Delek US Holdings, Inc.

Previous wording

Delek US Holdings, Inc. is a registrant pursuant to the Securities Act of 1933, as amended ("Securities Act") and is listed on the New York Stock Exchange ("NYSE") under the ticker symbol "DK". Unless otherwise noted or the context requires otherwise, the terms "we," "our," "us," "Delek" and the "Company" are used in this report to refer to Delek US Holdings, Inc. and its consolidated subsidiaries for all periods presented. You should read the following discussion of our financial condition and results of operations in conjunction with our historical condensed consolidated financial statements and notes thereto.

Current wording

Delek US Holdings, Inc. is a registrant pursuant to the Securities Act of 1933, as amended ("Securities Act") and is listed on the New York Stock Exchange ("NYSE") under the ticker symbol "DK". Unless otherwise noted or the context requires otherwise, the terms "we," "our," "us," "Delek" and the "Company" are used in this report to refer to Delek US Holdings, Inc. and its consolidated subsidiaries for all periods presented. You should read the following discussion of our financial condition and results of operations in conjunction with our historically condensed consolidated financial statements and notes thereto.

Previous wording

This Quarterly Report on Form 10-Q 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 ("Exchange Act"). These forward-looking statements reflect our current estimates, expectations and projections about our future results, performance, prospects and opportunities. Forward-looking statements include, among other things, statements that refer to the acquisition of 3 Bear Delaware Holding – NM, LLC ("Delaware Gathering") (the "Delaware Gathering Acquisition"), the acquisition of H2O Midstream Intermediate, LLC, H2O Midstream Permian LLC, and H2O Midstream LLC ("H2O Midstream") (the "H2O Midstream Acquisition") and the acquisition of Gravity Water Intermediate Holdings LLC ("Gravity") (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 any ongoing military conflict, such as the war between Russia and Ukraine ("the Russia-Ukraine War") and the conflict between Israel and Hamas (the "Israel-Hamas 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 fuel and convenience stores (the "Retail Stores") to a subsidiary of Fomento Económico Mexicano, S.A.B. de C.V. (“FEMSA”), statements of management’s goals and objectives, and other similar expressions concerning matters that are not historical facts. Words such as "may," "will," "should," "could," "would," "predicts," "potential," "continue," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates," "appears," "projects" and similar expressions, as well as statements in future tense, identify forward-looking statements.

Current wording

This Quarterly Report on Form 10-Q 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 ("Exchange Act"). These forward-looking statements reflect our current estimates, expectations and projections about our future results, performance, prospects and opportunities. Forward-looking statements include, among other things, statements that refer to the acquisition of H2O Midstream Intermediate, LLC, H2O Midstream Permian LLC, and H2O Midstream LLC ("H2O Midstream") (the "H2O Midstream Acquisition") and the acquisition of Gravity Water Intermediate Holdings LLC ("Gravity") (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 any ongoing military conflict, such as the war between Russia and Ukraine ("the Russia-Ukraine War"), the conflict between Israel and Hamas (the "Israel-Hamas War"), and the conflict between Israel and Iran (the "Israel-Iran 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 fuel and convenience stores (the "Retail Stores") to a subsidiary of Fomento Económico Mexicano, S.A.B. de C.V. (“FEMSA”), statements of management’s goals and objectives, and other similar expressions concerning matters that are not historical facts. Words such as "may," "will," "should," "could," "would," "predicts," "potential," "continue," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates," "appears," "projects" and similar expressions, as well as statements in future tense, identify forward-looking statements.

Previous wording

•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 H2O 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;

Current wording

•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 H2O Midstream 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;

Previous wording

•impacts of global conflicts such as the Israel-Hamas War and the Russia-Ukraine War;

Current wording

•impacts of global conflicts such as the Israel-Iran War, the Israel-Hamas War and the Russia-Ukraine War;

