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Delek US Holdings Reports Record Net Income For Third Quarter 2012

Investors are cautioned that the following important factors, among others, may affect these forward-looking statements. These factors include but are not limited to: risks and uncertainties with the respect to the quantities and costs of crude oil, the costs to acquire feedstocks and the price of the refined petroleum products we ultimately sell; management's ability to execute its strategy through acquisitions and transactional risks in acquisitions; our competitive position and the effects of competition; the projected growth of the industry in which we operate; changes in the scope, costs, and/or timing of capital projects; losses from derivative instruments; general economic and business conditions, particularly levels of spending relating to travel and tourism or conditions affecting the southeastern United States; potential conflicts of interest between our majority stockholder and other stockholders; and other risks contained in our filings with the United States Securities and Exchange Commission.

Forward-looking statements should not be read as a guarantee of future performance or results and will not be accurate indications of the times at, or by which such performance or results will be achieved. Forward-looking information is based on information available at the time and/or management's good faith belief with respect to future events, and is subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in the statements. Delek US undertakes no obligation to update or revise any such forward-looking statements.

       

Delek US Holdings, Inc.

 

Condensed Consolidated Balance Sheets (Unaudited)

 
September 30, 2012 December 31, 2011
(In millions, except share

and per share data)

ASSETS
Current assets:
Cash and cash equivalents $ 317.8 $ 225.9
Accounts receivable 284.9 277.1
Inventory 423.7 508.0
Other current assets 35.3   39.6  
Total current assets 1,061.7   1,050.6  
Property, plant and equipment:
Property, plant and equipment 1,415.6 1,317.3
Less: accumulated depreciation (316.5 ) (263.5 )
Property, plant and equipment, net 1,099.1   1,053.8  
Goodwill 69.7 69.7
Other intangibles, net 14.3 17.5
Other non-current assets 34.7   39.0  
Total assets $ 2,279.5   $ 2,230.6  
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable $ 525.2 $ 521.1
Current portion of long-term debt and capital lease obligations 52.6 68.2
Current portion of notes payable to related party 6.0
Obligation under Supply and Offtake Agreement 183.6 298.6
Accrued expenses and other current liabilities 107.7   100.8  
Total current liabilities 869.1   994.7  
Non-current liabilities:
Long-term debt and capital lease obligations, net of current portion 320.0 297.9
Notes payable to related party 60.5
Environmental liabilities, net of current portion 10.1 9.7
Asset retirement obligations 8.2 7.9
Deferred tax liabilities 188.4 168.1
Other non-current liabilities 31.3   38.2  
Total non-current liabilities 558.0   582.3  
Shareholders’ equity:
Preferred stock, $0.01 par value, 10,000,000 shares authorized, no shares issued and outstanding
Common stock, $0.01 par value, 110,000,000 shares authorized, 59,491,002 shares and 58,036,427 shares issued and outstanding at September 30, 2012 and December 31, 2011, respectively 0.6 0.6
Additional paid-in capital 364.0 356.9
Accumulated other comprehensive income (2.9 ) 1.8
Retained earnings 490.7 294.1
Non-controlling interest in subsidiaries   0.2  
Total shareholders’ equity 852.4   653.6  
Total liabilities and shareholders’ equity $ 2,279.5   $ 2,230.6  
         

Delek US Holdings, Inc.

 

Condensed Consolidated Statements of Income (Unaudited)

 
Three Months Ended Nine Months Ended
September 30, September 30,
2012     2011 2012     2011
(Revised) (Revised)
(In millions, except share and per share data)
Net sales $ 2,237.6 $ 2,205.0 $ 6,542.2 $ 5,197.2
Operating costs and expenses:
Cost of goods sold 1,935.8 1,923.3 5,771.9 4,558.5
Operating expenses 92.8 94.8 267.3 238.2
General and administrative expenses 23.0 18.8 74.7 61.9
Depreciation and amortization 20.6 19.4 61.2 53.3
(Gain) loss on sale of assets (0.1 ) 0.6   (0.1 ) 2.6  
Total operating costs and expenses 2,072.1   2,056.9   6,175.0   4,914.5  
Operating income 165.5   148.1   367.2   282.7  
Interest expense 11.2 16.4 35.9 38.7
Interest income (0.1 ) (0.1 )
Gain on investment in Lion Oil   (3.7 )   (12.9 )
Total non-operating expenses 11.1   12.7   35.8   25.8  
Income before income taxes 154.4 135.4 331.4 256.9
Income tax expense 54.1   47.0   117.1   87.5  
Net income 100.3 88.4 214.3 169.4
Net income attributed to non-controlling interest   3.1     5.1  
Net income attributable to Delek $ 100.3   $ 85.3   $ 214.3   $ 164.3  
Basic earnings per share $ 1.70   $ 1.47   $ 3.67   $ 2.93  
Diluted earnings per share $ 1.67   $ 1.46   $ 3.62   $ 2.91  
Weighted average common shares outstanding:
Basic 58,979,301   57,973,790   58,448,063   56,122,544  
Diluted 60,146,933   58,579,804   59,275,861   56,474,636  
Dividends declared per common share outstanding $ 0.1375   $ 0.0375   $ 0.4025   $ 0.1125  
 
