Company: DK
Filing Date: 2025-08-06
Form Type: 10-Q
Source: 0001694426-25-000112
Chunk: 114

Company: Delek US Holdings, Inc.
Filing Date: 2025-08-06
Form: 10-Q
Item: Part I, Item 2
Chunk 114
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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, disposal and recycling.

Business and Economic Environment Overview

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.

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