Previous wording

Our focus on safe and reliable operations is a pillar which underlines all of our business activities. We continue to identify opportunities to mitigate market risk and focus on efforts that improve our overall cost structure while not compromising operational excellence. During the first quarter of 2025, we continued to make progress on our "sum of the parts" efforts. Our logistics segment (or "Logistics") successfully closed the Gravity Acquisition which includes integrated full-cycle water systems in the Permian Basin, in addition to produced water gathering, and transportation assets in the Bakken, and along with the H2O Midstream Acquisition, provide a strong opportunity for integrated crude and water services to Delek Logistics customers. This acquisition represents another significant step in Delek Logistics' commitment of being a full suite crude, gas and water midstream services provider in the Permian Basin in addition to diversifying our logistics customer base to include more third-party customers. We expect that the Gravity Acquisition will be immediately accretive, delivering incremental contribution margin and cash flows. Subsequent to March 31, 2025, we entered into additional agreements with Delek Logistics which put additional midstream commercial activities in Delek Logistics and bring refining related activities and assets back to the Refining Segment. Additionally, these transactions increase consolidated financial availability by approximately $250 million.

Current wording

Our focus on safe and reliable operations is a pillar which underlines all of our business activities. We continue to identify opportunities to mitigate market risk and focus on efforts that improve our overall cost structure while not compromising operational excellence. During the first half of 2025, we continued to make progress on our "sum of the parts" efforts. Our logistics segment (or "Logistics") successfully closed the Gravity Acquisition which includes integrated full-cycle water systems in the Permian Basin, in addition to produced water gathering, and transportation assets in the Bakken, and along with the H2O Midstream Acquisition, provide a strong opportunity for integrated crude and water services to Delek Logistics customers. This acquisition represents another significant step in Delek Logistics' commitment of being a full suite crude, gas and water midstream services provider in the Permian Basin in addition to diversifying our logistics customer base to include more third-party customers. The Gravity Acquisition has become immediately accretive, delivering incremental contribution margin and cash flows. During the second quarter of 2025, we entered into additional agreements with Delek Logistics which put additional midstream commercial activities in Delek Logistics and will bring refining related activities and assets back to our refining segment (or "Refining"). Additionally, these transactions increased consolidated financial availability by approximately $250 million. Delek Logistics also sold $700.0 million of 7.325% Senior Notes due 2033, at par during the second quarter of 2025. Net proceeds were used to repay a portion of the outstanding borrowings under the Delek Logistics Revolving Facility providing Delek Logistics with $1.1 billion of availability on the facility providing further financial flexibility.

Previous wording

During the first quarter of 2025, the Refining segment continued to navigate a complex landscape including volatile crude oil prices and economic uncertainty. While crack spreads declined compared to the first quarter of 2024, they increased from the 2024 lows experienced toward the end of the year. Our disciplined approach to cost control, coupled with a focus on our enterprise optimization plan ("EOP") margin enhancements, supported EBITDA growth, while our capital deployment remained aligned with our strategic priorities. The domestic West Texas Intermediate ("WTI") differentials compared to Brent continued to be favorable, and the WTI Midland to Cushing differential widened unfavorably during 2025. Though refining margins softened compared to the first quarter of 2024, demand for refined products continues to be strong. Logistics continued to contribute strong results driven by incremental contributions from H2O Midstream and Gravity. We will continue to execute on our priorities of running safe and reliable operations, making further progress on our "sum of the parts" efforts, and delivering shareholder value while maintaining our financial strength and flexibility.

Current wording

During the second quarter of 2025, the Refining segment provided higher margins than the first quarter of 2025 and the prior year second quarter due to increased crack spreads. Crack spreads were higher during the second quarter of 2025 than the prior twelve months. Our disciplined approach to cost control, coupled with a focus on our enterprise optimization plan ("EOP") margin enhancements, supported earnings before interest, taxes, depreciation and amortization ("EBITDA") growth and improved cash flow, while our capital deployment remained aligned with our strategic priorities. The domestic West Texas Intermediate ("WTI") differentials compared to Brent continued to be favorable, and the WTI Midland to Cushing differential contracted favorably during the second quarter of 2025. The increased refining margins compared to the second quarter of 2024 continues to demonstrate that demand for refined products continues to be strong. Logistics continued to contribute strong results driven by incremental contributions from H2O Midstream and Gravity. We will continue to execute on our priorities of running safe and reliable operations, making further progress on our "sum of the parts" efforts, and delivering shareholder value while maintaining our financial strength and flexibility.

