Valero Energy Reports Second Quarter 2020 Results

Gran Tierra Energy Inc. Announces Second Quarter 2020 Results Achieved Significant Reductions in Operating and G&A Costs Resumption of Production, Development and Workover Activities in Second Half 2020 Strengthened Financial Position and Liquidity Profile with Attractive Outlook for 2021 CALGARY, Alberta, Aug. 04, 2020 (GLOBE NEWSWIRE) -- Gran Tierra Energy Inc. ("Gran Tierra" or the "Company") (NYSE American:GTE)(TSX:GTE)(LSE:GTE) today announced the Company's financial and operating results for the quarter ended June 30, 2020 ("the Quarter"). All dollar amounts are in United States ("U.S.") dollars and production amounts are on an average working interest before royalties ("WI") basis unless otherwise indicated. Per barrel ("bbl") of oil equivalent ("BOE") amounts are based on WI sales before royalties. For per BOE amounts based on net after royalty ("NAR") production, see Gran Tierra's Quarterly Report on Form 10-Q filed August 4, 2020. Key Highlights: Production: The Quarter's production averaged 20,165 BOE per day ("BOEPD"), down 32% from first quarter 2020 ("the Prior Quarter"); with the unprecedented impact of the COVID-19 pandemic and the related crash in world oil prices, Gran Tierra took decisive actions during the Quarter to protect the Company's balance sheet and liquidity; as a result, oil production was impacted by deferred development drilling, shut-in of higher cost production and wells that were left off-line awaiting routine mechanical workovers; the suspension of production at the Suroriente and PUT-7 Blocks in the southern Putumayo region due to force majeure related to a local farmers' blockade also reduced volumes; current production is approximately 19,000 BOEPDAchieved Significant Reductions in Costs: Since March 2020, in response to the global economic downturn and lower commodity prices, Gran Tierra rapidly implemented cost saving initiatives throughout the Company; significant progress has been made on lowering costs through the renegotiation of vendor contracts and optimization of personnel and rental equipment; as a result, Gran Tierra has reduced operating costs and cash general and administrative ("G&A") costs by 43% and 30%, respectively, from the Prior Quarter; the majority of the cost reductions are structural reductions in the Company's operations, which are expected to be maintained even if oil prices recover further; as a result of ongoing cost saving initiatives, the Company also expects per well drilling and completion capital costs to be reduced by approximately 30% at Acordionero and 18% at Costayaco compared to 2019Successful Redetermination of the Credit Facility & Covenant Waiver Until October 2021: During the Quarter, Gran Tierra successfully completed the semi-annual redetermination of the Company's bank-syndicated credit facility; the borrowing base limit was re-determined to $225 million from the prior limit of $300 million and the Company was granted relief under certain financial covenants until October 1, 2021 (the "Covenant Relief Period"), including relief from compliance with the ratio of Total Debt* to EBITDAX* during the Covenant Relief PeriodVAT & Income Tax Refunds Received: at the end of the Prior Quarter, Gran Tierra had total value-added tax ("VAT") and income tax receivables of $138 million; during the Quarter, the Company collected a total of $25 million in VAT and income tax refunds; during July 2020, the Company received another $21 million in tax refunds and expects to collect another $30 to $40 million before the end of 2020; therefore, Gran Tierra forecasts total collection in the range of $76 to $86 million in VAT and income tax refunds during 2020Capital Expenditures: With 2020's oil price volatility and logistical challenges due to COVID-19, Gran Tierra elected to significantly reduce the Quarter's activities; the Quarter's capital expenditures were only $5 million; while the Quarter's net loss was $371 million (including oil and gas property impairment of $398 million), funds flow from operations(1) was a positive $6 million, which more than covered capital expendituresOperations Resumption: Gran Tierra forecasts the following activities during the course of second half 2020: With the recent recovery in oil prices and tightening of differentials, Gran Tierra has initiated the required activities to safely resume several operations throughout the Company's Colombian portfolio, in strict accordance with COVID-19 protocols; the evolving situation with the COVID-19 pandemic may impact the timing of the planned activities and the resulting amount and timing of incremental production additionsAcordionero Workover and Development Activities to Resume (100% WI): Workovers: plans call for a restart of the routine workover program, with the first workover rig to begin operations during third quarter 2020, and a second workover rig starting up in fourth quarter 2020; a total of 8-10 offline wells are expected to be worked over to restore production by 2020 year-end; the wells can only be worked over one at a time in sequence; the total combined productive capacity of the 10 highest priority wells for workover is estimated to be approximately 3,500 bbl of oil per day ("BOPD") with weighted averages for water cut of 13%, gas-oil ratio of 639 standard cubic feet per bbl and API oil gravity of 17 degrees (based on 30-day averages prior to each well going offline earlier this year)Development Drilling: one drilling rig is expected to restart development drilling operations during fourth quarter 2020 to drill 1-2 new oil wells by 2020 year-end; these new wells are expected to begin production during first quarter 2021; the drilling rig is forecast to continue drilling new development oil wells at Acordionero throughout 2021; the next four planned wells are scheduled to be drilled from the new southwest pad; each of these new wells is expected to have an initial oil production rate of approximately 550 BOPD (initial 30-day average rate), in line with the strong performance of wells drilled in the field over the last year Costayaco/Vonu Workovers to Resume (100% WI): a workover rig is expected to start operations during fourth quarter 2020 to workover 2-4 wells; the wells can only be worked over one at a time in sequence; the total combined productive capacity for the four priority wells for workover is estimated to be approximately 1,000 BOPD with weighted averages for water cut of 44%, gas-oil ratio of 811 standard cubic feet per bbl and API oil gravity of 29 degrees (based on 30-day averages prior to each well going offline earlier this year)Suroriente Block (52% WI) to Resume Production: restart of this block is expected during second half 2020; the block's WI productive capacity is estimated to be approximately 3,600 BOPD (based on the 30-day average prior to the block being shut-in earlier this year)Majority of Minor Fields to Resume Production: the restart of the these fields is expected during second half 2020; these fields' combined WI productive capacity is estimated to be approximately 1,900 BOPD (based on 30-day averages prior to the shut-ins earlier this year, which were done to reduce costs and preserve value and liquidity) Financial Guidance for Second Half 2020 (based on the resumption of operations described above): Brent Oil Price: $41.00-45.00/bblCapital Expenditures: $25-35 million (new Acordionero southwest drilling pad & 1-2 new wells)Operating Netback(1): $55-75 millionEBITDA(1): $45-65 millionFunds Flow from Operations(1): $25-35 million Hedges In Place To Protect Cash Flows: Realized oil price hedging gains totaled $17 million during the first half of 2020; the Company has entered into additional oil price hedges and has a total 11,000 BOPD hedged for the second half of 2020 (average floor price of $35.68/bbl, average ceiling price of $43.43/bbl) as follows: Gran Tierra Positioned to Thrive in 2021: The Company's initiatives during the severe downturn of 2020 were focused on portfolio optimization, deferring short-cycle investments, and pacing projects to allow the safe resumption of operations when oil prices recovered and strict COVID-19 safety protocols were implemented; the Company is analyzing multiple scenarios focused on maximizing returns and free cash flow in 2021, and to optimize the ultimate oil recovery, free cash flow and long-term value from all assets; Gran Tierra believes its robust asset base will resume average production in excess of 30,000 BOEPD in 2021, based on current assumptions, including commodity prices remaining at current levels and that there is minimal global economic disruption from the COVID-19 pandemic next year Key Financial Metrics for the Quarter: Net loss was $371 million compared with a net loss of $252 million in the Prior Quarter, primarily due to a non-cash impairment on the Company's oil and gas properties as a result of significantly lower oil prices ($398 million)Adjusted EBITDA(1) was $18 million, compared with $35 million in the Prior QuarterFunds flow from operations(1) of $6 million ($0.02 per share, basic) decreased by 73% compared with the Prior Quarter, as a result of lower production and a 34% decrease in the Brent oil price, as well as a widening of differentials; capital expenditures totaled $5 million, a decrease of 89% compared to the Prior QuarterOil and gas sales were $34 million, down 61% from $86 million in the Prior Quarter, due to the decreases in production and oil pricesOperating netback(1)(2) decreased to $5.65 per BOE, which was caused mostly by the 34% drop in the Brent oil price from the Prior Quarter, while other cost components such as transportation expenses and the quality and transportation discount remained relatively unchanged; the drop in the Quarter's royalties to $1.63 per BOE, down from the Prior Quarter's $5.61 per BOE, partially offset the negative impact of the crash in oil pricesOperating expenses of $9.62 per BOE were down 21% from $12.17 per BOE in the Prior Quarter due to lower power generation costs, reduction in rental equipment and cost savings attributed to the lower activitiesWorkover expenses were $0.71 per BOE, down 85% from $4.64 per BOE in the Prior Quarter due to lower activity Transportation expenses were $1.68 per BOE, up from $1.52 per BOE in the Prior Quarter, due to higher pipeline sales Operations Update Acordionero (100% WI and Operator) During the Quarter, no development wells were drilled, however production from the remaining wells stabilized at approximately 11,000 BOPD during the Quarter, with downtime of only approximately 1%; the low downtime reflects excellent reliability from the field's gas-to-power generation; the stabilization of production is indicative of effective waterflood response due to proactive pattern balancing; this base production response provides an excellent platform to grow production and cash flow from future workovers and development drillingAt the end of the Quarter, a total of 14 oil wells require workovers to restore production; given the recent strong recovery in the Brent oil price, the Company is planning on restarting a workover program during third quarter 2020 Suroriente (52% WI and Operator) Gran Tierra plans to restart production from Suroriente during second half 2020The Cohembi and other oil fields in the Suroriente Block were producing at approximately 3,600 BOPD (WI) prior to the blockades, as the field was continuing to positively respond to increased water injection and pump optimizationsPrior to the blockades in late February 2020, activities were underway to expand the Cohembi water treatment, injection and processing facilities under a two-phased expansion program; the combined phased expansion would be expected to boost gross water injection capacity from 19,000 to 60,000 bbl of water per day Ayombero-Chuira (100% WI and Operator) Gran Tierra remains encouraged by results from the Ayombero-1 well, which continues to show stable production which averaged 158 BOPD for the Quarter on natural flow and has total cumulative oil production to date of 124,000 bblAyombero-2 and -3 remain suspended and ready for the next phase of operations to recover the wellbores; Gran Tierra continues detailed planning for the next phase of operations but plans to await further recovery in oil prices before restarting development activities Moqueta (100% WI and Operator) During the Quarter, Gran Tierra continued to optimize the waterflood at Moqueta, where oil production and water injection were in-line with expectationsOn June 21, 2020, Moqueta was shut-in immediately after a leak was detected in the pipeline that transports the field's production to Costayaco; repairs were made during July 2020 and the field was brought back on production on July 27, 2020; the temporary shut-in of Moqueta is expected to cause an immaterial reduction in the Company's total 2020 average production of approximately 400 BOPD; Moqueta is currently producing approximately 3,000 BOPD Message to Shareholders Gary Guidry, President and Chief Executive Officer of Gran Tierra, commented: "With the unprecedented volatility facing our industry during the COVID-19 pandemic and the related imbalance in world oil supply and demand, Gran Tierra took decisive action to protect our balance sheet and cash flows. We swiftly reduced our 2020 capital program and implemented cost saving initiatives throughout the Company. The team has made significant progress on lowering operating and G&A costs, and done a great job managing the crisis on all fronts. We believe we are well-positioned to withstand the current volatile environment with our low base decline, conventional oil asset base and the operational control for capital allocation and timing, while maintaining a low cost structure. As we move forward, we remain agile in the execution of our strategy as we plan to resume development and workover activities in Acordionero and restart the majority of shut-in oil fields during the second half of 2020. We will safely and diligently commence operations with a key objective of finishing 2020 strong to set up for an exciting 2021. We believe that Gran Tierra is well-positioned to thrive in 2021 and beyond." Financial and Operational Highlights (all amounts in $000s, except per share and BOE amounts) *These non-GAAP measures are defined in the Credit Agreement, dated as of September 18, 2015, by and among Gran Tierra Energy Inc., Gran Tierra Energy International Holdings Ltd., the Bank of Nova Scotia, Societe Generale and the lenders party thereto, as amended (the "Credit Agreement"). The Credit Agreement and all amendments thereto are available as exhibits to Gran Tierra's SEC filings. Total Debt means all debt of Gran Tierra and its subsidiaries party to the credit facility on a consolidated basis. EBITDAX means the sum of consolidated net income plus the following expenses or charges to the extent deducted from consolidated net income: interest, income taxes, depreciation, depletion, amortization, exploration expenses and other similar noncash charges, minus all noncash income added to consolidated net income. Senior Secured Leverage Ratio means the ratio of secured total date to EBITDAX.(1) Net debt is defined as face value of debt ($789 million), less cash and cash equivalents ($17 million). Net debt, funds flow from operations, operating netback, return on average capital employed, cash netback, earnings before interest, taxes and depletion, depreciation and accretion ("DD&A") ("EBITDA") and EBITDA adjusted for goodwill and asset impairment, unrealized foreign exchange gain or loss, stock based compensation expense or recovery, other loss and unrealized financial instruments gain or loss ("Adjusted EBITDA") are non-GAAP measures and do not have standardized meanings under generally accepted accounting principles in the United States of America ("GAAP"). Refer to "Non-GAAP Measures" in this press release for descriptions of these non-GAAP measures and reconciliations to the most directly comparable measures calculated and presented in accordance with GAAP.