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What changed in Delek Logistics Partners, LP's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Delek Logistics Partners, LP's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+189 added−222 removedSource: 10-K (2026-02-27) vs 10-K (2025-02-26)

Top changes in Delek Logistics Partners, LP's 2025 10-K

189 paragraphs added · 222 removed · 153 edited across 6 sections

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

49 edited+1 added−3 removed481 unchanged
Biggest changeOn August 10, 2021, the NHTSA proposed to amend the CAFE standards previously published in 2020 (for model years 2024-2026) to increase the stringency at a rate of 8% a year, rather than the 1.5% set previously.
Biggest changeOn May 2, 2022, the NHTSA published a final rule amending the CAFE standards for model years 2024–2026 to increase stringency by approximately 8% annually for model years 2024 and 2025 and 10% for model year 2026, superseding the 1.5% annual increases previously set.
Similarly, the respective indentures governing the 2028 Notes and 2029 Notes contain covenants that, among other things, limit our ability and the ability of our restricted subsidiaries to (i) incur, assume or guarantee additional indebtedness or issue certain convertible or redeemable equity securities; (ii) create liens to secure indebtedness; (iii) pay distributions on equity interests, repurchase equity securities or redeem subordinated securities; (iv) make investments; (v) make distributions, loans or other asset transfers from our restricted subsidiaries; (vi) consolidate with or merge with or into, or sell substantially all of our properties to, another person; (vii) sell or otherwise dispose or assets, including equity interests in subsidiaries; and (viii) enter into transactions with affiliates.
Similarly, the respective indentures governing the 2028 Notes, 2029 Notes and 2033 Notes contain covenants that, among other things, limit our ability and the ability of our restricted subsidiaries to (i) incur, assume or guarantee additional indebtedness or issue certain convertible or redeemable equity securities; (ii) create liens to secure indebtedness; (iii) pay distributions on equity interests, repurchase equity securities or redeem subordinated securities; (iv) make investments; (v) make distributions, loans or other asset transfers from our restricted subsidiaries; (vi) consolidate with or merge with or into, or sell substantially all of our properties to, another person; (vii) sell or otherwise dispose or assets, including equity interests in subsidiaries; and (viii) enter into transactions with affiliates.
Accordingly, we are indirectly subject to the operational and business risks of Delek Holdings and its assignees, including, but not limited to, the following: • the timing and extent of changes in the costs and availability of crude oil and other refinery feedstocks (including prolonged periods of low crude oil prices that could impact production of inland crude oil and reduce the amount of cost advantaged crude oil available and/or the discount of such crude oil as compared to other crude oil) and in the price and demand for Delek Holdings' refined products; • the risk of contract cancellation, non-renewal or failure to perform by Delek Holdings’ suppliers or customers, and Delek Holdings’ inability to replace such suppliers, contracts, customers and/or revenues; • disruptions due to equipment interruption or failure or other events at Delek Holdings’ facilities, or at third-party facilities on which Delek Holdings’ business is dependent; • the effects of economic downturns on Delek Holdings’ business and the business of its suppliers, customers, business partners and lenders; • changes in global and local economic conditions, e.g., as a result of the outbreak of the COVID-19 Pandemic; • Delek Holdings’ ability to remain in compliance with its contracts; • Delek Holdings’ ability to remain in compliance with the terms of its outstanding and any future indebtedness; • changes in the cost or availability of third-party pipelines, terminals and other means of delivering and transporting crude oil, feedstocks and refined products; • state and federal environmental, economic, health and safety, energy and other policies and regulations, and any changes in those policies and regulations; • environmental incidents and violations and related remediation costs, fines and other liabilities; and • changes in crude oil and refined product inventory levels and carrying costs. 26 | Risk Factors Additionally, Delek Holdings continually considers opportunities presented by third parties with respect to its refinery assets.
Accordingly, we are indirectly subject to the operational and business risks of Delek Holdings and its assignees, including, but not limited to, the following: • the timing and extent of changes in the costs and availability of crude oil and other refinery feedstocks (including prolonged periods of low crude oil prices that could impact production of inland crude oil and reduce the amount of cost advantaged crude oil available and/or the discount of such crude oil as compared to other crude oil) and in the price and demand for Delek Holdings' refined products; • the risk of contract cancellation, non-renewal or failure to perform by Delek Holdings’ suppliers or customers, and Delek Holdings’ inability to replace such suppliers, contracts, customers and/or revenues; • disruptions due to equipment interruption or failure or other events at Delek Holdings’ facilities, or at third-party facilities on which Delek Holdings’ business is dependent; • the effects of economic downturns on Delek Holdings’ business and the business of its suppliers, customers, business partners and lenders; • changes in global and local economic conditions, e.g., as a result of the outbreak of the COVID-19 Pandemic; • Delek Holdings’ ability to remain in compliance with its contracts; • Delek Holdings’ ability to remain in compliance with the terms of its outstanding and any future indebtedness; • changes in the cost or availability of third-party pipelines, terminals and other means of delivering and transporting crude oil, feedstocks and refined products; • state and federal environmental, economic, health and safety, energy and other policies and regulations, and any changes in those policies and regulations; • environmental incidents and violations and related remediation costs, fines and other liabilities; and • changes in crude oil and refined product inventory levels and carrying costs. 23 | Risk Factors Additionally, Delek Holdings continually considers opportunities presented by third parties with respect to its refinery assets.
Our revolving credit facility and the respective indentures governing the 2028 Notes and 2029 Notes (as defined in Note 10 to our consolidated financial statements in Item 8, Financial Statements and Supplementary Data, of this Annual Report on Form 10-K) contain, and any future financing agreements may contain, operating and financial restrictions and covenants that could limit our ability to finance future operations or capital needs, or to expand or pursue our business activities, which may, in turn, limit our ability to make cash distributions to our unitholders.
Our revolving credit facility and the respective indentures governing the 2028 Notes, 2029 Notes and 2033 Notes (as defined in Note 10 to our consolidated financial statements in Item 8, Financial Statements and Supplementary Data, of this Annual Report on Form 10-K) contain, and any future financing agreements may contain, operating and financial restrictions and covenants that could limit our ability to finance future operations or capital needs, or to expand or pursue our business activities, which may, in turn, limit our ability to make cash distributions to our unitholders.
"Business and Properties—Governmental Regulation and Environmental Matters—Water." Among other things, the OPA requires us to prepare a facility response plan identifying the personnel and equipment necessary to remove, to the maximum extent practicable, a “worst case discharge.” While our plans are designed to mitigate environmental impacts, such plans may not protect us from all liability associated with the discharge of crude oil or products into navigable waters. 30 | Risk Factors With respect to the releases that have occurred, or for an event that occurs or is discovered in the future, whether in connection with any of our assets or any other facility to which we send or have sent waste or by-products for treatment or disposal, or a facility or assets that we may acquire from time to time as part of our ongoing growth strategy, we could be liable for all costs and penalties associated with the remediation of such facilities under federal, state and local environmental laws or common law.
"Business and Properties—Governmental Regulation and Environmental Matters—Water." Among other things, the OPA requires us to prepare a facility response plan identifying the personnel and equipment necessary to remove, to the maximum extent practicable, a “worst case discharge.” While our plans are designed to mitigate environmental impacts, such plans may not protect us from all liability associated with the discharge of crude oil or products into navigable waters. 27 | Risk Factors With respect to the releases that have occurred, or for an event that occurs or is discovered in the future, whether in connection with any of our assets or any other facility to which we send or have sent waste or by-products for treatment or disposal, or a facility or assets that we may acquire from time to time as part of our ongoing growth strategy, we could be liable for all costs and penalties associated with the remediation of such facilities under federal, state and local environmental laws or common law.
When these events occur in connection with any of our refineries, pipelines or refined petroleum products terminals, or in connection with any facilities that receive our wastes or byproducts for treatment or disposal, we have in the past and could in the future be liable for costs and penalties associated with their remediation under federal, state, local and international environmental laws or common law, as well as for property damage to third parties caused by contamination from releases and spills. 33 | Risk Factors A material decrease in the supply of attractively priced crude oil could materially reduce the volumes of crude oil and refined products that we transport and store, which could materially and adversely affect our financial condition, results of operations, cash flows, ability to service our indebtedness and ability to make distributions to our unitholders.
When these events occur in connection with any of our refineries, pipelines or refined petroleum products terminals, or in connection with any facilities that receive our wastes or byproducts for treatment or disposal, we have in the past and could in the future be liable for costs and penalties associated with their remediation under federal, state, local and international environmental laws or common law, as well as for property damage to third parties caused by contamination from releases and spills. 30 | Risk Factors A material decrease in the supply of attractively priced crude oil could materially reduce the volumes of crude oil and refined products that we transport and store, which could materially and adversely affect our financial condition, results of operations, cash flows, ability to service our indebtedness and ability to make distributions to our unitholders.
In addition, a failure to comply with the provisions of our revolving credit facility or the indentures governing the 2028 Notes and 2029 Notes could result in a default or an event of default that could enable our lenders to declare the outstanding principal of that debt, together with accrued and unpaid interest and certain other indebtedness and other outstanding amounts, to be immediately due and payable.
In addition, a failure to comply with the provisions of our revolving credit facility or the indentures governing the 2028 Notes, 2029 Notes and 2033 Notes could result in a default or an event of default that could enable our lenders to declare the outstanding principal of that debt, together with accrued and unpaid interest and certain other indebtedness and other outstanding amounts, to be immediately due and payable.
If our operating results are not sufficient to service our current or future indebtedness, we will be forced to take actions such as reducing distributions, which is within our control, or such as reducing or delaying our business activities, acquisitions, investments or capital expenditures, selling assets or seeking additional equity capital, which actions we may not be able to effect on satisfactory terms or at all. 37 | Risk Factors Transportation on certain of our pipelines is subject to federal or state regulation, and the imposition and/or cost of compliance with such regulation could adversely affect our operations and cash flows available for distribution to our unitholders.
If our operating results are not sufficient to service our current or future indebtedness, we will be forced to take actions such as reducing distributions, which is within our control, or such as reducing or delaying our business activities, acquisitions, investments or capital expenditures, selling assets or seeking additional equity capital, which actions we may not be able to effect on satisfactory terms or at all. 34 | Risk Factors Transportation on certain of our pipelines is subject to federal or state regulation, and the imposition and/or cost of compliance with such regulation could adversely affect our operations and cash flows available for distribution to our unitholders.
Therefore, our unitholders desiring to assure their status as partners and avoid the risk of gain recognition from a loan to a short seller are urged to consult a tax advisor to discuss whether it is advisable to modify any applicable brokerage account agreements to prohibit their brokers from loaning their common limited partner units. 54 | Risk Factors We have adopted certain valuation methodologies and monthly conventions for U.S. federal income tax purposes that may result in a shift of income, gain, loss and deduction between our general partner and our unitholders.
Therefore, our unitholders desiring to assure their status as partners and avoid the risk of gain recognition from a loan to a short seller are urged to consult a tax advisor to discuss whether it is advisable to modify any applicable brokerage account agreements to prohibit their brokers from loaning their common limited partner units. 51 | Risk Factors We have adopted certain valuation methodologies and monthly conventions for U.S. federal income tax purposes that may result in a shift of income, gain, loss and deduction between our general partner and our unitholders.
Our unitholders could be held liable for any and all of our obligations as if they were general partners if a court or government agency were to determine that: • we were conducting business in a state but had not complied with that particular state’s partnership statute; or • our unitholders' right to act with other unitholders to remove or replace our general partner, to approve some amendments to our Partnership Agreement or to take other actions under our Partnership Agreement constitute “control” of our business. 51 | Risk Factors Unitholders may have liability to repay distributions that were wrongfully distributed to them.
Our unitholders could be held liable for any and all of our obligations as if they were general partners if a court or government agency were to determine that: • we were conducting business in a state but had not complied with that particular state’s partnership statute; or • our unitholders' right to act with other unitholders to remove or replace our general partner, to approve some amendments to our Partnership Agreement or to take other actions under our Partnership Agreement constitute “control” of our business. 48 | Risk Factors Unitholders may have liability to repay distributions that were wrongfully distributed to them.
Moreover, to the extent societal pressures or political or other factors are involved, it is possible that such liability could be imposed without regard to the company’s causation of or contribution to the asserted damage, or to other mitigating factors. 41 | Risk Factors There are also increasing financial risks for fossil fuel producers as shareholders currently invested in fossil-fuel energy companies concerned about the potential effects of climate change may elect in the future to shift some or all of their investments into non-energy related sectors.
