þ
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the quarterly period ended June 30, 2017
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the transition period from to
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Delaware
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35-2581557
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(State or other jurisdiction of
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(I.R.S. Employer
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incorporation or organization)
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Identification No.)
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7102 Commerce Way
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Brentwood, Tennessee
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37027
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(Address of principal executive offices)
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(Zip Code)
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Large accelerated filer
þ
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Accelerated filer
o
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Non-accelerated filer
o
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Smaller reporting company
o
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Emerging growth company
o
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(Do not check if a smaller reporting company)
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Exhibit 3.1
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Exhibit 3.2
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Exhibit 3.3
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Exhibit 10.1
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Exhibit 10.2
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Exhibit 10.3
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Exhibit 31.1
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Exhibit 31.2
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Exhibit 32.1
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Exhibit 32.2
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EX-101 INSTANCE DOCUMENT
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EX-101 SCHEMA DOCUMENT
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EX-101 CALCULATION LINKBASE DOCUMENT
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EX-101 LABELS LINKBASE DOCUMENT
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EX-101 PRESENTATION LINKBASE DOCUMENT
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Item 1.
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Financial Statements
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June 30, 2017
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December 31, 2016
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ASSETS
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Current assets:
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Cash and cash equivalents
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$
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572.3
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$
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689.2
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Accounts receivable
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284.0
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265.9
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Accounts receivable from related party
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4.0
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0.1
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Inventories, net of inventory valuation reserves
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377.4
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392.4
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Other current assets
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74.0
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49.3
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Total current assets
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1,311.7
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1,396.9
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Property, plant and equipment:
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Property, plant and equipment
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1,619.1
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1,587.6
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Less: accumulated depreciation
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(540.5
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)
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(484.3
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)
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Property, plant and equipment, net
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1,078.6
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1,103.3
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Goodwill
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12.2
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12.2
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Other intangibles, net
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27.0
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26.7
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Equity method investments
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357.3
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360.0
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Other non-current assets
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89.7
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80.7
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Total assets
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$
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2,876.5
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$
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2,979.8
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LIABILITIES AND STOCKHOLDERS’ EQUITY
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||||
Current liabilities:
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||||
Accounts payable
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$
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470.4
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$
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494.6
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Accounts payable to related party
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3.8
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1.8
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Current portion of long-term debt
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91.4
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84.4
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Obligation under Supply and Offtake Agreement
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145.4
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124.6
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Accrued expenses and other current liabilities
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164.8
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229.8
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Total current liabilities
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875.8
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935.2
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Non-current liabilities:
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Long-term debt, net of current portion
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731.1
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748.5
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Environmental liabilities, net of current portion
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5.8
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6.2
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Asset retirement obligations
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5.4
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5.2
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Deferred tax liabilities
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74.8
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76.2
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Other non-current liabilities
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32.2
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26.0
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Total non-current liabilities
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849.3
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862.1
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Stockholders’ equity:
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||||
Preferred stock, $0.01 par value, 10,000,000 shares authorized, no shares issued and outstanding
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—
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—
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Common stock, $0.01 par value, 110,000,000 shares authorized, 67,350,767 shares and 67,150,352 shares issued at June 30, 2017 and December 31, 2016, respectively
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0.7
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0.7
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Additional paid-in capital
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655.9
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650.5
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Accumulated other comprehensive loss
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(1.3
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)
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(20.8