(2) Operating netback as presented is defined as oil and gas sales less operating, workover and transportation expenses. See the table entitled Financial and Operational Highlights above for the components of consolidated operating netback and corresponding reconciliation. Conference Call Information: Gran Tierra will host its second quarter 2020 results conference call on Wednesday, August 5, 2020, at 9:00 a.m. Mountain Time, 11:00 a.m. Eastern Time. Interested parties may access the conference call by dialing +1-844-348-3792 or +1-614-999-9309 (North America), 0800-028-8438 or 020-3107-0289 (United Kingdom) or 01-800-518-5094 (Colombia). The call will also be available via webcast at www.grantierra.com. Corporate Presentation: Gran Tierra's Corporate Presentation has been updated and is available on the Company website at www.grantierra.com. Contact Information For investor and media inquiries please contact: Gary Guidry President & Chief Executive Officer Ryan Ellson Executive Vice President & Chief Financial Officer Rodger Trimble Vice President, Investor Relations +1-403-265-3221 [email protected] About Gran Tierra Energy Inc. Gran Tierra Energy Inc. together with its subsidiaries is an independent international energy company focused on oil and natural gas exploration and production in Colombia and Ecuador. The Company is focused on its existing portfolio of assets in Colombia and Ecuador and will pursue new growth opportunities throughout Colombia and Latin America, leveraging our financial strength. The Company's common stock trades on the NYSE American, the Toronto Stock Exchange and the London Stock Exchange under the ticker symbol GTE. Additional information concerning Gran Tierra is available at www.grantierra.com. Information on the Company's website (including the Sustainability Report) does not constitute a part of this press release. Investor inquiries may be directed to [email protected] or (403) 265-3221. Gran Tierra's Securities and Exchange Commission filings are available on the SEC website at http://www.sec.gov and on SEDAR at http://www.sedar.com and UK regulatory filings are available on the National Storage Mechanism website at https://data.fca.org.uk/#/nsm/nationalstoragemechanism. Forward-Looking Statements and Legal Advisories: This press release contains opinions, forecasts, projections, expectations and other statements about future events or results that constitute forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and financial outlook and forward-looking information within the meaning of applicable Canadian securities laws (collectively, "forward-looking statements"), which can be identified by such terms as "expect," "plan," "guidance," "forecast," "project," "objective," "will," "believe," "should," "could," "allow" and other terms that are forward-looking in nature. Such forward-looking statements include, but are not limited to, the Company's expectations regarding its capital program, 2020 and 2021 outlook, the benefits of reduced capital spending and G&A expenses, the benefits of derivative transactions, well performance, production, including the restart of production, and future development costs, liquidity and access to capital, future plans when oil prices increase, the Company's strategies and results thereof, the Company's operations including planned operations, the use and the availability of certain tax refunds, the Company's guidance, including future production, operating netback, EBITDA and funds flow from operations, and the impact of the COVID-19 pandemic, disruptions to operations and the decline in industry conditions. Among the important factors that could cause actual results to differ materially from those indicated by the forward-looking statements in this press release are: the unprecedented impact of the COVID-19 pandemic and the actions of OPEC and non-OPEC countries and the procedures imposed by governments in response thereto; disruptions to local operations; the decline and volatility in oil and gas industry conditions and commodity prices; the severe imbalance in supply and demand for oil and natural gas; prices and markets for oil and natural gas are unpredictable and volatile; the accuracy of productive capacity of any particular field; the timing and impact of any resumption of operations; Gran Tierra's operations are located in South America and unexpected problems can arise due to guerilla activity or local blockades or protests; technical difficulties and operational difficulties may arise which impact the production, transport or sale of our products; geographic, political and weather conditions can impact the production, transport or sale of our products; the ability of Gran Tierra to execute its business plan and realize expected benefits from current initiatives (including a reduction of the capital program); the risk that unexpected delays and difficulties in developing currently owned properties may occur; the ability to replace reserves and production and develop and manage reserves on an economically viable basis; the accuracy of testing and production results and seismic data, pricing and cost estimates (including with respect to commodity pricing and exchange rates); the risk profile of planned exploration activities; the effects of drilling down-dip; the effects of waterflood and multi-stage fracture stimulation operations; the extent and effect of delivery disruptions, equipment performance and costs; actions by third parties; the timely receipt of regulatory or other required approvals for our operating activities; the failure of exploratory drilling to result in commercial wells; unexpected delays due to the limited availability of drilling equipment and personnel; the risk that current global economic and credit market conditions may impact oil prices and oil consumption more than Gran Tierra currently predicts, which could cause Gran Tierra to further modify its strategy and capital spending program; volatility or declines in the trading price of our common stock or bonds; the risk that Gran Tierra does not receive the anticipated benefits of government programs, including government tax refunds; Gran Tierra's ability to comply with financial covenants in its credit agreement; and the risk factors detailed from time to time in Gran Tierra's periodic reports filed with the Securities and Exchange Commission, including, without limitation, under the caption "Risk Factors" in Gran Tierra's Quarterly Report for the quarter ended March 31, 2020 and Annual Report on Form 10-K for the year ended December 31, 2019, many of which are beyond the Company's control. These filings are available on the SEC website at http://www.sec.gov and on SEDAR at www.sedar.com. The unprecedented decline in oil prices and related reduction in the Company's capital program has significantly reduced the Company's forecasted Covenant EBITDAX. The forward-looking statements contained in this press release are based on certain assumptions made by Gran Tierra based on management's experience and other factors believed to be appropriate. Gran Tierra believes these assumptions to be reasonable at this time, but the forward-looking statements are subject to risk and uncertainties, many of which are beyond Gran Tierra's control, which may cause actual results to differ materially from those implied or expressed by the forward looking statements. The risk that the assumptions on which the 2020 and 2021 outlook are based prove incorrect may increase the later the period to which the outlook relates. In particular, the unprecedented nature of the current economic downturn, pandemic and industry decline may make it particularly difficult to identify risks or predict the degree to which identified risks will impact Gran Tierra's business and financial condition. All forward-looking statements are made as of the date of this press release and the fact that this press release remains available does not constitute a representation by Gran Tierra that Gran Tierra believes these forward-looking statements continue to be true as of any subsequent date. Actual results may vary materially from the expected results expressed in forward-looking statements. Gran Tierra disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as expressly required by applicable law. The estimates of future production, operating netback, EBITDA, funds flow from operations and certain expenses set forth in this press release may be considered to be future-oriented financial information or a financial outlook for the purposes of applicable Canadian securities laws. Financial outlook and future-oriented financial information contained in this press release about prospective financial performance, financial position or cash flows are provided to give the reader a better understanding of the potential future performance of the Company in certain areas and are based on assumptions about future events, including economic conditions and proposed courses of action, based on management's assessment of the relevant information currently available, and to become available in the future. In particular, this press release contains projected operational and financial information for the second half of 2020 and 2021. These projections contain forward-looking statements and are based on a number of material assumptions and factors set out above. Actual results may differ significantly from the projections presented herein. These projections may also be considered to contain future-oriented financial information or a financial outlook. The actual results of Gran Tierra's operations for any period will likely vary from the amounts set forth in these projections, and such variations may be material. See above for a discussion of the risks that could cause actual results to vary. The future-oriented financial information and financial outlooks contained in this press release have been approved by management as of the date of this press release. Readers are cautioned that any such financial outlook and future-oriented financial information contained herein should not be used for purposes other than those for which it is disclosed herein. The Company and its management believe that the prospective operational and financial information has been prepared on a reasonable basis, reflecting management's best estimates and judgments, and represent, to the best of management's knowledge and opinion, the Company's expected course of action. However, because this information is highly subjective, it should not be relied on as necessarily indicative of future results. Non-GAAP Measures This press release includes non-GAAP financial measures as further described herein. These non-GAAP measures do not have a standardized meaning under GAAP. Investors are cautioned that these measures should not be construed as alternatives to net income or loss or other measures of financial performance as determined in accordance with GAAP. Gran Tierra's method of calculating these measures may differ from other companies and, accordingly, they may not be comparable to similar measures used by other companies. Each non-GAAP financial measure is presented along with the corresponding GAAP measure so as to not imply that more emphasis should be placed on the non-GAAP measure. Operating netback as presented is defined as oil and gas sales less operating and transportation expenses. See the table entitled Financial and Operational Highlights above for the components of consolidated operating netback and corresponding reconciliation. Cash netback as presented is defined as net income before DD&A expenses, goodwill and asset impairment, deferred income tax expense or recovery, stock-based compensation expense or recovery, amortization of debt issuance costs, non-cash lease expense, lease payments, unrealized foreign exchange gains and losses, financial instrument gains or losses, loss on redemption of Convertible Notes and cash settlement of financial instruments. Management believes that operating netback and cash netback are useful supplemental measures for investors to analyze financial performance and provide an indication of the results generated by Gran Tierra's principal business activities prior to the consideration of other income and expenses. A reconciliation from net (loss) income to cash netback is as follows: EBITDA, as presented, is defined as net (loss) income adjusted for DD&A expenses, interest expense and income tax expense or recovery. Adjusted EBITDA is defined as EBITDA adjusted for goodwill and asset impairment, unrealized foreign exchange gain or loss, stock based compensation expense or recovery, other loss and unrealized financial instruments gain or loss. Management uses this financial measure to analyze performance and (loss) income generated by our principal business activities prior to the consideration of how non-cash items affect that income, and believes that this financial measure is also useful supplemental information for investors to analyze performance and our financial results. A reconciliation from net (loss) income to EBITDA and Adjusted EBITDA as follows: Funds flow from operations, as presented, is net (loss) income adjusted for DD&A expenses, goodwill and asset impairment, deferred tax expense or recovery, stock-based compensation expense or recovery, amortization of debt issuance costs, non-cash lease expense, lease payments, unrealized foreign exchange gains and losses, financial instruments gain or loss and cash settlement of financial instruments. Management uses this financial measure to analyze performance and income generated by our principal business activities prior to the consideration of how non-cash items affect that income, and believes that this financial measure is also useful supplemental information for investors to analyze performance and our financial results. A reconciliation from net (loss) income to funds flow from operations is as follows: Gran Tierra is unable to provide forward-looking net income and oil and gas sales, the GAAP measures most directly comparable to the non-GAAP measures, such as Adjusted EBITDA and funds flow from operations and operating netback, respectively, due to the impracticality of quantifying certain components required by GAAP as a result of the inherent volatility in the value of certain financial instruments held by the Company and the inability to quantify the effectiveness of commodity price derivatives used to manage the variability in cash flows associated with the forecasted sale of its oil production and changes in commodity prices. Presentation of Oil and Gas Information BOEs have been converted on the basis of 6 thousand cubic feet ("Mcf") of natural gas to 1 bbl of oil. BOEs may be misleading, particularly if used in isolation. A BOE conversion ratio of 6 Mcf: 1 bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. In addition, given that the value ratio based on the current price of oil as compared with natural gas is significantly different from the energy equivalent of six to one, utilizing a BOE conversion ratio of 6 Mcf: 1 bbl would be misleading as an indication of value. References to a formation where evidence of hydrocarbons has been encountered is not necessarily an indicator that hydrocarbons will be recoverable in commercial quantities or in any estimated volume. Gran Tierra's reported production is a mix of light crude oil and medium and heavy crude oil for which there is not a precise breakdown since the Company's oil sales volumes typically represent blends of more than one type of crude oil. Well test results should be considered as preliminary and not necessarily indicative of long-term performance or of ultimate recovery. Well log interpretations indicating oil and gas accumulations are not necessarily indicative of future production or ultimate recovery. If it is indicated that a pressure transient analysis or well-test interpretation has not been carried out, any data disclosed in that respect should be considered preliminary until such analysis has been completed. References to thickness of "oil pay" or of a formation where evidence of hydrocarbons has been encountered is not necessarily an indicator that hydrocarbons will be recoverable in commercial quantities or in any estimated volume. This press release contains certain oil and gas metrics, including operating netback and cash netback, which do not have standardized meanings or standard methods of calculation and therefore such measures may not be comparable to similar measures used by other companies and should not be used to make comparisons. These metrics are calculated as described in this press release and management believes that they are useful supplemental measures for the reasons described in this press release. Such metrics have been included herein to provide readers with additional measures to evaluate the Company's performance; however, such measures are not reliable indicators of the future performance of the Company and future performance may not compare to the performance in previous periods.