Moreover, to the extent societal pressures or political or other factors are involved, it is possible that such liability could be imposed without regard to the company’s causation of or contribution to the asserted damage, or to other mitigating factors. 38 | Risk Factors There are also increasing financial risks for fossil fuel producers as shareholders currently invested in fossil-fuel energy companies concerned about the potential effects of climate change may elect in the future to shift some or all of their investments into non-energy related sectors.
Unitholders’ voting rights are further restricted by a provision of our Partnership Agreement providing that any units held by a person that owns 20% or more of any class of units then outstanding, other than our general partner, its affiliates, their transferees and persons who acquired such units with the prior approval of the board of directors of our general partner, cannot vote on any matter. 50 | Risk Factors Our general partner’s interest in us and the control of our general partner may be transferred to a third party without unitholder consent.
Unitholders’ voting rights are further restricted by a provision of our Partnership Agreement providing that any units held by a person that owns 20% or more of any class of units then outstanding, other than our general partner, its affiliates, their transferees and persons who acquired such units with the prior approval of the board of directors of our general partner, cannot vote on any matter. 47 | Risk Factors Our general partner’s interest in us and the control of our general partner may be transferred to a third party without unitholder consent.
The provisions of our revolving credit facility and of the respective indentures governing the 2028 Notes and 2029 Notes may affect our ability to obtain future financing and pursue attractive business opportunities and our flexibility in planning for, and reacting to, changes in business conditions.
The provisions of our revolving credit facility and of the respective indentures governing the 2028 Notes, 2029 Notes and 2033 Notes may affect our ability to obtain future financing and pursue attractive business opportunities and our flexibility in planning for, and reacting to, changes in business conditions.
If any of these executives or other key personnel resigns or becomes unable to continue in his or her present role and is not adequately replaced, either by us or Delek Holdings, our business operations could be materially adversely affected. 35 | Risk Factors If we are unable to obtain needed capital or financing on satisfactory terms to fund expansions of our asset base, our ability to make quarterly cash distributions may be diminished or our financial leverage could increase.
If any of these executives or other key personnel resigns or becomes unable to continue in his or her present role and is not adequately replaced, either by us or Delek Holdings, our business operations could be materially adversely affected. 32 | Risk Factors If we are unable to obtain needed capital or financing on satisfactory terms to fund expansions of our asset base, our ability to make quarterly cash distributions may be diminished or our financial leverage could increase.
Our loss of such rights, through our inability to renew any rights-of-way contracts, or a significant increase in the costs of these rights, could have a material adverse effect on our business, financial condition, results of operations, ability to maintain our assets and cash flows and our ability to make distributions to our unitholders. 40 | Risk Factors We could incur substantial costs or disruptions in our business if we cannot obtain or maintain, or otherwise fail to maintain, necessary permits and authorizations or otherwise comply with health, safety, environmental and other laws and regulations.
Our loss of such rights, through our inability to renew any rights-of-way contracts, or a significant increase in the costs of these rights, could have a material adverse effect on our business, financial condition, results of operations, ability to maintain our assets and cash flows and our ability to make distributions to our unitholders. 37 | Risk Factors We could incur substantial costs or disruptions in our business if we cannot obtain or maintain, or otherwise fail to maintain, necessary permits and authorizations or otherwise comply with health, safety, environmental and other laws and regulations.
This exposure to the volatility of commodity prices could have a material adverse effect on our financial condition, results of operations, cash flows, ability to service our indebtedness and ability to make distributions to our unitholders. 34 | Risk Factors To partially mitigate the risk of various financial exposures inherent in our business, including commodity price risk and interest rate risk on our floating rate debt, we selectively use derivative financial instruments, such as fuel-related derivative transactions, and may use interest rate swaps and interest rate cap agreements.
This exposure to the volatility of commodity prices could have a material adverse effect on our financial condition, results of operations, cash flows, ability to service our indebtedness and ability to make distributions to our unitholders. 31 | Risk Factors To partially mitigate the risk of various financial exposures inherent in our business, including commodity price risk and interest rate risk on our floating rate debt, we selectively use derivative financial instruments, such as fuel-related derivative transactions, and may use interest rate swaps and interest rate cap agreements.
We may experience delays or unanticipated costs in implementing our cost efficiency plans, which could prevent the timely or full achievement of expected cost efficiencies and adversely affect our competitive position. 46 | Risk Factors Risks Relating to Our Partnership Structure Our general partner and its affiliates, including Delek Holdings, have conflicts of interest with us and limited duties to us and our unitholders, and they may favor their own interests to the detriment of us and our other common unitholders.
We may experience delays or unanticipated costs in implementing our cost efficiency plans, which could prevent the timely or full achievement of expected cost efficiencies and adversely affect our competitive position. 43 | Risk Factors Risks Relating to Our Partnership Structure Our general partner and its affiliates, including Delek Holdings, have conflicts of interest with us and limited duties to us and our unitholders, and they may favor their own interests to the detriment of us and our other common unitholders.
This 85% threshold will automatically decrease to 80% if at any time our general partner and its affiliates together own less than 77% of our outstanding common units. • Our general partner decides whether to retain separate counsel, accountants or other advisers to perform services for us. 47 | Risk Factors Our Partnership Agreement replaces the fiduciary duties that would otherwise be owed by our general partner with contractual standards governing its duties.
This 85% threshold will automatically decrease to 80% if at any time our general partner and its affiliates together own less than 77% of our outstanding common units. • Our general partner decides whether to retain separate counsel, accountants or other advisers to perform services for us. 44 | Risk Factors Our Partnership Agreement replaces the fiduciary duties that would otherwise be owed by our general partner with contractual standards governing its duties.
The Department of the Treasury and the IRS have recently issued final regulations providing guidance on the application of these rules for transfers of publicly traded partnership interests, including transfers of our common limited partner units. 53 | Risk Factors Under these regulations, the “amount realized” on a transfer of an interest in a publicly traded partnership, such as our common limited partner units, will generally be the amount of gross proceeds paid to the broker effecting the applicable transfer on behalf of the transferor, and such broker will generally be responsible for the relevant withholding obligations.
The Department of the Treasury and the IRS have recently issued final regulations providing guidance on the application of these rules for transfers of publicly traded partnership interests, including transfers of our common limited partner units. 50 | Risk Factors Under these regulations, the “amount realized” on a transfer of an interest in a publicly traded partnership, such as our common limited partner units, will generally be the amount of gross proceeds paid to the broker effecting the applicable transfer on behalf of the transferor, and such broker will generally be responsible for the relevant withholding obligations.
Fixed rate debt also exposes us to the risk that we may need to refinance maturing debt with new debt at higher rates. 39 | Risk Factors If we are unable to make investments in joint ventures or acquisitions on economically acceptable terms, our future growth could be limited, and any investments or acquisitions we may make may negatively impact our financial condition, results of operations, cash flows, ability to service our indebtedness and ability to make distributions to unitholders.
Fixed rate debt also exposes us to the risk that we may need to refinance maturing debt with new debt at higher rates. 36 | Risk Factors If we are unable to make investments in joint ventures or acquisitions on economically acceptable terms, our future growth could be limited, and any investments or acquisitions we may make may negatively impact our financial condition, results of operations, cash flows, ability to service our indebtedness and ability to make distributions to unitholders.
Moreover, changes to pipeline safety laws and regulations that result in more stringent or costly pipeline integrity management or safety standards could have a material adverse effect on us and similarly situated operators. 31 | Risk Factors A material decrease in wholesale fuel margins or in the quantity of barrels sold to wholesale customers could adversely affect our financial condition, results of operations, cash flows, ability to service our indebtedness and ability to make distribution to unitholders.
Moreover, changes to pipeline safety laws and regulations that result in more stringent or costly pipeline integrity management or safety standards could have a material adverse effect on us and similarly situated operators. 28 | Risk Factors A material decrease in wholesale fuel margins or in the quantity of barrels sold to wholesale customers could adversely affect our financial condition, results of operations, cash flows, ability to service our indebtedness and ability to make distribution to unitholders.
In such case, it is not entitled to the presumption of good faith discussed above. 49 | Risk Factors Our Partnership Agreement designates the Court of Chancery of the State of Delaware as the exclusive forum for certain types of actions and proceedings that may be initiated by our unitholders, which limits our unitholders’ ability to choose the judicial forum for disputes with us or our general partner’s directors, officers or other employees.
In such case, it is not entitled to the presumption of good faith discussed above. 46 | Risk Factors Our Partnership Agreement designates the Court of Chancery of the State of Delaware as the exclusive forum for certain types of actions and proceedings that may be initiated by our unitholders, which limits our unitholders’ ability to choose the judicial forum for disputes with us or our general partner’s directors, officers or other employees.
If the regulatory commissions in the states in which we operate change their policies and aggressively regulate the rates or terms of service of pipelines operating in those states, it could adversely affect our business, financial condition and results of operations. 38 | Risk Factors The Federal Trade Commission, the FERC and the Commodity Futures Trading Commission ("CFTC") hold statutory authority to monitor certain segments of the physical and futures energy commodities markets.
If the regulatory commissions in the states in which we operate change their policies and aggressively regulate the rates or terms of service of pipelines operating in those states, it could adversely affect our business, financial condition and results of operations. 35 | Risk Factors The Federal Trade Commission, the FERC and the Commodity Futures Trading Commission ("CFTC") hold statutory authority to monitor certain segments of the physical and futures energy commodities markets.
Our Partnership Agreement provides that, if a law is enacted or an existing law is modified or interpreted in a manner that subjects us to entity-level taxation, the target distribution amounts may be adjusted to reflect the impact of that law on us. 52 | Risk Factors Our unitholders are required to pay income taxes on their share of our taxable income even if they do not receive any cash distributions from us.
Our Partnership Agreement provides that, if a law is enacted or an existing law is modified or interpreted in a manner that subjects us to entity-level taxation, the target distribution amounts may be adjusted to reflect the impact of that law on us. 49 | Risk Factors Our unitholders are required to pay income taxes on their share of our taxable income even if they do not receive any cash distributions from us.
However, under the Tax Reform Act, for taxable years beginning after December 31, 2017, our deduction for “business interest” is limited to the sum of our business interest income and 30% of our “adjusted taxable income.” For purposes of this limitation, our adjusted taxable income is computed without regard to any business interest expense or business interest income. 55 | Unresolved Staff Comments, Cybersecurity Related Matters, Legal Proceedings and Mine Safety Disclosures ITEM 1B.
However, under the Tax Reform Act, for taxable years beginning after December 31, 2017, our deduction for “business interest” is limited to the sum of our business interest income and 30% of our “adjusted taxable income.” For purposes of this limitation, our adjusted taxable income is computed without regard to any business interest expense or business interest income. 52 | Unresolved Staff Comments, Cybersecurity Related Matters, Legal Proceedings and Mine Safety Disclosures ITEM 1B.
Potential difficulties that may be encountered in the integration process include, among others: • the inability to successfully integrate the H2O Midstream or Gravity business into our business in a manner that permits us to achieve the revenue and cost savings that we announced as anticipated from the acquisition; 28 | Risk Factors • complexities associated with managing the larger, integrated business; • potential unknown liabilities and unforeseen expenses, delays or regulatory conditions associated with the Delaware Gathering Acquisition; • integrating personnel from the two companies while maintaining focus on providing consistent, high-quality products and services; • loss of key employees; • integrating relationships with customers, vendors and business partners; • performance shortfalls at either or both of our existing businesses or the acquired business as a result of the diversion of management's attention caused by completing the acquisition and integration of operations into the Partnership; and • the disruption or loss in momentum in, each company’s ongoing business or inconsistencies in standards, controls, procedures and policies.
Potential difficulties that may be encountered in the integration process include, among others: • the inability to successfully integrate the H2O Midstream or Gravity business into our business in a manner that permits us to achieve the revenue and cost savings that we announced as anticipated from the acquisition; 25 | Risk Factors • complexities associated with managing the larger, integrated business; • potential unknown liabilities and unforeseen expenses, delays or regulatory conditions associated with the Gravity Acquisition and H2O Midstream Acquisition; • integrating personnel from the two companies while maintaining focus on providing consistent, high-quality products and services; • loss of key employees; • integrating relationships with customers, vendors and business partners; • performance shortfalls at either or both of our existing businesses or the acquired business as a result of the diversion of management's attention caused by completing the acquisition and integration of operations into the Partnership; and • the disruption or loss in momentum in, each company’s ongoing business or inconsistencies in standards, controls, procedures and policies.