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)
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Treasury stock, 5,195,791 shares, at cost, as of both June 30, 2017 and December 31, 2016
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(160.8
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)
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(160.8
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)
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Retained earnings
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476.6
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522.3
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Non-controlling interest in subsidiaries
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180.3
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190.6
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Total stockholders’ equity
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1,151.4
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1,182.5
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Total liabilities and stockholders’ equity
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$
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2,876.5
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$
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2,979.8
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Three Months Ended
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Six Months Ended
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||||||||||||
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June 30,
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June 30,
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||||||||||||
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2017
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2016
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2017
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2016
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Net sales
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$
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1,230.7
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$
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1,147.3
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$
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2,412.8
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$
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2,033.4
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Operating costs and expenses:
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||||||||
Cost of goods sold
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1,157.8
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1,025.3
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2,193.5
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1,841.1
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||||
Operating expenses
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62.1
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57.8
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123.3
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126.8
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Insurance proceeds — business interruption
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—
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—
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—
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(42.4
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)
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General and administrative expenses
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27.5
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23.6
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54.0
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52.6
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Depreciation and amortization
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29.5
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29.3
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58.5
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57.6
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||||
Other operating expense, net
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0.3
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—
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0.3
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—
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Total operating costs and expenses
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1,277.2
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1,136.0
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2,429.6
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2,035.7
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||||
Operating (loss) income
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(46.5
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)
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11.3
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(16.8
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)
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(2.3
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)
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||||
Interest expense
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14.9
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13.6
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28.4
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26.8
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||||
Interest income
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(0.8
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)
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(0.4
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)
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(1.8
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)
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(0.7
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)
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||||
(Income) loss from equity method investments
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(1.5
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)
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10.6
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(4.6
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)
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28.6
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|
||||
Other expense (income), net
|
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0.1
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(0.1
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)
|
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0.1
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0.5
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|
||||
Total non-operating expenses, net
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12.7
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23.7
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22.1
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55.2
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|
||||
Loss from continuing operations before income tax benefit
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(59.2
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)
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(12.4
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)
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(38.9
|
)
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(57.5
|
)
|
||||
Income tax benefit
|
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(27.0
|
)
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(9.9
|
)
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(22.0
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)
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(33.5
|
)
|
||||
Loss from continuing operations
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(32.2
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)
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(2.5
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)
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(16.9
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)
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(24.0
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)
|
||||
Discontinued operations:
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Income (loss) from discontinued operations
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—
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2.8
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—
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(1.1
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)
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||||
Income tax expense (benefit)
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—
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0.9
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—
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(0.6
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)
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||||
Income (loss) from discontinued operations, net of tax
|
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—
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1.9
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—
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(0.5
|
)
|
||||
Net loss
|
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(32.2
|
)
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(0.6
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)
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(16.9
|
)
|
|
(24.5
|
)
|
||||
Net income attributed to non-controlling interest
|
|
5.7
|
|