Delek US Holdings Reports Second Quarter 2020 Results- Reported second quarter net income of $87.7 million and Adjusted EBITDA loss of $(85.1) million- Business model transition to more stable cash flow is well underway- Midstream investments are coming to fruition and beginning to contribute- Retail and logistics segments continue performing well through the downturn- Agility to adapt operating expenses and capital spending to evolving macro environment- Quarterly dividend is being maintained at $0.31 per share BRENTWOOD, Tenn., Aug. 4, 2020 /PRNewswire/ -- Delek US Holdings, Inc. (NYSE: DK) ("Delek US") today announced financial results for its second quarter ended June 30, 2020. Delek US reported second quarter 2020 net income of $87.7 million, or $1.18 per diluted share, versus net income of $77.3 million, or $1.00 per diluted share, for the quarter ended June 30, 2019, which included a $16.8 million income tax benefit relating to incremental loss carrybacks provided by the CARES Act. On an adjusted basis, Delek US reported Adjusted net loss of $110.5 million, or $(1.50) per share for the second quarter 2020. This compares to Adjusted net income of $97.5 million, or $1.27 per share, in the prior-year period. Adjusted earnings before interest, taxes, depreciation and amortization ("Adjusted EBITDA") was $(85.1) million compared to Adjusted EBITDA of $210.7 million in the prior-year period. Reconciliations of net income reported under U.S. GAAP to Adjusted net income and Adjusted EBITDA are included in the financial tables attached to this release. Adjusted quarterly results were impacted by net losses totaling approximately $(74.9) million (after-tax) or $(1.02) per share, which is comprised of the following: an inventory headwind (or, an unfavorable "other inventory impact") on margin in the amount of $(91.4) million pre-tax, or $(69.9) million after-tax, related to FIFO accounting as compared to current market prices; and a negative margin impact of $(29.0) million pre-tax, or $(22.2) million after-tax, related to the sale of purchased product; realized hedging losses in the amount of $(134.0) million pre-tax, or $(103.9) million after-tax, the majority of which related to fixed price crude transactions that resulted in margin gains at our Tyler Refinery totaling $111.0 million pre-tax, or $84.9 million after-tax, where the magnitude was driven by the historic volatility in the crude market during the second quarter; and a reversal of the $36.1 million tax headwind disclosed in the first quarter of 2020. Note, the other inventory impact is separate from LCM inventory impacts that are excluded from adjusted results. Additionally, a breakdown of realized and unrealized hedging by segment is provided in the tables on page 10. Uzi Yemin, Chairman, President and Chief Executive Officer of Delek US, stated, "Our diversified portfolio is providing resilience during this period of weak refining margins with the logistics and retail segments generating a contribution margin above $80 million collectively. Our transition to midstream and more stable cash flow is well underway with previous capital investments poised to support ongoing growth from robust second quarter levels." Mr. Yemin continued, "Our company has a long history of being nimble and we remain agile in terms of flexing our capital spending and cost structure to the prevailing macro environment. We are on-track to exceed guidance of $100 million of cost reductions year over year. Capital spending was reduced dramatically from first quarter levels and we expect to remain disciplined with minimal outlay anticipated for the balance of the year. As of June 30th, the company had a cash balance of $849 million and is well positioned for a turbulent macro environment." Regular Quarterly Dividend Delek US announced today its Board of Directors declared a regular quarterly cash dividend of $0.31 per share. Shareholders of record on August 19, 2020 will receive this cash dividend payable on September 3, 2020. Liquidity As of June 30, 2020, Delek US had a cash balance of $849.0 million and total consolidated long-term debt of $2,454.9 million, resulting in net debt of $1,605.9 million. As of June 30, 2020, Delek Logistics Partners, LP (NYSE: DKL) ("Delek Logistics") had $995.2 million of total debt and $16.2 million of cash, which is included in the consolidated amounts on Delek US' balance sheet. Excluding Delek Logistics, Delek US had approximately $832.8 million in cash and $1,459.7 million of debt, or a $626.9 million net debt position. Refining Segment Refining contribution margin decreased to $59.7 million in the second quarter 2020 from $198.1 million in the second quarter 2019. On an adjusted basis, adjusted refining contribution margin was $(124.1) million in the second quarter 2020 compared to $216.5 million in the second quarter 2019. The current period adjusted refining contribution margin reflects $(90.6) million of other inventory impact, $(29.0) million of losses related to the sale of purchased product, and $(137.0) million of realized hedging losses, partially offset by a $111.0 million benefit from fixed price crude cost transactions. On a year-over-year basis, results were reduced primarily due to lower crude oil differentials, crack spreads and throughputs as a result of decreased demand due to COVID-19. Further, during the second quarter 2020, the realized Midland-Cushing crude oil discount was $0.48 per barrel compared to a realized discount of $1.77 per barrel in the prior year period. These factors were partially offset by the crude oil futures market that was in contango of $3.06 per barrel in the second quarter 2020 compared to contango of $0.20 per barrel in the second quarter 2019. Other inventory impact is primarily calculated by multiplying the change of barrels in refined inventory by the difference between current period average NYMEX WTI price and per barrel cost of materials and other for the period recognized on a FIFO basis. The other inventory impact on adjusted refining contribution margin was a charge of $(90.6) million in the second quarter 2020 compared to a charge of $(12.0) million in the second quarter 2019. Other inventory impact included a (charge) benefit to the refineries during the second quarter of 2020 of $(11.8) million for Big Spring, $(59.8) million for El Dorado and $(17.5) million Krotz Springs, as compared to a (charge) benefit of $(11.6) million for Big Spring, $1.1 million for El Dorado and $(1.5) million for Krotz Springs in the second quarter of 2019. Additionally, we buy and sell purchased product to optimize margins and to meet contractual demands, as needed. We recognized losses of $(29.0) million within the refining margins during the second quarter 2020, of which $(30.5) million relates to the Krotz Springs refinery, compared to gains totaling $8.3 million during the second quarter 2019. Logistics Segment The logistics segment contribution margin in the second quarter 2020 was $61.4 million compared to $44.2 million in the second quarter 2019. Results improved on a year-over-year basis primarily due to the drop down of the Delek Permian Gathering business and Trucking Assets, increased crude gathering, operating expense reductions and an increase in income from equity method investments. This was partially offset by lower West Texas gross margin on a year-over-year basis. Logistics segment contribution margin reflected another inventory impact to earnings relating to its West Texas inventory consisting of a charge totaling $(0.5) million during the second quarter of 2020 compared to a charge of $(0.8) million during the second quarter of 2019. Retail Segment For the second quarter 2020, contribution margin was $24.3 million compared to $17.6 million in the prior year period for the retail segment. Merchandise sales were approximately $89.4 million with an average retail margin of 30.8% in the second quarter 2020, compared to merchandise sales of approximately $83.3 million with an average retail margin of 31.2% in the prior-year period. Approximately 42.4 million retail fuel gallons were sold at an average margin of $0.45 per gallon in the second quarter 2020 compared to 53.7 million retail fuel gallons sold at an average margin of $0.29 per gallon in the second quarter 2019. In the second quarter 2020, the average merchandise store count was 253 compared to 277 in the prior year period. On a same store sales basis in the second quarter 2020, merchandise sales increased 13.1% and fuel gallons sold decreased 19.7% compared to the prior-year period. Retail segment contribution margin reflected another inventory impact to earnings relating to its fuel inventory consisting of a charge totaling $(3.2) million during the second quarter of 2020 compared to no charge during the second quarter of 2019. Corporate/Other Contribution margin from Corporate/Other was a loss of $15.5 million in the second quarter 2020 compared to a loss of $9.6 million in the prior-year period. Note, hedging gains (losses) related to the refining segment have been reclassified from the corporate and other segment to the refining segment starting in the first quarter of 2020 and have been retrospectively reclassified in 2019 for comparison purposes. Corporate/Other segment contribution margin reflected another inventory impact to earnings consisting of a benefit totaling $2.9 million during the second quarter of 2020 compared to no benefit during the second quarter of 2019. Second Quarter 2020 Results | Conference Call Information Delek US will hold a conference call to discuss its second quarter 2020 results on Wednesday, August 5, 2020 at 8:30 a.m. Central Time. Investors will have the opportunity to listen to the conference call live by going to www.DelekUS.com and clicking on the Investor Relations tab. Participants are encouraged to register at least 15 minutes early to download and install any necessary software. Presentation materials accompanying the call will be available on the investor relations tab of the Delek US website approximately five minutes prior to the start of the call. For those who cannot listen to the live broadcast, the online replay will be available on the website for 90 days. Investors may also wish to listen to Delek Logistics' (NYSE: DKL) second quarter 2020 earnings conference call that will be held on Wednesday, August 5, 2020 at 7:30 a.m. Central Time and review Delek Logistics' earnings press release. Market trends and information disclosed by Delek Logistics may be relevant to the logistics segment reported by Delek US. Both a replay of the conference call and press release for Delek Logistics are available online at www.deleklogistics.com. About Delek US Holdings, Inc. Delek US Holdings, Inc. is a diversified downstream energy company with assets in petroleum refining, logistics, renewable fuels and convenience store retailing. The refining assets consist of refineries operated in Tyler and Big Spring, Texas, El Dorado, Arkansas and Krotz Springs, Louisiana with a combined nameplate crude throughput capacity of 302,000 barrels per day. The logistics operations primarily consist of Delek Logistics Partners, LP (NYSE: DKL). Delek US Holdings, Inc. and its affiliates own approximately 71% (including the 2% general partner interest) of Delek Logistics Partners, LP. Delek Logistics Partners, LP is a growth-oriented master limited partnership focused on owning and operating midstream energy infrastructure assets. The convenience store retail operates approximately 253 convenience stores in central and West Texas and New Mexico. Safe Harbor Provisions Regarding Forward-Looking Statements This press release contains forward-looking statements that are based upon current expectations and involve a number of risks and uncertainties. Statements concerning current estimates, expectations and projections about future results, performance, prospects, opportunities, plans, actions and events and other statements, concerns, or matters that are not historical facts are "forward-looking statements," as that term is defined under the federal securities laws. These statements contain words such as "possible," "believe," "should," "could," "would," "predict," "plan," "estimate," "intend," "may," "anticipate," "will," "if", "potential," "expect" or similar expressions, as well as statements in the future tense. These forward-looking statements include, but are not limited to, statements regarding throughput at the Company's refineries; crude oil prices, discounts and quality and our ability to benefit therefrom; share repurchases; returning cash to shareholders; payments of dividends; growth; investments into our business; the performance and execution of our midstream growth initiatives, including the Big Spring Gathering System, the Red River joint venture and the Wink to Webster long-haul crude oil pipeline, and the flexibility, benefits and the expected returns therefrom; RINs waivers and tax credits and the value and benefit therefrom; cash and liquidity; opportunities and anticipated performance and financial position. Investors are cautioned that the following important factors, among others, may affect these forward-looking statements. These factors include, but are not limited to: uncertainty related to timing and amount of future share repurchases and dividend payments; risks and uncertainties with respect to the quantities and costs of crude oil we are able to obtain and the price of the refined petroleum products we ultimately sell; including uncertainties regarding future decisions by OPEC regarding production and pricing disputes between OPEC members and Russia; uncertainty relating to the impact of the COVID-19 outbreak on the demand for crude oil, refined products and transportation and storage services; risks related to Delek US' exposure to Permian Basin crude oil, such as supply, pricing, gathering, production and transportation capacity; gains and losses from derivative instruments; management's ability to execute its strategy of growth, including risks associated with acquisitions and dispositions; acquired assets may suffer a diminishment in fair value as a result of which we may need to record a write-down or impairment in carrying value of the asset; the possibility of litigation challenging renewable fuel standard waivers;changes in the scope, costs, and/or timing of capital and maintenance projects; the ability to grow the Big Spring Gathering System; the ability of the Red River joint venture to complete the expansion project to increase the Red River pipeline capacity; the ability of the joint venture to construct the Wink to Webster long haul crude oil pipeline; operating hazards inherent in transporting, storing and processing crude oil and intermediate and finished petroleum products; our competitive position and the effects of competition; the projected growth of the industries in which we operate; general economic and business conditions affecting the geographic areas in which we operate; and other risks described in Delek US' filings with the United States Securities and Exchange Commission (the "SEC"), including risks disclosed in our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and other filings and reports with the SEC. 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 to reflect events or circumstances that occur, or which Delek US becomes aware of, after the date hereof, except as required by applicable law or regulation. Non-GAAP Disclosures: Our management uses certain "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 with U.S. GAAP. These financial and operational non-GAAP measures are important factors in assessing our operating results and profitability and include: Adjusted net income (loss) - calculated as net income attributable to Delek US adjusted for certain identified infrequently occurring items, non-cash items and items that are not attributable to our on-going operations (collectively, "Adjusting Items") recorded during the period; Adjusted net income (loss) per share - calculated as Adjusted net income (loss) divided by weighted average shares outstanding, assuming dilution, as adjusted for any anti-dilutive instruments that may not be permitted for consideration in GAAP earnings per share calculations but that nonetheless favorably impact dilution; Earnings before interest, taxes, depreciation and amortization ("EBITDA") - calculated as net income attributable to Delek adjusted to add back interest expense, income tax expense, depreciation and amortization; Adjusted EBITDA - calculated as EBITDA adjusted for the identified Adjusting Items in Adjusted net income (loss) that do not relate to interest expense, income tax expense, depreciation or amortization, and adjusted to include income (loss) attributable to non-controlling interests; Adjusted Segment Contribution Margin - calculated as Segment Contribution Margin adjusted for the identified Adjusting Items in Adjusted net income (loss) that impact Segment Contribution Margin; Refining margin - calculated as the difference between total refining revenues and total cost of materials and other; Adjusted refining margin -- calculated as refining margin adjusted for certain identified infrequently occurring items, non-cash items and items that are not attributable to our on-going refining operations recorded during the period; Refining margin per sales barrel - calculated as refining margin divided by our average refining sales in barrels per day (excluding purchased barrels) multiplied by 1,000 and multiplied by the number of days in the period; and Adjusted refining margin per sales barrel - calculated as adjusted refining margin divided by our average refining sales in barrels per day (excluding purchased barrels) multiplied by 1,000 and multiplied by the number of days in the period;We believe these non-GAAP operational and financial measures are useful to investors, lenders, ratings agencies and analysts to assess our ongoing performance because, when reconciled to their most comparable GAAP financial measure, they provide improved comparability between periods through the exclusion of certain items that we believe are not indicative of our core operating performance and that may obscure our underlying results and trends. Non-GAAP measures have important limitations as analytical tools, because they exclude some, but not all, items that affect net earnings and operating income. These measures should not be considered substitutes for their most directly comparable U.S. GAAP financial measures. Additionally, because Adjusted net income or loss, adjusted net income or loss per share, EBITDA and adjusted EBITDA, and Adjusted Segment Contribution Margin or any of our other identified non-GAAP measures may be defined differently by other companies in its industry, Delek US' definition may not be comparable to similarly titled measures of other companies. See the accompanying tables in this earnings release for a reconciliation of these non-GAAP measures to the most directly comparable GAAP measures. Delek US Holdings, Inc. Condensed Consolidated Balance Sheets (Unaudited) (In millions, except share and per share data) June 30, 2020 December 31, 2019 ASSETS Current assets: Cash and cash equivalents $ 849.0 $ 955.3 Accounts receivable, net 480.4 792.6 Inventories, net of inventory