Any reduction, suspension or termination of any of our commercial agreements could have a material adverse effect on our financial condition, results of operations, cash flows and ability to make distributions to unitholders. 32 | Risk Factors If Delek Holdings satisfies only its minimum obligations under, or if we are unable to renew or extend, the various commercial agreements we have with Delek Holdings, our financial condition, results of operations, cash flows, ability to service our indebtedness and ability to make distributions to unitholders could suffer.
Any reduction, suspension or termination of any of our commercial agreements could have a material adverse effect on our financial condition, results of operations, cash flows and ability to make distributions to unitholders. 29 | Risk Factors If Delek Holdings satisfies only its minimum obligations under, or if we are unable to renew or extend, the various commercial agreements we have with Delek Holdings, our financial condition, results of operations, cash flows, ability to service our indebtedness and ability to make distributions to unitholders could suffer.
We have the ability to incur additional debt; however, such ability is subject to limitations under our revolving credit facility and the respective indentures governing the 2028 Notes and 2029 Notes.
We have the ability to incur additional debt; however, such ability is subject to limitations under our revolving credit facility and the respective indentures governing the 2028 Notes, 2029 Notes and 2033 Notes.
To the extent any regional or global disease outbreak impacts our business or the global markets for our products, it could have a material adverse effect on our business, financial condition, results of operation and liquidity. 27 | Risk Factors Our operations are subject to many risks and operational hazards, some of which may result in business interruptions and shutdowns of our facilities and liability for damages.
To the extent any regional or global disease outbreak impacts our business or the global markets for our products, it could have a material adverse effect on our business, financial condition, results of operation and liquidity. 24 | Risk Factors Our operations are subject to many risks and operational hazards, some of which may result in business interruptions and shutdowns of our facilities and liability for damages.
We have incurred, and will continue to incur, costs to protect our assets from physical risks and to employ processes, to the extent available, to mitigate such risks. 29 | Risk Factors Extreme weather events may disrupt our ability to operate and maintain our facilities or to transport crude oil, refined petroleum or petrochemical and plastics products, both within and outside affected areas.
We have incurred, and will continue to incur, costs to protect our assets from physical risks and to employ processes, to the extent available, to mitigate such risks. 26 | Risk Factors Extreme weather events may disrupt our ability to operate and maintain our facilities or to transport crude oil, refined petroleum or petrochemical and plastics products, both within and outside affected areas.
"Business and Properties—Delek Holdings' Crude Oil and Refined Products Intermediation Agreement." As we expect to continue to derive the substantial majority of our margins from Delek Holdings, either directly or indirectly, for the foreseeable future, we are subject to the risk of nonpayment, nonperformance or underperformance by Delek Holdings under our commercial agreements or its assignees.
"Business and Properties—Delek Holdings' Crude Oil and Refined Products Intermediation Agreement." As we expect to continue to derive margins from Delek Holdings, either directly or indirectly, for the foreseeable future, we are subject to the risk of nonpayment, nonperformance or underperformance by Delek Holdings under our commercial agreements or its assignees.
The redemption price will be paid in cash or by delivery of a promissory note, as determined by our general partner. 48 | Risk Factors Our Partnership Agreement requires that we distribute all of our available cash, which could limit our ability to grow and make acquisitions.
The redemption price will be paid in cash or by delivery of a promissory note, as determined by our general partner. 45 | Risk Factors Our Partnership Agreement requires that we distribute all of our available cash, which could limit our ability to grow and make acquisitions.
We cannot accurately predict the amount and timing of any additional impairments of long-lived assets or goodwill in the future. 45 | Risk Factors The Partnership's ongoing study of strategic options could materially impact our strategic direction, business and results of operations.
We cannot accurately predict the amount and timing of any additional impairments of long-lived assets or goodwill in the future. 42 | Risk Factors The Partnership's ongoing study of strategic options could materially impact our strategic direction, business and results of operations.
Any loss of our key customers, including Delek Holdings, could adversely affect our financial condition, results of operations, cash flows, ability to service our indebtedness and ability to make distributions to our unitholders. 36 | Risk Factors Restrictions in our revolving credit facility and in the respective indentures governing the 2028 Notes and 2029 Notes could adversely affect our business, financial condition, results of operations and ability to make quarterly cash distributions to our unitholders.
Any loss of our key customers, including Delek Holdings, could adversely affect our financial condition, results of operations, cash flows, ability to service our indebtedness and ability to make distributions to our unitholders. 33 | Risk Factors Restrictions in our revolving credit facility and in the respective indentures governing the 2028 Notes, 2029 Notes and 2033 Notes could adversely affect our business, financial condition, results of operations and ability to make quarterly cash distributions to our unitholders.
As a result, our operations are subject to a series of regulatory, political, litigation, and financial risks associated with the production and processing of fossil fuels and emission of GHGs. In the United States, no comprehensive climate change legislation has been implemented at the federal level. However, following the U.S.
As a result, our operations are subject to a series of regulatory, political, litigation, and financial risks associated with the production and processing of fossil fuels and emission of GHGs. In the United States, no comprehensive climate change legislation has been implemented at the federal level.
We may be adversely affected by the effects of inflation. Inflation has the potential to adversely affect our liquidity, business, financial condition and results of operations by increasing our overall cost structure, particularly if we are unable to achieve commensurate increases in the prices we charge our customers.
Inflation has the potential to adversely affect our liquidity, business, financial condition and results of operations by increasing our overall cost structure, particularly if we are unable to achieve commensurate increases in the prices we charge our customers.
Delek Holdings is the only or primary customer for a majority of our assets, including but not limited to our assets used to support the Tyler Refinery and the majority of our terminalling assets.
Delek Holdings is a primary customer for a many of our assets, including but not limited to our assets used to support the Tyler Refinery and the majority of our terminalling assets.
We could also be liable under laws that protect the privacy of personal information, subject to regulatory penalties, experience 44 | Risk Factors damage to our reputation or a loss of consumer confidence, or incur additional costs for remediation and modification or enhancement of our information systems to prevent future occurrences, all of which could adversely affect our reputation, business, operations or financial results.
We could also be liable under laws that protect the privacy of personal information, subject to regulatory penalties, experience damage to our reputation or a loss of consumer confidence, or incur additional costs for remediation and modification or enhancement of our information systems to prevent future occurrences, all of which could adversely affect our reputation, business, operations or financial results. 41 | Risk Factors We may be adversely affected by the effects of inflation.
As of February 20, 2025, Delek Holdings owned 63.6% of our outstanding common limited partner units. Our Partnership Agreement restricts the voting rights of unitholders owning 20% or more of our common limited partner units.
As of February 20, 2026, Delek Holdings owned 63.3% of our outstanding common limited partner units. Our Partnership Agreement restricts the voting rights of unitholders owning 20% or more of our common limited partner units.
The EPA finalized new regulations under the New Source Performance Standards (NSPS) OOOOa, OOOOb and OOOOc in March 2024 to expand and strengthen emissions reduction requirements for new, modified and reconstructed oil and natural gas sources, and require states to reduce methane emissions from existing sources nationwide. Compliance costs are not expected to be material.
The EPA finalized new regulations under the New Source Performance Standards (NSPS) OOOOa, OOOOb and OOOOc in March 2024 to expand and strengthen emissions reduction requirements for new, modified and reconstructed oil and natural gas sources, and require states to reduce methane emissions from existing sources nationwide.
Delek Holdings may sell units in the public or private markets, and such sales could have an adverse impact on the trading price of the common units. As of February 20, 2025, Delek Holdings held 34,111,278 common limited partner units. In addition, we have agreed to provide Delek Holdings with certain registration rights on a portion of these units.
Delek Holdings may sell units in the public or private markets, and such sales could have an adverse impact on the trading price of the common units. As of February 20, 2026, Delek Holdings held 33,868,203 common limited partner units. In addition, we have agreed to provide Delek Holdings with certain registration rights on a portion of these units.
The revolving credit facility and the respective indentures governing the 2028 Notes and 2029 Notes also have cross-default provisions that would apply to certain other indebtedness we may have. Our debt levels may limit our flexibility to obtain financing and to pursue other business opportunities. As of December 31, 2024, we had approximately $1,885.4 million in debt outstanding.
The revolving credit facility and the respective indentures governing the 2028 Notes, 2029 Notes and 2033 Notes also have cross-default provisions that would apply to certain other indebtedness we may have. Our debt levels may limit our flexibility to obtain financing and to pursue other business opportunities. As of December 31, 2025, we had approximately $2,361.9 million in debt outstanding.
Our unitholders may also incur a tax liability upon any such sale of their units to Delek Holdings. At February 20, 2025, Delek Holdings owned 34,111,278 common limited partner units, or 63.6% of our total outstanding common limited partner units. Our unitholders' liability may not be limited if a court finds that unitholder action constitutes control of our business.
Our unitholders may also incur a tax liability upon any such sale of their units to Delek Holdings. At February 20, 2026, Delek Holdings owned 33,868,203 common limited partner units, or 63.3% of our total outstanding common limited partner units. Our unitholders' liability may not be limited if a court finds that unitholder action constitutes control of our business.
Some state regulatory agencies, including those in Colorado, Ohio, and Texas, have modified their regulations or guidance to account for induced seismicity. These developments could result in additional regulation and restrictions on the use of injection disposal wells and hydraulic fracturing. Such regulations and restrictions could cause delays and impose additional costs and restrictions on our customers.
Some state regulatory 39 | Risk Factors agencies, including those in Colorado, Ohio, and Texas, have modified their regulations or guidance to account for induced seismicity. These developments could result in additional regulation and restrictions on the use of injection disposal wells and hydraulic fracturing.
Additionally, certain of our customers produce oil and gas on federal lands. On January 20, 2021, the Acting Secretary for the Department of the Interior signed an order effectively suspending new fossil fuel leasing and permitting on federal lands for 60 days.
Such regulations and restrictions could cause delays and impose additional costs and restrictions on our customers. Additionally, certain of our customers produce oil and gas on federal lands. On January 20, 2021, the Acting Secretary for the Department of the Interior signed an order effectively suspending new fossil fuel leasing and permitting on federal lands for 60 days.
On January 20, 2025, the U.S. again began the process to withdraw from participating in the Paris Agreement. The adoption and implementation of new or more stringent legislation or regulations could result in increased costs of compliance or costs of consuming, and thereby reduce demand for, oil and natural gas, which could reduce demand for our services and products.
On January 27, 2026, the U.S. completed the process of withdrawing from the Paris Agreement. The adoption and implementation of new or more stringent legislation or regulations could result in increased costs of compliance or costs of consuming, and thereby reduce demand for, oil and natural gas, which could reduce demand for our services and products.
The results of such reviews or studies could spur initiatives to further regulate hydraulic fracturing. 42 | Risk Factors State and federal regulatory agencies recently have focused on a possible connection between the hydraulic fracturing related activities and the increased occurrence of seismic activity. When caused by human activity, such events are called induced seismicity.
State and federal regulatory agencies recently have focused on a possible connection between the hydraulic fracturing related activities and the increased occurrence of seismic activity. When caused by human activity, such events are called induced seismicity.
Uncertainty surrounding new or continued global hostilities or other sustained military campaigns, and the possibility that infrastructure facilities could be direct targets of, or indirect casualties of, an act of terror, armed conflict or war, may affect our operations in unpredictable ways, including disruptions of crude oil supplies and markets for refined products.
A direct attack on our assets, or the assets of others used by us, could have a material adverse effect on our business, financial condition and results of operations. 40 | Risk Factors Uncertainty surrounding new or continued global hostilities or other sustained military campaigns, and the possibility that infrastructure facilities could be direct targets of, or indirect casualties of, an act of terror, armed conflict or war, may affect our operations in unpredictable ways, including disruptions of crude oil supplies and markets for refined products.
We may be more susceptible to a direct attack as a result of our connection to Israel. 43 | Risk Factors A direct attack on our assets, or the assets of others used by us, could have a material adverse effect on our business, financial condition and results of operations.
We may be more susceptible to a direct attack as a result of our connection to Israel.
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Supreme Court finding that GHG emissions constitute a pollutant under the Clean Air Act, the EPA has adopted regulations that, among other things, establish construction and operating permit reviews for GHG emissions from certain large stationary sources, require the monitoring and annual reporting of GHG emissions from certain petroleum and natural gas system sources in the United States, implement New Source Performance Standards directing the reduction of methane from certain new, modified, or reconstructed facilities in the oil and natural gas sector, and together with the DOT, implement GHG emissions limits on vehicles manufactured for operation in the United States.
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On July 31, 2025 EPA issued an Interim Final Rule to extend several deadlines for these regulations. Compliance costs are not expected to be material. Further, several federal governmental agencies have conducted reviews and studies on the environmental aspects of hydraulic fracturing, including the EPA. The results of such reviews or studies could spur initiatives to further regulate hydraulic fracturing.
