Company: DK
Filing Date: 2025-05-07
Form Type: 10-Q
Source: 0001694426-25-000060
Chunk: 111

Company: Delek US Holdings, Inc.
Filing Date: 2025-05-07
Form: 10-Q
Item: Part I, Item 8
Chunk 111
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ting RINs inventory on hand or effective economic hedges through net forward purchase commitments. RINs prices are highly sensitive to regulatory and political influence and conditions, and therefore often do not correlate to movements in crude oil prices, refined product prices or crack spreads. 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 for each of the quarterly periods in 2024 and for the first quarterly period in 2025. 

Energy Costs

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. 

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.

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Management's Discussion and Analysis

Non-GAAP Measures

Our management uses certain non-Generally Accepted Accounting Principles (“non-GAAP”) operational measures to evaluate our operating segment performance and non-GAAP financial measures to evaluate past performance and prospects for the future to supplement our GAAP financial information presented in accordance