valuation reserves 653.5 946.7 Other current assets 390.0 268.7 Total current assets 2,372.9 2,963.3 Property, plant and equipment: Property, plant and equipment 3,514.9 3,362.8 Less: accumulated depreciation (1,031.5) (934.5) Property, plant and equipment, net 2,483.4 2,428.3 Operating lease right-of-use assets 183.9 183.6 Goodwill 855.7 855.7 Other intangibles, net 110.0 110.3 Equity method investments 367.3 407.3 Other non-current assets 64.4 67.8 Total assets $ 6,437.6 $ 7,016.3 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 1,004.2 $ 1,599.7 Current portion of long-term debt 33.4 36.4 Obligation under Supply and Offtake Agreements 99.0 332.5 Current portion of operating lease liabilities 43.4 40.5 Accrued expenses and other current liabilities 409.3 346.8 Total current liabilities 1,589.3 2,355.9 Non-current liabilities: Long-term debt, net of current portion 2,421.5 2,030.7 Obligation under Supply and Offtake Agreements 215.0 144.8 Environmental liabilities, net of current portion 106.3 137.9 Asset retirement obligations 36.8 68.6 Deferred tax liabilities 335.4 267.9 Operating lease liabilities, net of current portion 140.2 144.3 Other non-current liabilities 33.8 30.9 Total non-current liabilities 3,289.0 2,825.1 Stockholders' equity: Preferred stock, $0.01 par value, 11,000,000 shares and 10,000,000 shares authorized at June 30,2020 and December 31, 2019, respectively, no shares issued and outstanding - - Common stock, $0.01 par value, 110,000,000 shares authorized, 91,232,964 shares and 90,987,025 shares issued at June 30, 2020 and December 31, 2019, respectively 0.9 0.9 Additional paid-in capital 1,160.1 1,151.9 Accumulated other comprehensive income 0.5 0.1 Treasury stock, 17,575,527 shares and 17,516,814 shares, at cost, as of June 30, 2020 and December 31, 2019, respectively (694.1) (692.2) Retained earnings 926.4 1,205.6 Non-controlling interests in subsidiaries 165.5 169.0 Total stockholders' equity 1,559.3 1,835.3 Total liabilities and stockholders' equity $ 6,437.6 $ 7,016.3 Delek US Holdings, Inc. Condensed Consolidated Statements of Income (Unaudited) (1) (In millions, except share and per share data) Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Net revenues $ 1,535.5 $ 2,480.3 $ 3,356.7 $ 4,680.2 Cost of sales: Cost of materials and other 1,277.8 2,067.7 3,188.4 3,767.1 Operating expenses (excluding depreciation and amortization presented below) 103.4 135.8 232.6 276.7 Depreciation and amortization 53.6 42.6 100.6 81.9 Total cost of sales 1,434.8 2,246.1 3,521.6 4,125.7 Operating expenses related to retail and wholesale business (excluding depreciation and amortization presented below) 24.4 26.5 49.7 52.3 General and administrative expenses 61.7 69.5 127.4 131.7 Depreciation and amortization 6.0 7.5 11.6 15.0 Other operating income, net (14.2) (3.6) (14.9) (1.2) Total operating costs and expenses 1,512.7 2,346.0 3,695.4 4,323.5 Operating income (loss) 22.8 134.3 (338.7) 356.7 Interest expense 29.8 32.8 66.1 61.5 Interest income (0.5) (3.3) (2.2) (5.8) Income from equity method investments (10.7) (9.3) (15.8) (11.9) Gain on sale on non-operating refinery (56.9) - (56.9) - Other (income) expense, net (1.5) 4.9 (2.4) 3.5 Total non-operating (income) expense, net (39.8) 25.1 (11.2) 47.3 Income (loss) before income tax (benefit) expense 62.6 109.2 (327.5) 309.4 Income tax (benefit) expense (35.9) 24.6 (119.0) 70.4 Income (loss) from continuing operations, net of tax 98.5 84.6 (208.5) 239.0 Discontinued operations: Loss from discontinued operations, including gain (loss) on sale of discontinued operations - (1.0) - (1.0) Income tax benefit - (0.2) - (0.2) Loss from discontinued operations, net of tax - (0.8) - (0.8) Net income (loss) 98.5 83.8 (208.5) 238.2 Net income attributed to non-controlling interests 10.8 6.5 18.2 11.6 Net income (loss) attributable to Delek $ 87.7 $ 77.3 $ (226.7) $ 226.6 Basic income (loss) per share: Income (loss) from continuing operations $ 1.19 $ 1.02 $ (3.08) $ 2.95 Loss from discontinued operations - (0.01) $ - $ (0.01) Basic (loss) income per share $ 1.19 $ 1.01 $ (3.08) $ 2.94 Diluted income (loss) per share: Income (loss) from continuing operations $ 1.18 $ 1.01 $ (3.08) $ 2.92 Loss from discontinued operations - (0.01) $ - $ (0.01) Diluted (loss) income per share $ 1.18 $ 1.00 $ (3.08) $ 2.91 Weighted average common shares outstanding: Basic 73,547,582 76,598,846 73,492,656 77,192,763 Diluted 74,028,043 77,280,692 73,492,656 77,883,285 Dividends declared per common share outstanding $ 0.31 $ 0.28 $ 0.93 $ 0.55 Delek US Holdings, Inc. Condensed Cash Flow Data (Unaudited) (In millions) Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Cash flows from operating activities: Net cash (used in) provided by operating activities $ (169.0) $ 102.0 (323.1) 235.4 Cash flows from investing activities: Net cash used in investing activities (9.3) (202.4) (155.9) (329.4) Cash flows from financing activities: Net cash provided by (used in) financing activities 242.4 62.1 372.7 (33.9) Net decrease in cash and cash equivalents 64.1 (38.3) (106.3) (127.9) Cash and cash equivalents at the beginning of the period 784.9 989.7 955.3 1,079.3 Cash and cash equivalents of continuing operations at the end of the period $ 849.0 $ 951.4 $ 849.0 $ 951.4 COVID-19 Tax Legislative Changes On March 27, 2020, the Coronavirus Aid Relief, and Economic Security Act (the "CARES Act") was enacted into law. The Act includes several significant provisions for corporations, including the usage of net operating losses, interest deductions and payroll benefits. Pursuant to the provisions of the CARES Act, we recognized $16.8 million of current federal income tax benefit for the three and six months ended June 30, 2020, attributable to anticipated tax refunds from net operating loss carryback to prior 35% tax rate years. Additionally, we recorded an income tax receivable totaling $193 million as of June 30, 2020 related to the net operating loss carryback, which we expect to collect in the first half of 2021. Finally, we deferred $4.4 million of payroll tax payments under the provisions of the CARES Act during the six months ended June 30, 2020, which will be payable in equal installments in December 2021 and December 2022. Delek US Holdings, Inc. Segment Data (Unaudited) (In millions) Three Months Ended June 30, 2020 Refining Logistics Retail Corporate, Other and Eliminations Consolidated Net revenues (excluding inter-segment fees and revenues) $ 1,001.9 $ 27.3 $ 165.4 $ 340.9 $ 1,535.5 Inter-segment fees and revenues 75.1 90.4 - (165.5) - Operating costs and expenses: - Cost of materials and other 928.6 43.9 119.6 185.7 1,277.8 Operating expenses (excluding depreciation and amortization presented below) 88.7 12.4 21.5 5.2 127.8 Segment contribution margin $ 59.7 $ 61.4 $ 24.3 $ (15.5) $ 129.9 Depreciation and amortization $ 44.8 $ 8.7 $ 3.3 $ 2.8 59.6 General and administrative expenses 61.7 Other operating income, net (14.2) Operating income $ 22.8 Capital spending (excluding business combinations) $ 12.2 $ 0.7 $ 1.3 $ 0.8 $ 15.0 Three Months Ended June 30, 2019 Refining (1) Logistics Retail Corporate, Other and Eliminations (1) Consolidated Net revenues (excluding inter-segment fees and revenues) $ 2,152.5 $ 93.1 $ 224.5 $ 10.2 $ 2,480.3 Inter-segment fees and revenues 215.3 62.2 - (277.5) - Operating costs and expenses: Cost of materials and other 2,054.7 93.8 182.1 (262.9) 2,067.7 Operating expenses (excluding depreciation and amortization presented below) 115.0 17.3 24.8 5.2 162.3 Segment contribution margin $ 198.1 $ 44.2 $ 17.6 $ (9.6) $ 250.3 Depreciation and amortization $ 33.2 $ 6.7 $ 4.2 $ 6.0 50.1 General and administrative expenses 69.5 Other operating income, net (3.6) Operating income $ 134.3 Capital spending (excluding business combinations) $ 48.9 $ 1.3 $ 5.4 $ 30.4 $ 86.0 Delek US Holdings, Inc. Segment Data (Unaudited) (In millions) Six Months Ended June 30, 2020 Refining Logistics Retail Corporate, Other and Eliminations Consolidated Net revenues (excluding inter-segment fees and revenues) $ 2,571.1 $ 84.2 $ 344.0 $ 357.4 $ 3,356.7 Inter-segment fees and revenues 233.8 196.9 - (430.7) - Operating costs and expenses: Cost of materials and other 2,835.2 145.2 263.7 (55.7) 3,188.4 Operating expenses (excluding depreciation and amortization presented below) 200.4 27.2 43.7 11.0 282.3 Segment contribution margin $ (230.7) $ 108.7 $ 36.6 $ (28.6) $ (114.0) Depreciation and amortization $ 82.0 $ 15.0 $ 6.2 $ 9.0 112.2 General and administrative expenses 127.4 Other operating income, net (14.9) Operating loss $ (338.7) Capital spending (excluding business combinations) $ 180.3 $ 3.7 $ 7.5 $ 11.8 $ 203.3 Six Months Ended June 30, 2019 Refining (1) Logistics Retail Corporate, Other and Eliminations (1) Consolidated Net revenues (excluding inter-segment fees and revenues) $ 4,059.9 $ 182.9 $ 421.7 $ 15.7 $ 4,680.2 Inter-segment fees and revenues 399.9 124.9 - (524.8) - Operating costs and expenses: Cost of materials and other 3,723.8 190.1 345.5 (492.3) 3,767.1 Operating expenses (excluding depreciation and amortization presented below) 236.0 33.4 48.4 11.2 329.0 Segment contribution margin $ 500.0 $ 84.3 $ 27.8 $ (28.0) $ 584.1 Depreciation and amortization $ 64.3 $ 13.2 $ 8.5 10.9 96.9 General and administrative expenses 131.7 Other operating income, net (1.2) Operating income $ 356.7 Capital spending (excluding business combinations) $ 130.5 $ 2.2 $ 10.5 $ 71.1 $ 214.3 (1) The refining segment results of operations for the three and six months ended June 30, 2019, includes hedging gains, a component of cost of materials and other, of $19.8 million and $27.4 million, respectively, which was previously included and reported in corporate, other and eliminations. Delek US Holdings, Inc. Schedule of Hedging Gains (Losses) $ in millions Three Months Ended June 30, 2020 Hedging Gains (Losses) Included in Segment Contribution Margin Refining Logistics Retail Corporate, Other and Eliminations Consolidated Unrealized hedging gain (loss) $ (9.9) $ (2.3) $ - $ (11.2) $ (23.4) Realized hedging gain (loss) (137.0) 1.3 - 1.7 (134.0) Total hedging gain (loss) $ (146.9) $ (1.0) $ - $ (9.5) $ (157.4) Delek US Holdings, Inc. Schedule of Hedging Gains (Losses) $ in millions Three Months Ended June 30, 2019 Hedging Gains (Losses) Included in Segment Contribution Margin Refining Logistics Retail Corporate, Other and Eliminations Consolidated Unrealized hedging gain (loss) $ (6.8) $ 0.2 $ - $ 3.0 $ (3.6) Realized hedging gain (loss) 32.4 0.2 - 0.4 33.0 Total hedging gain (loss) $ 25.6 $ 0.4 $ - $ 3.4 $ 29.4 Delek US Holdings, Inc. Schedule of Hedging Gains (Losses) $ in millions Six Months Ended June 30, 2020 Hedging Gains (Losses) Included in Segment Contribution Margin Refining Logistics Retail Corporate, Other and Eliminations Consolidated Unrealized hedging gain (loss) $ 38.7 $ - $ - $ (10.1) $ 28.6 Realized hedging gain (loss) (105.2) 2.1 - (6.9) (110.0) Total hedging gain (loss) $ (66.5) $ 2.1 $ - $ (17.0) $ (81.4) Delek US Holdings, Inc. Schedule of Hedging Gains (Losses) $ in millions Six Months Ended June 30, 2019 Hedging Gains (Losses) Included in Segment Contribution Margin Refining Logistics Retail Corporate, Other and Eliminations Consolidated Unrealized hedging gain (loss) $ (23.2) $ - $ - $ (7.5) $ (30.7) Realized hedging gain (loss) 67.4 (0.6) - 8.4 75.2 Total hedging gain (loss) $ 44.2 $ (0.6) $ - $ 0.9 $ 44.5 Refining Segment Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Tyler, TX Refinery (Unaudited) (Unaudited) Days in period 91 91 182 181 Total sales volume - refined product (average barrels per day)(1) 69,746 77,657 72,364 73,863 Products manufactured (average barrels per day): Gasoline 37,225 39,997 38,633 39,671 Diesel/Jet 27,897 31,505 27,650 29,455 Petrochemicals, LPG, NGLs 3,216 3,318 2,604 2,690 Other 1,319 1,654 1,281 1,411 Total production 69,657 76,474 70,168 73,227 Throughput (average barrels per day): Crude oil 64,408 71,918 65,187 68,219 Other feedstocks 5,848 5,106 5,648 5,785 Total throughput 70,256 77,024 70,835 74,004 Per barrel of refined product sales: Tyler refining margin (2) $ 32.72 $ 12.15 $ 4.62 $ 16.84 Tyler adjusted refining margin (2) $ 21.24 $ 12.12 $ 10.32 $ 13.98 Operating expenses $ 3.00 $ 3.65 $ 3.38 $ 4.15 Crude Slate: (% based on amount received in period) WTI crude oil 94.2 % 87.7 % 93.3 % 89.3 % East Texas crude oil 5.8 % 12.3 % 6.7 % 10.7 % El Dorado, AR Refinery Days in period 91 91 182 181 Total sales volume - refined product (average barrels per day)(1) 76,059 51,002 76,805 51,717 Products manufactured (average barrels per day): Gasoline 34,346 21,821 35,376 21,159 Diesel 30,060 17,802 28,849 16,633 Petrochemicals, LPG, NGLs 2,063 551 2,062 678 Asphalt 6,049 6,961 6,345 5,899 Other 605 683 788 661 Total production 73,123 47,818 73,420 45,030 Throughput (average barrels per day): Crude oil 71,406 47,935 71,514 44,542 Other feedstocks 2,369 359 2,506 1,270 Total throughput 73,775 48,294 74,020 45,812 Per barrel of refined product sales: El Dorado refining margin $ 3.08 $ 8.93 $ (2.74) $ 11.21 El Dorado adjusted refining margin $ (4.29) 8.98 $ (2.74) $ 10.84 Operating expenses $ 3.53 $ 5.93 $ 3.98 $ 6.31 Crude Slate: (% based on amount received in period) WTI crude oil 51.4 % 43.9 % 42.9 % 42.6 % Local Arkansas crude oil 14.7 % 29.0 % 17.0 % 28.3 % Other 33.9 % 27.1 % 40.1 % 29.1 % Refining Segment Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Big Spring, TX Refinery (Unaudited) (Unaudited) Days in period - based on date acquired 91 91 182 181 Total sales volume - refined product (average barrels per day) (1) 70,679 78,158 54,382 79,993 Products manufactured (average barrels per day): Gasoline 35,789 36,428 25,198 37,657 Diesel/Jet 27,924 26,638 18,860 27,494 Petrochemicals, LPG, NGLs 3,563 3,679 2,472 3,763 Asphalt 2,055 1,900 1,452 1,707 Other 1,208 1,354 844 1,296 Total production 70,539 69,999 48,826 71,917 Throughput (average barrels per day): Crude oil 70,327 72,965 50,116 72,649 Other feedstocks 1,483 (581) 78 648 Total throughput 71,810 72,384 50,194 73,297 Per barrel of refined product sales: Big Spring refining margin $ 7.88 $ 13.77 $ 0.71 $ 16.00 Big Spring adjusted refining margin $ 3.76 $ 13.82 $ 0.73 $ 15.79 Operating expenses $ 3.55 $ 3.69 $ 4.89 $ 3.75 Crude Slate: (% based on amount received in period) WTI crude oil 83.9 % 73.3 % 75.1 % 76.3 % WTS crude oil 16.1 % 26.7 % 24.9 % 23.7 % Krotz Springs, LA Refinery Days in period - based on date acquired 91 91 182 181 Total sales volume - refined product (average barrels per day) (1) 61,441 75,283 71,229 76,749 Products manufactured (average barrels per day): Gasoline 17,461 34,498 24,135 36,270 Diesel/Jet 21,742 29,776 26,337 30,082 Heavy oils 215 1,110 473 1,100 Petrochemicals, LPG, NGLs 840 4,264 1,923 5,758 Other 18,871 - 14,704 52 Total production 59,129 69,648 67,572 73,262 Throughput (average barrels per day): Crude oil 59,468 70,162 65,975 71,240 Other feedstocks 1,114 (1,327) 2,104 908 Total throughput 60,582 68,835 68,079 72,148 Per barrel of refined product sales: Krotz Springs refining margin $ (0.64) $ 9.69 $ (1.12) $ 10.84 Krotz Springs adjusted refining margin $ (8.12) $ 9.72 $ (1.12) $ 10.36 Operating expenses $ 3.53 $ 4.39 $ 3.47 $ 4.14 Crude Slate: (% based on amount received in period) WTI Crude 69.7 % 61.0 % 67.7 % 62.0 % Gulf Coast Sweet Crude 30.3 % 39.0 % 32.3 % 38.0 % (1) Includes inter-refinery sales and sales to other segments which are eliminated in consolidation. See tables below. (2) Tyler's refining margin per barrel and the adjusted refining margin per barrel for the second quarter 2020 both reflect the $111.0 million margin benefit of favorable fixed price crude cost transactions during the quarter, but exclude the offsetting realized hedging losses of approximately $(111.0) million. Giving effect to the related hedging losses, both the refining margin per barrel and the adjusted refining margin per barrel would have decreased by $(17.49). Such margin impact was unusually large because of the historic volatility in the crude commodities market during the period. Included in the refinery statistics above are the following inter-refinery and sales to other segments: Inter-refinery Sales Three Months Ended June 30, Six Months Ended June 30, (in barrels per day) 2020 2019 2020 2019 (Unaudited) (Unaudited) Tyler refined product sales to other Delek refineries 2,190 914 1,477 557 El Dorado refined product sales to other Delek refineries 1,074 988 446 1,886 Big Spring refined product sales to other Delek refineries 1,269 653 1,147 903 Krotz Springs refined product sales to other Delek refineries 197 10,211 245 5,530 Refinery Sales to Other Segments Three Months Ended June 30, Six Months Ended June 30, (in barrels per day) 2020 2019 2020 2019 (Unaudited) (Unaudited) Tyler refined product sales to other Delek segments 1,592 24 2,400 281 El Dorado refined product sales to other Delek segments 11 58 169 155 Big Spring refined product sales to other Delek segments 20,570 25,215 22,841 26,034 Pricing statistics (average for the period presented) Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 (Unaudited) (Unaudited) WTI - Cushing crude oil (per barrel) $ 29.77 $ 59.80 $ 37.93 $ 57.36 WTI - Midland crude oil (per barrel) $ 29.77 $ 57.56 $ 37.90 $ 55.65 WTS -- Midland crude oil (per barrel) (1) $ 29.61 $ 57.93 $ 37.69 $ 55.95 LLS (per barrel) (1) $ 31.30 $ 67.06 $ 39.73 $ 64.73 Brent crude oil (per barrel) $ 33.35 $ 68.44 $ 42.16 $ 66.14 U.S. Gulf Coast 5-3-2 crack spread (per barrel) (1) $ 6.67 $ 17.74 $ 8.74 $ 