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The BLM has also asserted regulatory authority over aspects of the hydraulic fracturing process and issued a final rule in March 2015 that established more stringent standards for performing hydraulic fracturing on federal and Indian lands, including requirements relating to well construction and integrity, handling of wastewater and chemical disclosure.
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However, in December 2017, the BLM published a final rule rescinding the 2015 rule and the U.S. District Court for the Northern District of California upheld the December 2017 rescission rule in a March 2020 decision. Further, several federal governmental agencies have conducted reviews and studies on the environmental aspects of hydraulic fracturing, including the EPA.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

11 edited+3 added−2 removed9 unchanged
Biggest changeWe utilize IT and OT systems across our operations to capture accounting, technical and regulatory data for archiving, analysis, and reporting. Our primary business systems mostly consist of purchased and licensed software programs that integrate with our internal solutions. Additionally, our technology encompasses a company-wide network through which employees have access to key business applications.
Biggest changeOur primary business systems mostly consist of purchased and licensed software programs that integrate with our internal solutions. Additionally, our technology encompasses a company-wide network through which employees have access to key business applications. We maintain and continually enhance a comprehensive, risk-based cybersecurity program aimed at safeguarding our data, along with the data of our customers and partners.
To assist in these efforts, the board of directors of our general partner has assigned a number of cybersecurity related responsibilities to its standing committees while retaining overall responsibility for the oversight of Delek's cybersecurity activities. 56 | Unresolved Staff Comments, Cybersecurity Related Matters, Legal Proceedings and Mine Safety Disclosures In overseeing cybersecurity risks, the Board of Directors follows the principles identified by the National Association of Corporate Directors in the oversight of cybersecurity risks.
To assist in these efforts, the board of directors of our general partner has assigned a number of cybersecurity related responsibilities to its standing committees while retaining overall responsibility for the oversight of Delek's cybersecurity activities. 53 | Unresolved Staff Comments, Cybersecurity Related Matters, Legal Proceedings and Mine Safety Disclosures In overseeing cybersecurity risks, the Board of Directors follows the principles identified by the National Association of Corporate Directors in the oversight of cybersecurity risks.
The Partnership possesses monitoring capabilities for both its IT and OT infrastructure. To identify material cybersecurity risks, we use a combination of technical assessments, risk analysis, vulnerability scanning, incident and event monitoring, threat intelligence and third-party assessments along with ongoing monitoring and management. We manage our material cybersecurity risks through a combination of security measures, audits, training, planning, and testing.
The Partnership collaborates with third-party vendors to leverage managed security services, enhancing the Partnership’s cybersecurity capabilities. The Partnership possesses monitoring capabilities for both its IT and OT infrastructure. To identify material cybersecurity risks, we use a combination of technical assessments, risk analysis, vulnerability scanning, incident and event monitoring, threat intelligence and third-party assessments along with ongoing monitoring and management.
ITEM 1C. CYBERSECURITY Cybersecurity Related Matters Risk Management and Strategy We depend on information technology ("IT") and operational technology (“OT”) for various operations, including refinery processes, petroleum movement monitoring in pipelines and terminals, point-of-sale processing at our retail sites, and other critical processes and transactions.
ITEM 1C. CYBERSECURITY Cybersecurity Related Matters Risk Management and Strategy We depend on information technology ("IT") and operational technology (“OT”) for various operations, including refinery processes, petroleum movement monitoring in pipelines and terminals, and other critical processes and transactions. We utilize IT and OT systems across our operations to capture accounting, technical and regulatory data for archiving, analysis, and reporting.
Our risk assessment process related to cybersecurity includes identifying threats and conducting vulnerability assessments, likelihood and impact assessments related to our own information and OT systems as well as our third-party service providers. The Partnership collaborates with third-party vendors to leverage managed security services, enhancing the Partnership’s cybersecurity capabilities.
The Partnership follows well-organized cybersecurity frameworks with a Chief Information Security Officer dedicated to overseeing cybersecurity initiatives throughout the entire enterprise. Our risk assessment process related to cybersecurity includes identifying threats and conducting vulnerability assessments, likelihood and impact assessments related to our own information and OT systems as well as our third-party service providers.
Furthermore, we have reinforced our data protection capabilities by investing in both hardware and software. Recognizing that humans are often the most vulnerable element of even the most secure computer architectures, The Partnership upholds a robust mandatory security awareness program, including required training and phishing campaigns for our employees.
Recognizing that humans are often the most vulnerable element of even the most secure computer architectures, The Partnership upholds a robust mandatory security awareness program, including required training and phishing campaigns for our employees. The Partnership also conducts monthly reviews of global cybersecurity incidents to ensure that appropriate mitigation measures are in place to guard against similar threats.
The Partnership has established processes for regular disaster recovery planning and response readiness testing. Our security approach also includes multiple layers of defense and testing of controls. We have implemented security measures, including segmentation, firewalls, intrusion detection systems, encryption, multi-factor authentication and data loss prevention to safeguard our systems and data.
We manage our material cybersecurity risks through a combination of security measures, audits, training, planning, and testing. The Partnership has established processes for regular disaster recovery planning and response readiness testing. Our security approach also includes multiple layers of defense and testing of controls.
Building upon the success of the drill conducted in 2024 and previous years, we remain committed to continuous improvement and proactive preparedness in addressing potential challenges and effectively managing incidents. The Partnership has not experienced a significant cybersecurity breach or associated expenses, penalties, or settlements for years ended December 31, 2024, 2023 and 2022.
The Partnership is committed to enhancing its organizational resilience through a multiyear, comprehensive incident response tabletop drill program. Building upon the success of the drill conducted in 2024 and previous years, we remain committed to continuous improvement and proactive preparedness in addressing potential challenges and effectively managing incidents.
We maintain and continually enhance a comprehensive, risk-based cybersecurity program aimed at safeguarding our data, along with the data of our customers and partners. The identification, assessment, and management of cyber risks fall under our Enterprise Risk Management (“ERM”) program, overseen by the board of directors of our general partner.
The identification, assessment, and management of cyber risks fall under our Enterprise Risk Management (“ERM”) program, overseen by the board of directors of our general partner. Our Chief Technology & Data Officer/Chief Information Officer holds overall responsibility for IT, OT, and cybersecurity.
The Technology Committee’s designated focus on these areas of the Partnership’s digitalization, information and operational security policies help ensure strategic alignment of the Partnership’s strategies with information security and risk management. 57 | Unresolved Staff Comments, Cybersecurity Related Matters, Legal Proceedings and Mine Safety Disclosures Management Oversight Our senior leadership team is actively involved in cybersecurity governance, ensuring the highest level of oversight of cybersecurity risks.
By prioritizing ethical design and deployment, we aim to reduce risks such as bias, misuse, and data breaches—aligning with our goals of integrity and social responsibility. 54 | Unresolved Staff Comments, Cybersecurity Related Matters, Legal Proceedings and Mine Safety Disclosures Management Oversight Our senior leadership team is actively involved in cybersecurity governance, ensuring the highest level of oversight of cybersecurity risks.
The Partnership continuously assesses and enhances the confidentiality, integrity, and availability of our IT and OT assets.
The Partnership has not experienced a significant cybersecurity breach or associated expenses, penalties, or settlements for years ended December 31, 2025, 2024 and 2023. The Partnership continuously assesses and enhances the confidentiality, integrity, and availability of our IT and OT assets.
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Our Chief Technology & Data Officer/Chief Information Officer holds overall responsibility for IT, OT, and cybersecurity. The Partnership follows well-organized cybersecurity frameworks with a Chief Information Security Officer dedicated to overseeing cybersecurity initiatives throughout the entire enterprise.
Added
We have implemented security measures, including segmentation, firewalls, intrusion detection systems, encryption, multi-factor authentication and data loss prevention to safeguard our systems and data. Furthermore, we have reinforced our data protection capabilities by investing in both hardware and software.
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The Partnership also conducts monthly reviews of global cybersecurity incidents to ensure that appropriate mitigation measures are in place to guard against similar threats. The Partnership is committed to enhancing its organizational resilience through a multiyear, comprehensive incident response tabletop drill program.
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The Technology Committee’s designated focus on these areas of the Partnership’s digitalization, information and operational security policies help ensure strategic alignment of the Partnership’s strategies with information security and risk management. We also continue to monitor the use of AI throughout our business and we have embedded responsible AI principles into our corporate framework.
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This ensures that any AI adoption supports long-term security, resilience, transparency, and trust. Delek’s AI Policy sets the foundation for responsible use of AI technologies. It emphasizes fairness, accountability, and compliance with regulatory standards.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

1 edited+0 added−0 removed2 unchanged
Biggest changeSee Note 15 to the consolidated financial statements in Item 8, Financial Statements and Supplementary Data, of this Annual Report on Form 10-K, which is incorporated by reference in this Item 3, for additional information.
Biggest changeSee Note 15 to our accompanying condensed consolidated financial statements, which is incorporated by reference in this Item 1, for additional information.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

1 edited+0 added−0 removed5 unchanged
Biggest changeOur common units trade on the NYSE under the symbol "DKL." There were three holders of record of our common units held by the public as of February 20, 2025. In addition, as of February 20, 2025, Delek Holdings and its affiliates owned 34,111,278 of our common units.
Biggest changeOur common units trade on the NYSE under the symbol "DKL." There were three holders of record of our common units held by the public as of February 20, 2026. In addition, as of February 20, 2026, Delek Holdings and its affiliates owned 33,868,203 of our common units.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

89 edited+32 added−64 removed87 unchanged
Biggest changeResults from Equity Method Investments 2024 vs. 2023 Income from equity method investments increased by $11.9 million, or 37.8%, in the year ended December 31, 2024 compared to the year ended December 31, 2023, primarily due to the W2W Investment, which was acquired on August 5, 2024, and contributed income of $9.2 million during the period and increases in throughput at two of our joint ventures which had been negatively impacted by the turnaround at the Tyler Refinery in prior year. 74 | Management's Discussion and Analysis of Financial Condition and Results of Operations Operating Segments Gathering and Processing Segment The following table and discussion present the results of operations and certain operating statistics of the gathering and processing segment for the years ended December 31, 2024 and 2023: Gathering and Processing Year Ended December 31, 2024 2023 Net revenues $ 364,719 $ 371,110 Cost of materials and other $ 77,037 $ 83,118 Operating expenses (excluding depreciation and amortization) $ 80,317 $ 75,136 Segment EBITDA $ 207,150 $ 199,463 Throughputs (bpd (1) ) Year Ended December 31, 2024 2023 El Dorado Assets: Crude pipelines (non-gathered) 69,903 67,003 Refined products pipelines to Enterprise Systems 59,136 58,181 El Dorado Gathering System 11,568 13,782 East Texas Crude Logistics System 34,711 32,668 Midland Gathering System 217,847 230,471 Plains Connection System 333,405 250,140 Delaware Gathering Assets Volumes Year Ended December 31, 2024 2023 Natural Gas Gathering and Processing (Mcfd (2) ) 74,831 71,239 Crude Oil Gathering (bpd (1) ) 123,978 111,335 Water Disposal and Recycling (bpd (1) ) 128,539 108,907 Midland Water Gathering System Volumes Year Ended December 31, 2024 2023 Water Disposal and Recycling (bpd (1) ) (3) 280,955 — (1) bpd - average barrels per day.
Biggest changeGathering and Processing Year Ended December 31, 2025 2024 Net revenues $ 498,097 $ 364,719 Cost of materials and other $ 113,202 $ 77,037 Operating expenses (excluding depreciation and amortization) $ 128,213 $ 80,317 Segment EBITDA $ 259,527 $ 207,150 Throughputs (bpd (1) ) Year Ended December 31, 2025 2024 El Dorado Assets: Crude pipelines (non-gathered) 66,125 69,903 Refined products pipelines to Enterprise Systems 54,616 59,136 El Dorado Gathering System 9,454 11,568 East Texas Crude Logistics System 31,296 34,711 Midland Gathering System 219,782 217,847 Plains Connection System 182,523 333,405 Delaware Gathering Assets Volumes Year Ended December 31, 2025 2024 Natural Gas Gathering and Processing (Mcfd (2) ) 62,111 74,831 Crude Oil Gathering (bpd (1) ) 138,575 123,978 Water Disposal and Recycling (bpd (1) ) 107,415 128,539 Midland Water Gathering System Volumes (3) Year Ended December 31, 2025 2024 Water Disposal and Recycling (bpd (1) ) 587,419 280,955 (1) bpd - average barrels per day.