|
6.4
|
|
|
9.8
|
|
|
11.7
|
|
||||
Net loss attributable to Delek
|
|
$
|
(37.9
|
)
|
|
$
|
(7.0
|
)
|
|
$
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(26.7
|
)
|
|
$
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(36.2
|
)
|
Basic loss per share:
|
|
|
|
|
|
|
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|
||||||||
Loss from continuing operations
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|
$
|
(0.61
|
)
|
|
$
|
(0.14
|
)
|
|
$
|
(0.43
|
)
|
|
$
|
(0.58
|
)
|
Income (loss) from discontinued operations
|
|
—
|
|
|
0.03
|
|
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—
|
|
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(0.01
|
)
|
||||
Total basic loss per share
|
|
$
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(0.61
|
)
|
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$
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(0.11
|
)
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|
$
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(0.43
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)
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$
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(0.59
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)
|
Diluted loss per share:
|
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|
|
|
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|
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||||||||
Loss from continuing operations
|
|
$
|
(0.61
|
)
|
|
$
|
(0.14
|
)
|
|
$
|
(0.43
|
)
|
|
$
|
(0.58
|
)
|
Income (loss) from discontinued operations
|
|
—
|
|
|
0.03
|
|
|
—
|
|
|
(0.01
|
)
|
||||
Total diluted loss per share
|
|
$
|
(0.61
|
)
|
|
$
|
(0.11
|
)
|
|
$
|
(0.43
|
)
|
|
$
|
(0.59
|
)
|
Weighted average common shares outstanding:
|
|
|
|
|
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|
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||||||||
Basic
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|
62,054,485
|
|
|
61,827,201
|
|
|
62,016,489
|
|
|
61,979,604
|
|
||||
Diluted
|
|
62,054,485
|
|
|
61,827,201
|
|
|
62,016,489
|
|
|
61,979,604
|
|
||||
Dividends declared per common share outstanding
|
|
$
|
0.15
|
|
|
$
|
0.15
|
|
|
$
|
0.30
|
|
|
$
|
0.30
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Net loss attributable to Delek
|
|
$
|
(37.9
|
)
|
|
$
|
(7.0
|
)
|
|
$
|
(26.7
|
)
|
|
$
|
(36.2
|
)
|
Other comprehensive (loss) income:
|
|
|
|
|
|
|
|
|
||||||||
Commodity contracts designated as cash flow hedges:
|
|
|
|
|
|
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|
||||||||
Unrealized (losses) gains, net of ineffectiveness gains of $0.1 million and $0.4 million for the three and six months ended June 30, 2017, respectively, and $1.5 million and $0.5 million for the three and six months ended June 30, 2016, respectively
|
|
(3.7
|
)
|
|
14.8
|
|
|
(9.8
|
)
|
|
7.9
|
|
||||
Realized losses reclassified to cost of goods sold
|
|
31.7
|
|
|
7.1
|
|
|
39.5
|
|
|
14.4
|
|
||||
Increase related to cash flow hedges, net
|
|
28.0
|
|
|
21.9
|
|
|
29.7
|
|
|
22.3
|
|
||||
Income tax expense
|
|
(9.8
|
)
|
|
(7.7
|
)
|
|
(10.4
|
)
|
|
(7.8
|
)
|
||||
Net comprehensive income on commodity contracts designated as cash flow hedges
|
|
18.2
|
|
|
14.2
|
|
|
19.3
|
|
|
14.5
|
|
||||
Foreign currency translation gain
|
|
0.1
|
|
|
0.1
|
|
|
0.1
|
|
|
0.2
|
|
||||
Other comprehensive income (loss) from equity method investments, net of tax expense of a nominal amount for the six months ended June 30, 2017, and net of tax benefit of $0.1 million for the six months ended June 30, 2016
|
|
—
|
|
|
—
|
|
|
0.1
|
|
|
(0.2
|
)
|
||||
Total other comprehensive income
|
|
18.3
|
|
|
14.3
|
|
|
19.5
|
|
|
14.5
|
|
||||
Comprehensive (loss) income attributable to Delek
|
|
$
|
(19.6
|
)
|
|
$
|
7.3
|
|
|
$
|
(7.2
|
)
|
|
$
|
(21.7
|
)
|
|
|
Six Months Ended June 30,
|
||||||
|
|
2017
|
|
2016
|
||||
Cash flows from operating activities:
|
|
|
|
|
||||
Net loss
|
|
$
|
(16.9
|
)
|
|
$
|
(24.5
|
)
|
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
|
|
|
|
|
||||
Depreciation and amortization
|
|
58.5
|
|
|
57.6
|
|
||
Amortization of deferred financing costs and debt discount
|
|
2.0
|
|
|
2.2
|
|
||
Accretion of asset retirement obligations
|
|
0.2
|
|
|
0.2
|
|
||
Amortization of unfavorable contract liability
|
|
(2.9
|
)
|
|
—
|
|
||
Deferred income taxes
|
|
(12.4
|
)
|
|
(19.3
|
)
|
||
(Income) loss from equity method investments
|
|
(4.6
|
)
|
|
28.6
|
|
||
Dividends from equity method investments
|
|
10.8
|
|
|
10.1
|
|
||
Loss on disposal of assets
|
|
0.3
|
|
|
—
|
|
||
Equity-based compensation expense
|
|
7.9
|
|
|
8.2
|
|
||
Income tax benefit of equity-based compensation
|
|
—
|
|
|
0.3
|
|
||
Loss from discontinued operations
|
|
—
|
|
|
0.5
|
|
||
Changes in assets and liabilities, net of acquisitions:
|
|
|
|
|
|
|
||
Accounts receivable
|
|
(22.0
|
)
|
|
(13.1
|
)
|
||
Inventories and other current assets
|
|
(4.9
|
)
|
|
(47.6
|
)
|
||
Fair value of derivatives
|
|
10.5
|
|
|
27.9
|
|
||
Accounts payable and other current liabilities
|
|
(72.4
|
)
|
|
98.1
|
|
||
Obligation under Supply and Offtake Agreement
|
|
20.8
|
|
|
18.0
|
|
||
Non-current assets and liabilities, net
|
|
(11.2
|
)
|
|
(3.9
|
)
|
||
Cash (used in) provided by operating activities - continuing operations
|
|
(36.3
|
)
|
|
143.3
|
|
||
Cash provided by operating activities - discontinued operations
|
|
—
|
|
|
13.3
|
|
||
Net cash (used in) provided by operating activities
|
|
(36.3
|
)
|
|
156.6
|
|
||
Cash flows from investing activities:
|
|
|
|
|
||||
Business combinations
|
|
(4.8
|
)
|
|
—
|
|
||
Equity method investment contributions
|
|
(2.9
|
)
|
|
(33.1
|
)
|
||
Purchases of property, plant and equipment
|
|
(35.0
|
)
|
|
(18.7
|
)
|
||
Purchase of intangible assets
|
|
—
|
|
|
(0.7
|
)
|
||
Proceeds from sales of assets
|
|
—
|
|
|
0.2
|
|
||
Cash used in investing activities - continuing operations
|
|
(42.7
|
)
|
|
(52.3
|
)
|
||
Cash used in investing activities - discontinued operations
|
|
—
|
|
|
(7.1
|
)
|
||
Net cash used in investing activities
|
|
(42.7
|
)
|
|
(59.4
|
)
|
||
Cash flows from financing activities:
|
|
|
|
|
||||
Proceeds from long-term revolvers
|
|
434.5
|
|
|
160.8
|
|
||
Payments on long-term revolvers
|
|
(627.6
|
)
|
|
(149.9
|
)
|
||
Proceeds from term debt
|
|
248.1
|
|
|
—
|
|
||
Payments on term debt
|
|
(60.4
|
)
|
|
(35.3
|
)
|
||
Proceeds from product financing agreements
|
|
21.0
|
|
|
50.4
|
|
||
Repayments of product financing agreements
|
|
(6.0
|
)
|
|
—
|
|
||
Taxes paid due to the net settlement of equity-based compensation
|
|
(2.2
|
)
|
|
(0.5
|
)
|
||
Income tax benefit of equity-based compensation
|
|
—
|
|
|
(0.3
|
)
|
||
Repurchase of common stock
|
|
—
|
|
|
(6.0
|
)
|
||
Repurchase of non-controlling interest
|
|
(7.3
|
)
|
|
—
|
|
||
Distribution to non-controlling interest
|
|
(13.2
|
)
|
|
(11.6
|
)
|
||
Dividends paid
|
|
(19.0
|
)
|
|
(18.9
|
)
|
||
Deferred financing costs paid
|
|
(5.8
|
)
|
|
(0.4
|
)
|
||
Cash used in financing activities - continuing operations
|
|
(37.9
|
)
|
|
(11.7
|
)
|
||
Cash used in financing activities - discontinued operations
|
|
—
|
|
|
(10.6
|
)
|
||
Net cash used in financing activities
|
|
(37.9
|
)
|
|
(22.3
|
)
|
||
Net (decrease) increase in cash and cash equivalents
|
|
(116.9
|
)
|
|
74.9
|
|
||
Cash and cash equivalents at the beginning of the period
|
|
689.2
|
|
|
302.2
|
|
||
Cash and cash equivalents at the end of the period
|
|
572.3
|
|
|
377.1
|
|
||
Less cash and cash equivalents of discontinued operations at the end of the period
|
|
—
|
|
|
13.1
|
|
||
Cash and cash equivalents of continuing operations at the end of the period
|
|
$
|
572.3
|
|
|
$
|
364.0
|
|
|
|
|
|
|
|
|
Six Months Ended June 30,
|
||||||
|
|
2017
|
|
2016
|
||||
Supplemental disclosures of cash flow information:
|
|
|
|
|
||||
Cash paid during the period for:
|
|
|
|
|
||||
Interest, net of capitalized interest of $0.1 for both the 2017 and 2016 periods
|
|
$
|
28.3
|
|
|
$
|
29.0
|
|
Income taxes
|
|
$
|
59.3
|
|
|
$
|
1.6
|
|
Non-cash investing activities:
|
|
|
|
|
||||
Decrease in accrued capital expenditures
|
|
$
|
(4.8
|
)
|
|
$
|
(8.7
|
)
|
|
|
June 30,
2017 |
|
December 31,
2016 |
||||
|
|
|
||||||
ASSETS
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
4.9
|
|
|
$
|
0.1
|
|
Accounts receivable
|
|
18.3
|
|
|
19.2
|
|
||
Accounts receivable from related parties
|
|
4.2
|
|
|
2.8
|
|
||
Inventory
|
|
6.5
|
|
|
8.9
|
|
||
Other current assets
|
|
1.4
|
|
|
1.1
|
|
||
Property, plant and equipment, net
|
|
245.6
|
|
|
251.0
|
|
||
Equity method investments
|
|
104.6
|
|
|
101.1
|
|
||
Goodwill
|
|
12.2
|
|
|
12.2
|
|
||
Intangible assets, net
|
|
13.9
|
|
|
14.4
|
|
||
Other non-current assets
|
|
3.9
|
|
|
4.7
|
|
||
Total assets
|
|
$
|
415.5
|
|
|
$
|
415.5
|
|
LIABILITIES AND DEFICIT
|
|
|
|
|
||||
Accounts payable
|
|
$
|
10.2
|
|
|
$
|
10.9
|
|
Accrued expenses and other current liabilities
|
|
11.1
|
|
|
9.8
|
|
||
Revolving credit facility
|
|
396.9
|
|
|
392.6
|
|
||
Asset retirement obligations
|
|
3.9
|
|
|
3.8
|
|
||
Other non-current liabilities
|
|
14.5
|
|
|
11.7
|
|
||
Deficit
|
|
(21.1
|
)
|
|
(13.3
|
)
|
||
Total liabilities and deficit
|
|
$
|
415.5
|
|
|
$
|
415.5
|
|
Balance Sheet Information
|
|
June 30, 2017
|
|
December 31, 2016
|
||||
Current assets
|
|
$
|
535.1
|
|
|
$
|
471.3
|
|
Non-current assets
|
|
1,589.8
|
|
|
1,624.0
|
|
||
Current liabilities
|
|
483.0
|
|
|
445.5
|
|
||
Non-current liabilities
|
|
1,069.9
|
|
|
1,067.4
|
|
||
Non-controlling interests
|
|
61.2
|
|
|
61.3
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
Income Statement Information
|
|
June 30, 2017
|
|
June 30, 2016
|
|
June 30, 2017
|
|
June 30, 2016
|
||||||||
Revenue
|
|
$
|
1,119.1
|
|
|
$
|
1,008.4
|
|
|
$
|
2,269.7
|
|
|
$
|
1,858.4
|
|
Gross profit
|
|
173.5
|
|
|
137.0
|
|
|
351.2
|
|
|
251.8
|
|
||||
Pre-tax income (loss)
|
|
7.1
|
|
|
(29.2
|
)
|
|
20.0
|
|
|
(86.5
|
)
|
||||
Net income (loss)
|
|
4.8
|
|
|
(20.6
|
)
|
|
15.0
|
|
|
(56.7