15.77 U.S. Gulf Coast 3-2-1 crack spread (per barrel) (1) $ 7.08 $ 19.24 $ 9.32 $ 17.23 U.S. Gulf Coast 2-1-1 crack spread (per barrel) (1) $ 2.35 $ 9.75 $ 5.35 $ 8.55 U.S. Gulf Coast Unleaded Gasoline (per gallon) $ 0.81 $ 1.79 $ 1.02 $ 1.66 Gulf Coast Ultra low sulfur diesel (per gallon) $ 0.91 $ 1.94 $ 1.19 $ 1.91 U.S. Gulf Coast high sulfur diesel (per gallon) $ 0.73 $ 1.80 $ 1.04 $ 1.78 Natural gas (per MMBTU) $ 1.75 $ 2.51 $ 1.81 $ 2.69 (1) For our Tyler and El Dorado refineries, we compare our per barrel refining product margin to the Gulf Coast 5-3-2 crack spread consisting of WTI Cushing crude, U.S. Gulf Coast CBOB and U.S, Gulf Coast Pipeline No. 2 heating oil (ultra low sulfur diesel). For our Big Spring refinery, we compare our per barrel refined product margin to the Gulf Coast 3-2-1 crack spread consisting of WTI Cushing crude, Gulf Coast 87 Conventional gasoline and Gulf Coast ultra-low sulfur diesel, and for our Krotz Springs refinery, we compare our per barrel refined product margin to the Gulf Coast 2-1-1 crack spread consisting of LLS crude oil, Gulf Coast 87 Conventional gasoline and U.S, Gulf Coast Pipeline No. 2 heating oil (high sulfur diesel). The Tyler refinery's crude oil input is primarily WTI Midland and east Texas, while the El Dorado refinery's crude input is primarily a combination of WTI Midland, local Arkansas and other domestic inland crude oil. The Big Spring refinery's crude oil input is primarily comprised of WTS and WTI Midland. The Krotz Springs refinery's crude oil input is primarily comprised of LLS and WTI Midland. Delek US Holdings, Inc. Reconciliation of Refining Margin per barrel to Adjusted Refining Margin per barrel (1) $ in millions, except per share data Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 (Unaudited) (Unaudited) Tyler (2) Reported refining margin, $ per barrel $ 32.72 $ 12.15 $ 4.62 $ 16.84 Adjustments: LCM net inventory valuation loss (benefit) (11.48) (0.03) 5.70 (2.86) Adjusted refining margin $/bbl $ 21.24 $ 12.12 $ 10.32 $ 13.98 El Dorado (3) Reported refining margin, $ per barrel $ 3.08 $ 8.93 $ (2.74) $ 11.21 Adjustments: LCM net inventory valuation loss (benefit) (7.37) 0.05 - (0.37) Adjusted refining margin $/bbl $ (4.29) $ 8.98 $ (2.74) $ 10.84 Big Spring (4) Reported refining margin, $ per barrel $ 7.88 $ 13.77 $ 0.71 $ 16.00 Adjustments: LCM net inventory valuation loss (benefit) (4.12) 0.05 0.02 (0.21) Adjusted refining margin $/bbl $ 3.76 $ 13.82 $ 0.73 $ 15.79 Krotz Springs (5) Reported refining margin, $ per barrel $ (0.64) $ 9.69 $ (1.12) $ 10.84 Adjustments: LCM net inventory valuation loss (benefit) (7.48) 0.03 - (0.48) Adjusted refining margin $/bbl $ (8.12) $ 9.72 $ (1.12) $ 10.36 (1) Adjusted refining margin per barrel is presented to provide a measure to evaluate performance excluding inventory valuation adjustments and other items at the individual refinery level. Delek US believes that the presentation of adjusted measures provides useful information to investors in assessing its results of operations at each refinery. Because adjusted refining margin per barrel may be defined differently by other companies in its industry, Delek US' definition may not be comparable to similarly titled measures of other companies. (2) Tyler adjusted refining margins exclude the following items. Net inventory valuation loss/benefit - There was approximately $72.8 million and $0.2 million of valuation benefit in the second quarter 2020 and 2019, respectively. There was approximately $75.1 million of valuation loss and $38.3 million of valuation benefit for the six months ended June 30, 2020 and 2019, respectively. These amounts resulted from lower of cost or market adjustments on LIFO inventory in the respective periods. Note also that Tyler's refining margin per barrel and the adjusted refining margin per barrel for the second quarter 2020 both reflect the $111.0 million margin benefit of favorable fixed price crude cost transactions during the quarter, but exclude the offsetting realized hedging losses of approximately $(111.0) million. Giving effect to the related hedging losses, both the refining margin per barrel and the adjusted refining margin per barrel would have decreased by $(17.49). Such margin impact was unusually large because of the historic volatility in the crude commodities market during the period. (3) El Dorado adjusted refining margins exclude the following items. Net inventory valuation loss/benefit - There was approximately $51.0 million of valuation benefit as compared to a $0.3 million of valuation loss in the second quarter 2020 and 2019, respectively. There was a nominal amount of valuation benefit and $3.4 million of valuation benefit for the six months ended June 30, 2020 and 2019, respectively. These amounts resulted from lower of cost or net realizable value adjustments on FIFO inventory in the respective periods. (4) Big Spring adjusted refining margins exclude the following items. Net inventory valuation loss/benefit - There was approximately $26.5 million of valuation benefit and $0.4 million of valuation losses in the second quarter 2020 and 2019, respectively. There was approximately $0.2 million of valuation loss and $3.0 million of valuation benefit for the six months ended June 30, 2020 and 2019, respectively. These amounts resulted from lower of cost or net realizable value adjustments on FIFO inventory in the respective periods. (5) Krotz Springs adjusted refining margins exclude the following items. Net inventory valuation loss/benefit - There was approximately $41.8 million of valuation benefit and $0.2 million of valuation loss in the second quarter 2020 and 2019, respectively. There was nominal amount of valuation benefit and $6.7 million of valuation benefit for the six months ended June 30, 2020 and 2019, respectively.These amounts resulted from lower of cost or net realizable value adjustments on FIFO inventory in the respective periods. Logistics Segment Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 (Unaudited) (Unaudited) Pipelines & Transportation: (average bpd) Lion Pipeline System: Crude pipelines (non-gathered) 79,066 37,625 75,995 33,179 Refined products pipelines 56,093 29,893 55,110 26,511 SALA Gathering System 9,447 14,315 13,449 14,798 East Texas Crude Logistics System 10,275 19,550 12,224 18,835 Wholesale Marketing & Terminalling: East Texas - Tyler Refinery sales volumes (average bpd) (1) 65,028 71,123 68,839 69,857 West Texas wholesale marketing throughputs (average bpd) 9,143 11,404 12,612 12,418 West Texas wholesale marketing margin per barrel $ 0.64 $ 6.25 $ 1.96 $ 4.84 Big Spring wholesale marketing throughputs (average bpd) 76,004 82,964 71,195 85,339 Terminalling throughputs (average bpd) (2) 138,593 156,922 136,961 154,643 (1) Excludes jet fuel and petroleum coke. (2) Consists of terminalling throughputs at our Tyler, Big Spring, Big Sandy and Mount Pleasant, Texas, El Dorado and North Little Rock, Arkansas and Memphis and Nashville, Tennessee terminals. Retail Segment Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 (Unaudited) (Unaudited) Number of stores (end of period) 253 263 253 263 Average number of stores 253 277 253 279 Retail fuel sales (thousands of gallons) 42,436 53,743 90,376 107,633 Average retail gallons sold per average number of fuel stores (in thousands) 171 201 365 399 Retail fuel margin ($ per gallon) (1) $ 0.45 $ 0.29 $ 0.37 $ 0.25 Merchandise sales (in millions) $ 89.4 $ 83.3 $ 161.1 $ 158.6 Merchandise sales per average number of stores (in millions) $ 0.4 $ 0.3 $ 0.6 $ 0.6 Merchandise margin % 30.8 % 31.2 % 31.1 % 31.1 % Same-Store Comparison (2) Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 (Unaudited) (Unaudited) Change in same-store fuel gallons sold (19.7) % 1.7 % (13.9) % 3.1 % Change in same-store merchandise sales 13.1 % (2.5) % 7.6 % (0.5) % (1) Retail fuel margin represents gross margin on fuel sales in the retail segment, and is calculated as retail fuel sales revenue less retail fuel cost of sales. The retail fuel margin per gallon calculation is derived by dividing retail fuel margin by the total retail fuel gallons sold for the period. (2) Same-store comparisons include period-over-period increases or decreases in specified metrics for stores that were in service at both the beginning of the earliest period and the end of the most recent period used in the comparison. Delek US Holdings, Inc. Reconciliation of Amounts Reported Under U.S. GAAP $ in millions Three Months Ended June 30, Six Months Ended June 30, Reconciliation of Net Income (Loss) attributable to Delek to Adjusted Net Income (Loss) 2020 2019 2020 2019 (Unaudited) (Unaudited) Reported net income (loss) attributable to Delek $ 87.7 $ 77.3 $ (226.7) $ 226.6 Adjustments Net inventory valuation (benefit) loss (203.1) 0.6 75.1 (51.5) Tax effect of inventory valuation 47.7 (0.1) (17.7) 12.1 Net after tax inventory valuation (benefit) loss (155.4) 0.5 57.4 (39.4) Unrealized hedging (gain) loss 23.4 3.6 (28.6) 30.7 Tax effect of unrealized hedging (gain) loss (5.3) (0.8) 6.5 (6.9) Net after tax unrealized hedging (gain) loss 18.1 2.8 (22.1) 23.8 Gain from sale of Bakersfield non-operating refinery (56.9) - (56.9) - Tax effect of gain from sale of Bakersfield non-operating refinery 12.8 - 12.8 - Net after tax effect of gain from sale of Bakersfield non-operating refinery (44.1) - (44.1) - Non-operating, pre-acquisition litigation contingent losses and related legal expenses - 6.7 - 6.7 Tax effect of non-operating pre-acquisition litigation contingent losses and related legal expenses - (1.5) - (1.5) Net after tax non-operating pre-acquisition litigation contingent losses and related legal expenses - 5.2 - 5.2 Retroactive biodiesel tax credit (1) - 11.0 - 20.7 Tax effect of retroactive biodiesel tax credit - (0.1) - (0.2) Net after tax retroactive biodiesel tax credit - 10.9 - 20.5 Discontinued operations (income) loss - 1.0 - 1.0 Tax effect of discontinued operations - (0.2) - (0.2) Net after tax discontinued operations (income) loss - 0.8 - 0.8 Tax benefit from loss carryback provided by CARES Act (2) (16.8) - (16.8) - Tax adjustment to reduce deferred tax asset valuation allowance resulting from Big Springs Gathering Assets Acquisition - - (22.3) - Total after tax adjustments (198.2) 20.2 (47.9) 10.9 Adjusted net income (loss) $ (110.5) $ 97.5 $ (274.6) $ 237.5 (1) An adjustment for the portion of the retroactive biodiesel tax credit reenacted in December 2019 that was attributable to 2019 has been included in the three and six months ended June 30, 2019 for comparability. (2) As a result of the reinstatement of the tax-loss carryback provisions under the Coronavirus Aid, Relief, and Economic Security Act (the "CARES" Act), we recognized an additional tax benefit in the second quarter 2020 from applying the carryback to periods with a 35% tax rate. Delek US Holdings, Inc. Reconciliation of Amounts Reported Under U.S. GAAP per share data Three Months Ended June 30, Six Months Ended June 30, Reconciliation of U.S. GAAP Income (Loss) per share to Adjusted Net Income (Loss) per share 2020 2019 2020 2019 (Unaudited) (Unaudited) Reported diluted income (loss) per share $ 1.18 $ 1.00 $ (3.08) $ 2.91 Adjustments, after tax (per share) (1) (2) Adjustment to convert reported diluted income (loss) per share to basic (in periods when adjusted earnings is a loss but we have GAAP net income) 0.01 - - - Net inventory valuation loss (benefit) (2.11) 0.01 0.78 (0.51) Unrealized hedging (gain) loss 0.25 0.04 (0.30) 0.30 Gain from sale of Bakersfield non-operating refinery (0.60) - (0.60) - Non-operating, pre-acquisition litigation contingent losses and related legal expenses - 0.07 - 0.07 Retroactive biodiesel tax credit - 0.14 - 0.26 Discontinued operations (income) loss - 0.01 - 0.01 Tax benefit from loss carryback provided by CARES Act (0.23) - (0.23) - Tax adjustment to reduce deferred tax asset valuation allowance resulting from Big Springs Gathering Assets Acquisition - - (0.30) - Total adjustments (2.68) 0.27 (0.65) 0.13 Adjusted net income (loss) per share $ (1.50) $ 1.27 $ (3.73) $ 3.04 (1) The tax calculation is based on the appropriate marginal income tax rate related to each adjustment and for each respective time period, which is applied to the adjusted items in the calculation of adjusted net income in all periods. (2) For periods of Adjusted net loss, Adjustments (Adjusting Items) and Adjusted net loss per share are presented using basic weighted average shares outstanding. Delek US Holdings, Inc. Reconciliation of Amounts Reported Under U.S. GAAP $ in millions Three Months Ended June 30, Six Months Ended June 30, Reconciliation of Net Income (Loss) attributable to Delek to Adjusted EBITDA 2020 2019 2020 2019 (Unaudited) (Unaudited) Reported net income (loss) attributable to Delek $ 87.7 $ 77.3 $ (226.7) $ 226.6 Add: Interest expense, net 29.3 29.5 63.9 55.7 Income tax (benefit) expense - continuing operations (35.9) 24.6 (119.0) 70.4 Depreciation and amortization 59.6 50.1 112.2 96.9 EBITDA 140.7 181.5 (169.6) 449.6 Adjustments Net inventory valuation (benefit) loss (203.1) 0.6 75.1 (51.5) Unrealized hedging (gain) loss 23.4 3.6 (28.6) 30.7 Gain from sale of Bakersfield non-operating refinery (56.9) - (56.9) - Non-operating, pre-acquisition litigation contingent losses and related legal expenses - 6.7 - 6.7 Retroactive biodiesel tax credit (1) - 11.0 - 20.7 Discontinued operations (income) loss, net of tax - 0.8 - 0.8 Net income attributable to non-controlling interest 10.8 6.5 18.2 11.6 Total adjustments (225.8) 29.2 7.8 19.0 Adjusted EBITDA $ (85.1) $ 210.7 $ (161.8) $ 468.6 (1) The portion of the retroactive biodiesel tax credit reenacted in December 2019 that was attributable to 2019 has been added to the three and six months ended June 30, 2019. Delek US Holdings, Inc. Reconciliation of Amounts Reported Under U.S. GAAP $ in millions Three Months Ended June 30, 2020 Reconciliation of U.S. GAAP Segment Contribution Margin to Adjusted Segment Contribution Margin Refining Logistics Retail Corporate, Other and Eliminations Consolidated Reported segment contribution margin $ 59.7 $ 61.4 $ 24.3 $ (15.5) $ 129.9 Adjustments Net inventory valuation (benefit) loss (193.7) (2.9) (3.2) (3.3) (203.1) Unrealized hedging (gain) loss 9.9 2.3 - 11.2 23.4 Total adjustments $ (183.8) $ (0.6) $ (3.2) $ 7.9 $ (179.7) Adjusted segment contribution margin $ (124.1) $ 60.8 $ 21.1 $ (7.6) $ (49.8) Delek US Holdings, Inc. Reconciliation of Amounts Reported Under U.S. GAAP $ in millions Three Months Ended June 30, 2019 Reconciliation of U.S. GAAP Segment Contribution Margin to Adjusted Segment Contribution Margin Refining Logistics Retail Corporate, Other and Eliminations Consolidated Reported segment contribution margin $ 198.1 $ 44.2 $ 17.6 $ (9.6) $ 250.3 Adjustments Net inventory valuation (benefit) loss 0.6 - - - 0.6 Unrealized hedging (gain) loss 6.8 (0.2) - - - (3.0) 3.6 Retroactive biodiesel tax credit (1) 11.0 - - - 11.0 Total adjustments $ 18.4 $ (0.2) $ - $ (3.0) $ 15.2 Adjusted segment contribution margin $ 216.5 $ 44.0 $ 17.6 $ (12.6) $ 265.5 Delek US Holdings, Inc. Reconciliation of Amounts Reported Under U.S. GAAP $ in millions Six Months Ended June 30, 2020 Reconciliation of U.S. GAAP Segment Contribution Margin to Adjusted Segment Contribution Margin Refining Logistics Retail Corporate, Other and Eliminations Consolidated Reported segment contribution margin $ (230.7) $ 108.7 $ 36.6 $ (28.6) $ (114.0) Adjustments Net inventory valuation (benefit) loss 75.3 (0.1) - (0.1) 75.1 Unrealized hedging (gain) loss (38.7) - - 10.1 (28.6) Total adjustments $ 36.6 $ (0.1) $ - $ 10.0 $ 46.5 Adjusted segment contribution margin $ (194.1) $ 108.6 $ 36.6 $ (18.6) $ (67.5) Delek US Holdings, Inc. Reconciliation of Amounts Reported Under U.S. GAAP $ in millions Six Months Ended June 30, 2019 Reconciliation of U.S. GAAP Segment Contribution Margin to Adjusted Segment Contribution Margin Refining Logistics Retail Corporate, Other and Eliminations Consolidated Reported segment contribution margin $ 500.0 $ 84.3 $ 27.8 $ (28.0) $ 584.1 Adjustments Net inventory valuation (benefit) loss (51.4) (0.1) - - (51.5) Unrealized hedging (gain) loss 23.2 - - 7.5 30.7 Retroactive biodiesel tax credit (1) 20.7 - - - 20.7 Total adjustments $ (7.5) $ (0.1) $ - $ 7.5 $ (0.1) Adjusted segment contribution margin $ 492.5 $ 84.2 $ 27.8 $ (20.5) $ 584.0 (1) An adjustment for the portion of the retroactive biodiesel tax credit reenacted in December 2019 that was attributable to 2019 has been included in the three and six months ended June 30, 2019 for comparability. Three Months Ended June 30, Six Months Ended June 30, Reconciliation of Refining Segment Gross Margin to Refining Margin 2020 2019 2020 2019 (Unaudited) (Unaudited) Net revenues $ 1,077.0 $ 2,367.8 $ 2,804.9 $ 4,459.8 Cost of sales 1,062.1 2,202.9 3,117.6 4,024.1 Gross margin 14.9 164.9 (312.7) 435.7 Add back (items included in cost of sales): Operating expenses (excluding depreciation and amortization) 88.7 115.0 200.4 236.0 Depreciation and amortization 44.8 33.2 82.0 64.3 Refining margin $ 148.4 $ 313.1 $ (30.3) $ 736.0 Information about Delek US Holdings, Inc. can be found on its website (www.delekus.com), investor relations webpage (ir.delekus.com), news webpage (www.delekus.com/news) and its Twitter account (@DelekUSHoldings). View original content to download multimedia:http://www.prnewswire.com/news-releases/delek-us-holdings-reports-second-quarter-2020-results-301106108.html SOURCE Delek US Holdings, Inc.