In addition, past financial and/or operating performance is not necessarily a reliable indicator of future performance, and you should not use our historical performance to anticipate results or future period trends.
In addition, past financial and/or operating performance is not necessarily a reliable indicator of future performance, and you should not use our historical performance to anticipate results or future period trends.
Important factors that, individually or in the aggregate, could cause such differences include, but are not limited to: • our substantial dependence on Delek Holdings or its assignees and their support of and respective ability to pay us under our commercial agreements; • our future coverage, leverage, financial flexibility and growth, and our ability to improve performance and achieve distribution growth at any level or at all; • Delek Holdings' future growth, strategic priorities, financial performance, share repurchases, crude oil supply pricing and flexibility and product distribution; • industry dynamics, including Permian Basin growth, ownership concentration, efficiencies and takeaway capacity; • the age and condition of our assets and operating hazards and other risks incidental to transporting, storing and gathering crude oil, intermediate and refined products, including, but not limited to, costs, penalties, regulatory or legal actions and other effects related to spills, releases and tank failures; • changes in insurance markets impacting costs and the level and types of coverage available; 60 | Management's Discussion and Analysis of Financial Condition and Results of Operations • the timing and extent of changes in commodity prices and demand for refined products, and the impact of events such as the conflicts in Ukraine and the Middle East, and the global response to such conflicts, and any future public health crisis on such demand; • the wholesale marketing margins we are able to obtain and the number of barrels of product we are able to purchase and sell in our West Texas wholesale business; • the shift from hydrocarbon energy sources to alternative energy sources; • the suspension, reduction or termination of Delek Holdings' or its assignees' or third-party's obligations under our commercial agreements including the duration, fees or terms thereof; • the ability to attract and retain key personnel; • the results of our investments in joint ventures; • the ability to secure commercial agreements with Delek Holdings or third parties upon expiration of existing agreements; • the possibility of inefficiencies, curtailments, or shutdowns in refinery operations or pipelines, whether due to infection in the workforce or in response to reductions in demand as a result of a public health crisis; • disruptions due to equipment interruption or failure, or other events, including terrorism, sabotage or cyber-attacks, at our facilities, Delek Holdings’ facilities or third-party facilities on which our business is dependent; • changes in the availability and cost of capital of debt and equity financing; • our reliance on information technology systems in our day-to-day operations; • changes in general economic conditions, including uncertainty regarding the timing, pace and extent of economic recovery in the United States due to governmental fiscal policy or a public health crisis; • the effects of existing and future laws and governmental regulations, including, but not limited to, the rules and regulations promulgated by the Federal Energy Regulatory Commission ("FERC") and state commissions and those relating to environmental protection, pipeline integrity and safety as well as current and future restrictions on commercial and economic activities in response to a public health crisis; • the timely receipt of required government approvals and permits; • significant operational, investment or other changes required by existing or future environmental statutes and regulations, including international agreements and national or regional societal, legislation; and regulatory measures to limit or reduce greenhouse gas emissions; • competitive conditions in our industry including capacity overbuild in areas where we operate; • actions taken by our customers and competitors; • the demand for crude oil, refined products and transportation and storage services; • our ability to successfully implement our business plan; • inability to complete growth projects on time and on budget; • our ability to successfully complete acquisitions and integrate acquired businesses, and to achieve the anticipated benefits therefrom; • disruptions due to acts of God, natural disasters, casualty losses, severe weather patterns, such as freezing conditions, cyber or other attacks on our electronic systems, and other matters beyond our control which might cause damage to our pipelines, terminal facilities and other assets and could impact our operating results through increased costs and/or loss of revenue; • changes in the price of RINs could affect our results of operations; • future decisions by OPEC+ regarding production and pricing and disputes between OPEC+ regarding such; • changes or volatility in interest and inflation rates; • labor relations; • large customer defaults; • changes in tax status and regulations; • the effects of future litigation or environmental liabilities that are not covered by insurance; and • other factors discussed elsewhere in this Annual Report on Form 10-K.
Important factors that, individually or in the aggregate, could cause such differences include, but are not limited to: • our substantial dependence on Delek Holdings or its assignees and their support of and respective ability to pay us under our commercial agreements; • our future coverage, leverage, financial flexibility and growth, and our ability to improve performance and achieve distribution growth at any level or at all; • Delek Holdings' future growth, strategic priorities, financial performance, share repurchases, crude oil supply pricing and flexibility and product distribution; • industry dynamics, including Permian Basin growth, ownership concentration, efficiencies and takeaway capacity; • the age and condition of our assets and operating hazards and other risks incidental to transporting, storing and gathering crude oil, intermediate and refined products, including, but not limited to, costs, penalties, regulatory or legal actions and other effects related to spills, releases and tank failures; • changes in insurance markets impacting costs and the level and types of coverage available; • the timing and extent of changes in commodity prices and demand for refined products, and the impact of events such as the conflicts in Ukraine and the Middle East, and the global response to such conflicts, and any future public health crisis on such demand; • the wholesale marketing margins we are able to obtain and the number of barrels of product we are able to purchase and sell in our West Texas wholesale business; • the shift from hydrocarbon energy sources to alternative energy sources; • the suspension, reduction or termination of Delek Holdings' or its assignees' or third-party's obligations under our commercial agreements including the duration, fees or terms thereof; • the ability to attract and retain key personnel; 57 | Management's Discussion and Analysis of Financial Condition and Results of Operations • the results of our investments in joint ventures; • the ability to secure commercial agreements with Delek Holdings or third parties upon expiration of existing agreements; • the possibility of inefficiencies, curtailments, or shutdowns in refinery operations or pipelines, whether due to infection in the workforce or in response to reductions in demand as a result of a public health crisis; • disruptions due to equipment interruption or failure, or other events, including terrorism, sabotage or cyber-attacks, at our facilities, Delek Holdings’ facilities or third-party facilities on which our business is dependent; • changes in the availability and cost of capital of debt and equity financing; • our reliance on information technology systems in our day-to-day operations; • changes in general economic conditions, including uncertainty regarding the timing, pace and extent of economic recovery in the United States due to governmental fiscal policy or a public health crisis; • the effects of existing and future laws and governmental regulations, including, but not limited to, the rules and regulations promulgated by the Federal Energy Regulatory Commission ("FERC") and state commissions and those relating to environmental protection, pipeline integrity and safety as well as current and future restrictions on commercial and economic activities in response to a public health crisis; • the timely receipt of required government approvals and permits; • significant operational, investment or other changes required by existing or future environmental statutes and regulations, including international agreements and national or regional societal, legislation; and regulatory measures to limit or reduce greenhouse gas emissions; • competitive conditions in our industry including capacity overbuild in areas where we operate; • actions taken by our customers and competitors; • the demand for crude oil, refined products and transportation and storage services; • our ability to successfully implement our business plan; • inability to complete growth projects on time and on budget; • our ability to successfully complete acquisitions and integrate acquired businesses, and to achieve the anticipated benefits therefrom; • disruptions due to acts of God, natural disasters, casualty losses, severe weather patterns, such as freezing conditions, cyber or other attacks on our electronic systems, and other matters beyond our control which might cause damage to our pipelines, terminal facilities and other assets and could impact our operating results through increased costs and/or loss of revenue; • changes in the price of RINs could affect our results of operations; • future decisions by OPEC+ regarding production and pricing and disputes between OPEC+ regarding such; • changes or volatility in interest and inflation rates; • labor relations; • large customer defaults; • changes in tax status and regulations; • the effects of future litigation or environmental liabilities that are not covered by insurance; and • other factors discussed elsewhere in this Annual Report on Form 10-K.
Although Delek Holdings has committed to minimum volumes under certain of the commercial agreements, as described above, our results of operations will be impacted by: • Delek Holdings’ utilization of our assets in excess of its minimum volume commitments; • our ability to identify and execute acquisitions and organic expansion projects and capture incremental volume increases from Delek Holdings or third parties; • our ability to increase throughput volumes at our refined products terminals and provide additional ancillary services at those terminals; • our ability to identify and serve new customers in our marketing and trucking operations; and • our ability to make connections to third-party facilities and pipelines. 67 | Management's Discussion and Analysis of Financial Condition and Results of Operations Operating and Maintenance Expenses We seek to maximize the profitability of our operations by effectively managing operating and maintenance expenses.
Although Delek Holdings has committed to minimum volumes under certain of the commercial agreements, as described above, our results of operations will be impacted by: • Delek Holdings’ utilization of our assets in excess of its minimum volume commitments; • our ability to identify and execute acquisitions and organic expansion projects and capture incremental volume increases from Delek Holdings or third parties; • our ability to increase throughput volumes at our refined products terminals and provide additional ancillary services at those terminals; • our ability to identify and serve new customers in our marketing and trucking operations; and • our ability to make connections to third-party facilities and pipelines. 63 | Management's Discussion and Analysis of Financial Condition and Results of Operations Operating and Maintenance Expenses We seek to maximize the profitability of our operations by effectively managing operating and maintenance expenses.
(2) Reimbursement from Delek Holdings for capital expenditures represents amounts for certain capital expenditures reimbursable to us from Delek Holdings pursuant to the terms of the Omnibus Agreement (as defined in Note 4 to our consolidated financial statements included in Item 8, Financial Statements and Supplementary Data, of this Annual Report on Form 10-K). 71 | Management's Discussion and Analysis of Financial Condition and Results of Operations Summary of Financial and Other Information A discussion and analysis of the factors contributing to our results of operations is presented below.
(2) Reimbursement from Delek Holdings for capital expenditures represents amounts for certain capital expenditures reimbursable to us from Delek Holdings pursuant to the terms of the Omnibus Agreement (as defined in Note 4 to our consolidated financial statements included in Item 8, Financial Statements and Supplementary Data, of this Annual Report on Form 10-K). 68 | Management's Discussion and Analysis of Financial Condition and Results of Operations Summary of Financial and Other Information A discussion and analysis of the factors contributing to our results of operations is presented below.
These metrics are significant factors in assessing our operating results and profitability and include: ■ volumes (including pipeline throughput and terminal volumes) ■ operating and maintenance expenses ■ cost of materials and other ■ EBITDA and distributable cash flow (as such terms are defined below) ■ net income of joint ventures Volumes The amount of revenue we generate primarily depends on the volumes of crude oil and refined products that we handle in our pipeline, transportation, terminalling, storage and marketing operations.
These metrics are significant factors in assessing our operating results and profitability and include: ■ volumes (including pipeline throughput and terminal volumes) ■ operating and maintenance expenses ■ cost of materials and other ■ EBITDA and distributable cash flow (as such terms are defined below) ■ EBITDA of joint ventures Volumes The amount of revenue we generate primarily depends on the volumes of crude oil and refined products that we handle in our pipeline, transportation, terminalling, storage and marketing operations.
See further discussion below in 'Other 2024 Developments' detailing the strategic initiatives the Partnership has implemented in order to position ourselves as a premier, full-service midstream provider in the Permian Basin. These actions not only enhance our standing in the market but also move to align us as an independent, largely third-party cash flow company with a robust growth profile.
See further discussion below in 'Other 2025 Developments' detailing the strategic initiatives the Partnership has implemented in order to position ourselves as a premier, full-service midstream provider in the Permian Basin. These actions not only enhance our standing in the market but also move to align us as an independent, largely third-party cash flow company with a robust growth profile.
Floating interest rate debt is calculated using rates in effect on December 31, 2024. (2) Amounts reflect future estimated lease payments under operating leases having remaining non-cancelable terms in excess of one year as of December 31, 2024. We also have other non-current liabilities pertaining to environmental liabilities and asset retirement obligations.
Floating interest rate debt is calculated using rates in effect on December 31, 2025. (2) Amounts reflect future estimated lease payments under operating leases having remaining non-cancelable terms in excess of one year as of December 31, 2025. We also have other non-current liabilities pertaining to environmental liabilities and asset retirement obligations.
Business and Economic Environment Overview During the year ended December 31, 2024, we made significant strides in our commitment to being a full suite crude, gas and water midstream services provider in the Permian Basin, in addition to diversifying our customer base to include more third-party customers.
Business and Economic Environment Overview During the year ended December 31, 2025, we made significant strides in our commitment to being a full-suite crude, gas and water midstream services provider in the Permian Basin, in addition to diversifying our customer base to include more third-party customers.
While many of the expenses related to the operating activities are variable in nature, some of the expenditures can be somewhat fixed in the short-term due to forward planning on our level of activity. Refer to Cash Distributions section for cash distributions made in 2024 and planned distributions for 2025.