Previous wording

The near term economic outlook still has uncertainty with the introduction of widespread tariffs by the U.S., geopolitical instability and commodity market volatility. The uncertainty surrounding trade negotiations and the potential for further expansion of tariffs have contributed to increased market and commodity volatility and potential economic downturns. As a result, we continue to progress our business transformation focused on enterprise-wide opportunities to improve the efficiency of our cost structure. We continued to advance our strategic initiatives aimed at long-term value creation. This includes the progress made on our EOP. During 2024, we announced a new EOP which includes initiatives that are focused on improving our financial health and ability to generate cash flows. The EOP includes leaner costs including lower general and administrative expenses, lower operating expenses specifically at the Big Spring Refinery and Krotz Springs Refinery and lowering interest expense. The EOP also includes stronger margins including accretive minimal capital projects in our Refining segment and commercial improvements including market optionality, improved product slate and optimization. By executing on our initiatives to optimize our cost structure, we are positioning the Company in the event of lower crack spreads and volatility in the commodity markets.

Current wording

The near term economic outlook still has uncertainty with the introduction of widespread tariffs by the U.S., geopolitical instability and commodity market volatility. The uncertainty surrounding trade negotiations and the potential for further expansion of tariffs have contributed to increased market and commodity volatility and potential economic downturns. As a result, we continue to progress our business transformation focused on enterprise-wide opportunities to improve the efficiency of our cost structure. We continued to advance our strategic initiatives aimed at long-term value creation. This includes the progress made on our EOP. During 2024, we announced a new EOP which includes initiatives that are focused on improving our financial health and ability to generate cash flows. The EOP includes leaner costs including lower general and administrative expenses, lower operating expenses specifically at the Big Spring Refinery and Krotz Springs Refinery and lowering interest expense. At the El Dorado Refinery our EOP is focused on margin improvement through enhanced logistics, reduced costs, higher quality product slate, and new products producing higher yields. The EOP also includes stronger margins including accretive minimal capital projects in our Refining segment and commercial improvements including market optionality, improved product slate and optimization. By executing on our initiatives to optimize our cost structure, we are positioning the Company in the event of lower crack spreads and volatility in the commodity markets.

Previous wording

We want to reward our shareholders with a disciplined and balanced capital allocation framework. As we strengthen our relative financial position, we believe a balanced approach between shareholder returns and balance sheet improvement is appropriate. As of March 31, 2025, we returned $47.4 million of capital in 2025 to shareholders through dividends and share buybacks.

Current wording

We want to reward our shareholders with a disciplined and balanced capital allocation framework. As we strengthen our relative financial position, we believe a balanced approach between shareholder returns and balance sheet improvement is appropriate. As of June 30, 2025, we returned $75.8 million of capital in 2025 to shareholders through dividends and share buybacks and returned another $7.9 million through share buybacks in July of 2025.

Previous wording

On May 1, 2025, we transferred the Delek Permian Gathering purchasing and blending business to Delek Logistics (the "DPG Dropdown”). In connection with the DPG Dropdown, Delek Logistics will assume all of the rights and obligations to purchase crude oil under certain contracts associated with Delek Logistics’ existing Midland Gathering System. Total consideration included the execution of the Termination Agreement (as defined below), the execution of the Throughput Agreement (as defined below), the execution of the El Dorado Purchase Agreement” (as defined below) and cancellation of $58.8 million in payables owed to Delek Logistics.

Current wording

On May 1, 2025, we transferred the Delek Permian Gathering purchasing and blending activities to Delek Logistics (the "DPG Dropdown”). In connection with the DPG Dropdown, Delek Logistics will assume all of the rights and obligations to purchase crude oil under certain contracts associated with Delek Logistics’ existing Midland Gathering System. Total consideration included the cancellation of $58.8 million in payables owed to Delek Logistics.

Previous wording

During the second quarter 2024, we realigned our reportable segments for financial reporting purposes to reflect changes in the manner in which our chief operating decision maker, or CODM, assesses financial information for decision-making purposes. The change represents reporting the operating results of our 50% interest in a joint venture that owns asphalt terminals located in the southwestern region of the U.S. within the refining segment. Prior to this change, these operating results were reported as part of corporate, other and eliminations. While this reporting change did not change our consolidated results, segment data for previous years has been restated and is consistent with the current year presentation.