Delek Logistics Partners, LP Reports Second Quarter 2020 Results- Reported second quarter net income attributable to all partners of $44.4 million; EBITDA increased 44.9% year-over-year- Limited Partners' interest in net income increased approximately 107% y/y- Second quarter distributable cash flow coverage ratio of 1.58x and total leverage ratio below 4.1x- Exceeded year-end distribution coverage target of 1.4 - 1.5x in the second quarter- Recent asset drop downs, business initiatives and asset optimization lead to improving outlook in 2H20- Jefferson agreement supports Paline Pipeline and creates flexibility for customers- Declared second quarter distribution of $0.90 per limited partner unit; reflects 5.9% percent increase year-over-year- Reiterating 5% distribution growth in 2020 versus year-ago levels BRENTWOOD, Tenn., Aug. 4, 2020 /PRNewswire/ -- Delek Logistics Partners, LP (NYSE: DKL) ("Delek Logistics") today announced its financial results for the second quarter 2020. For the three months ended June 30, 2020, Delek Logistics reported net income attributable to all partners of $44.4 million, or $1.18 per diluted common limited partner unit. This compares to net income attributable to all partners of $24.9 million, or $0.69 per diluted common limited partner unit, in the second quarter 2019. Net cash from operating activities was $37.5 million in the second quarter 2020 compared to $24.8 million in the second quarter 2019. Distributable cash flow was $57.0 million in the second quarter 2020, compared to $31.2 million in the second quarter 2019. Reconciliation of net cash from operating activities as reported under U.S. GAAP to distributable cash flow is included in the financial tables attached to this release. For the second quarter 2020, earnings before interest, taxes, depreciation and amortization ("EBITDA") was $64.8 million compared to $44.8 million in the second quarter 2019. Results improved on a year-over-year basis primarily due to the drop down of the Big Spring Gathering System and Trucking Assets, increased crude gathering, operating expense reductions and an increase in income from equity method investments. This was partially offset by a lower West Texas gross margin on a year-over-year basis. Reconciliation of net income attributable to all partners as reported under U.S. GAAP to EBITDA is included in the financial tables attached to this release. Uzi Yemin, Chairman, President and Chief Executive Officer of Delek Logistics' general partner, remarked: "Despite continued macro volatility stemming from COVID-19, Delek Logistics delivered stellar financial performance in the second quarter, with EBITDA and Limited Partners interest in net income increasing approximately 45% and 107%, respectively, versus last year. Second quarter distribution growth was 5.9% on a year-over-year basis. The combination of recent asset drop downs from our sponsor Delek US Holdings, Inc. (NYSE: DK) ("Delek US") along with internal business initiatives, asset optimization efforts and the Red River pipeline expansion, which is currently underway, should lead to improving performance in the second half of the year. I am pleased to announce an agreement with Jefferson Energy, that will provide Jefferson's Beaumont Terminal with direct connection to the Paline Pipeline. This agreement expands Paline's reach by giving shippers increased destination points for their crude leading to better flexibility for our customers." Mr. Yemin continued, "Our strong outlook gives us confidence in delivering 5% distribution growth on a year-over-year basis in 2020. We have already exceeded our distribution coverage target in the second quarter, well in advanced of our guidance to achieve this by year-end and we remain confident in reducing the leverage ratio below 4.0x before the end of the year." Distribution and Liquidity On July 24, 2020, Delek Logistics declared a quarterly cash distribution of $0.90 per common limited partner unit for the second quarter 2020, which equates to $3.60 per common limited partner unit on an annualized basis. This distribution will be paid on August 12, 2020 to unitholders of record on August 7, 2020. This represents a 1.1% increase from the first quarter 2020 distribution of $0.89 per common limited partner unit, or $3.56 per common limited partner unit on an annualized basis, and a 5.9% increase over Delek Logistics' second quarter 2019 distribution of $0.85 per common limited partner unit, or $3.40 per common limited partner unit annualized. For the second quarter 2020, the total cash distribution declared to all partners, including incentive distribution rights (IDRs), was approximately $36.0 million. Based on the distribution for the second quarter 2020, the distributable cash flow coverage ratio for the second quarter was 1.58x. As of June 30, 2020, Delek Logistics had total debt of approximately $995.2 million and cash of $16.2 million. Additional borrowing capacity, subject to certain covenants, under the $850.0 million credit facility was $100.0 million. The total leverage ratio, calculated in accordance with the credit facility, for the second quarter 2020 was below 4.1x, which is within the current requirements of the maximum allowable leverage ratio of 5.5x. Financial Results Revenue for the second quarter 2020 was $117.6 million compared to $155.3 million in the prior-year period. The decrease in revenue is primarily due to lower commodity prices and average throughput volumes. Total operating expenses were $12.4 million in the second quarter 2020, compared to $17.3 million in the second quarter 2019. The decrease was primarily due to cost control measures put in place at the end of the first quarter 2020. Total contribution margin was $61.3 million in the second quarter 2020 compared to $44.2 million in the second quarter 2019, mainly driven by the contribution from new assets and lower expenses. General and administrative expenses were $4.7 million for the second quarter 2020, compared to $5.3 million in the prior-year period. Pipelines and Transportation Segment Contribution margin in the second quarter 2020 was $42.5 million compared to $24.1 million in the second quarter 2019. The recent drop down of Big Spring Gathering System and the Trucking Assets were the primary drivers behind the year over year growth. Operating expenses were $9.7 million in the second quarter 2020 compared to $12.7 million in the prior-year period. Wholesale Marketing and Terminalling Segment During the second quarter 2020, contribution margin was $18.8 million, compared to $20.0 million in the second quarter 2019. This decrease was primarily due to lower terminalling throughput and gross margin in west Texas. Operating expenses of $2.7 million in the second quarter 2020 were lower than the $4.6 million in the prior-year period. Lower demand negatively impacted volumes and margins in the west Texas wholesale business. Average throughput in the second quarter 2020 was 9,143 barrels per day compared to 11,404 barrels per day in the second quarter 2019. The west Texas gross margin per barrel decreased year-over-year to $0.64 per barrel and included approximately $0.6 million, or $0.76 per barrel, from renewable identification numbers (RINs) generated in the quarter. During the second quarter 2019, the west Texas gross margin per barrel was $6.25 per barrel and included $0.3 million from RINs, or $0.25 per barrel. Average terminalling throughput volume of 138,593 barrels per day during the second quarter 2020 decreased on a year-over-year basis from 156,922 barrels per day in the second quarter 2019. During the second quarter 2020, average volume under the East Texas marketing agreement with Delek US was 65,028 barrels per day compared to 71,123 barrels per day during the second quarter 2019. Second Quarter 2020 Results | Conference Call Information Delek Logistics will hold a conference call to discuss its second quarter 2020 results on Wednesday, August 5, 2020 at 7:30 a.m. Central Time. Investors will have the opportunity to listen to the conference call live by going to www.DelekLogistics.com. Participants are encouraged to register at least 15 minutes early to download and install any necessary software. An archived version of the replay will also be available at www.DelekLogistics.com for 90 days. Investors may also wish to listen to Delek US' (NYSE: DK) second quarter 2020 earnings conference call on Wednesday, August 5, 2020 at 8:30 a.m. Central Time and review Delek US' earnings press release. Market trends and information disclosed by Delek US may be relevant to Delek Logistics, as it is a consolidated subsidiary of Delek US. Investors can find information related to Delek US and the timing of its earnings release online by going to www.DelekUS.com. About Delek Logistics Partners, LP Delek Logistics Partners, LP, headquartered in Brentwood, Tennessee, was formed by Delek US Holdings, Inc. (NYSE: DK) to own, operate, acquire and construct crude oil and refined products logistics and marketing assets. Safe Harbor Provisions Regarding Forward-Looking Statements This press release contains forward-looking statements that are based upon current expectations and involve a number of risks and uncertainties. Statements concerning current estimates, expectations and projections about future results, performance, prospects, opportunities, plans, actions and events and other statements, concerns, or matters that are not historical facts are "forward-looking statements," as that term is defined under the federal securities laws. These statements contain words such as "possible," "believe," "should," "could," "would," "predict," "plan," "estimate," "intend," "may," "anticipate," "will," "if," "expect" or similar expressions, as well as statements in the future tense, and can be impacted by numerous factors, including the fact that a substantial majority of Delek Logistics' contribution margin is derived from Delek US, thereby subjecting us to Delek US' business risks; risks relating to the securities markets generally; risks and costs relating to the age and operational hazards of our assets including, without limitation, costs, penalties, regulatory or legal actions and other effects related to releases, spills and other hazards inherent in transporting and storing crude oil and intermediate and finished petroleum products; the impact of adverse market conditions affecting the utilization of Delek Logistics' assets and business performance, including margins generated by its wholesale fuel business; the impact of the COVID-19 outbreak on the demand for crude oil, refined products and transportation and storage services; uncertainties regarding future decisions by OPEC regarding production and pricing disputes between OPEC members and Russia; an inability of Delek US to grow as expected as it relates to our potential future growth opportunities, including dropdowns, and other potential benefits; the results of our investments in joint ventures; the ability of the Red River joint venture to complete the expansion to increase the Red River pipeline capacity; adverse changes in laws including with respect to tax and regulatory matters; and other risks as disclosed in our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and other reports and filings with the United States Securities and Exchange Commission. Forward looking statements include, but are not limited to, statements regarding future growth at Delek Logistics; distributions and the amounts and timing thereof; potential dropdown inventory and the evaluation of incentive distribution rights; expected earnings or returns from joint ventures or other acquisitions; expansion projects; ability to create long-term value for our unit holders; financial flexibility and borrowing capacity; and distribution growth of 5% or at all. 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 Logistics undertakes no obligation to update or revise any such forward-looking statements to reflect events or circumstances that occur, or which Delek Logistics becomes aware of, after the date hereof, except as required by applicable law or regulation Non-GAAP Disclosures: Our management uses certain "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 with U.S. GAAP. These financial and operational non-GAAP measures are important factors in assessing our operating results and profitability and include: Earnings before interest, taxes, depreciation and amortization ("EBITDA") - calculated as net income before net interest expense, income tax expense, depreciation and amortization expense, including amortization of customer contract intangible assets, which is included as a component of net revenues in our accompanying condensed consolidated statements of income. Distributable cash flow - calculated as net cash flow from operating activities plus or minus changes in assets and liabilities, less maintenance capital expenditures net of reimbursements and other adjustments not expected to settle in cash. Delek Logistics believes this is an appropriate reflection of a liquidity measure by which users of its financial statements can assess its ability to generate cash.EBITDA and distributable cash flow are non-U.S. GAAP supplemental financial measures that management and external users of our condensed consolidated financial statements, such as industry analysts, investors, lenders and rating agencies, may use to assess: Delek Logistics' operating performance as compared to other publicly traded partnerships in the midstream energy industry, without regard to historical cost basis or, in the case of EBITDA, financing methods; the ability of our assets to generate sufficient cash flow to make distributions to our unitholders; Delek Logistics' ability to incur and service debt and fund capital expenditures; and the viability of acquisitions and other capital expenditure projects and the returns on investment of various investment opportunities.Delek Logistics believes that the presentation of EBITDA, distributable cash flow and distributable cash flow coverage ratio provide useful information to investors in assessing its financial condition, its results of operations and the cash flow its business is generating. EBITDA, distributable cash flow and distributable cash flow coverage ratio should not be considered in isolation or as alternatives to net income, operating income, cash flow from operating activities or any other measure of financial performance or liquidity presented in accordance with U.S. GAAP. Non-GAAP measures have important limitations as analytical tools, because they exclude some, but not all, items that affect net income and net cash provided by operating activities. These measures should not be considered substitutes for their most directly comparable U.S. GAAP financial measures. Additionally, because EBITDA and distributable cash flow may be defined differently by other partnerships in its industry, Delek Logistics' definitions of EBITDA and distributable cash flow may not be comparable to similarly titled measures of other partnerships, thereby diminishing their utility. See the accompanying tables in this earnings release for a reconciliation of these non-GAAP measures to the most directly comparable GAAP measures. Delek Logistics Partners, LP Condensed Consolidated Balance Sheets (Unaudited) (In thousands, except unit and per unit data) June 30, 2020 December 31, 2019 ASSETS Current assets: Cash and cash equivalents $ 16,196 $ 5,545 Accounts receivable 15,907 13,204 Inventory 2,140 12,617 Other current assets 499 2,204 Total current assets 43,497 33,570 Property, plant and equipment: Property, plant and equipment 680,969 461,325 Less: accumulated depreciation (207,225) (166,281) Property, plant and equipment, net 473,744 295,044 Equity method investments 255,323 246,984 Operating lease right-of-use assets 18,884 3,745 Goodwill 12,203 12,203 Marketing Contract Intangible, net 127,393 130,999 Rights-of-way 35,698 15,597 Other non-current assets 6,995 6,305 Total assets $ 973,737 $ 744,447 LIABILITIES AND DEFICIT Current liabilities: Accounts payable $ 1,795 $ 12,471 Accounts payable to related parties - 8,898 Interest payable 2,596 2,572 Excise and other taxes payable 4,330 3,941 Current portion of operating lease liabilities 5,793 1,435 Accrued expenses and other current liabilities 3,461 5,765 Total current liabilities 17,975 35,082 Non-current liabilities: Long-term debt 995,200 833,110 Asset retirement obligations 5,802 5,588 Deferred tax liabilities 1,158 215 Operating lease liabilities, net of current portion 13,091 2,310 Other non-current liabilities 18,826 19,261 Total non-current liabilities 1,034,077 860,484 Total liabilities 1,052,052 895,566 Equity (Deficit): Common unitholders - public; 8,687,371 units issued and outstanding at June 30, 2020 (9,131,579 at December 31, 2019) 160,870 164,436 Common unitholders - Delek Holdings; 20,745,868 units issued and outstanding at June 30, 2020 (15,294,046 at December 31, 2019) (235,961) (310,513) General partner - 600,678 units issued and outstanding at June 30, 2020 (498,482 at December 31, 2019) (3,224) (5,042) Total deficit (78,315) (151,119) Total liabilities and deficit $ 973,737 $ 744,447 Delek Logistics Partners, LP Condensed Consolidated Statements of Income (Unaudited) (In thousands, except unit and per unit data) Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Net revenues: Affiliate $ 87,629 $ 61,918 $ 194,328 $ 124,883 Third-party 30,008 93,424 86,710 182,942 Net revenues 117,637 155,342 281,038 307,825 Cost of sales: Cost of materials and other 43,892 93,854 145,185 190,119 Operating expenses (excluding depreciation and amortization presented below) 11,623 16,521 25,577 31,828 Depreciation and amortization 8,223 6,188 14,026 12,312 Total cost of sales 63,738 116,563 184,788 234,259 Operating expenses related to wholesale business (excluding depreciation and amortization presented below) 826 806 1,616 1,557 General and administrative expenses 4,721 5,293 10,851 9,766 Depreciation and amortization 471 451 967 901 Other operating income, net - (27) (107) (25) Total operating costs and expenses 69,756 123,086 198,115 246,458 Operating income 47,881 32,256 82,923 61,367 Interest expense, net 10,670 11,354 22,494 22,655 Income from equity method investments (6,462) (4,515) (12,015) (6,466) Total non-operating expenses, net 4,206 7,300 10,477 16,650 Income before income tax expense 43,675 24,956 72,446 44,717 Income tax (benefit) expense (740) 71 235 136 Net income attributable to partners $ 44,415 $ 24,885 $ 72,211 $ 44,581 Comprehensive income attributable to partners $ 44,415 $ 24,885 $ 72,211 $ 44,581 Less: General