|
)
|
||||
Net income (loss) attributable to Alon USA
|
|
2.2
|
|
|
(20.4
|
)
|
|
9.5
|
|
|
(55.9
|
)
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||
|
|
June 30, 2016
|
|
June 30, 2016
|
||||
Revenue
|
|
279.1
|
|
|
498.9
|
|
||
Cost of goods sold
|
|
(228.6
|
)
|
|
(403.9
|
)
|
||
Operating expenses
|
|
(32.5
|
)
|
|
(65.4
|
)
|
||
General and administrative expenses
|
|
(5.7
|
)
|
|
(11.3
|
)
|
||
Depreciation and amortization
|
|
(8.0
|
)
|
|
(15.8
|
)
|
||
Other operating income, net
|
|
0.3
|
|
|
—
|
|
||
Interest expense
|
|
(1.8
|
)
|
|
(3.6
|
)
|
||
Income (loss) from discontinued operations before taxes
|
|
2.8
|
|
|
(1.1
|
)
|
||
Income tax expense (benefit)
|
|
0.9
|
|
|
(0.6
|
)
|
||
Income (loss) from discontinued operations, net of tax
|
|
$
|
1.9
|
|
|
$
|
(0.5
|
)
|
|
|
June 30,
2017 |
|
December 31,
2016 |
||||
Refinery raw materials and supplies
|
|
$
|
165.4
|
|
|
$
|
145.6
|
|
Refinery work in process
|
|
35.9
|
|
|
37.6
|
|
||
Refinery finished goods
|
|
169.6
|
|
|
200.3
|
|
||
Logistics refined products
|
|
6.5
|
|
|
8.9
|
|
||
Total inventories
|
|
$
|
377.4
|
|
|
$
|
392.4
|
|
|
|
June 30,
2017 |
|
December 31,
2016 |
||||
DKL Revolver
|
|
$
|
154.5
|
|
|
$
|
392.6
|
|
DKL Notes
(1)
|
|
242.4
|
|
|
—
|
|
||
Wells Term Loan
(2)
|
|
52.1
|
|
|
63.6
|
|
||
Wells Revolving Loan
|
|
45.0
|
|
|
—
|
|
||
Reliant Bank Revolver
|
|
17.0
|
|
|
17.0
|
|
||
Promissory Notes
|
|
95.0
|
|
|
130.0
|
|
||
Lion Term Loan Facility
(3)
|
|
216.5
|
|
|
229.7
|
|
||
|
|
822.5
|
|
|
832.9
|
|
||
Less: Current portion of long-term debt and notes payable
|
|
91.4
|
|
|
84.4
|
|
||
|
|
$
|
731.1
|
|
|
$
|
748.5
|
|
(1)
|
The DKL Notes are net of deferred financing costs of
$5.7 million
and debt discount of
$1.9 million
at
June 30, 2017
.
|
(2)
|
The Wells Term Loan is net of deferred financing costs of a nominal amount and
$0.1 million
, respectively, and debt discount of
$0.4 million
and
$0.5 million
, respectively, at
June 30, 2017
and
December 31, 2016
.
|
(3)
|
The Lion Term Loan Facility is net of deferred financing costs of
$2.6 million
and
$3.0 million
, respectively, and debt discounts of
$0.9 million
and
$1.1 million
, respectively, at
June 30, 2017
and
December 31, 2016
.
|
Other Current Assets
|
June 30,
2017 |
|
December 31,
2016 |
||||
Prepaid expenses
|
$
|
9.5
|
|
|
$
|
14.0
|
|
Short-term derivative assets (see Note 15)
|
11.1
|
|
|
6.8
|
|
||
Income and other tax receivables
|
39.8
|
|
|
19.2
|
|
||
RINs Obligation surplus (see Note 14)
|
8.7
|
|
|
4.9
|
|
||
Other
|
4.9
|
|
|
4.4
|
|
||
Total
|
$
|
74.0
|
|
|
$
|
49.3
|
|
Other Non-Current Assets
|
June 30,
2017 |
|
December 31,
2016 |
||||
Prepaid tax asset
|
$
|
57.8
|
|
|
$
|
59.5
|
|
Deferred financing costs
|
6.9
|
|
|
8.2
|
|
||
Long-term income tax receivables
|
2.1
|
|
|
7.5
|
|
||
Supply and Offtake receivable
|
20.2
|
|
|
—
|
|
||
Other
|
2.7
|
|
|
5.5
|
|
||
Total
|
$
|
89.7
|
|
|
$
|
80.7
|
|
Accrued Expenses and Other Current Liabilities
|
June 30,
2017 |
|
December 31,
2016 |
||||
Income and other taxes payable
|
$
|
58.2
|
|
|
$
|
115.7
|
|
Short-term derivative liabilities (see Note 15)
|
1.2
|
|
|
26.1
|
|
||
Interest payable
|
7.7
|
|
|
9.6
|
|
||
Employee costs
|
7.0
|
|
|
7.3
|
|
||
Environmental liabilities (see Note 16)
|
1.0
|
|
|
1.0
|
|
||
Product financing agreements
|
—
|
|
|
6.0
|
|
||
RINs Obligation deficit (see Note 14)
|
—
|
|
|
25.6
|
|
||
Other
|
89.7
|
|
|
38.5
|
|
||
Total
|
$
|
164.8
|
|
|
$
|
229.8
|
|
Other Non-Current Liabilities
|
June 30,
2017 |
|
December 31,
2016 |
||||
Long-term derivative liabilities (see Note 15)
|
$
|
27.1
|
|
|
$
|
17.3
|
|
Other
|
5.1
|
|
|
8.7
|
|
||
Total
|
$
|
32.2
|
|
|
$
|
26.0
|
|
|
|
Delek Stockholders' Equity
|
|
Non-Controlling Interest in Subsidiaries
|
|
Total Stockholders' Equity
|
||||||
Balance at December 31, 2016
|
|
$
|
991.9
|
|
|
$
|
190.6
|
|
|
$
|
1,182.5
|
|
Net income (loss)
|
|
(26.7
|
)
|
|
9.8
|
|
|
(16.9
|
)
|
|||
Net unrealized gain on cash flow hedges, net of income tax expense of $10.4 million and ineffectiveness gain of $0.4 million
|
|
19.3
|
|
|
—
|
|
|
19.3
|
|
|||
Foreign currency translation gain
|
|
0.1
|
|
|
—
|
|
|
0.1
|
|
|||
Other comprehensive income from equity method investments, net of income tax expense of a nominal amount
|
|
0.1
|
|
|
—
|
|
|
0.1
|
|
|||
Common stock dividends ($0.30 per share)
|
|
(19.0
|
)
|
|
—
|
|
|
(19.0
|
)
|
|||
Distribution to non-controlling interest
|
|
—
|
|
|
(13.2
|
)
|
|
(13.2
|
)
|
|||
Repurchase of non-controlling interest
|
|
—
|
|
|
(7.3
|
)
|
|
(7.3
|
)
|
|||
Equity-based compensation expense
|
|
7.5
|
|
|
0.4
|
|
|
7.9
|
|
|||
Taxes due to the net settlement of equity-based compensation
|
|
(2.2
|
)
|
|
—
|
|
|
(2.2
|
)
|
|||
Other
|
|
0.1
|
|
|
—
|
|
|
0.1
|
|
|||
Balance at June 30, 2017
|
|
$
|
971.1
|
|
|
$
|
180.3
|
|
|
$
|
1,151.4
|
|
Date Declared
|
|
Dividend Amount Per Share
|
|
Record Date
|
|
Payment Date
|
February 27, 2017
|
|
$0.15
|
|
March 15, 2017
|
|
March 29, 2017
|
May 8, 2017
|
|
$0.15
|
|
May 23, 2017
|
|
June 2, 2017
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||
|
|
June 30,
|
|
June 30,
|
||||||||
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||
Weighted average common shares outstanding
|
|
62,054,485
|
|
|
61,827,201
|
|
|
62,016,489
|
|
|
61,979,604
|
|
Dilutive effect of equity instruments
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Weighted average common shares outstanding, assuming dilution
|
|
62,054,485
|
|
|
61,827,201
|
|
|
62,016,489
|
|
|
61,979,604
|
|
|
|
Three Months Ended June 30, 2017
|
||||||||||||||
(In millions)
|
|
Refining
|
|
Logistics
|
|
Corporate,
Other and Eliminations |
|
Consolidated
|
||||||||
Net sales (excluding intercompany fees and sales)
|
|
$
|
1,144.8
|
|
|
$
|
87.1
|
|
|
$
|
(1.2
|
)
|
|
$
|
1,230.7
|
|
Intercompany fees and sales
|
|
8.2
|
|
|
39.6
|
|
|
(47.8
|
)
|
|
—
|
|
||||
Operating costs and expenses:
|
|
|
|
|
|
|
|
|
||||||||
Cost of goods sold
|
|
1,115.4
|
|
|
85.0
|
|
|
(42.6
|
)
|
|
1,157.8
|
|
||||
Operating expenses
|
|
51.6
|
|
|
10.0
|
|
|
0.5
|
|
|
62.1
|
|
||||
Segment contribution margin
|
|
$
|
(14.0
|
)
|
|
$
|
31.7
|
|
|
$
|
(6.9
|
)
|
|
10.8
|
|
|
General and administrative expenses
|
|
|
|
|
|
|
|
27.5
|
|
|||||||
Depreciation and amortization
|
|
|
|
|
|
|
|
29.5
|
|
|||||||
Other operating expense, net
|
|
|
|
|
|
|
|
0.3
|
|
|||||||
Operating loss
|
|
|
|
|
|
|
|
$
|
(46.5
|
)
|
||||||
Total assets
|
|
$
|
1,949.6
|
|
|
$
|
415.5
|
|
|
$
|
511.4
|
|
|
$
|
2,876.5
|
|
Capital spending (excluding business combinations)
|
|
$
|
11.2
|
|
|
$
|
2.1
|
|
|
$
|
1.7
|
|
|
$
|
15.0
|
|
|
|
Six Months Ended June 30, 2017
|
||||||||||||||
|
|
Refining
|
|
Logistics
|
|
Corporate,
Other and Eliminations |
|
Consolidated
|
||||||||
Net sales (excluding intercompany fees and sales)
|
|
$
|
2,235.3
|
|
|
$
|
180.0
|
|
|
$
|
(2.5
|
)
|
|
$
|
2,412.8
|
|
Intercompany fees and sales
|
|
17.2
|
|
|
76.2
|
|
|
(93.4
|
)
|
|
—
|
|
||||
Operating costs and expenses:
|
|
|
|
|
|
|
|
|
||||||||
Cost of goods sold
|
|
2,099.7
|
|
|
177.6
|
|
|
(83.8
|
)
|
|
2,193.5
|
|
||||
Operating expenses
|
|
102.4
|
|
|
20.3
|
|
|
0.6
|
|
|
123.3
|
|
||||
Insurance proceeds — business interruption
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Segment contribution margin
|
|
$
|
50.4
|
|
|
$
|
58.3
|
|
|
$
|
(12.7
|
)
|
|
96.0
|
|
|
General and administrative expenses
|
|
|
|
|
|
|
|
54.0
|
|
|||||||
Depreciation and amortization
|
|
|
|
|
|
|
|
58.5
|
|
|||||||
Other operating expense, net
|
|
|
|
|
|
|
|
$
|
0.3
|
|
||||||
Operating loss
|
|
|
|
|
|
|
|
$
|
(16.8
|
)
|
||||||
Capital spending (excluding business combinations)
|
|
$
|
22.0
|
|
|
$
|
4.9
|
|
|
$
|
3.3
|
|
|
$
|
30.2
|
|
|
|
Three Months Ended June 30, 2016
|
||||||||||||||
|
|
Refining
|
|
Logistics
|
|
Corporate,
Other and Eliminations (4) |
|
Consolidated
|
||||||||
Net sales (excluding intercompany fees and sales)
|
|
$
|
980.6
|
|
|
$
|
75.5
|
|
|
$
|
—
|
|
|
$
|
1,056.1
|
|
Intercompany fees and sales
(1)
|
|
97.1
|
|
|
36.3
|
|
|
(42.2
|
)
|
|
91.2
|
|
||||
Operating costs and expenses:
|
|
|
|
|
|
|
|
|
||||||||
Cost of goods sold
|
|
988.1
|
|
|
73.1
|
|
|
(35.9
|
)
|
|
1,025.3
|
|
||||
Operating expenses
|
|
49.6
|
|
|
8.7
|
|
|
(0.5
|
)
|
|
57.8
|
|
||||
Segment contribution margin
|
|
$
|
40.0
|
|
|
$
|
30.0
|
|
|
$
|
(5.8
|
)
|
|
64.2
|
|
|
General and administrative expenses
|
|
|
|
|
|
|
|
23.6
|
|
|||||||
Depreciation and amortization
|
|
|
|
|
|
|
|
29.3
|
|
|||||||
Operating income
|
|
|
|
|
|
|
|
$
|
11.3
|
|
||||||
Total assets
(2)
|
|
$
|
2,002.2
|
|
|
$
|
381.8
|
|
|
$
|
964.0
|
|
|
$
|
3,348.0
|
|
Capital spending (excluding business combinations)
(3)
|
|
$
|
3.6
|
|
|
$
|
0.8
|
|
|
$
|
2.7
|
|
|
$
|
7.1
|
|
|
|
Six Months Ended June 30, 2016
|
||||||||||||||
|
|
Refining
|
|
Logistics
|
|
Corporate,
Other and Eliminations (4) |
|
Consolidated
|
||||||||
Net sales (excluding intercompany fees and sales)
|
|
$
|
1,716.5
|
|
|
$
|
143.2
|
|
|
$
|
0.5
|
|
|
$
|
1,860.2
|
|
Intercompany fees and sales
(1)
|
|
188.5
|
|
|
72.7
|
|
|
(88.0
|
)
|
|
173.2
|
|
||||
Operating costs and expenses:
|
|
|
|
|
|
|
|
|
||||||||
Cost of goods sold
|
|
1,776.0
|
|
|
139.9
|
|
|
(74.8
|
)
|
|
1,841.1
|
|
||||
Operating expenses
|
|
107.9
|
|
|
19.2
|
|
|
(0.3
|
)
|
|
126.8
|
|
||||
Insurance proceeds - business interruption
|
|
(42.4
|
)
|
|
—
|
|
|
—
|
|
|
(42.4
|
)
|
||||
Segment contribution margin
|
|
$
|
63.5
|
|
|
$
|
56.8
|
|
|
$
|
(12.4
|
)
|
|
107.9
|
|
|
General and administrative expenses
|
|
|
|
|
|
|
|
52.6
|
|
|||||||
Depreciation and amortization
|
|
|
|
|
|
|
|
57.6
|
|
|||||||
Operating loss
|
|
|
|
|
|
|
|
$
|
(2.3
|
)
|
||||||
Capital spending (excluding business combinations)
(3)
|
|
$
|
6.9
|
|
|
$
|
1.9
|
|
|
$
|
4.8
|
|
|
$
|
13.6
|
|
(1)
|
Intercompany fees and sales for the refining segment include revenues from the Retail Entities of
$91.2 million
and
$173.2 million
during the
three and six
months ended
June 30, 2016
, the operations of which are reported in discontinued operations.