Delek US Holdings, Inc.
Condensed Consolidated Statements of Cash Flows (Unaudited)
(In millions)
                 

Nine Months Ended

September 30,

2012   2011
Cash Flow Data
Cash flows provided by operating activities: $ 270.9 $ 24.5
Cash flows used in investing activities: (107.6 ) (126.9 )
Cash flows provided by (used in) financing activities: (71.4 ) 272.0  
Net increase in cash and cash equivalents $ 91.9   $ 169.6  
 
Delek US Holdings, Inc.
Segment Data
(In millions)
 
    Three Months Ended September 30, 2012
  Refining     Retail     Marketing    

Corporate, Other and

Eliminations

    Consolidated
Net sales (excluding intercompany fees and sales) $ 1,540.8 $ 495.5 $ 201.2 $ 0.1 $ 2,237.6
Intercompany fees and sales 32.0 65.9 (97.9 )
Operating costs and expenses:
Cost of goods sold 1,322.4 450.6 255.3 (92.5 ) 1,935.8
Operating expenses 61.0   33.9   2.1   (4.2 ) 92.8  
Segment contribution margin $ 189.4   $ 11.0   $ 9.7   $ (1.1 ) 209.0  
General and administrative expenses 23.0
Depreciation and amortization 20.6
Gain on sale of assets (0.1 )
Operating income $ 165.5  
Total assets $ 1,602.5   $ 420.8   $ 188.4   $ 67.8   $ 2,279.5  

Capital spending (excluding business combinations)

$ 15.7   $ 6.4   $ 0.2   $ 7.5   $ 29.8  
   
Three Months Ended September 30, 2011
  Refining     Retail     Marketing    

Corporate, Other and

Eliminations

    Consolidated
(Revised)
Net sales (excluding intercompany fees and sales) $ 1,516.4 $ 499.4 $ 188.7 $ 0.5 $ 2,205.0
Intercompany fees and sales 18.0 6.3 (24.3 )
Operating costs and expenses:
Cost of goods sold 1,308.4 449.2 187.2 (21.5 ) 1,923.3
Operating expenses 61.7   34.6   1.0   (2.5 ) 94.8
Segment contribution margin $ 164.3   $ 15.6   $ 6.8   $ 0.2   186.9
General and administrative expenses 18.8
Depreciation and amortization 19.4
Loss on sale of assets 0.6
Operating income $ 148.1
Total assets $ 1,476.7   $ 405.1   $ 72.9   $ 59.5   $ 2,014.2
Capital spending (excluding business combinations) $ 12.1   $ 10.1   $ 0.1   $ 2.2   $ 24.5
   
Nine Months Ended September 30, 2012
  Refining     Retail     Marketing    

Corporate, Other and

Eliminations

    Consolidated
Net sales (excluding intercompany fees and sales) $ 4,533.9 $ 1,427.3 $ 581.8 $ (0.8 ) $ 6,542.2
Intercompany fees and sales 116.8 179.3 (296.1 )
Operating costs and expenses:
Cost of goods sold 4,036.9 1,294.8 729.8 (289.6 ) 5,771.9
Operating expenses 175.2   96.0   6.0   (9.9 ) 267.3  
Segment contribution margin $ 438.6   $ 36.5   $ 25.3   $ 2.6   503.0  
General and administrative expenses 74.7
Depreciation and amortization 61.2
Gain on sale of assets (0.1 )
Operating income $ 367.2  
Capital spending (excluding business combinations) $ 49.7   $ 17.6   $ 0.6   $ 12.3   $ 80.2  
   
Nine Months Ended September 30, 2011
  Refining     Retail     Marketing    

Corporate, Other and

Eliminations

    Consolidated
(Revised)
Net sales (excluding intercompany fees and sales) $ 3,253.0 $ 1,410.5 $ 533.2 $ 0.5 $ 5,197.2
Intercompany fees and sales 28.4 16.7 (45.1 )
Operating costs and expenses:
Cost of goods sold 2,799.8 1,272.3 526.2 (39.8 ) 4,558.5
Operating expenses 140.7   101.5   3.5   (7.5 ) 238.2
Segment contribution margin $ 340.9   $ 36.7   $ 20.2   $ 2.7   400.5
General and administrative expenses 61.9
Depreciation and amortization 53.3
Loss on sale of assets 2.6
Operating income $ 282.7
Capital spending (excluding business combinations) $ 21.1   $ 26.3   $ 0.1   $ 2.6   $ 50.1
       