partner's interest in net income, including incentive distribution rights 9,647 8,079 18,724 15,348 Limited partners' interest in net income $ 34,768 $ 16,806 $ 53,487 $ 29,233 Net income per limited partner unit: Common units - basic $ 1.18 $ 0.69 $ 1.98 $ 1.20 Common units - diluted $ 1.18 $ 0.69 $ 1.98 $ 1.20 Weighted average limited partner units outstanding: Common units - basic 29,427,298 24,409,359 26,953,934 24,408,270 Common units - diluted 29,430,555 24,414,343 26,956,523 24,414,077 Cash distribution per limited partner unit $ 0.900 $ 0.850 $ 1.790 $ 1.670 Delek Logistics Partners, LP Condensed Consolidated Statements of Cash Flows (Unaudited) (In thousands) Six Months Ended June 30, 2020 2019 Cash flows from operating activities Net cash provided by operating activities $ 72,381 $ 51,823 Cash flows from investing activities Net cash used in investing activities (114,242) (136,556) Cash flows from financing activities Net cash provided by financing activities 52,512 85,651 Net increase in cash and cash equivalents 10,651 918 Cash and cash equivalents at the beginning of the period 5,545 4,522 Cash and cash equivalents at the end of the period $ 16,196 $ 5,440 Delek Logistics Partners, LP Reconciliation of Amounts Reported Under U.S. GAAP (In thousands) Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Reconciliation of Net Income to EBITDA: Net income $ 44,415 $ 24,885 $ 72,211 $ 44,581 Add: Income tax (benefit) expense (740) 71 235 136 Depreciation and amortization 8,694 6,639 14,993 13,213 Amortization of customer contract intangible assets 1,803 1,802 3,605 3,605 Interest expense, net 10,670 11,354 22,494 22,655 EBITDA $ 64,842 $ 44,751 $ 113,538 $ 84,190 Reconciliation of net cash from operating activities to distributable cash flow: Net cash provided by operating activities $ 37,545 $ 24,806 $ 72,381 $ 51,823 Changes in assets and liabilities 19,345 7,133 20,999 9,489 Non-cash lease expense (366) (393) (640) (1,409) Distributions from equity method investments in investing activities 1,580 - 1,690 804 Maintenance and regulatory capital expenditures (98) (963) (726) (1,781) Reimbursement from Delek Holdings for capital expenditures 16 670 55 1,384 Accretion of asset retirement obligations (107) (99) (214) (198) Deferred income taxes (943) 3 (943) 3 Other operating income, net - 27 107 25 Distributable Cash Flow $ 56,972 $ 31,184 $ 92,709 $ 60,140 Delek Logistics Partners, LP Distributable Coverage Ratio Calculation (In thousands) Three Months Ended June 30, Six Months Ended June 30, Distributions to partners of Delek Logistics, LP 2020 2019 2020 2019 Limited partners' distribution on common units $ 26,490 $ 20,755 $ 48,229 $ 40,769 General partner's distributions 542 423 986 831 General partner's incentive distribution rights 8,937 7,736 17,632 14,752 Total distributions to be paid (2) $ 35,969 $ 28,914 $ 66,847 $ 56,352 Distributable cash flow $ 56,972 $ 31,184 $ 92,709 $ 60,140 Distributable cash flow coverage ratio (1) 1.58x 1.08x 1.39x 1.07x (1) Distributable cash flow coverage ratio is calculated by dividing distributable cash flow by distributions to be paid in each respective period. (2) The distributions for the six months ended June 30, 2020 reflect the impact of the distribution waiver that waived all of the distributions for the first quarter of 2020 on the 5.0 million Additional Units, related to the Big Spring Gathering Assets transaction, with respect to base distributions and the IDRs. In addition, the distributions for the three and six months ended June 30, 2020 reflect the waiver of distributions in respect of the IDRs associated with the Additional Units for at least two years. Delek Logistics Partners, LP Segment Data (unaudited) (In thousands) Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Pipelines and Transportation Net revenues: Affiliate $ 61,394 $ 36,731 $ 99,897 $ 73,390 Third party 2,032 7,477 11,496 11,451 Total pipelines and transportation 63,426 44,208 111,393 84,841 Cost of sales: Cost of materials and other 11,182 7,357 17,280 12,924 Operating expenses (excluding depreciation and amortization) 9,731 12,728 21,187 23,562 Segment contribution margin $ 42,513 $ 24,123 $ 72,926 $ 48,355 Total Assets $ 836,510 $ 525,070 Wholesale Marketing and Terminalling Net revenues: Affiliates (1) $ 26,235 $ 25,187 $ 94,431 $ 51,493 Third party 27,976 85,947 75,214 171,491 Total wholesale marketing and terminalling 54,211 111,134 169,645 222,984 Cost of sales: Cost of materials and other 32,710 86,497 127,905 177,195 Operating expenses (excluding depreciation and amortization) 2,718 4,599 6,006 9,823 Segment contribution margin $ 18,783 $ 20,038 $ 35,734 $ 35,966 Total Assets $ 137,227 244,240 Consolidated Net revenues: Affiliates $ 87,629 $ 61,918 $ 194,328 $ 124,883 Third party 30,008 93,424 86,710 182,942 Total consolidated 117,637 155,342 281,038 307,825 Cost of sales: Cost of materials and other 43,892 93,854 145,185 190,119 Operating expenses (excluding depreciation and amortization presented below) 12,449 17,327 27,193 33,385 Contribution margin 61,296 44,161 108,660 84,321 General and administrative expenses 4,721 5,293 10,851 9,766 Depreciation and amortization 8,694 6,639 14,993 13,213 Other operating income, net - (27) (107) (25) Operating income $ 47,881 $ 32,256 $ 82,923 $ 61,367 Total Assets $ 973,737 $ 769,310 (1) Affiliate revenue for the wholesale marketing and terminalling segment is presented net of amortization expense pertaining to the marketing contract intangible we acquired in connection with the Big Spring acquisition. Delek Logistics Partners, LP Segment Capital Spending (In thousands) Three Months Ended June 30, Six Months Ended June 30, Pipelines and Transportation 2020 2019 2020 2019 Maintenance capital spending $ 119 $ 818 $ 430 $ 1,228 Discretionary capital spending 298 - 433 14 Segment capital spending $ 417 $ 818 863 1,242 Wholesale Marketing and Terminalling Maintenance capital spending $ 232 $ 302 1,362 409 Discretionary capital spending 3 222 1,456 595 Segment capital spending $ 235 $ 524 2,818 1,004 Consolidated Maintenance capital spending $ 351 $ 1,120 1,792 1,637 Discretionary capital spending 301 222 1,889 609 Total capital spending $ 652 $ 1,342 $ 3,681 $ 2,246 Delek Logistics Partners, LP Segment Data (Unaudited) Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Pipelines and Transportation Segment: Throughputs (average bpd) El Dorado Assets: Crude pipelines (non-gathered) 79,066 37,625 75,995 33,179 Refined products pipelines to Enterprise Systems 56,093 29,893 55,110 26,511 El Dorado Gathering System 9,447 14,315 13,449 14,798 East Texas Crude Logistics System 10,275 19,550 12,224 18,835 Big Spring Gathering Assets 105,162 - 105,162 - Wholesale Marketing and Terminalling Segment: East Texas - Tyler Refinery sales volumes (average bpd) (1) 65,028 71,123 68,839 69,857 Big Spring marketing throughputs (average bpd) 76,004 82,964 71,195 85,339 West Texas marketing throughputs (average bpd) 9,143 11,404 12,612 12,418 West Texas gross margin per barrel $ 0.64 $ 6.25 $ 1.96 $ 4.84 Terminalling throughputs (average bpd) 138,593 156,922 136,961 154,643 (1) Excludes jet fuel and petroleum coke. Information about Delek Logistics Partners, LP can be found on its website (www.deleklogistics.com), investor relations webpage (ir.deleklogistics.com), news webpage (www.deleklogistics.com/news) and its Twitter account (@DelekLogistics). View original content to download multimedia:http://www.prnewswire.com/news-releases/delek-logistics-partners-lp-reports-second-quarter-2020-results-301106080.html SOURCE Delek Logistics Partners, LP

Trecora Resources Reports Second Quarter and First Half 2020 Results- Total outstanding debt reduced to $78.2 million, excluding Paycheck Protection Program loans; the lowest level since third quarter 2016- Cash balance remains strong at $29.9 million at the end of June- Second quarter net loss from continuing operations of $1.9 million- Second quarter Adjusted EBITDA from continuing operations of $4.2 million- Operating cash flow from continuing operations of $16.5 million, a $12.1 million improvement from first quarter of this year- Company's current growth initiatives in 2020 on track to yield approximately $4 million in incremental value creation- Conference call at 10:00 am ET tomorrow, August 5, 2020 SUGAR LAND, Texas, Aug. 4, 2020 /PRNewswire/ -- Trecora Resources ("Trecora" or the "Company") (NYSE: TREC), a leading provider of specialty hydrocarbons and specialty waxes, today announced financial results for the second quarter ended June 30, 2020. "Trecora's second quarter results demonstrate the resiliency of our business and our executional focus, despite the market impacts from COVID-19. Our cash flow from continuing operations of $16.5 million was a $12.1 million improvement from first quarter this year. We ended the second quarter with $78.2 million of debt excluding Paycheck Protection Program loans, $29.9 million of cash and no borrowings on our revolver. Our Company's debt is at its lowest since the third quarter of 2016," said Pat Quarles, Trecora's President and Chief Executive Officer. "Net loss from continuing operations in the second quarter was $1.9 million while Adjusted EBITDA from continuing operations was $4.2 million. Demand for our Specialty Petrochemicals declined in April and May but rebounded in June while margins for these products expanded significantly as our feedstock costs declined throughout the quarter. Our Specialty Waxes business results were weaker than expected due to both exposure to certain durable good end-uses and the impact from falling custom processing revenues in this segment. While our visibility looking forward remains poor, we see demand in Specialty Petrochemicals continuing to improve into the third quarter, while still below pre-pandemic levels. "Our growth initiative launched in 2020 remains on track to achieve approximately $4 million of annualized incremental EBITDA value creation. With additional inbound projects continuing to develop, we believe the expanding pipeline of projects offer further opportunities for profit improvements ahead. "Finally, we recently completed the sale of a 975,000 share portion of Trecora's overall ownership in AMAK. We believe we will complete the sale of our remaining AMAK shares by the end of the third quarter. Coupled with the anticipated receipt of Federal income tax refunds allowed under the CARES Act, we expect our bank debt, net of cash, to be negative. With our strong balance sheet we can better navigate the current market environment as well as prudently consider growth opportunities and drive shareholder value," concluded Mr. Quarles. Sami Ahmad, Trecora's Chief Financial Officer stated, "We have taken a number of measures in the first half of 2020 to strengthen our balance sheet and provide for sufficient liquidity as we progress through this downturn. We fully repaid our revolver balance of $23 million and paid down another $1 million on our Term Loan during the second quarter of 2020. As a result, our bank debt balance as of June 30 was $78.2 million compared to $102.3 million at March 31. We maintained keen attention to costs with a focus on safe and reliable operation of our plants as well as preserving the continuity of our workforce. Cash on the balance sheet stood at approximately $29.9 million at the end of second quarter. Finally, in addition to proceeds from the AMAK share sale we expect to receive approximately $16.5 million in tax refunds in the second half of the year." Second Quarter 2020 Financial Results Net loss from continuing operations in the second quarter of 2020 was $1.9 million, or $0.07 per diluted share[1], compared to a net income from continuing operations of $2.4 million, or $0.10 per diluted share[2], in the second quarter of 2019. Adjusted EBITDA from continuing operations was $4.2 million for the second quarter of 2020, compared with Adjusted EBITDA from continuing operations of $9.3 million in the second quarter of 2019. Adjusted EBITDA from continuing operations declined due to lower sales volumes for prime products and by-products in our Specialty Petrochemicals segment, as well as lower Specialty Waxes sales revenue, both of which were impacted by COVID-19. Total revenue in the second quarter of 2020 was $40.7 million compared to $69.4 million in the second quarter of 2019. This 41.4% year-over-year decrease was primarily due to lower sales volumes for prime products and by-products which was impacted by COVID-19. Also, gross revenue was reduced by lower selling prices resulting from the sharp decline in feedstock costs relative to the same period a year ago. Gross profit in the second quarter of 2020 was $6.2 million, or 15.2% of total revenues, compared to $10.6 million, or 15.2% of total revenues, in the second quarter of 2019. Operating loss in the second quarter of 2020 was $0.3 million compared to operating income of $4.3 million for the second quarter of 2019. Specialty Petrochemicals Specialty Petrochemicals net income from continuing operations was $1.4 million in the second quarter of 2020, compared to net income of $4.7 million in the second quarter of 2019. Specialty Petrochemicals volume in the second quarter of 2020 was 15.3 million gallons, compared to 19.7 million gallons in the first quarter of 2020 and 21.4 million gallons in the second quarter of 2019. Sales volume of our Specialty Petrochemicals products decreased 28.5% year-over-year, due to lower demand from polyethylene end-use markets as well as lower sales to Canadian oil sands customers. Prime product volume in the second quarter of 2020 was 13.1 million gallons, compared to 16.2 million gallons in the first quarter of 2020 and 17.7 million gallons in the second quarter of 2019. By-product sales volume was 2.3 million gallons in the second quarter of 2020. Adjusted EBITDA from continuing operations for Specialty Petrochemicals in the second quarter of 2020 was $5.0 million compared to $10.4 million in the second quarter of 2019. Dollar amounts in thousands/rounding may apply THREE MONTHS ENDED JUNE 30, 2020 2019 % Change Product sales $31,236 $58,584 (47%) Processing fees 1,159 1,527 (24%) Gross revenues $32,395 $60,111 (46%) Operating profit before depreciation and amortization 4,974 10,028 (50%) Operating profit 2,354 7,104 (67%) Net profit before taxes 1,648 6,375 (74%) Depreciation and amortization 2,621 2,925 (10%) Adjusted EBITDA from continuing operations 4,998 10,353 (52%) Capital expenditures 5,382 1,461 268% Specialty Waxes Specialty Waxes net loss from continuing operations was $0.3 million in the second quarter of 2020, compared to a net loss from continuing operations of $1.0 million in the second quarter of 2019. Specialty Waxes generated revenues of approximately $8.3 million in the second quarter of 2020, a $2.1 million decrease from $10.4 million in the first quarter of 2020, and a $1.0 million decrease from the second quarter of 2019. Revenue included $5.5 million of wax product sales in the second quarter of 2020. Wax sales volumes decreased approximately 16.0% or nearly 1.6 million pounds from the second quarter of 2019. Lower sales volumes, in the second quarter of 2020, reflect the impact on our customers from COVID-19. Many of our customers, especially in the automotive, furniture and construction end-markets, had significant decline in sales demand due to the pandemic. There were no material disruptions to feed supply during the second quarter of 2020. Processing revenues, which were $2.8 million in the second quarter of 2020, increased 11.7%, or approximately $0.3 million, from the second quarter of 2019. Adjusted EBITDA from continuing operations for Specialty Waxes in the second quarter of 2020 was $0.9 million compared to $0.7 million in the second quarter of 2019. Dollar amounts in thousands/rounding may apply THREE MONTHS ENDED JUNE 30, 2020 2019 % Change Product sales $5,471 $6,745 (19%) Processing fees 2,808 2,516 12% Gross revenues $8,279 $9,261 (11%) Operating profit before depreciation and amortization 854 766 11% Operating loss (485) (633) 23% Net loss before taxes (445) (1,013) 56% Depreciation and amortization 1,338 1,399 (4%) Adjusted EBITDA from continuing operations 892 734 22% Capital expenditures 285 426 (33%) First Half 2020 Financial Results Net income from continuing operations in the first half of 2020 was $4.0 million, or $0.16 per diluted share[3], compared to net income of $4.3 million, or $0.17 per diluted share[4], for the same period in 2019. Adjusted EBITDA from continuing operations in the first half of 2020 was $9.7 million, compared to Adjusted EBITDA from continuing operations of $17.7 million for the same period in 2019. Total revenue in the first half of 2020 was $102.7 million, compared to $134.5 million for the same period in 2019, a decrease of 23.6%. This decrease was primarily due to lower sales volumes for prime products and byproducts as a result of COVID-19 and its general impact on the economy. A decrease in average selling prices resulting from a sharp decrease in feedstock costs also contributed to the revenue decline. Gross profit in the first half of 2020 was $14.2 million, or 13.9% of total revenues, compared to $20.6 million, or 15.3% of total revenues, for the same period in 2019. Operating income in the first half of 2020 was $0.9 million, compared to operating income of $8.1 million for the same period in 2019. Specialty Petrochemicals Specialty Petrochemicals net income was $6.0 million in the first half of 2020, compared to net income of $10.8 million for the same period in 2019. Specialty Petrochemicals volume in the first half of 2020 was 35.1 million gallons, compared to 43.9 million gallons for the same period in 2019. Prime product volume in the first half of 2020 was 29.3 million gallons, compared to 35.4 million gallons in the same period 2019. Adjusted EBITDA from continuing operations for Specialty Petrochemicals in the first half of 2020 decreased 47% to $11.5 million, compared to $21.8 million for the same period in 2019. Dollar amounts in thousands/rounding may apply SIX MONTHS ENDED JUNE 30, 2020 2019 % Change Product sales $81,622 $114,074 (28%) Processing fees 2,403 2,910 (17%) Gross revenues $84,025 $116,984 (28%) Operating profit before depreciation and amortization 11,464 21,435 (47%) Operating profit 6,226 15,437 (60%) Net profit before taxes 4,590 13,510 (66%) Depreciation and amortization 5,238 5,999 (13%) Adjusted EBITDA from continuing operations 11,471 21,758 (47%) Capital expenditures 6,983 2,839 146% Specialty Waxes Specialty Waxes net income of $0.9 million in the first half of 2020 compared to a net loss of $3.6 million