Current wording

During the second quarter of 2024, we realigned our reportable segments for financial reporting purposes to reflect changes in the manner in which our chief operating decision maker, or CODM, assesses financial information for decision-making purposes. The change represents reporting the operating results of our 50% interest in a joint venture that owns asphalt terminals located in the southwestern region of the U.S. within the refining segment. Prior to this change, these operating results were reported as part of corporate, other and eliminations. While this reporting change did not change our consolidated results, segment data for previous years has been restated and is consistent with the current year presentation.

Previous wording

(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 West Texas Intermediate ("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.

Current wording

(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.

Previous wording

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, New Mexico and North Dakota for our refining segment and third parties. It is comprised of the consolidated balance sheet and results of operations of Delek Logistics (NYSE: DKL), where we owned a 63.4% interest at March 31, 2025. Delek Logistics was formed by Delek in 2012 to own, operate, acquire and construct crude oil and refined products logistics and marketing assets. 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. In addition, this segment also includes water disposal and recycling operations, located in the Delaware Basin of New Mexico, the Midland Basin of Texas and the Bakken. The storage and transportation business owns or leases associated crude oil storage tanks. The logistics segment has an aggregate of approximately 11.2 million barrels of active shell capacity. It also owns and operates nine light product terminals and markets light products using third-party terminals. Logistics has strategic investments in pipeline joint ventures that provide access to pipeline capacity as well as the potential for earnings from joint venture operations. The logistics segment owns or leases approximately 161 tractors and 306 trailers used to haul primarily crude oil and other products for related and third parties.

Current wording

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, New Mexico and North Dakota for our refining segment and third parties. It is comprised of the consolidated balance sheet and results of operations of Delek Logistics (NYSE: DKL), where we owned a 63.3% interest at June 30, 2025. Delek Logistics was formed by Delek in 2012 to own, operate, acquire and construct crude oil and refined products logistics and marketing assets. 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. In addition, this segment also includes water disposal and recycling operations, located in the Delaware Basin of New Mexico, the Midland Basin of Texas and the Bakken Basin of North Dakota. The storage and transportation business owns or leases associated crude oil storage tanks. The logistics segment has an aggregate of approximately 11.2 million barrels of active shell capacity. It also owns and operates nine light product terminals and markets light products using third-party terminals. Logistics has strategic investments in pipeline joint ventures that provide access to pipeline capacity as well as the potential for earnings from joint venture operations. The logistics segment owns or leases approximately 161 tractors and 306 trailers used to haul primarily crude oil and other products for related and third parties.

Previous wording

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. More consolidation in our industry is expected from increased cost pressures due in part to the regulatory environment continuing to move towards reducing carbon emissions and transitioning to renewable energy in the long-term. However, we believe we are uniquely positioned as a leader in operating and excelling in niche markets and could continue capitalizing on our niche position by being the supplier of choice in our markets.

Current wording

It is vitally important that our strategic objectives, especially in view of the evolutionary direction of our macroeconomic and geopolitical environment, involve a process of continuous evaluation of our business model in terms of cost structure, as well as long-term economic and operational sustainability. More consolidation in our industry is expected from increased cost pressures due in part to the regulatory environment continuing to move towards reducing carbon emissions and transitioning to renewable energy in the long-term. However, we believe we are uniquely positioned as a leader in operating and excelling in niche markets and could continue capitalizing on our niche position by being the supplier of choice in our markets.

Previous wording

•Execute on our strategic initiatives, which may include opportunities to monetize our investment in Delek Logistics. The goal being, to help unlock value embedded in the Delek valuation, along with deconsolidating Delek Logistics by bringing Delek's ownership in Delek Logistics below 50%.

Current wording

•Execute on our strategic initiatives, which may include opportunities to monetize our investment in Delek Logistics. The goal being to help unlock value embedded in the Delek valuation, along with deconsolidating Delek Logistics by reducing Delek's ownership in Delek Logistics.

Previous wording

We have positioned the Company to continue to run safely, reliably and environmentally responsibly while leveraging our Delek Logistics business. Many uncertainties remain in 2025 with respect to the global supply and demand of the crude oil and refined products markets and it is difficult to predict the ultimate economic impacts this may have on our operations. We expect refining capacity rationalization to lower refined products inventory and crude oil demand to continue to rise. These factors will help absorb the recent additions in global supply and balance the

Current wording

We have positioned the Company to continue to run safely, reliably and environmentally responsibly while leveraging our Delek Logistics business. Crack spreads have increased two consecutive quarters since Q4 2024 providing the highest crack spreads since the first quarter of 2024. Many uncertainties remain in 2025 with respect to the global supply and demand of the crude oil and refined products markets and it is difficult to predict the ultimate economic impacts this may have on our operations. We expect refining capacity rationalization to lower refined products inventory and crude oil demand to continue to rise. These factors will help absorb the recent additions in global supply and balance the market over the next 6 to 12 months. However, U.S. policy changes and escalating conflicts in the Middle East could potentially result in supply disruptions or further volatility in crude oil prices.