Refining Segment

Three Months Ended

September 30,

Nine Months Ended

September 30,

2012     2011 2012     2011
Tyler Refinery
Days operated in period 92 92 274 273
Total sales volume (average barrels per day) (1) 62,467 59,920 59,329 59,446
Products manufactured (average barrels per day):
Gasoline 32,444 30,802 31,202 31,483
Diesel/Jet 22,849 22,798 21,538 22,360
Petrochemicals, LPG, NGLs 2,868 2,704 2,422 2,270
Other 2,007   2,525   1,980   2,458
Total production 60,168   58,829   57,142   58,571
Throughput (average barrels per day):
Crude oil 60,092 57,625 55,246 55,767
Other feedstocks 497   2,187   2,379   3,674
Total throughput 60,589   59,812   57,625   59,441
Per barrel of sales:
Tyler refining margin $ 21.98 $ 23.47 $ 20.60 $ 20.12
Tyler refining margin excluding intercompany marketing service fee $ 22.47 $ 24.14 $ 21.17 $ 20.68
Direct operating expenses $ 5.37 $ 5.33 $ 5.62 $ 5.51
       

Three Months Ended

September 30,

Nine Months Ended

September 30,

2012     2011 2012     2011
(Revised) (Revised)
El Dorado Refinery
Days operated in period 92 92 274 155
Total sales volume (average barrels per day) (1) 84,168 82,317 84,145 76,426
Products manufactured (average barrels per day):
Gasoline 30,514 34,115 31,849 31,561
Diesel 27,484 28,001 27,832 26,151
Petrochemicals, LPG, NGLs 1,198 1,348 1,303 1,315
Asphalt 8,489 18,095 9,483 15,517
Other (589 ) 3,706   928   3,224
Total production 67,096   85,265   71,395   77,768
Throughput (average barrels per day):
Crude oil 62,592 79,761 66,106 72,283
Other feedstocks 7,165   6,305   6,755   6,338
Total throughput 69,757   86,066   72,861   78,621
Per barrel of sales:
El Dorado refining margin $ 16.03 $ 12.77 $ 12.10 $ 13.11
Direct operating expenses $ 3.89 $ 4.27 $ 3.64 $ 4.34
Pricing statistics (average for the period presented):
WTI — Cushing crude oil (per barrel) $ 92.29 $ 89.59 $ 96.21 $ 95.45
Mars crude oil (per barrel) (2) $ 104.37 $ 109.45 $ 107.91 $ 110.67
US Gulf Coast 5-3-2 crack spread (per barrel) $ 29.96 $ 30.80 $ 26.43 $ 23.87
US Gulf Coast Unleaded Gasoline (per gallon) $ 2.87 $ 2.81 $ 2.87 $ 2.80
Ultra low sulfur diesel (per gallon) $ 3.07 $ 3.01 $ 3.06 $ 2.97
Natural gas (per MMBTU) $ 2.88 $ 4.12 $ 2.54 $ 4.22
     

Marketing Segment

Three Months Ended

September 30,

 

Nine Months Ended

September 30,

2012   2011   2012   2011
Days operated in period 92 92 274 273
Products sold (average barrels per day): (1)
Gasoline 7,055 7,385 7,089 6,704
Diesel 9,612 8,711 9,105 8,796
Other 48   43   63   45
Total sales 16,715   16,139   16,257   15,545
       

Retail Segment

Three Months Ended

September 30,

Nine Months Ended

September 30,

2012     2011 2012     2011
Number of stores (end of period) 372 384 372 384
Average number of stores 373 389 374 398
Retail fuel sales (thousands of gallons) 106,379 106,518 303,496 305,949
Average retail gallons per average number of stores (in thousands) 285 274 811 769
Retail fuel margin ($ per gallon) $ 0.139 $ 0.188 $ 0.148 $ 0.167
Merchandise sales (in thousands) $ 100,020 $ 100,639 $ 287,777 $ 284,065
Merchandise sales per average number of stores (in thousands) $ 268 $ 259 $ 769 $ 714
Merchandise margin % 28.6 % 29.0 % 29.2 % 30.0 %
Credit expense (% of gross margin) 12.1 % 11.4 % 11.7 % 11.6 %
Operating expense/merchandise sales plus total gallons 15.8 % 16.1 % 15.6 % 16.6 %
Change in same-store fuel gallons sold (0.8 )% 3.2 % 0.8 %
Change in same-store merchandise sales 0.5 % 2.4 % 4.0 % 2.3 %
 

(1)

Sales volume includes 2,674 bpd and 3,238 bpd sold to the marketing and retail segments during the three and nine months ended September 30, 2012 and 1,678 bpd and 1,640 bpd during the three and nine months ended September 30, 2011, respectively.

(2)

Average for the period April 29, 2011 through June 30, 2011.





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