for the same period in 2019. Specialty Waxes had revenues of $18.7 million in the first half of 2020, a 6.7% increase from the same period of 2019. Revenues included $12.3 million of wax product sales and $6.4 million of processing revenues. Wax sales volumes in the first half of 2020 increased approximately 3.9% from the same period 2019. In the first half of 2019 planned maintenance turnaround at our Pasadena facility, along with outages at multiple wax feed suppliers, constrained specialty wax production and thereby sales volumes. There were no material disruptions to feed supply during the first half of 2020. Adjusted EBITDA from continuing operations for Specialty Waxes in the first half of 2020 was $2.0 million, compared to $(0.2) million for the same period in 2019. Dollar amounts in thousands/rounding may apply SIX MONTHS ENDED JUNE 30, 2020 2019 % Change Product sales $12,268 $12,748 (4)% Processing fees 6,448 4,794 34% Gross revenues $18,716 $17,542 7% Operating profit (loss) before depreciation and amortization 1,920 (83) 2,413% Operating loss (747) (2,830) 74% Net loss before taxes (687) (3,552) 81% Depreciation and amortization 2,666 2,747 (3%) Adjusted EBITDA from continuing operations 1,996 (154) 1,396% Capital expenditures 601 935 (36%) Earnings Call Tomorrow's conference call and presentation slides will be simulcast live on the Internet, and can be accessed on the investor relations section of the Company's website at http://www.trecora.com or at https://edge.media-server.com/mmc/p/zucq82i6. A replay of the call will also be available through the same link. To participate via telephone, callers should dial in at least ten to fifteen minutes prior to the 10:00 am Eastern start time; domestic callers (U.S. and Canada) should call +1-866-417-5724 or +1-409-217-8234 if calling internationally, using the conference ID 6689633. To listen to the playback, please call 1-855-859-2056 if calling within the United States or 1-404-537-3406 if calling internationally. Use pin number 6689633 for the replay. Use of Non-GAAP Measures This press release includes the use of both U.S. generally accepted accounting principles ("GAAP") and non-GAAP financial measures. The Company believes certain financial measures, such as EBITDA from continuing operations and Adjusted EBITDA from continuing operations, which are non-GAAP measures, provide users of our financial statements with supplemental information that may be useful in evaluating our operating performance. The Company believes that such non-GAAP measures, when read in conjunction with our operating results presented under GAAP, can be used to better assess our performance from period to period and relative to performance of other companies in our industry, without regard to financing methods, historical cost basis or capital structure. These measures are not measures of financial performance or liquidity under GAAP and should be considered in addition to, and not as a substitute for, analysis of our results under GAAP. We define EBITDA from continuing operations as net income (loss) from continuing operations plus interest expense (benefit), income taxes, depreciation and amortization. We define Adjusted EBITDA from continuing operations as EBITDA from continuing operations plus share-based compensation, plus restructuring and severance expenses, plus or minus equity in AMAK's earnings and losses, plus impairment losses and plus or minus gains or losses on disposal of assets. These non-GAAP measures have been reconciled to the nearest GAAP measure in the tables below entitled Reconciliation of Selected GAAP Measures to Non-GAAP Measures. Forward-Looking Statements Some of the statements and information contained in this earnings press release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Statements regarding the Company's financial position, business strategy and plans and objectives of the Company's management for future operations and other statements that are not historical facts, are forward-looking statements. Forward-looking statements are often characterized by the use of words such as "outlook," "may," "will," "should," "could," "expects," "plans," "anticipates, "contemplates," "proposes," "believes," "estimates," "predicts," "projects," "potential," "continue," "intend," or the negative of such terms and other comparable terminology, or by discussions of strategy, plans or intentions. Forward-looking statements involve known and unknown risks, uncertainties, assumptions, and other important factors that could cause the actual results, performance or our achievements, or industry results, to differ materially from historical results, any future results, or performance or achievements expressed or implied by such forward-looking statements. Such risks, uncertainties and factors include, but are not limited to: not completing, or not completely realizing the anticipated benefits from, the sale of our stake in AMAK; general economic and financial conditions domestically and internationally; insufficient cash flows from operating activities; our ability to attract and retain key employees; feedstock, product and mineral prices; feedstock availability and our ability to access third party transportation; competition; industry cycles; natural disasters or other severe weather events, health epidemics and pandemics (including COVID-19) and terrorist attacks; our ability to consummate extraordinary transactions, including acquisitions and dispositions, and realize the financial and strategic goals of such transactions; technological developments and our ability to maintain, expand and upgrade our facilities; regulatory changes; environmental matters; lawsuits; outstanding debt and other financial and legal obligations (including having to return the amounts borrowed under the Paycheck Protection Program or failing to qualify for forgiveness of such loans, in whole or in part); difficulties in obtaining additional financing on favorable conditions, or at all; local business risks in foreign countries, including civil unrest and military or political conflict, local regulatory and legal environments and foreign currency fluctuations; and other risks detailed in our latest Annual Report on Form 10-K, including but not limited to: "Part I, Item 1A. Risk Factors" and "Part II, Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" therein, and in our other filings with the Securities and Exchange Commission (the "SEC"). Many of these risks and uncertainties are currently amplified by and will continue to be amplified by, or in the future may be amplified by, the COVID-19 pandemic. There may be other factors of which we are currently unaware or deem immaterial that may cause our actual results to differ materially from the forward-looking statements. In addition, to the extent any inconsistency or conflict exists between the information included in this report and the information included in our prior releases, reports and other filings with the SEC, the information contained in this report updates and supersedes such information. Forward-looking statements are based on current plans, estimates, assumptions and projections, and, therefore, you should not place undue reliance on them. Forward-looking statements speak only as of the date they are made, and we undertake no obligation to update them in light of new information or future events. About Trecora Resources (TREC)TREC owns and operates a specialty petrochemicals facility specializing in high purity hydrocarbons and other petrochemical manufacturing and a specialty wax facility, both located in Texas, and provides custom processing services at both facilities. In addition, the Company is the original developer and a 27.0% owner of Al Masane Al Kobra Mining Co., a Saudi Arabian joint stock company. Investor Relations Contact:Jason FinkelsteinThe Piacente Group, [email protected] 1 Based on 24.8 million shares outstanding. 2 Based on 25.1 million shares outstanding. 3 Based on 25.4 million shares outstanding. 4 Based on 25.1 million shares outstanding. TRECORA RESOURCES AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS June 30, 2020 (Unaudited) December 31, 2019 ASSETS (thousands of dollars, except par value) Current Assets Cash $ 29,877 $ 6,145 Trade receivables, net 20,240 26,320 Inventories 7,595 13,624 Investment in AMAK (held-for-sale) 29,175 32,872 Prepaid expenses and other assets 3,233 4,947 Taxes receivable 16,229 182 Total current assets 106,349 84,090 Plant, pipeline and equipment, net 189,237 188,919 Intangible assets, net 13,814 14,736 Operating lease assets, net 11,915 13,512 Mineral properties in the United States 562 562 TOTAL ASSETS 321,877 301,819 LIABILITIES Current Liabilities Accounts payable 11,027 14,603 Accrued liabilities 7,801 5,740 Current portion of long-term debt 4,194 4,194 Current portion of lease liabilities 3,142 3,174 Current portion of other liabilities 955 924 Total current liabilities 27,119 28,635 CARES Act, PPP Loans 6,123 - Long-term debt, net of current portion 73,998 79,095 Post-retirement benefit, net of current portion 327 338 Lease liabilities, net of current portion 8,773 10,338 Other liabilities, net of current portion 512 595 Deferred income taxes 23,860 11,375 Total liabilities 140,712 130,376 EQUITY Common stock-authorized 40 million shares of $0.10 par value; issued and outstanding 24.8 million and 24.8 million in 2020 and 2019, respectively 2,482 2,475 Additional paid-in capital 60,386 59,530 Retained earnings 118,008 109,149 Total Trecora Resources Stockholders' Equity 180,876 171,154 Noncontrolling Interest 289 289 Total equity 181,165 171,443 TOTAL LIABILITIES AND EQUITY 321,877 301,819 TRECORA RESOURCES AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME THREE MONTHS ENDEDJUNE 30, SIX MONTHS ENDEDJUNE 30, (unaudited) (unaudited) 2020 2019 2020 2019 (thousands of dollars, except per share amounts) Revenues Product sales $ 36,707 $ 65,329 $ 93,890 $ 126,822 Processing fees 3,967 4,042 8,851 7,704 40,674 69,371 102,741 134,526 Operating costs and expenses Cost of sales and processing (including depreciation and amortization of $3,750, $4,128, $7,486 and $8,357, respectively) 34,507 58,806 88,496 113,888 Gross Profit 6,167 10,565 14,245 20,638 General and Administrative Expenses General and administrative 6,289 6,042 12,963 12,076 Depreciation 212 208 428 421 6,501 6,250 13,391 12,497 Operating income (loss) (334) 4,315 854 8,141 Other income (expense) Interest income - - - 5 Interest expense (735) (1,401) (1,651) (2,900) Miscellaneous income (expense), net 68 284 6 256 (667) (1,117) (1,645) (2,639) Income (loss) from continuing operations before income taxes (1,001) 3,198 (791) 5,502 Income tax expense (benefit) 858 691 (4,795) 1,185 Income (loss) from continuing operations (1,859) 2,507 4,004 4,317 Income (loss) from discontinued operations, net of tax (2) (103) 4,855 (162) Net income (loss) (1,861) 2,404 8,859 4,155 Basic earnings (losses) per common share Net income (loss) from continuing operations (dollars) $ (0.07) $ 0.10 $ 0.16 $ 0.17 Net income from discontinued operations, net of tax (dollars) $ - $ - $ 0.20 $ (0.01) Net income (loss) (dollars) $ (0.07) $ 0.10 $ 0.36 $ 0.16 Basic weighted average number of common shares outstanding 24,802 24,696 24,784 24,675 Diluted earnings (losses) per common share Net income (loss) from continuing operations (dollars) $ (0.07) $ 0.10 $ 0.16 $ 0.17 Net income from discontinued operations, net of tax (dollars) $ - $ - $ 0.19 $ (0.01) Net income (loss) (dollars) $ (0.07) $ 0.10 $ 0.35 $ 0.16 Diluted weighted average number of common shares outstanding 24,802 25,091 25,360 25,089 TRECORA RESOURCES AND SUBSIDIARIES RECONCILIATION OF SELECTED GAAP MEASURES TO NON-GAAP MEASURES EBITDA from continuing operations and Adjusted EBITDA from continuing operations (thousands of dollars; rounding may apply) THREE MONTHS ENDED THREE MONTHS ENDED 6/30/2020 6/30/2019 SPEC. PETRO SPEC. WAX CORP TREC SPEC. PETRO SPEC. WAX CORP TREC NET INCOME (LOSS) $ 1,393 $ (332) $ (2,922) $ (1,861) $ 4,666 $ (1,013) $ (1,249) $ 2,404 Loss from discontinued operations, net of tax - - (2) (2) - - (103) (103) Income (Loss) from continuing operations $ 1,393 $ (332) $ (2,920) $ (1,859) $ 4,666 $ (1,013) $ (1,146) $ 2,507 Interest 736 - (1) 735 1,053 347 1 1,401 Tax expense (benefit) 255 (113) 716 858 1,709 - (1,018) 691 Depreciation and amortization 185 23 4 212 172 24 12 208 Depreciation and amortization in cost of sales 2,436 1,314 - 3,750 2,753 1,375 - 4,128 EBITDA from continuing operations 5,005 892 (2,201) 3,696 10,353 733 (2,151) 8,935 Share based compensation - - 543 543 - - 345 345 Loss on disposal of assets (7) - - (7) - - - - Adjusted EBITDA from continuing operations $ 4,998 $ 892 $ (1,658) $ 4,232 $ 10,353 $ 733 $ (1,806) $ 9,280 Revenue 32,395 8,279 - 40,674 60,110 9,260 - 69,371 SIX MONTHS ENDED SIX MONTHS ENDED 6/30/2020 6/30/2019 SPEC. PETRO SPEC. WAX CORP TREC SPEC. PETRO SPEC. WAX CORP TREC NET INCOME (LOSS) $ 5,989 $ 882 $ 1,988 $ 8,859 $ 10,808 $ (3,552) $ (3,101) $ 4,155 Loss from discontinued operations, net of tax - - 4,855 4,855 - - (162) (162) Income (Loss) from continuing operations $ 5,989 $ 882 $ (2,867) $ 4,004 $ 10,808 $ (3,552) $ (2,939) $ 4,317 Interest 1,651 - - 1,651 2,248 651 1 2,900 Tax expense (benefit) (1,399) (1,569) (1,827) (4,795) 2,703 - (1,518) 1,185 Depreciation and amortization 371 47 10 428 341 48 32 421 Depreciation and amortization in cost of sales 4,867 2,619 - 7,486 5,658 2,699 - 8,357 EBITDA from continuing operations 11,479 1,979 (4,684) 8,774 21,758 (154) (4,424) 17,180 Share based compensation - - 933 933 - - 558 558 (Gain) Loss on disposal of assets (8) 17 - 9 - - - - Adjusted EBITDA from continuing operations $ 11,471 $ 1,996 $ (3,751) $ 9,716 $ 21,758 $ (154) $ (3,866) $ 17,738 Revenue 84,025 18,716 - 102,741 116,984 17,542 - 134,526 View original content to download multimedia:http://www.prnewswire.com/news-releases/trecora-resources-reports-second-quarter-and-first-half-2020-results-301106076.html SOURCE Trecora Resources

Profire Energy Announces Changes to its Board of Directors LINDON, Utah, Aug. 04, 2020 (GLOBE NEWSWIRE) -- Profire Energy, Inc. (Nasdaq: PFIE), a technology company which creates, installs and services burner management solutions in the oil and gas industry, today announced the resignation of Mr. Arlen B. Crouch from the Company's Board of Directors. Mr. Crouch has served on the Company's Board since 2013. Contemporaneously with Mr. Crouch's resignation, the Board of Directors appointed Colleen Larkin Bell as the newest member of the Company's Board. Both of these changes were effective August 3, 2020. "On behalf of our board of directors, I want to thank Arlen for his service to Profire," stated Brenton Hatch, Profire's Executive Chairman. "His advice and expert guidance have been crucial to Profire for many years. We wish him the best in his retirement and any future endeavors." Ms. Bell joins the Board with 30 years of experience in the natural gas and energy industry as a legal professional, in which she has held various executive roles. Ms. Bell served as Vice President and General Manager of Dominion Energy Western Distribution, Gas Infrastructure Group from 2016 to 2019. Prior to her time at Dominion Energy, Ms. Bell served as the Vice President and General Counsel for Questar Corporation. "Colleen will be a great addition to the team and offers a deep understanding of industry practices," said Ryan Oviatt, the Company's Co-CEO and President. "Her expertise coupled with industry knowledge will be valuable to us as Profire continues to navigate through current market conditions and as we continue to position ourselves for future growth as the industry recovers. We are pleased to have her join the Board and we look forward to working with her over the coming years." "Colleen's appointment will bring critical experience and a connection to the downstream utility distribution sector," said Cameron Tidball, the Company's Co-CEO and President. "Colleen's experience in support of regulatory compliance issues in the natural gas utility sector will help support further expansion of our customer and product development opportunities. We welcome her to the Profire team and look forward to her presence and involvement with the Board." "Joining Profire at this time presents a unique opportunity," said Ms. Bell. "Profire is a well-managed company that is looking to build and expand its industry-leading technology to help users minimize waste and costs as the sector currently faces multiple headwinds. I look forward to working with the management team and the Board to provide shareholder value while delivering valuable products and expertise within the oil and gas industry." About Profire Energy, Inc.Profire Energy assists energy production companies in the safe and efficient production and transportation of oil and natural gas. As energy companies seek greater safety for their employees, compliance with more stringent regulatory standards, and enhanced margins with their energy production processes, Profire Energy's burner management products are continuing to be a key part of their solutions. Profire Energy has offices in Lindon, Utah; Victoria, Texas; Homer, Pennsylvania; Greeley, Colorado; Millersburg, Ohio; and Acheson, Alberta, Canada. For additional information, visit www.profireenergy.com. Cautionary Note Regarding Forward-Looking Statements. Statements made in this release that are not historical are forward-looking statements. This release contains forward-looking statements. All such forward-looking statements are subject to uncertainty and changes in circumstances. Forward-looking statements are not guarantees of future results or performance and involve risks, assumptions and uncertainties that could cause actual events or results to differ materially from the events or results described in, or anticipated by, the forward-looking statements. Factors that could materially affect such forward-looking statements include certain economic, business, public market and regulatory risks and factors identified in the company's periodic reports filed with the Securities and Exchange Commission. All forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. All forward-looking statements are made only as of the date of this release and the Company assumes no obligation to update forward-looking statements to reflect subsequent events or circumstances, except as required by law. Readers should not place undue reliance on these forward-looking statements. Contact:Profire Energy, Inc.Ryan Oviatt, Co-CEO and CFO(801) 796-5127 Three Part AdvisorsSteven Hooser, Partner(214) 872-2710