Previous wording

The table below reflects the quarterly average prices of WTI Midland and WTI Cushing crude oil for each of the quarterly periods in 2024 and for the first quarterly period in 2025.

Current wording

The table below reflects the quarterly average prices of WTI Midland and WTI Cushing crude oil for each of the quarterly periods in 2024 and for the two quarterly periods in 2025.

Previous wording

The chart below illustrates the key differentials impacting our refining operations, including WTI Cushing to Brent, WTI Midland to WTI Cushing, and Louisiana Light Sweet crude oil ("LLS") to WTI Cushing for each of the quarterly periods in 2024 and for the first quarterly period in 2025.

Current wording

The chart below illustrates the key differentials impacting our refining operations, including WTI Cushing to Brent, WTI Midland to WTI Cushing, and Louisiana Light Sweet crude oil ("LLS") to WTI Cushing for each of the quarterly periods in 2024 and for the two quarterly periods in 2025.

Previous wording

The charts below illustrate the quarterly average prices of Gulf Coast Gasoline ("CBOB"), U.S. High Sulfur Diesel ("HSD") and U.S. Ultra Low Sulfur Diesel ("ULSD") for each of the quarterly periods in 2024 and for the first quarterly period in 2025.

Current wording

The charts below illustrate the quarterly average prices of Gulf Coast Gasoline ("CBOB"), U.S. High Sulfur Diesel ("HSD") and U.S. Ultra Low Sulfur Diesel ("ULSD") for each of the quarterly periods in 2024 and for the two quarterly periods in 2025.

Previous wording

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 in 2024 and for the first quarterly period in 2025.

Current wording

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 in 2024 and for the two quarterly periods in 2025.

Previous wording

The chart below illustrates the volatility in RINs for each of the quarterly periods in 2024 and for the first quarterly period in 2025.

Current wording

The chart below illustrates the volatility in RINs for each of the quarterly periods in 2024 and for the two quarterly periods in 2025.

Previous wording

Energy costs are a significant element of our refining segment's earnings before interest, taxes, depreciation and amortization ("EBITDA") ("Refining EBITDA") and can significantly impact our ability to capture crack spreads, with natural gas representing the largest component. Natural gas prices are driven by supply-side factors such as amount of natural gas production, level of natural gas in storage and import and export activity, while demand-side factors include variability of weather, economic growth and the availability and price of other fuels. Refiners and other large-volume fuel consumers may be more or less susceptible to volatility in natural gas prices depending on their consumption levels as well as their capabilities to switch to more economical sources of fuel/energy. Additionally, geographic location of facilities make consumers vulnerable to price differentials of natural gas available at different supply hubs. Within Delek’s geographic footprint, we source the majority of our natural gas from the Gulf Coast, and secondarily from the Permian, coinciding with the physical locations of our refineries. We manage our risk around natural gas prices by entering into variable and fixed-price supply contracts in both the Gulf and Permian Basin or by entering into derivative hedges based on forecasted consumption and forward curve prices, as appropriate, in accordance with our risk policy.

Current wording

Energy costs are a significant element of our refining segment's earnings before interest, taxes, depreciation and amortization ("Refining EBITDA") and can significantly impact our ability to capture crack spreads, with natural gas representing the largest component. Natural gas prices are driven by supply-side factors such as the amount of natural gas production, level of natural gas in storage and import and export activity, while demand-side factors include variability of weather, economic growth and the availability and price of other fuels. Refiners and other large-volume fuel consumers may be more or less susceptible to volatility in natural gas prices depending on their consumption levels as well as their capabilities to switch to more economical sources of fuel/energy. Additionally, geographic location of facilities makes consumers vulnerable to price differentials of natural gas available at different supply hubs. Within Delek’s geographic footprint, we source the majority of our natural gas from the Gulf Coast, and secondarily from the Permian, coinciding with the physical locations of our refineries. We manage our risk around natural gas prices by entering into variable and fixed-price supply contracts in both the Gulf and Permian Basin or by entering into derivative hedges based on forecasted consumption and forward curve prices, as appropriate, in accordance with our risk policy.