While many of the expenses related to the operating activities are variable in nature, some of the expenditures can be somewhat fixed in the short-term due to forward planning on our level of activity. Refer to Cash Distributions section for cash distributions made in 2025 and planned distributions for 2026.
The charts on the following page provide historical commodity pricing statistics for crude oil, refined product and natural gas. 69 | Management's Discussion and Analysis of Financial Condition and Results of Operations Non-GAAP Measures 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 financial information presented in accordance with United States Generally Accepted Accounting Principles ("GAAP").
The charts on the following page provide historical commodity pricing statistics for crude oil, refined product and natural gas. 65 | Management's Discussion and Analysis of Financial Condition and Results of Operations 66 | Management's Discussion and Analysis of Financial Condition and Results of Operations Non-GAAP Measures 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 financial information presented in accordance with United States Generally Accepted Accounting Principles ("GAAP").
New Accounting Pronouncements See Note 2 to the consolidated financial statements in Item 8, Financial Statements and Supplementary Data, of this Annual Report on Form 10-K for a discussion of new accounting pronouncements applicable to us. 87 | Quantitative and Qualitative Disclosures about Market Risk
New Accounting Pronouncements See Note 2 to the consolidated financial statements in Item 8, Financial Statements and Supplementary Data, of this Annual Report on Form 10-K for a discussion of new accounting pronouncements applicable to us. 83 | Quantitative and Qualitative Disclosures about Market Risk
Regulatory projects in the wholesale marketing and terminalling segment relates to scheduled maintenance and improvements on our terminalling tanks and racks at certain of our terminals in order to maintain environmental and other regulatory compliance.
Regulatory projects in the wholesale marketing and terminalling segment relate to scheduled maintenance and improvements on our terminalling tanks and racks at certain of our terminals in order to maintain environmental and other regulatory compliance.
The Midland Gathering Assets support our crude oil gathering activities which primarily serves Delek Holdings refining needs throughout the Permian Basin. The Midland Water Gathering Assets support our water disposal and recycling operations primarily in the Midland Basin in Texas.
The Midland Gathering Assets support our crude oil gathering activities which primarily serve Delek Holdings refining needs throughout the Permian Basin. The Midland Water Gathering Assets support our water disposal and recycling operations primarily in the Midland Basin in Texas.
In addition, in January 2025, the Partnership closed the Gravity Acquisition which includes integrated full-cycle water systems in the Midland Basin, in addition to produced water gathering, and transportation assets in the Bakken, and along with our H2O Midstream Acquisition, provide a strong opportunity for integrated crude and water services to its customers.
In January 2025, the Partnership closed the Gravity Acquisition which includes integrated full-cycle water systems in the Midland Basin, in addition to water gathering, and transportation assets in the Bakken, and along with our H2O Midstream Acquisition, provides a strong opportunity for integrated crude and water services to its customers.
Cost of Materials and Other These costs include: (i) all costs of purchased refined products in our wholesale marketing and terminalling segment, as well as additives and related transportation of such products; (ii) costs associated with the operation of our trucking assets, which primarily include allocated employee costs and other costs related to fuel, truck leases and repairs and maintenance; (iii) the cost of pipeline capacity leased from any third parties; and Financing The Partnership anticipates paying a cash distribution to its unitholders at a distribution rate of $1.105 per unit for the quarter ended December 31, 2024 ($4.420 per unit on an annualized basis).
Cost of Materials and Other These costs include: (i) all costs of purchased refined products in our wholesale marketing and terminalling segment, as well as additives and related transportation of such products; (ii) costs associated with the operation of our trucking assets, which primarily include allocated employee costs and other costs related to fuel, truck leases and repairs and maintenance; (iii) the cost of pipeline capacity leased from any third parties; and Financing The Partnership anticipates paying a cash distribution to its unitholders at a distribution rate of $1.125 per unit for the quarter ended December 31, 2025 ($4.50 per unit on an annualized basis).
Refer to Consolidated Results of Operations above for details and discussion of the investments in pipeline joint ventures segment for the year ended December 31, 2024.
Refer to Consolidated Results of Operations above for details and discussion of the investments in pipeline joint ventures segment for the year ended December 31, 2025.
Operating activities included cash outflows related to payments to suppliers for crude and other materials and payments for services. Refer to the Cash Flow section for our operating activities spend in 2024.
Operating activities included cash outflows related to payments to suppliers for crude and other materials and payments for services. Refer to the Cash Flow section for our operating activities spend in 2025.
Refer to the capital spending section for our capital expenditures for 2024 and our planned capital expenditures for 2025. 84 | Management's Discussion and Analysis of Financial Condition and Results of Operations Off-Balance Sheet Arrangements We have no off-balance sheet arrangements through the date of the filing of this Annual Report on Form 10-K. 85 | Critical Accounting Estimates Critical Accounting Estimates The fundamental objective of financial reporting is to provide useful information that allows a reader to comprehend our business activities.
Refer to the capital spending section for our capital expenditures for 2025 and our planned capital expenditures for 2026. 81 | Management's Discussion and Analysis of Financial Condition and Results of Operations Off-Balance Sheet Arrangements We have no off-balance sheet arrangements through the date of the filing of this Annual Report on Form 10-K. 82 | Critical Accounting Estimates Critical Accounting Estimates The fundamental objective of financial reporting is to provide useful information that allows a reader to comprehend our business activities.
A majority of our existing assets are both integral to and dependent upon the success of Delek Holdings' refining operations, as many of our assets are contracted exclusively to Delek Holdings in support of its the Tyler Refinery, the El Dorado Refinery and the Big Spring Refinery.
A significant potion of our existing assets are both integral to and dependent upon the success of Delek Holdings' refining operations, as many of our assets are contracted exclusively to Delek Holdings in support of the Tyler Refinery, El Dorado Refinery and Big Spring Refinery.
Operating Expenses 2024 vs. 2023 Operating expenses for the storage and transportation segment increased by $0.2 million, or 1.1%, in the year ended December 31, 2024 compared to the year ended December 31, 2023.
Operating Expenses 2025 vs. 2024 Operating expenses for the storage and transportation segment increased by $0.1 million, or 0.3%, in the year ended December 31, 2025, compared to the year ended December 31, 2024.
Management measures the operating performance of each of its reportable segments based on the segment EBITDA. 72 | Management's Discussion and Analysis of Financial Condition and Results of Operations Results of Operations Consolidated Results of Operations - Comparison of the Year Ended December 31, 2024 versus the Year Ended December 31, 2023 and the Year Ended December 31, 2023 versus the Year Ended December 31, 2022 Net Revenues 2024 vs. 2023 Net revenues decreased by $79.8 million, or 7.8%, in the year ended December 31, 2024 compared to the year ended December 31, 2023.
Management measures the operating performance of each of its reportable segments based on the segment EBITDA. 69 | Management's Discussion and Analysis of Financial Condition and Results of Operations Results of Operations Consolidated Results of Operations - Comparison of the Year Ended December 31, 2025 versus the Year Ended December 31, 2024 Net Revenues 2025 vs. 2024 Net revenues increased by $72.7 million, or 7.7%, in the year ended December 31, 2025, compared to the year ended December 31, 2024.
Interest Income 2024 vs. 2023 Interest income increased by $47.8 million, or 100.0%, in the year ended December 31, 2024 compared to the year ended December 31, 2023, primarily driven by income from certain of our commercial agreements with Delek Holdings that met the criteria to be accounted for as sales-type leases during the third quarter of 2024.
Interest Income 2025 vs. 2024 Interest income increased by $64.7 million, or 135.4%, in the year ended December 31, 2025, compared to the year ended December 31, 2024, primarily driven by income from certain of our commercial agreements with Delek Holdings that met the criteria to be accounted for as sales-type leases during the third quarter of 2024.
Additionally, we have prioritized reducing our leverage ratio, providing us with more financial flexibility to pursue opportunities and expand operations. By reducing our leverage and maintaining a strong financial position, we are better equipped to navigate challenges that may arise.
This commitment protects employees, assets, and operations, minimizing financial losses and maintaining stakeholder trust. Additionally, we have prioritized reducing our leverage ratio, providing us with more financial flexibility to pursue opportunities and expand operations. By reducing our leverage and maintaining a strong financial position, we are better equipped to navigate challenges that may arise.
Under certain of our agreements with Delek Holdings and third parties, the fees that are subject to adjustments using the consumer price index increased 3.3% and the fees that are subject to adjustments using the producer price index increased approximately 0.8%.
Under certain of our agreements with Delek Holdings and third parties, the fees that are subject to adjustments using the consumer price index increased 2.6% and the fees that are subject to adjustments using the producer price index increased approximately 1.4%.
(iii) potential issuance of additional equity; At December 31, 2024, our total liquidity amounted to $720.0 million comprised of $714.6 million in unused credit commitments under our third-party revolving credit facility (as discussed in Note 10 of our consolidated financial statements included in Item 8, Financial Statements and Supplementary Data, of this Annual Report on Form 10-K), and $5.4 million in cash and cash equivalents.
(iii) potential issuance of additional equity; At December 31, 2025, our total liquidity amounted to $949.1 million comprised of $938.2 million in unused credit commitments under our third-party revolving credit facility (as discussed in Note 10 of our consolidated financial statements included in Item 8, Financial Statements and Supplementary Data, of this Annual Report on Form 10-K), and $10.9 million in cash and cash equivalents.
EBITDA 2024 vs. 2023 EBITDA decreased by $15.5 million, or 24.3%, in the year ended December 31, 2024 compared to the year ended December 31, 2023, primarily due to decrease in revenue associated with sales-type lease accounting, partially offset by lower cost associated with decrease in trucking activity. 80 | Management's Discussion and Analysis of Financial Condition and Results of Operations Investments in Pipeline Joint Ventures Segment The Investments in Pipeline Joint Ventures segment relates to strategic Joint Venture investments, accounted for as equity method investments, to support the Delek Holdings operations in terms of offering connection to takeaway pipelines, alternative crude supply sources and flow of high quality crude oil to the Delek Holdings refining system.
EBITDA 2025 vs. 2024 EBITDA decreased by $22.5 million, or 46.5%, in the year ended December 31, 2025, compared to the year ended December 31, 2024, primarily due to a decrease in revenue related to sales-type lease accounting. 77 | Management's Discussion and Analysis of Financial Condition and Results of Operations Investments in Pipeline Joint Ventures Segment The Investments in Pipeline Joint Ventures segment relates to strategic Joint Venture investments, accounted for as equity method investments, to support the Delek Holdings operations in terms of offering connection to takeaway pipelines, alternative crude supply sources and flow of high-quality crude oil to the Delek Holdings refining system.
Cash Distributions On January 24, 2025, the board of directors of our general partner declared a distribution of $1.105 per common unit (the "Distribution"), which equates to an estimated amount of approximately $59.3 million per quarter, or approximately $237.2 million per year, based on the number of common units outstanding as of December 31, 2024.
Cash Distributions On January 26, 2026, the board of directors of our general partner declared a distribution of 1.125 per common unit (the "Distribution"), which equates to an estimated amount of approximately $60.2 million per quarter, or approximately $240.8 million per year, based on the number of common units outstanding as of December 31, 2025.
Additionally, we are seeking opportunities to further diversify our customer base by increasing third-party throughput volumes utilizing certain of our existing systems and expanding our existing asset portfolio to service more third-party customers. • Expand our ESG Consciousness and Lower Our Carbon Footprint.
Additionally, we are seeking opportunities to further diversify our customer base by increasing third-party throughput volumes utilizing certain of our existing systems and expanding our existing asset portfolio to service more third-party customers. • Enhance Our Commitment to Sustainability and Minimize our Carbon Emissions.
The Distribution was paid on February 11, 2025 to common unitholders of record on February 4, 2025 and represents a 4.7% increase over the fourth quarter 2023 distribution. This increase in the distribution is consistent with our intent to maintain an attractive distribution growth profile over the long term.
The Distribution was paid on February 12, 2026, to common unitholders of record on February 5, 2026, and represents a 1.8% increase over the fourth quarter 2024 distribution. This increase in the distribution is consistent with our intent to maintain an attractive distribution growth profile over the long term.
The Delaware Gathering Assets support our crude oil and natural gas gathering, processing and transportation businesses, as well as water disposal and recycling operations, located in the Delaware Basin of New Mexico.
The Delaware Gathering Assets support our crude oil and natural gas gathering, treatment, acid gas injection, processing and transportation businesses, including the operations at Libby 1 and Libby 2 gas processing plants, as well as water disposal and recycling operations, located in the Delaware Basin of New Mexico.