|
(2)
|
Assets held for sale of
$468.3 million
are included in the corporate, other and eliminations segment as of
June 30, 2016
.
|
(3)
|
Capital spending excludes capital spending associated with the Retail Entities of
$2.6 million
and
$6.0 million
during the
three and six
months ended
June 30, 2016
.
|
(4)
|
The corporate, other and eliminations segment operating results for the
three and six
months ended
June 30, 2016
have been restated to reflect the reclassification of the Retail Entities to discontinued operations.
|
|
|
Refining
|
|
Logistics
|
|
Corporate,
Other and Eliminations |
|
Consolidated
|
||||||||
Property, plant and equipment
|
|
$
|
1,223.0
|
|
|
$
|
347.3
|
|
|
$
|
48.8
|
|
|
$
|
1,619.1
|
|
Less: Accumulated depreciation
|
|
(412.1
|
)
|
|
(101.7
|
)
|
|
(26.7
|
)
|
|
(540.5
|
)
|
||||
Property, plant and equipment, net
|
|
$
|
810.9
|
|
|
$
|
245.6
|
|
|
$
|
22.1
|
|
|
$
|
1,078.6
|
|
Depreciation expense for the three months ended June 30, 2017
|
|
$
|
21.8
|
|
|
$
|
5.5
|
|
|
$
|
2.0
|
|
|
$
|
29.3
|
|
Depreciation expense for the six months ended June 30, 2017
|
|
$
|
43.6
|
|
|
$
|
10.4
|
|
|
$
|
3.9
|
|
|
$
|
57.9
|
|
|
|
As of June 30, 2017
|
||||||||||||||
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Assets
|
|
|
|
|
|
|
|
|
||||||||
OTC commodity swaps
|
|
$
|
—
|
|
|
$
|
59.3
|
|
|
$
|
—
|
|
|
$
|
59.3
|
|
RINs Obligation surplus
|
|
—
|
|
|
8.7
|
|
|
—
|
|
|
8.7
|
|
||||
Total assets
|
|
—
|
|
|
68.0
|
|
|
—
|
|
|
68.0
|
|
||||
Liabilities
|
|
|
|
|
|
|
|
|
||||||||
OTC commodity swaps
|
|
—
|
|
|
(80.0
|
)
|
|
—
|
|
|
(80.0
|
)
|
||||
RIN commitment contracts
|
|
—
|
|
|
(2.2
|
)
|
|
—
|
|
|
(2.2
|
)
|
||||
J. Aron step-out liability
|
|
—
|
|
|
(145.4
|
)
|
|
—
|
|
|
(145.4
|
)
|
||||
Total liabilities
|
|
—
|
|
|
(227.6
|
)
|
|
—
|
|
|
(227.6
|
)
|
||||
Net liabilities
|
|
$
|
—
|
|
|
$
|
(159.6
|
)
|
|
$
|
—
|
|
|
$
|
(159.6
|
)
|
|
|
As of December 31, 2016
|
||||||||||||||
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Assets
|
|
|
|
|
|
|
|
|
||||||||
OTC commodity swaps
|
|
$
|
—
|
|
|
$
|
53.1
|
|
|
$
|
—
|
|
|
$
|
53.1
|
|
RINs Obligation surplus
|
|
—
|
|
|
4.9
|
|
|
—
|
|
|
4.9
|
|
||||
Total assets
|
|
—
|
|
|
58.0
|
|
|
—
|
|
|
58.0
|
|
||||
Liabilities
|
|
|
|
|
|
|
|
|
||||||||
OTC commodity swaps
|
|
—
|
|
|
(103.6
|
)
|
|
—
|
|
|
(103.6
|
)
|
||||
RIN commitment contracts
|
|
—
|
|
|
(0.8
|
)
|
|
—
|
|
|
(0.8
|
)
|
||||
RINs Obligation deficit
|
|
—
|
|
|
(25.6
|
)
|
|
—
|
|
|
(25.6
|
)
|
||||
J. Aron step-out liability
|
|
—
|
|
|
(144.8
|
)
|
|
—
|
|
|
(144.8
|
)
|
||||
Total liabilities
|
|
—
|
|
|
(274.8
|
)
|
|
—
|
|
|
(274.8
|
)
|
||||
Net liabilities
|
|
$
|
—
|
|
|
$
|
(216.8
|
)
|
|
$
|
—
|
|
|
$
|
(216.8
|
)
|
•
|
limiting the exposure to price fluctuations of commodity inventory above or below target levels at each of our segments;
|
•
|
managing our exposure to commodity price risk associated with the purchase or sale of crude oil, feedstocks and finished grade fuel products at each of our segments; and
|
•
|
limiting the exposure to interest rate fluctuations on our floating rate borrowings.
|
(1)
|
As of
June 30, 2017
and
December 31, 2016
, we had open derivative positions representing
25,419,902
barrels and
9,348,000
barrels, respectively, of crude oil and refined petroleum products. Of these open positions, contracts representing
1,150,000
barrels and
3,392,000
barrels were designated as cash flow hedging instruments as of
June 30, 2017
and
December 31, 2016
, respectively.
|
(2)
|
As of
June 30, 2017
and
December 31, 2016
, we had open RIN contracts representing
96,250,000
and
36,750,000
RINs, respectively.
|
(3)
|
As of
June 30, 2017
and
December 31, 2016
,
$5.7 million
and
$14.7 million
, respectively, of cash collateral held by counterparties has been netted with the derivatives with each counterparty.
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Gains (losses) on derivatives not designated as hedging instruments
|
|
$
|
3.9
|
|
|
$
|
(13.1
|
)
|
|
$
|
8.5
|
|
|
$
|
(12.6
|
)
|
Realized losses reclassified out of OCI on derivatives designated as cash flow hedging instruments
|
|
(31.7
|
)
|
|
(7.1
|
)
|
|
(39.5
|
)
|
|
(14.4
|
)
|
||||
Gains recognized due to cash flow hedging ineffectiveness
|
|
0.1
|
|
|
1.5
|
|
|
0.4
|
|
|
0.5
|
|
||||
Total
|
|
$
|
(27.7
|
)
|
|
$
|
(18.7
|
)
|
|
$
|
(30.6
|
)
|
|
$
|
(26.5
|
)
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
|
June 30,
|
|
June 30,
|
||||||||||||
(in millions, except per share data)
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Net sales
|
|
$
|
2,337.3
|
|
|
$
|
2,155.3
|
|
|
$
|
4,662.1
|
|
|
$
|
3,885.8
|
|
Net income (loss) attributable to Delek
|
|
(36.0
|
)
|
|
(20.7
|
)
|
|
(19.3
|
)
|
|
(73.9
|
)
|
||||
Earnings (loss) per share:
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
$
|
(0.44
|
)
|
|
$
|
(0.26
|
)
|
|
$
|
(0.24
|
)
|
|
$
|
(0.91
|
)
|
Diluted
|
|
(0.44
|
)
|
|
(0.26
|
)
|
|
(0.24
|
)
|
|
(0.91
|
)
|
(a)
|
To eliminate transactions between Delek and Alon USA for purchases and sales of refined product reducing revenue and the associated cost of goods sold. Such pro forma eliminations reduced combined pro forma sales by
$12.5 million
and
$0.4 million
for the three months ended June 30, 2017 and 2016, respectively, and
$20.4 million
and
$5.9 million
for the six months ended June 30, 2017 and 2016, respectively.
|
(b)
|
To eliminate Delek’s equity income in Alon USA as the closing of the Delek/Alon Merger resulted in New Delek obtaining full control of Alon USA effective July 1, 2017. Such pro forma elimination resulted in an increase (decrease) to pre-tax income of of
$(0.4) million
and
$10.4 million
for the three months ended June 30, 2017 and 2016, respectively, and
$(3.2) million
and
$28.2 million
for the six months ended June 30, 2017 and 2016, respectively.
|
(c)
|
To record the tax effect on pro forma adjustments and additional tax benefit associated with dividends received from Alon USA at a combined U.S. (federal and state) income tax statutory blended rate of
35.59%
for the three and six months ended June 30, 2017, and
35.37%
for the three and six months ended June 30, 2016.
|
(d)
|
To adjust the weighted average number of shares outstanding based on
0.504
of a share of Delek common stock for each share of Alon USA common stock outstanding as of June 30, 2017, reflecting the elimination of Alon USA historical weighted average shares outstanding and the addition of the estimated New Delek incremental shares issued.