Previous wording

The chart below illustrates the quarterly average prices of Waha (Permian Basin) and Henry Hub (Gulf Coast) per million British Thermal Units ("MMBtu") for each of the quarterly periods in 2024 and for the first quarterly period in 2025.

Current wording

The chart below illustrates the quarterly average prices of Waha (Permian Basin) and Henry Hub (Gulf Coast) per million British Thermal Units ("MMBtu") for each of the quarterly periods in 2024 and for the two quarterly periods in 2025.

Previous wording

Reconciliation of segment EBITDA to net (loss) income attributable to Delek (in millions)

Current wording

Reconciliation of segment EBITDA to net loss attributable to Delek (in millions)

Previous wording

Consolidated Results of Operations — Comparison of the Three Months Ended March 31, 2025 versus the Three Months Ended March 31, 2024

Current wording

Consolidated Results of Operations — Comparison of the Three and Six Months Ended June 30, 2025 versus the Three and Six Months Ended June 30, 2024

Previous wording

Consolidated net loss for the three months ended March 31, 2025 was $158.5 million compared to a net loss of $25.2 million for the three months ended March 31, 2024. Consolidated net loss attributable to Delek for the three months ended March 31, 2025 was $172.7 million, or $(2.78) per basic share, compared to a loss of $32.6 million, or $(0.51) per basic share, for the three months ended March 31, 2024. Explanations for significant drivers impacting net loss as compared to the comparable period of the prior year are discussed in the sections below.

Current wording

Consolidated net loss for the six months ended June 30, 2025 was $248.6 million compared to a net loss of $51.3 million for the six months ended June 30, 2024. Consolidated net loss attributable to Delek for the six months ended June 30, 2025 was $279.1 million, or $(4.55) per basic share, compared to a loss of $69.8 million, or $(1.09) per basic share, for the six months ended June 30, 2024. Explanations for significant drivers impacting net loss as compared to the comparable period of the prior year are discussed in the sections below.

Previous wording

We generated net revenues of $2,641.9 million and $3,128.0 million during the three months ended March 31, 2025 and 2024, respectively, a decrease of $486.1 million, or 15.5%. The decrease in net revenues was primarily due to the following:

Current wording

We generated net revenues of $5,406.5 million and $6,436.1 million during the six months ended June 30, 2025 and 2024, respectively, a decrease of $1,029.6 million, or 16.0%. The decrease in net revenues was primarily due to the following:

Previous wording

•in our refining segment, decreases in the average price of U.S. Gulf Coast gasoline of 10.8% and ULSD of 12.6% and decreased sales volumes (including purchased products), partially offset by an increase in the average price of U.S. Gulf Coast HSD of 8.7%; and

Current wording

•in our refining segment, decreases in the average price of U.S. Gulf Coast gasoline of 13.3% and ULSD of 13.4% and decreased sales volumes (including purchased products), partially offset by an increase in the average price of U.S. Gulf Coast HSD of 3.1%; and

Previous wording

•incremental expenses associated with the H2O Midstream Acquisition and Gravity Acquisition; and

Current wording

•incremental costs associated with the H2O Midstream Acquisition and Gravity Acquisition; and

Previous wording

Cost of materials and other was $2,399.5 million for the three months ended March 31, 2025, compared to $2,732.9 million for three months ended March 31, 2024, a decrease of $333.4 million, or 12.2%. The net decrease in cost of materials and other primarily related to the following:

Current wording

Cost of materials and other was $4,814.5 million for the six months ended June 30, 2025, compared to $5,758.4 million for six months ended June 30, 2024, a decrease of $943.9 million, or 16.4%. The net decrease in cost of materials and other primarily related to the following:

Previous wording

•a decrease in the cost of crude oil feedstocks at the refineries, including a 7.2% decrease in the average cost of WTI Cushing crude oil and a 7.7% decrease in the average cost of WTI Midland crude oil and decreased sales volume (including purchased products).

Current wording

•a decrease in the cost of crude oil feedstocks at the refineries, including a 14.4% decrease in the average cost of WTI Cushing crude oil and a 14.6% decrease in the average cost of WTI Midland crude oil and decreased sales volume (including purchased products).