A secondary benefit of growing our contribution of third-party cash flows is to continue to increase our economic separation with our sponsor Delek USA and to progress deconsolidation. 2024 Strategic Focus Areas In service to these overarching Long-Term Strategic Objectives, as we began 2024, we focused on the following Strategic Focus Areas : I. Generate Stable Cash Flow II.
A secondary benefit of growing our contribution of third-party cash flows is to continue to increase our economic separation from our sponsor Delek Holdings and to progress deconsolidation. 2025 Strategic Focus Areas In service to these overarching Long-Term Strategic Objectives, as we began 2025, we prioritized the following Strategic Focus Areas : I. Achieve Strong Cash Flow Growth II.
See the Consolidated Statements of Income and Comprehensive Income included in item 8. Financial Statements and Supplementary Data, of this Annual Report on Form 10-K for more detail regarding our results of operations. (2) For a definition of EBITDA see "Non-GAAP Measures" above. (3) EBITDA includes $14.8 million of goodwill impairment for the year ended December 31, 2023.
See the Consolidated Statements of Income and Comprehensive Income included in item 8. Financial Statements and Supplementary Data, of this Annual Report on Form 10-K for more details regarding our results of operations. (2) For a definition of EBITDA see "Non-GAAP Measures" above.
We believe we were in compliance with the covenants in all debt facilities as of December 31, 2024. See Note 10 to our consolidated financial statements in Item 8, Financial Statements and Supplementary Data, of this Annual Report on Form 10-K for a complete discussion of our third-party indebtedness. Agreements Governing Certain Indebtedness of Delek Holdings Please read Item 1A.
See Note 10 to our consolidated financial statements in Item 8, Financial Statements and Supplementary Data, of this Annual Report on Form 10-K for a complete discussion of our third-party indebtedness. Agreements Governing Certain Indebtedness of Delek Holdings Please read Item 1A.
As of December 31, 2024, our total indebtedness consisted of: • An aggregate principal amount of $435.4 million under the DKL Revolving Facility, due on October 13, 2027, with an average borrowing rate of 7.27%. • An aggregate principal amount of $400.0 million, under the 2028 Notes (7.125% senior notes), due in 2028, with an effective interest rate of 7.38%. • An aggregate principal amount of $1,050.0 million, under the 2029 Notes (8.625% senior notes), due in 2029, with an effective interest rate of 8.82%.
As of December 31, 2025, our total indebtedness consisted of: • An aggregate principal amount of $211.9 million under the DKL Revolving Facility, due on October 13, 2027, with an average borrowing rate of 6.58%. • An aggregate principal amount of $400.0 million, under the 2028 Notes (7.125% senior notes), due in 2028, with an effective interest rate of 7.37%. • An aggregate principal amount of $1,050.0 million, under the 2029 Notes (8.625% senior notes), due in 2029, with an effective interest rate of 8.80%. • An aggregate principal amount of $700.0 million, under the 2033 Notes (7.375% senior notes), due in 2033, with an effective interest rate of 7.63%.
Cost of Materials and Other 2024 vs. 2023 Cost of materials and other for the storage and transportation segment decreased by $6.2 million, or 9.7%, in the year ended December 31, 2024 compared to the year ended December 31, 2023 primarily due to decrease in trucking activity.
Cost of Materials and Other 2025 vs. 2024 Cost of materials and other for the storage and transportation segment decreased by $3.7 million, or 6.5%, in the year ended December 31, 2025, compared to the year ended December 31, 2024.
Investments in Pipeline Joint Ventures The Partnership owns a portion of four joint ventures (accounted for as equity method investments) that have constructed separate crude oil pipeline systems and related ancillary assets primarily in the Permian Basin and Gulf Coast regions and with strategic connections to Cushing, Midland and connections from Wink, Texas to Webster, Texas and other key exchange points, which provide crude oil and refined product pipeline transportation to third parties and subsidiaries of Delek Holdings.
Investments in Pipeline Joint Ventures The Partnership owns a portion of four joint ventures (accounted for as equity method investments) that have constructed separate crude oil pipeline systems and related ancillary assets primarily in the Permian Basin and Gulf Coast regions and with strategic connections to Cushing, Midland and connections from Wink, Texas to Webster, Texas and other key exchange points, which provide crude oil and refined product pipeline transportation to third parties and subsidiaries of Delek Holdings. 61 | Management's Discussion and Analysis of Financial Condition and Results of Operations Strategic Overview Long-Term Strategic Objectives The Partnership’s Long-Term Strategic Objectives have been focused on providing a competitive yield and growing our distribution while maintaining healthy coverage and leverage ratios.
Executive Summary: Management's View of Our Business and Strategic Overview Management's View of Our Business The Partnership provides gathering, pipeline and other transportation services primarily for crude oil and natural gas customers, storage, wholesale marketing and terminalling services primarily for intermediate and refined product customers, and water disposal and recycling services through its owned assets and joint ventures located primarily in the Permian Basin (including the Delaware sub-basin) and other select areas in the Gulf Coast region.
We undertake no obligation to revise or update any forward-looking statements as a result of new information, future events or otherwise. 58 | Management's Discussion and Analysis of Financial Condition and Results of Operations Executive Summary: Management's View of Our Business and Strategic Overview Management's View of Our Business The Partnership provides gathering, pipeline and other transportation services primarily for crude oil and natural gas customers, storage, wholesale marketing and terminalling services primarily for intermediate and refined product customers, and water disposal and recycling services through its owned assets and joint ventures located primarily in the Permian Basin (including the Delaware sub-basin) and other select areas in the Gulf Coast region.
(2) Consists of terminalling throughputs at our Tyler, Big Spring, Big Sandy and Mount Pleasant, Texas terminals, our El Dorado and North Little Rock, Arkansas terminals and our Memphis and Nashville, Tennessee terminals.
(2) Marketing agreement terminated on August 5, 2024, upon assignment to Delek Holdings. (3) Consists of terminalling throughputs at our Tyler, Big Spring, Big Sandy and Mount Pleasant, Texas terminals, our El Dorado and North Little Rock, Arkansas terminals and our Memphis and Nashville, Tennessee terminals.
The following chart shows a summary of the average prices per gallon of gasoline and diesel purchased in our West Texas operations for the years ended December 31, 2024 and 2023.
The following chart shows a summary of the average cost per gallon of gasoline and diesel purchased in our West Texas operations for the years ended December 31, 2025 and 2024. Refer to the Refined Products Volume - Gallons chart above for a summary of volumes impacting our West Texas operations.
Cash Flows The following table sets forth a summary of our consolidated cash flows for the year ended December 31, 2024 and 2023 (in thousands): Year Ended December 31, 2024 2023 Net cash provided by operating activities $ 206,339 $ 225,319 Net cash used in investing activities (384,579) (89,629) Net cash provided by (used in) financing activities 179,869 (139,905) Net increase (decrease) in cash and cash equivalents $ 1,629 $ (4,215) Operating Activities Net cash provided by operating activities decreased by $19.0 million for the year ended December 31, 2024 compared to the year ended December 31, 2023.
Cash Flows The following table sets forth a summary of our consolidated cash flows for the year ended December 31, 2025, and 2024 (in thousands): Year Ended December 31, 2025 2024 Net cash provided by operating activities $ 237,115 $ 206,339 Net cash used in investing activities (444,200) (384,579) Net cash provided by financing activities 212,593 179,869 Net increase (decrease) in cash and cash equivalents $ 5,508 $ 1,629 Operating Activities Net cash provided by operating activities increased by $30.8 million for the year ended December 31, 2025, compared to the year ended December 31, 2024.
Reconciliation of net income to EBITDA (in thousands) Year Ended December 31, 2024 2023 Net income $ 142,685 $ 126,236 Add: Income tax expense 479 1,205 Depreciation and amortization 96,375 92,384 Amortization of marketing contract intangible 4,206 7,211 Interest expense, net 103,168 143,244 EBITDA $ 346,913 $ 370,280 70 | Management's Discussion and Analysis of Financial Condition and Results of Operations Reconciliation of net cash from operating activities to distributable cash flow (in thousands) Year Ended December 31, 2024 2023 Net cash provided by operating activities $ 206,339 $ 225,319 Changes in assets and liabilities 48,769 29,474 Distributions from equity method investments in investing activities 4,277 9,002 Non-cash lease expense (8,112) (9,549) Regulatory and sustaining capital expenditures not distributable (1) (12,658) (7,272) Reimbursement from (refund to) Delek Holdings for capital expenditures (2) 335 1,280 Sales-type lease receipts, net of income recognized 11,843 — Accretion (920) (705) Deferred income taxes (479) (638) Gain on disposal of assets 6,410 1,266 Distributable cash flow $ 255,804 $ 248,177 (1) Regulatory and sustaining capital expenditures represent cash expenditures (including for the addition or improvement to, or the replacement of, our capital assets, and for the acquisition of existing, or the construction or development of new, capital assets) made to maintain our long-term operating income or operating capacity.
Reconciliation of net income to EBITDA (in thousands) Year Ended December 31, 2025 2024 Net income $ 176,460 $ 142,685 Add: Income tax expense 458 479 Depreciation and amortization 125,600 96,375 Proportional interest, taxes, depreciation and amortization from equity-method investments 26,357 15,797 Amortization of marketing contract intangible — 4,206 Interest expense, net 66,779 103,168 EBITDA $ 395,654 $ 362,710 67 | Management's Discussion and Analysis of Financial Condition and Results of Operations Reconciliation of net cash from operating activities to distributable cash flow (in thousands) Year Ended December 31, 2025 2024 Net cash provided by operating activities $ 237,115 $ 206,339 Changes in assets and liabilities 41,729 48,769 Distributions from equity method investments in investing activities 13,559 4,277 Non-cash lease expense (6,245) (8,112) Regulatory and sustaining capital expenditures not distributable (1) (15,808) (12,658) Reimbursement from Delek Holdings for capital expenditures (2) 48 335 Sales-type lease receipts, net of income recognized 17,189 11,843 Accretion (2,617) (920) Deferred income taxes (255) (479) Gain on disposal of assets 3,602 6,410 Distributable cash flow $ 288,317 $ 255,804 (1) Regulatory and sustaining capital expenditures represent cash expenditures (including for the addition or improvement to, or the replacement of, our capital assets, and for the acquisition of existing, or the construction or development of new, capital assets) made to maintain our long-term operating income or operating capacity.
Operating Expenses 2024 vs. 2023 Operating expenses for the gathering and processing segment increased by $5.2 million, or 6.9%, in the year ended December 31, 2024 compared to the year ended December 31, 2023, primarily driven by incremental costs of $6.1 million associated with H20 Midstream operations which began in the third quarter of 2024.
Operating Expenses 2025 vs. 2024 Operating expenses for the gathering and processing segment increased by $47.9 million, or 59.6%, in the year ended December 31, 2025, compared to the year ended December 31, 2024, primarily driven by the following: • incremental costs associated with the Gravity and H2O Midstream operations of $31.0 million and $10.6 million, respectively.
In the Midland Basin combined crude and water offering is appealing for our customers and bringing additional growth opportunities to our system. ◦ Pursue Acquisitions. Delek logistics will also continue to look for attractive bolt-on acquisitions which are accretive to its free cash flow, EBITDA and leverage profiles. • Engage in Mutually Beneficial Transactions with Delek Holdings.
Delek logistics will also continue to look for attractive bolt-on acquisitions which are accretive to its free cash flow, EBITDA and leverage profiles. • Engage in Mutually Beneficial Transactions with Delek Holdings.
We expect to achieve this objective through ESG-Conscious Investments with Clear Value Propositions and Sustainable Returns. How We Evaluate Our Operations We use a variety of financial and operating metrics to analyze our segment performance.
We expect to achieve this objective by pursuing investments that offer clear value propositions and sustainable returns, with a focus on innovative solutions that support both our growth and environmental responsibility. How We Evaluate Our Operations We use a variety of financial and operating metrics to analyze our segment performance.
Operational Comparison of the Year Ended December 31, 2024 versus the Year Ended December 31, 2023: Net Revenues 2024 vs. 2023 Net revenues for the gathering and processing segment decreased by $6.4 million, or 1.7%, in the year ended December 31, 2024 compared to the year ended December 31, 2023, primarily due to the following: • recording certain throughput fees as interest income under sales-type lease accounting that were previously recorded as revenue in the prior year period; and • partially offset by an increase in revenue associated with the H20 Midstream operations of $19.5 million which began in the third quarter of 2024. 75 | Management's Discussion and Analysis of Financial Condition and Results of Operations Cost of Materials and Other 2024 vs. 2023 Cost of materials and other for the gathering and processing segment decreased by $6.1 million, or 7.3%, in the year ended December 31, 2024 compared to the year ended December 31, 2023, driven primarily by the following: • lower natural gas costs; and • partially offset by incremental costs of $1.2 million associated with H20 Midstream operations which began in the third quarter of 2024.
