v3.26.1
Fair Value Measurements
 6 Months Ended
Jun. 30, 2026
Fair Value Disclosures [Abstract]  
Fair Value Measurements Fair Value Measurements
Our assets and liabilities that are measured at fair value include commodity derivatives, interest rate derivatives, investment commodities, environmental credits obligations, and our Inventory Intermediation Agreement. ASC 820, Fair Value Measurements ("ASC 820") requires disclosures that categorize assets and liabilities measured at fair value into one of three different levels depending on the observability of the inputs employed in the measurement. Level 1 inputs are quoted prices in active markets for identical assets or liabilities. Level 2 inputs are observable inputs other than quoted prices included within Level 1 for the asset or liability, either directly or indirectly through market-corroborated inputs. Level 3 inputs are unobservable inputs for the asset or liability reflecting our assumptions about pricing by market participants.
Commodity and Interest Rate Derivatives
Our commodity derivative contracts, which consist of commodity swaps, exchange-traded futures, options and physical commodity forward purchase and sale contracts (that do not qualify for the NPNS exception under ASC 815), are valued based on exchange pricing and/or price index developers such as Platts or Argus and are, therefore, classified as Level 2.
Our crude exchange contract is valued based on forward crude prices that are observable market inputs, and therefore classified as Level 2.
Our interest rate swaps are valued based on discounted cash flow models that incorporate the cash flows of the derivatives, as well as the current SOFR rate and a forward SOFR curve, along with other observable market inputs and are, therefore, classified as Level 2.
Environmental Credit Obligations
Our environmental credit obligation positions are subject to fair value accounting pursuant to our accounting policy. As part of our refining operations, we generate certain regulatory environmental credit obligations, the most notable of which is the renewable volume obligation ("RVO"), which are satisfied through RINs. Because our obligations to provide RINs exceed the RINs we are able to generate annually on a consolidated basis, and because we have the legal ability to transfer RINs generated or purchased through any of our entities to our obligated parties as needed, we view and manage the Company’s RINs holdings on a consolidated basis. Therefore, the sum of all of our obligated parties’ Net RINs obligations and our RIN holdings at the end of each period comprises the Company’s “Consolidated Net RINs Obligation.” The Consolidated Net RINs Obligation may be a surplus ("Consolidated Net RIN surplus") or deficit ("Consolidated Net RIN deficit") at the end of each reporting period depending on the amount of RINs held on a consolidated basis and the amount owed to the EPA. When there is a Consolidated Net RIN deficit, we have elected to apply the fair value option using the fair value guidance provided by ASC 820. To the extent the obligations are measured at fair value they are categorized as Level 2, either directly through observable inputs or indirectly through market-corroborated inputs, and gains (losses) related to changes in fair value are recorded as a component of cost of materials and other in the condensed consolidated statements of income. When there is a Consolidated Net RIN surplus, we value the asset at historical cost under the inventory method. With respect to our Consolidated Net RINs Obligation, we recognized losses of $(151.2) million and $(332.0) million on changes in fair value for the three and six months ended June 30, 2026, respectively, primarily attributable to movements in the market prices of RINs that occurred during the period. There were losses of $(5.2) million and $(6.3) million on changes in fair value for the three and six months ended June 30, 2025, respectively.
Our RINs commitment contracts, which are forward contracts accounted for as derivatives (see Note 10 and Note 15), are future commitments to purchase or sell RINs at fixed prices and quantities. The RINs commitment contracts are categorized as Level 2, and are measured at fair value based on quoted prices from an independent pricing service.