|
•
|
volatility in our refining margins or fuel gross profit as a result of changes in the prices of crude oil, other feedstocks and refined petroleum products;
|
•
|
risk factors relating to the Delek/Alon Merger, including but not limited to risks surrounding the combining of operations, financial position and cash flows as well as systems, processes and controls going forward, as further discussed in Part II, Item 1A, "Risk Factors";
|
•
|
our ability to execute our strategy of growth through acquisitions and the transactional risks inherent in such acquisitions;
|
•
|
acquired assets may suffer a diminishment in fair value, which may require us to record a write-down or impairment;
|
•
|
liabilities related to, and the effects of, the sale of the Retail Entities (as defined below);
|
•
|
reliability of our operating assets;
|
•
|
competition;
|
•
|
changes in, or the failure to comply with, the extensive government regulations applicable to our industry segments;
|
•
|
diminution in value of long-lived assets may result in an impairment in the carrying value of the assets on our balance sheet and a resultant loss recognized in the statement of operations;
|
•
|
general economic and business conditions affecting the southern United States;
|
•
|
volatility under our derivative instruments;
|
•
|
deterioration of creditworthiness or overall financial condition of a material counterparty (or counterparties);
|
•
|
unanticipated increases in cost or scope of, or significant delays in the completion of, our capital improvement and periodic turnaround projects;
|
•
|
risks and uncertainties with respect to the quantities and costs of refined petroleum products supplied to our pipelines and/or held in our terminals;
|
•
|
operating hazards, natural disasters, casualty losses and other matters beyond our control;
|
•
|
increases in our debt levels or costs;
|
•
|
changes in our ability to continue to access the credit markets;
|
•
|
compliance, or failure to comply, with restrictive and financial covenants in our various debt agreements;
|
•
|
the inability of our subsidiaries to freely make dividends, loans or other cash distributions to us;
|
•
|
seasonality;
|
•
|
acts of terrorism aimed at either our facilities or other facilities that could impair our ability to produce or transport refined products or receive feedstocks;
|
•
|
changes in the cost or availability of transportation for feedstocks and refined products; and
|
•
|
other factors discussed under the headings "Management’s Discussion and Analysis of Financial Condition and Results of Operations" and "Risk Factors" and in our other filings with the SEC.
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
Statement of Operations Data
|
|
June 30,
|
|
June 30,
|
||||||||||||
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Net sales:
|
|
|
|
|
|
|
|
|
||||||||
Refining
|
|
$
|
1,153.0
|
|
|
$
|
1,077.7
|
|
|
$
|
2,252.5
|
|
|
$
|
1,905.0
|
|
Logistics
|
|
126.7
|
|
|
111.8
|
|
|
256.2
|
|
|
215.9
|
|
||||
Other
|
|
(49.0
|
)
|
|
(42.2
|
)
|
|
(95.9
|
)
|
|
(87.5
|
)
|
||||
Net sales
|
|
$
|
1,230.7
|
|
|
$
|
1,147.3
|
|
|
$
|
2,412.8
|
|
|
$
|
2,033.4
|
|
Operating costs and expenses:
|
|
|
|
|
|
|
|
|
||||||||
Cost of goods sold
|
|
1,157.8
|
|
|
1,025.3
|
|
|
2,193.5
|
|
|
1,841.1
|
|
||||
Operating expenses
|
|
62.1
|
|
|
57.8
|
|
|
123.3
|
|
|
126.8
|
|
||||
Insurance proceeds — business interruption
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(42.4
|
)
|
||||
General and administrative expenses
|
|
27.5
|
|
|
23.6
|
|
|
54.0
|
|
|
52.6
|
|
||||
Depreciation and amortization
|
|
29.5
|
|
|
29.3
|
|
|
58.5
|
|
|
57.6
|
|
||||
Other operating expense
|
|
0.3
|
|
|
—
|
|
|
0.3
|
|
|
—
|
|
||||
Total operating costs and expenses
|
|
1,277.2
|
|
|
1,136.0
|
|
|
2,429.6
|
|
|
2,035.7
|
|
||||
Operating (loss) income
|
|
(46.5
|
)
|
|
11.3
|
|
|
(16.8
|
)
|
|
(2.3
|
)
|
||||
Interest expense
|
|
14.9
|
|
|
13.6
|
|
|
28.4
|
|
|
26.8
|
|
||||
Interest income
|
|
(0.8
|
)
|
|
(0.4
|
)
|
|
(1.8
|
)
|
|
(0.7
|
)
|
||||
(Income) loss from equity method investments
|
|
(1.5
|
)
|
|
10.6
|
|
|
(4.6
|
)
|
|
28.6
|
|
||||
Other expense (income), net
|
|
0.1
|
|
|
(0.1
|
)
|
|
0.1
|
|
|
0.5
|
|
||||
Total non-operating expenses, net
|
|
12.7
|
|
|
23.7
|
|
|
22.1
|
|
|
55.2
|
|
||||
Loss from continuing operations before income tax benefit
|
|
(59.2
|
)
|
|
(12.4
|
)
|
|
(38.9
|
)
|
|
(57.5
|
)
|
||||
Income tax benefit
|
|
(27.0
|
)
|
|
(9.9
|
)
|
|
(22.0
|
)
|
|
(33.5
|
)
|
||||
Loss from continuing operations
|
|
(32.2
|
)
|
|
(2.5
|
)
|
|
(16.9
|
)
|
|
(24.0
|
)
|
||||
Income (loss) from discontinued operations, net of tax
|
|
—
|
|
|
1.9
|
|
|
—
|
|
|
(0.5
|
)
|
||||
Net loss
|
|
(32.2
|
)
|
|
(0.6
|
)
|
|
(16.9
|
)
|
|
(24.5
|
)
|
||||
Net income attributed to non-controlling interest
|
|
5.7
|
|
|
6.4
|
|
|
9.8
|
|
|
11.7
|
|
||||
Net loss attributable to Delek
|
|
$
|
(37.9
|
)
|
|
$
|
(7.0
|
)
|
|
$
|
(26.7
|
)
|
|
$
|
(36.2
|
)
|
Basic earnings per share:
|
|
|
|
|
|
|
|
|
||||||||
Loss from continuing operations
|
|
$
|
(0.61
|
)
|
|
$
|
(0.14
|
)
|
|
$
|
(0.43
|
)
|
|
$
|
(0.58
|
)
|
Income (loss) from discontinued operations
|
|
—
|
|
|
0.03
|
|
|
—
|
|
|
(0.01
|
)
|
||||
Total basic loss per share
|
|
$
|
(0.61
|
)
|
|
$
|
(0.11
|
)
|
|
$
|
(0.43
|
)
|
|
$
|
(0.59
|
)
|
Diluted earnings per share:
|
|
|
|
|
|
|
|
|
|
|||||||
Loss from continuing operations
|
|
$
|
(0.61
|
)
|
|
$
|
(0.14
|
)
|
|
$
|
(0.43
|
)
|
|
$
|
(0.58
|
)
|
Income (loss) from discontinued operations
|
|
—
|
|
|
0.03
|
|
|
—
|
|
|
(0.01
|
)
|
||||
Total diluted loss per share
|
|
$
|
(0.61
|
)
|
|
$
|
(0.11
|
)
|
|
$
|
(0.43
|
)
|
|
$
|
(0.59
|
)
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Net sales
|
|
$
|
1,153.0
|
|
|
$
|
1,077.7
|
|
|
$
|
2,252.5
|
|
|
$
|
1,905.0
|
|
Cost of goods sold
|
|
1,115.4
|
|
|
988.1
|
|
|
2,099.7
|
|
|
1,776.0
|
|
||||
Gross margin
|
|
37.6
|
|
|
89.6
|
|
|
152.8
|
|
|
129.0
|
|
||||
Operating expenses
|
|
51.6
|
|
|
49.6
|
|
|
102.4
|
|
|
107.9
|
|
||||
Insurance proceeds — business interruption
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(42.4
|
)
|
||||
Contribution margin
|
|
$
|
(14.0
|
)
|
|
$
|
40.0
|
|
|
$
|
50.4
|
|
|
$
|
63.5
|
|
1
|
Total sales volume includes
743
and
842
bpd sold to the logistics segment during the
three and six
months ended
June 30, 2017
, respectively, and
785
and
1,070
bpd during the
three and six
months ended
June 30, 2016
, respectively. Total sales volume also includes sales of
1
and
5
bpd of intermediate and finished products to the El Dorado refinery during the
three and six
months ended
June 30, 2017
, respectively, and
797
and
516
bpd during the
three and six
months ended
June 30, 2016
, respectively. Total sales volume excludes
4,177
and
5,297
bpd of wholesale activity
|
1
|
Total sales volume includes
525
and
787
bpd of produced finished product sold to the Tyler refinery during the
three and six
months ended
June 30, 2017
, respectively. There were no produced finished products sold to the Tyler refinery during the
three and six
months ended
June 30, 2016
. Total sales volume excludes
19,219
and
18,880
bpd of wholesale activity during the
three and six
months ended
June 30, 2017
, respectively, and
20,450
and
22,585
bpd during the
three and six
months ended
June 30, 2016
, respectively.
