventory valuation (losses) gains of $(0.4) million, $(1.9) million and $(8.5) million, respectively, which were recorded as a component of cost of materials and other in the consolidated statements of income.
Removed
From time to time, we also may enter into forward purchase or sale derivative contracts for trading purposes (primarily in our Canadian business) and, as a result, may have trading investment commodities on hand related to the purchased inventory.
Removed
Such derivative contracts and related investment commodities are recorded at fair value and subject to pricing risk each period with changes in fair value reflected in other operating income, net in the profit and loss section of our consolidated financial statements.
Removed
For the years ended December 31, 2023, 2022 and 2021, all of our forward purchase and sales contracts that were accounted for as derivative instruments consisted of contracts related to our Canadian trading activities.
Removed
In addition, current or future governmental policies may increase or decrease the risk of inflation, which could further increase costs and may have an adverse effect on our ability to maintain current levels of gross margin and operating expenses as a percentage of sales if the prices at which we are able to sell our products and services do not increase in line with increases in costs.
Removed
These contracts are classified as held for trading and are recognized at fair value with changes in fair value recognized in the income statement.
Removed
The following table sets forth information relating to trading commodity derivative contracts as of December 31, 2023 ($ in millions): Total Outstanding Notional Contract Volume by Year of Maturity Contract Description Fair Value Notional Contract Volume 2023 Crude forward contracts - long (1) $ 7.2 118,935 118,935 Crude forward contracts - short (1) (7.2) 118,935 118,935 Total $ — (1) Volume in barrels.

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