Inventory Intermediation
We elected to account for our Inventory Intermediation step-out liability at fair value in accordance with ASC 825, as it pertains to the fair value option. This standard permits the election to carry financial instruments and certain other items similar to financial instruments at fair value on the balance sheet, with all changes in fair value reported in earnings. With respect to the Inventory Intermediation Agreement, we apply fair value measurement as follows: (1) we determine fair value for our amended variable step-out liability based on changes in fair value related to market volatility based on a floating commodity-index price, and for our amended fixed step-out liability based on changes to interest rates and the timing and amount of expected future cash settlements where such obligation is categorized as Level 2. Gains (losses) related to changes in fair value due to commodity-index price are recorded as a component of cost of materials and other, and changes in fair value due to interest rate risk are recorded as a component of interest expense in the condensed consolidated statements of income; and (2) we determine fair value of the commodity-indexed revolving over/short inventory financing liability based on the market prices for the consigned crude oil and refined products collateralizing the financing/funding where such obligation is categorized as Level 2 and is presented in the current portion of the obligation under Inventory Intermediation Agreement on our condensed consolidated balance sheets. Gains (losses) related to the change in fair value are recorded as a component of cost of materials and other in the condensed consolidated statements of income. See Note 8 for discussion of gains and losses recognized from changes in fair value.
Debt
The fair values of the Delek Logistics 2029 Notes, 2033 Notes, and 2034 Notes are each measured using quoted market prices in an active market (Level 2 in the fair value hierarchy). The carrying values (excluding unamortized debt issuance costs) and estimated fair values of these notes were as follows (in millions):
Balance at June 30, 2026Balance at December 31, 2025
Carrying ValueFair ValueCarrying ValueFair Value
Delek Logistics 2029 Notes (1)
$650.0 $676.6 $1,050.0 $1,100.4 
Delek Logistics 2033 Notes$700.0 $714.4 $700.0 $716.4 
Delek Logistics 2034 Notes$800.0 $797.3 N/AN/A
(1) The carrying value of the Delek Logistics 2029 Notes decreased as a result of a conditional notice of partial redemption of $400.0 million in principal, issued concurrently with the offering of the Delek Logistics 2034 Notes.
The fair value approximates the historical or amortized cost basis comprising our carrying value for all other financial instruments and therefore are not included in the table below. The fair value hierarchy for our financial assets and liabilities accounted for at fair value on a recurring basis was as follows (in millions):
As of June 30, 2026
Level 1Level 2Level 3Total
Assets
Commodity derivatives$— $84.3 $— $84.3 
Interest rate swap derivatives— 4.4 — 4.4 
RINs commitment contracts— 0.7 — 0.7 
Total assets— 89.4 — 89.4 
Liabilities
Commodity derivatives— (88.6)— (88.6)
Interest rate swap derivatives— (3.9)— (3.9)
Consolidated Net RINs deficit— (822.5)— (822.5)
Crude exchange contract— (80.0)— (80.0)
Inventory Intermediation Agreement obligation— (95.2)— (95.2)
Total liabilities— (1,090.2)— (1,090.2)
Net liabilities$— $(1,000.8)$— $(1,000.8)
As of December 31, 2025
Level 1Level 2Level 3Total
Assets
Commodity derivatives$— $15.0 $— $15.0 
Total assets— 15.0 — 15.0 
Liabilities
Commodity derivatives— (16.7)— (16.7)
Interest rate derivatives— (2.3)— (2.3)
RINs commitment contracts— (2.7)— (2.7)
Consolidated Net RINs deficit— (107.4)— (107.4)
Inventory Intermediation Agreement obligation— (119.5)— (119.5)
Total liabilities— (248.6)— (248.6)
Net liabilities$— $(233.6)$— $(233.6)
The derivative values above are based on analysis of each contract as the fundamental unit of account as required by ASC 820. In the table above, derivative assets and liabilities with the same counterparty are not netted where the legal right of offset exists. This differs from the presentation in the financial statements which reflects our policy, wherein we have elected to offset the fair value amounts recognized for multiple derivative instruments executed with the same counterparty and where the legal right of offset exists. As of June 30, 2026, and December 31, 2025, $2.5 million and $2.4 million, respectively, of cash collateral was held by counterparty brokerage firms and has been netted with the net derivative positions with each counterparty. See Note 10 for further information regarding derivative instruments.
Non-Recurring Fair Value Measurements
The Gravity Acquisition was accounted for as a business combination using the acquisition method of accounting, with the assets acquired and liabilities assumed at their respective acquisition date fair values at the closing date. The fair value measurements were based on a combination of valuation methods including discounted cash flows, the market approach and obsolescence adjusted replacement costs, all of which are Level 3 inputs. See Note 2 for further information.