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Logistics Segment Contribution:
|
|
|
|
|
|
|
|
|
||||||||
Net sales
|
|
$
|
126.7
|
|
|
$
|
111.8
|
|
|
$
|
256.2
|
|
|
$
|
215.9
|
|
Cost of goods sold
|
|
85.0
|
|
|
73.1
|
|
|
177.6
|
|
|
139.9
|
|
||||
Gross margin
|
|
41.7
|
|
|
38.7
|
|
|
78.6
|
|
|
76.0
|
|
||||
Operating expenses
|
|
10.0
|
|
|
8.7
|
|
|
20.3
|
|
|
19.2
|
|
||||
Contribution margin
|
|
$
|
31.7
|
|
|
$
|
30.0
|
|
|
$
|
58.3
|
|
|
$
|
56.8
|
|
|
|
|
|
|
|
|
|
|
||||||||
Operating Information:
|
|
|
|
|
|
|
|
|
||||||||
East Texas - Tyler Refinery sales volumes (average bpd)
(1)
|
|
77,878
|
|
|
70,188
|
|
|
70,677
|
|
|
68,301
|
|
||||
West Texas wholesale marketing throughputs (average bpd)
|
|
13,422
|
|
|
12,594
|
|
|
13,942
|
|
|
13,482
|
|
||||
West Texas wholesale marketing margin per barrel
|
|
$
|
4.26
|
|
|
$
|
2.13
|
|
|
$
|
3.44
|
|
|
$
|
1.00
|
|
Terminalling throughputs (average bpd)
(2)
|
|
128,111
|
|
|
126,476
|
|
|
122,026
|
|
|
122,645
|
|
||||
Throughputs (average bpd)
|
|
|
|
|
|
|
|
|
||||||||
Lion Pipeline System:
|
|
|
|
|
|
|
|
|
||||||||
Crude pipelines (non-gathered)
|
|
59,953
|
|
|
56,302
|
|
|
59,351
|
|
|
56,322
|
|
||||
Refined products pipelines to Enterprise Systems
|
|
49,820
|
|
|
53,670
|
|
|
50,583
|
|
|
53,725
|
|
||||
SALA Gathering System
|
|
15,957
|
|
|
18,288
|
|
16,242
|
|
|
18,645
|
||||||
East Texas Crude Logistics System
|
|
13,591
|
|
|
12,909
|
|
14,876
|
|
|
11,127
|
||||||
El Dorado Rail Offloading Rack
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
(1)
|
Excludes jet fuel and petroleum coke.
|
(2)
|
Consists of terminalling throughputs at our Tyler, Big Sandy and Mount Pleasant, Texas, El Dorado and North Little Rock, Arkansas, and Memphis and Nashville, Tennessee terminals.
|
|
|
Six Months Ended June 30,
|
||||||
|
|
2017
|
|
2016
|
||||
Cash Flow Data:
|
|
|
|
|
||||
Operating activities
|
|
$
|
(36.3
|
)
|
|
$
|
156.6
|
|
Investing activities
|
|
(42.7
|
)
|
|
(59.4
|
)
|
||
Financing activities
|
|
(37.9
|
)
|
|
(22.3
|
)
|
||
Net (decrease) increase
|
|
$
|
(116.9
|
)
|
|
$
|
74.9
|
|
|
|
Full Year
2017 Forecast |
|
Six Months Ended June 30, 2017
|
||||
Refining:
|
|
|
|
|
||||
Sustaining maintenance, including turnaround activities
|
|
$
|
42.8
|
|
|
$
|
16.8
|
|
Regulatory
|
|
12.8
|
|
|
1.1
|
|
||
Discretionary projects
|
|
7.4
|
|
|
4.1
|
|
||
Refining segment total
|
|
63.0
|
|
|
22.0
|
|
||
Logistics:
|
|
|
|
|
||||
Regulatory
|
|
5.2
|
|
|
0.3
|
|
||
Sustaining maintenance
|
|
8.8
|
|
|
3.1
|
|
||
Discretionary projects
|
|
7.1
|
|
|
1.5
|
|
||
Logistics segment total
|
|
21.1
|
|
|
4.9
|
|
||
Other:
|
|
|
|
|
||||
Regulatory
|
|
1.2
|
|
|
0.1
|
|
||
Sustaining maintenance
|
|
0.2
|
|
|
0.1
|
|
||
Growth/profit improvements
|
|
9.5
|
|
|
3.1
|
|
||
Other total
|
|
10.9
|
|
|
3.3
|
|
||
Total capital spending
|
|
$
|
95.0
|
|
|
$
|
30.2
|
|
|
|
Total Outstanding
|
|
Notional Contract Volume by
Year of Maturity
|
||||||||||||
Contract Description
|
|
Fair Value
|
|
Notional Contract Volume
|
|
2017
|
|
2018
|
|
2019
|
||||||
Contracts not designated as hedging instruments:
|
|
|
|
|
|
|
|
|
|
|
||||||
Crude oil price swaps - long
(1)
|
|
$
|
1.6
|
|
|
3,214,000
|
|
|
1,714,000
|
|
|
1,500,000
|
|
|
—
|
|
Crude oil price swaps - short
(1)
|
|
(2.8
|
)
|
|
2,824,000
|
|
|
1,564,000
|
|
|
1,260,000
|
|
|
—
|
|
|
Inventory, refined product and crack spread swaps - long
(1)
|
|
(4.4
|
)
|
|
10,027,311
|
|
|
8,617,311
|
|
|
1,410,000
|
|
|
—
|
|
|
Inventory, refined product and crack spread swaps - short
(1)
|
|
11.7
|
|
|
8,204,590
|
|
|
6,569,590
|
|
|
1,635,000
|
|
|
—
|
|
|
RIN commitment contracts - long
(2)
|
|
4.2
|
|
|
52,050,000
|
|
|
52,050,000
|
|
|
—
|
|
|
—
|
|
|
RIN commitment contracts - short
(2)
|
|
(6.4
|
)
|
|
44,200,000
|
|
|
44,200,000
|
|
|
—
|
|
|
—
|
|
|
Total
|
|
$
|
3.9
|
|
|
120,519,901
|
|
|
114,714,901
|
|
|
5,805,000
|
|
|
—
|
|
Contracts designated as cash flow hedging instruments:
|
|
|
|
|
|
|
|
|
|
|
||||||
Crude oil price swaps - long
(1)
|
|
$
|
(26.8
|
)
|
|
1,150,000
|
|
|
—
|
|
|
1,150,000
|
|
|
—
|
|
Total
|
|
$
|
(26.8
|
)
|
|
1,150,000
|
|
|
—
|
|
|
1,150,000
|
|
|
—
|
|
•
|
the inability to successfully combine the businesses of Old Delek and Alon USA in a manner that permits New Delek to achieve the synergies anticipated to result from the Delek/Alon Merger, which would result in the anticipated benefits of the Delek/Alon Merger not being realized partly or wholly in the time frame currently anticipated or at all;
|
•
|
lost sales and customers as a result of certain customers of either of the two companies deciding not to do business with New Delek;
|
•
|
complexities associated with managing the combined businesses;
|
•
|
integrating personnel from the two companies;
|
•
|
challenges in the creation of uniform standards, controls, procedures, policies and information systems;
|
•
|
potential unknown liabilities and unforeseen increased expenses, delays or regulatory conditions associated with the Delek/Alon Merger; and
|
•
|
performance shortfalls at one or both of the two companies as a result of the diversion of management’s attention caused by completing the Delek/Alon Merger and integrating the companies’ operations.
|
Exhibit No.
|
|
Description
|
||
3.1
|
|
|
|
Amended and Restated Certificate of Incorporation of Delek US Holdings, Inc. (f/k/a Delek Holdco, Inc.), dated as of April 20, 2017 (incorporated by reference to Exhibit 3.3 to Amendment No. 3 to the Registration Statement on Form S-4, filed by the Registrant with the SEC on April 24, 2017).