Previous wording

•an increase in maintenance costs.

Current wording

•an increase in maintenance costs; and

Previous wording

Operating expenses (included in both cost of sales and other operating expenses) were $212.4 million for the three months ended March 31, 2025 compared to $214.9 million in three months ended March 31, 2024, a decrease of $2.5 million, or 1.2%. The decrease in operating expenses was primarily driven by the following:

Current wording

Operating expenses (included in both cost of sales and other operating expenses) were $424.4 million for the six months ended June 30, 2025 compared to $400.9 million in six months ended June 30, 2024, an increase of $23.5 million, or 5.9%. The increase in operating expenses was primarily driven by the following:

Previous wording

Depreciation and amortization (included in both cost of sales and other operating expenses) was $101.3 million for the three months ended March 31, 2025 compared to $91.7 million in 2024, an increase of $9.6 million, or 10.5%. The increase was a result of a general increase in our fixed asset base due to capital projects and turnarounds completed and depreciation and amortization attributable to the H2O Midstream Acquisition and Gravity Acquisition.

Current wording

Depreciation and amortization (included in both cost of sales and other operating expenses) was $195.4 million for the six months ended June 30, 2025 compared to $180.1 million in 2024, an increase of $15.3 million, or 8.5%. The increase was a result of a general increase in our fixed asset base due to capital projects and turnarounds completed and depreciation and amortization attributable to the H2O Midstream Acquisition and Gravity Acquisition.

Previous wording

Other operating income, net was $7.0 million and $1.7 million for the three months ended March 31, 2025 and 2024, respectively, an increase of $5.3 million. The increase was primarily driven by the following:

Current wording

Other operating income, net was $6.6 million and $80.4 million for the six months ended June 30, 2025 and 2024, respectively, a decrease of $73.8 million. The decrease was primarily driven by the following:

Previous wording

This increase was partially offset by the following:

Current wording

The increase was partially offset by the following:

Previous wording

•an increase in net average borrowings outstanding (including the obligations under the inventory intermediation agreement which has an associated interest charge) of approximately $322.9 million during the three months ended March 31, 2025 (calculated as a simple average of beginning borrowings/obligation and ending borrowings/obligation for the period) compared to the three months ended March 31, 2024; and

Current wording

•an increase in net average borrowings outstanding (including the obligations under the inventory intermediation agreement which has an associated interest charge) of approximately $360.9 million during the six months ended June 30, 2025 (calculated as a simple average of beginning borrowings/obligation and ending borrowings/obligation for the period) compared to the six months ended June 30, 2024; and

Previous wording

•a decrease in the average effective interest rate of 170 basis points during the three months ended March 31, 2025 compared to the three months ended March 31, 2024 (where effective interest rate is calculated as interest expense divided by the net average borrowings/obligations outstanding).

Current wording

•a decrease in the average effective interest rate of 131 basis points during the six months ended June 30, 2025 compared to the six months ended June 30, 2024 (where effective interest rate is calculated as interest expense divided by the net average borrowings/obligations outstanding).

Previous wording

•a decrease in income from our investment in W2W Holdings LLC to $5.4 million during the three months ended March 31, 2025 from $9.4 million in the three months ended March 31, 2024; and

Current wording

•a decrease in income from our investment in W2W Holdings LLC to $5.9 million during the three months ended June 30, 2025 from $10.6 million in the three months ended June 30, 2024; and

Previous wording

•a decrease in income from our investment in Red River Pipeline Company LLC to $2.3 million during the three months ended March 31, 2025 from $5.2 million in the three months ended March 31, 2024.

Current wording

•a decrease in income from our investment in Red River Pipeline Company LLC to $2.8 million during the three months ended June 30, 2025 from $5.5 million in the three months ended June 30, 2024.

Previous wording

We recognized income from equity method investments of $13.3 million for the three months ended March 31, 2025, compared to $21.9 million for the three months ended March 31, 2024, a decrease of $8.6 million. This decrease was primarily driven by the following:

Current wording

We recognized income from equity method investments of $35.5 million for the six months ended June 30, 2025, compared to $52.3 million for the six months ended June 30, 2024, a decrease of $16.8 million. This decrease was primarily driven by the following: