Delek Logistics

3 Months Ended

Mar. 31, 2022

Delek Logistics and the Alon Partnership

Delek Logistics

Delek Logistics is a publicly traded limited partnership that was formed by Delek in 2012 to own, operate, acquire and construct crude oil and refined products logistics and marketing assets. A substantial majority of Delek Logistics' assets are integral to Delek’s refining and marketing operations. As of March 31, 2022, we owned a 78.9% interest in Delek Logistics, consisting of 34,311,278 common limited partner units and the non-economic general partner interest. The limited partner interests in Delek Logistics not owned by us are reflected in net income attributable to non-controlling interest in the accompanying condensed consolidated statements of income and in non-controlling interest in subsidiaries in the accompanying condensed consolidated balance sheets.

On April 14, 2022, Delek Logistics filed a shelf registration statement with the SEC registering for the potential sale, from time to time by Delek Logistics, of up to $200.0 million of common limited partner units of Delek Logistics.

On December 20, 2021, Delek commenced a program to sell up to 434,590 common limited partner units representing limited partner interests in Delek Logistics over the next three months in open market transactions conducted pursuant to Rule 144 under the Securities Act of 1933, as amended, and a Rule 10b5-1 trading plan all of which were sold as of March 18, 2022. For the three months ended March 31, 2022, we sold 385,522 units for gross proceeds of $16.4 million; $13.6 million net of taxes.

In August 2020, Delek Logistics filed a shelf registration statement, which subsequently became effective, with the SEC for the proposed re-sale or other disposition from time to time by Delek of up to 14.0 million common limited partner units representing our limited partner interests in Delek Logistics. No units were sold as of March 31, 2022.

We have agreements with Delek Logistics that, among other things, establish fees for certain administrative and operational services provided by us and our subsidiaries to Delek Logistics, provide certain indemnification obligations and establish terms for fee-based commercial logistics and marketing services provided by Delek Logistics and its subsidiaries to us. The revenues and expenses associated with these agreements are eliminated in consolidation.

Delek Logistics is a VIE, as defined under GAAP, and is consolidated into our condensed consolidated financial statements, representing our logistics segment. The assets of Delek Logistics can only be used to settle its own obligations and its creditors have no recourse to our assets. Exclusive of intercompany balances and the marketing agreement intangible asset between Delek Logistics and Delek which are

eliminated in consolidation, the Delek Logistics condensed consolidated balance sheets as presented below are included in the condensed consolidated balance sheets of Delek (unaudited, in millions).



	March 31, 2022		December 31, 2021
ASSETS
Cash and cash equivalents	$	2.7	$	4.3
Accounts receivable	20.4		15.4
Accounts receivable from related parties	—		—
Inventory	1.8		2.4
Other current assets	1.5		1.0
Property, plant and equipment, net	448.3		449.4
Equity method investments	249.9		250.0
Operating lease right-of-use assets	19.1		20.9
Goodwill	12.2		12.2
Intangible assets, net	154.5		153.9
Other non-current assets	24.9		25.6
Total assets	$	935.3	$	935.1
LIABILITIES AND DEFICIT
Accounts payable	$	12.6	$	8.2
Accounts payable to related parties	50.3		64.4

Current portion of operating lease liabilities	6.7		6.8
Accrued expenses and other current liabilities	26.7		17.4
Long-term debt	905.5		899.0
Asset retirement obligations	6.6		6.5

Operating lease liabilities, net of current portion	12.4		14.1
Other non-current liabilities	21.0		22.7
Deficit	(106.5)		(104.0)
Total liabilities and deficit	$	935.3	$	935.1