|
3.2
|
|
|
|
Certificate of Amendment of Amended and Restated Certificate of Incorporation of Delek US Holdings, Inc. (f/k/a Delek Holdco, Inc.), dated as of June 30, 2017 (incorporated by reference to Exhibit 3.2 to the Company's Form 8-K filed on July 3, 2017).
|
3.3
|
|
|
|
Amended and Restated Bylaws of Delek US Holdings, Inc. (f/k/a Delek Holdco, Inc.), as amended, effective as of July 1, 2017 (incorporated by reference to Exhibit 3.2 to the Company's Form 8-K filed on July 3, 2017).
|
10.1
|
|
*
|
|
Second Amendment to Amended and Restated Credit Agreement, dated May 17, 2017, among Delek Refining, Ltd., as borrower and Delek Refining, Inc. and Delek U.S. Refining GP, LLC, as guarantors, Wells Fargo Bank, National Association, as administrative agent, and a syndicate of lenders.
|
10.2
|
|
*
|
|
First Amendment to Second Amended and Restated Financing Agreement, dated April 13, 2017, among Lion Oil Company as borrower, certain subsidiaries of Lion Oil Company named therein as guarantors, the various institutions from time to time party to this Agreement, as Lenders, Fifth Third Bank as Administrative Agent and Lead Collateral Agent and Bank Hapoalim B.M., as Designated Account Collateral Agent.
|
10.3
|
|
§
|
|
Executive Employment Agreement, effective April 1, 2017, by and between Delek US Holdings, Inc. and Kevin Kremke (incorporated by reference to Exhibit 10.1 to the Company's Form 8-K filed on January 31, 2017).
|
31.1
|
|
*
|
|
Certification of the Company’s Chief Executive Officer pursuant to Rule 13a-14(a)/15(d)-14(a) under the Securities Exchange Act of 1934, as amended.
|
31.2
|
|
*
|
|
Certification of the Company’s Chief Financial Officer pursuant to Rule 13a-14(a)/15(d)-14(a) under the Securities Exchange Act of 1934, as amended.
|
32.1
|
|
**
|
|
Certification of the Company’s Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
32.2
|
|
**
|
|
Certification of the Company’s Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
101
|
|
|
|
The following materials from Delek US Holdings, Inc.’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2017, formatted in XBRL (eXtensible Business Reporting Language): (i) Condensed Consolidated Balance Sheets as of June 30, 2017 and December 31, 2016 (Unaudited), (ii) Condensed Consolidated Statements of Income for the three and six months ended June 30, 2017 and 2016 (Unaudited), (iii) Condensed Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2017 and 2016 (Unaudited), (iv) Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2017 and 2016 (Unaudited), and (v) Notes to Condensed Consolidated Financial Statements (Unaudited).
|
§
|
Management contract or compensatory plan or arrangement.
|
*
|
Filed herewith.
|
**
|
Furnished herewith.
|
Delek US Holdings, Inc.
|
|
|
|
By:
|
/s/ Ezra Uzi Yemin
|
|
Ezra Uzi Yemin
|
|
Director (Chairman), President and Chief Executive Officer
(Principal Executive Officer)
|
|
|
By:
|
/s/ Kevin Kremke
|
|
Kevin Kremke
|
|
Executive Vice President and Chief Financial Officer
(Principal Financial and Accounting Officer)
|
Exhibit No.
|
|
Description
|
||
3.1
|
|
|
|
Amended and Restated Certificate of Incorporation of Delek US Holdings, Inc. (f/k/a Delek Holdco, Inc.), dated as of April 20, 2017 (incorporated by reference to Exhibit 3.3 to Amendment No. 3 to the Registration Statement on Form S-4, filed by the Registrant with the SEC on April 24, 2017).
|
3.2
|
|
|
|
Certificate of Amendment of Amended and Restated Certificate of Incorporation of Delek US Holdings, Inc. (f/k/a Delek Holdco, Inc.), dated as of June 30, 2017 (incorporated by reference to Exhibit 3.2 to the Company's Form 8-K filed on July 3, 2017).
|
3.3
|
|
|
|
Amended and Restated Bylaws of Delek US Holdings, Inc. (f/k/a Delek Holdco, Inc.), as amended, effective as of July 1, 2017 (incorporated by reference to Exhibit 3.2 to the Company's Form 8-K filed on July 3, 2017).
|
10.1
|
|
*
|
|
Second Amendment to Amended and Restated Credit Agreement, dated May 17, 2017, among Delek Refining, Ltd., as borrower and Delek Refining, Inc. and Delek U.S. Refining GP, LLC, as guarantors, Wells Fargo Bank, National Association, as administrative agent, and a syndicate of lenders.
|
10.2
|
|
*
|
|
First Amendment to Second Amended and Restated Financing Agreement, dated April 13, 2017, among Lion Oil Company as borrower, certain subsidiaries of Lion Oil Company named therein as guarantors, the various institutions from time to time party to this Agreement, as Lenders, Fifth Third Bank as Administrative Agent and Lead Collateral Agent and Bank Hapoalim B.M., as Designated Account Collateral Agent.
|
10.3
|
|
§
|
|
Executive Employment Agreement, effective April 1, 2017, by and between Delek US Holdings, Inc. and Kevin Kremke (incorporated by reference to Exhibit 10.1 to the Company's Form 8-K filed on January 31, 2017).
|
31.1
|
|
*
|
|
Certification of the Company’s Chief Executive Officer pursuant to Rule 13a-14(a)/15(d)-14(a) under the Securities Exchange Act of 1934, as amended.
|
31.2
|
|
*
|
|
Certification of the Company’s Chief Financial Officer pursuant to Rule 13a-14(a)/15(d)-14(a) under the Securities Exchange Act of 1934, as amended.
|
32.1
|
|
**
|
|
Certification of the Company’s Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
32.2
|
|
**
|
|
Certification of the Company’s Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
101
|
|
|
|
The following materials from Delek US Holdings, Inc.’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2017, formatted in XBRL (eXtensible Business Reporting Language): (i) Condensed Consolidated Balance Sheets as of June 30, 2017 and December 31, 2016 (Unaudited), (ii) Condensed Consolidated Statements of Income for the three and six months ended June 30, 2017 and 2016 (Unaudited), (iii) Condensed Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2017 and 2016 (Unaudited), (iv) Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2017 and 2016 (Unaudited), and (v) Notes to Condensed Consolidated Financial Statements (Unaudited).
|
§
|
Management contract or compensatory plan or arrangement.
|
*
|
Filed herewith.
|
**
|
Furnished herewith.
|
|
|
|
|
2
|
|
Section
|
Refers only to Old Holdco
|
Refers only to New Holdco
|
Refers to both Old Holdco and New Holdco
|
2.4(e)
|
|
|
X
|
2.4(f)(v)
|
X
|
|
|
2.4(f)(vi)
|
|
X
|
|
4.17
|
|
|
X
|
5.6
|
|
|
X
|
6.13(h)
|
|
|
X
|
8.5
|
|
|
X
|
8.7
|
|
|
X
|
8.11
|
|
|
X
|
Definition of “Capital Expenditures”
|
X
|
|
|
Definition of “Change of Control”
|
|
X
|
|
|
3
|
|
Definition of “Guarantors”
|
|
|
X
|
Definition of “High Yield Offering”
|
|
X
|
|
Definition of “Lion Acquisition”
|
X
|
|
|
Definition of “Lion Acquisition Agreement”
|
X
|
|
|
Definition of “Loan Documents”
|
|
|
X
|
Definition of “Loan Party”
|
|
|
X
|
Definition of “Permitted Holders”
|
|
|
X
|
Definition of “Permitted JV Investments”
|
X
|
|
|
Definition of “Refining Agreement”
|
|
|
X
|
Definition of “Specified Affiliate”
|
|
|
X
|
Schedule 5.1/5.2
|
|
X
|
|
|
4
|
|
|
5
|
|
|
6
|
|
|
7
|
|
|
8
|
|
By:
|
/s/ Ezra Uzi Yemin
|
|
Ezra Uzi Yemin,
|
|
President and Chief Executive Officer
(Principal Executive Officer)
|
By:
|
/s/ Kevin Kremke
|
|
Kevin Kremke,
|
|
Executive Vice President and Chief Financial Officer
(Principal Financial and Accounting Officer)
|
By:
|
/s/ Ezra Uzi Yemin
|
|
Ezra Uzi Yemin,
|
|
President and Chief Executive Officer
(Principal Executive Officer)
|
By:
|
/s/ Kevin Kremke
|
|
Kevin Kremke,
|
|
Executive Vice President and Chief Financial Officer
(Principal Financial and Accounting Officer)
|