Operational Comparison of the Year Ended December 31, 2025 versus the Year Ended December 31, 2024 Net Revenues 2025 vs. 2024 Net revenues for the gathering and processing segment increased by $133.4 million, or 36.6%, in the year ended December 31, 2025, compared to the year ended December 31, 2024, primarily due to the following: • an increase in revenue associated with the Gravity operations of $90.1 million which began on January 2, 2025; • an increase in revenue associated with the H2O Midstream operations of $41.0 million which began in September 2024; and • partially offset by a decrease due to recording certain throughput fees as interest income under sales-type lease accounting, whereas these fees were recognized as revenue during part of the prior year period. 72 | Management's Discussion and Analysis of Financial Condition and Results of Operations Cost of Materials and Other 2025 vs. 2024 Cost of materials and other for the gathering and processing segment increased by $36.2 million, or 46.9%, in the year ended December 31, 2025, compared to the year ended December 31, 2024, driven primarily by the following: • incremental costs associated with Gravity and H2O Midstream operations of $15.9 million and $3.0 million, respectively; and • an increase of $11.2 million associated with the DPG dropdown which occurred on May 1, 2025.
The increase of $173.7 million in our long-term debt balance compared to the balance at December 31, 2023 resulted from the issuance of the 2029 Notes during the year ended December 31, 2024, which was partially offset by the payments under the DKL Credit Facility and the 2025 Notes.
The increase of $476.5 million in our long-term debt balance compared to the balance at December 31, 2024, resulted from additional borrowings under our 2033 Notes, partially offset by the paydown of the revolving facility during the year ended December 31, 2025.
(2) Mcfd - average thousand cubic feet per day. (3) 2024 volumes include volumes from September 11, 2024, through December 31, 2024.
(2) Mcfd - average thousand cubic feet per day. (3) Consists of volumes of H2O Midstream and Gravity. 2024 H2O Midstream volumes are from September 11, 2024 through December 31, 2024. Gravity volumes are from January 2, 2025, to December 31, 2025.
As a result of these efforts, the Partnership saw a $16.4 million increase in net income during the year ended December 31, 2024, as compared to the prior year period. Our EBITDA (as defined in "Non GAAP Measures" section below) decreased $23.4 million in 2024 as compared to 2023.
As a result of these efforts, the Partnership saw a $33.8 million increase in net income during the year ended December 31, 2025, as compared to the prior year period. Our EBITDA increased $32.9 million in 2025 as compared to 2024.
We can give no assurances that any of the events anticipated by the forward-looking statements will occur or, if any of them do, what impact they will have on our results of operations and financial condition. 61 | Management's Discussion and Analysis of Financial Condition and Results of Operations In light of these risks, uncertainties and assumptions, our actual results of operations and execution of our business strategy could differ materially from those expressed in, or implied by, the forward-looking statements, and you should not place undue reliance upon them.
In light of these risks, uncertainties and assumptions, our actual results of operations and execution of our business strategy could differ materially from those expressed in, or implied by, the forward-looking statements, and you should not place undue reliance upon them.
In providing these services, we do not take ownership of the refined products or crude oil that we transport. While we do not take ownership of gas that is gathered, we sell the processed gas at a market price which we remit to the producer, net of our fees.
While we do not take ownership of gas that is gathered, we sell the processed gas at a market price which we remit to the producer, net of our fees. Therefore, we are not directly exposed to changes in commodity prices with respect to these operations.
The following table provides summary financial data (in thousands, except unit and per unit amounts): Summary Statement of Operations Data (1) Year Ended December 31, 2024 2023 Net revenues: Gathering and Processing $ 364,719 $ 371,110 Wholesale marketing and terminalling 451,522 505,701 Storage and transportation 124,395 143,598 Total 940,636 1,020,409 Cost of materials and other 483,735 532,627 Operating expenses (excluding depreciation and amortization presented below) 122,734 118,101 General and administrative expenses 35,944 24,766 Depreciation and amortization 96,375 92,384 Impairment of goodwill — 14,848 Other operating income, net (978) (1,266) Operating income $ 202,826 $ 238,949 Interest income (47,792) — Interest expense 150,960 143,244 Income from equity method investments (43,301) (31,433) Other income, net (205) (303) Total non-operating expenses, net 59,662 111,508 Income before income tax expense 143,164 127,441 Income tax expense 479 1,205 Net income 142,685 126,236 Comprehensive income 142,685 126,236 Less: Preferred unitholder's interest in net income 768 — Net income attributable to limited partners $ 141,917 $ 126,236 EBITDA (2) (3) $ 346,913 $ 370,280 Net income per limited partner unit: Basic $ 2.99 $ 2.90 Diluted $ 2.99 $ 2.89 Weighted average limited partner units outstanding: Basic 47,452,138 43,583,938 Diluted 47,479,248 43,611,314 (1) This information is presented at a summary level for your reference.
The following table provides summary financial data (in thousands, except unit and per unit amounts): Summary Statement of Operations Data (1) Year Ended December 31, 2025 2024 Net revenues: Gathering and Processing $ 498,097 $ 364,719 Wholesale marketing and terminalling 417,635 451,522 Storage and transportation 97,591 124,395 Total 1,013,323 940,636 Cost of materials and other 509,299 483,735 Operating expenses (excluding depreciation and amortization presented below) 168,377 122,734 General and administrative expenses 28,639 35,944 Depreciation and amortization 125,600 96,375 Other operating income, net (436) (978) Operating income 181,844 202,826 Interest income (112,517) (47,792) Interest expense 179,296 150,960 Income from equity method investments (61,793) (43,301) Other income, net (60) (205) Total non-operating expenses, net 4,926 59,662 Income before income tax expense 176,918 143,164 Income tax expense 458 479 Net income 176,460 142,685 Comprehensive income 176,460 142,685 Less: Preferred unitholder's interest in net income — 768 Net income attributable to limited partners $ 176,460 $ 141,917 EBITDA (2) $ 395,654 $ 362,710 Net income per limited partner unit: Basic $ 3.30 $ 2.99 Diluted $ 3.30 $ 2.99 Weighted average limited partner units outstanding: Basic 53,501,020 47,452,138 Diluted 53,552,206 47,479,248 (1) This information is presented at a summary level for your reference.
EBITDA 2024 vs. 2023 EBITDA increased by $7.7 million, or 3.9%, in the year ended December 31, 2024 compared to the year ended December 31, 2023 primarily driven by the following: • incremental EBITDA of $12.1 million associated with H20 Midstream operations which began in the third quarter of 2024; • impairment of $14.8 million taken in prior year associated with Delaware Gathering reporting unit; and • partially offset by lower revenue related to sales-type lease accounting. 76 | Management's Discussion and Analysis of Financial Condition and Results of Operations Wholesale Marketing and Terminalling Segment The table and discussion below present the results of operations and certain operating statistics of the wholesale marketing and terminalling segment for the years ended December 31, 2024 and 2023: Wholesale Marketing and Terminalling Year Ended December 31, 2024 2023 Net revenues $ 451,522 $ 505,701 Cost of materials and other $ 349,049 $ 388,536 Operating expenses (excluding depreciation and amortization) $ 14,820 $ 17,796 Segment EBITDA $ 91,729 $ 106,512 Operating Information Year Ended December 31, 2024 2023 East Texas - Tyler Refinery sales volumes (average bpd) (1) 67,682 60,626 Big Spring marketing throughputs (average bpd) 44,999 77,897 West Texas marketing throughputs (average bpd) 5,828 10,032 West Texas marketing gross margin per barrel $ 3.18 $ 5.18 Terminalling throughputs (average bpd) (2) 154,217 113,803 (1) Excludes jet fuel and petroleum coke.
EBITDA 2025 vs. 2024 EBITDA increased by $52.4 million, or 25.3%, in the year ended December 31, 2025, compared to the year ended December 31, 2024, primarily driven by the following: • incremental EBITDA of $42.6 million and $26.7 million associated with the operations of Gravity and H2O Midstream, respectively; and • partially offset by a decrease due to recording certain throughput fees as interest income under sales-type lease accounting in the current period. 73 | Management's Discussion and Analysis of Financial Condition and Results of Operations Wholesale Marketing and Terminalling Segment The table and discussion below present the results of operations and certain operating statistics of the wholesale marketing and terminalling segment for the years ended December 31, 2025 and 2024: Wholesale Marketing and Terminalling Year Ended December 31, 2025 2024 Net revenues $ 417,635 $ 451,522 Cost of materials and other $ 342,187 $ 349,049 Operating expenses (excluding depreciation and amortization) $ 9,359 $ 14,820 Segment EBITDA $ 62,934 $ 91,729 Operating Information Year Ended December 31, 2025 2024 East Texas - Tyler Refinery sales volumes (average bpd) (1) 68,052 67,682 Big Spring marketing throughputs (average bpd) (2) — 44,999 West Texas marketing throughputs (average bpd) 8,737 5,828 West Texas marketing gross margin per barrel $ 3.42 $ 3.18 Terminalling throughputs (average bpd) (3) 145,237 154,217 (1) Excludes jet fuel and petroleum coke.
However, sustained depressed demand/prices over the longer term could not only curb exploration and production expansion opportunities under our agreements, it could also impact our customers' willingness or ability to renew commercial agreements or result in liquidity or credit constraints that could impact our longer term relationship with them. 68 | Management's Discussion and Analysis of Financial Condition and Results of Operations That said, our recent expansion of our gas processing capabilities have improved both our customer and geographic diversification which lowers concentration risk in those areas, in addition to adding service offerings to our portfolio.
However, sustained depressed demand/prices over the longer term could not only curb exploration and production expansion opportunities under our agreements, but it could also impact our customers' willingness or ability to renew commercial agreements or result in liquidity or credit constraints that could impact our longer-term relationship with them. 64 | Management's Discussion and Analysis of Financial Condition and Results of Operations That said, despite the recent crude price softness, we are seeing higher volumes in our crude gathering business.
Underwriting discounts totaled $6.6 million. 64 | Management's Discussion and Analysis of Financial Condition and Results of Operations Segment Overview We review operating results in four reportable segments: (i) gathering and processing; (ii) wholesale marketing and terminalling; (iii) storage and transportation; and (iv) investments in pipeline joint ventures.
The acquisition is synergistic to our recent acquisition of H2O Midstream and supplements our integrated crude and produced water gathering and disposal offering in the Midland Basin. 60 | Management's Discussion and Analysis of Financial Condition and Results of Operations Segment Overview We review operating results in four reportable segments: (i) gathering and processing; (ii) wholesale marketing and terminalling; (iii) storage and transportation; and (iv) investments in pipeline joint ventures.
Segment EBITDA for our investments in pipeline joint ventures increased by $11.9 million with the acquisition of the W2W Investment from Delek Holdings. See the “Results of Operations” section below for further discussion. The near term economic outlook still has some uncertainty with geopolitical instability and commodity market volatility.
Segment EBITDA for our investments in pipeline joint ventures increased by $29.1 million with the acquisition of the investment in Wink to Webster Holdings, LLC (the "W2W Investment") from Delek Holdings. See the “Results of Operations” section below for further discussion.
EBITDA 2024 vs. 2023 EBITDA decreased by $14.8 million, or 13.9%, in the year ended December 31, 2024 compared to the year ended December 31, 2023, primarily driven by the following: • a decline in wholesale margins partially due to lower RINs prices; • lower revenue related to sales-type lease accounting; and • partially offset by decrease in operating expenses. 79 | Management's Discussion and Analysis of Financial Condition and Results of Operations Storage and Transportation Segment The table and discussion below present the results of operations and certain operating statistics of the storage and transportation segment for the years ended December 31, 2024 and 2023: Storage and Transportation Year Ended December 31, 2024 2023 Net revenues $ 124,395 $ 143,598 Cost of materials and other $ 57,539 $ 63,710 Operating expenses (excluding depreciation and amortization) $ 18,299 $ 18,104 Segment EBITDA $ 48,325 $ 63,850 Operational Comparison of the Year Ended December 31, 2024 versus the Year Ended December 31, 2023: Net Revenues 2024 vs. 2023 Net revenues for the storage and transportation segment decreased by $19.2 million, or 13.4%, in the year ended December 31, 2024 compared to the year ended December 31, 2023, primarily due to recording certain storage fees as interest income under sales-type lease accounting that were previously recorded as revenue in the prior year period.
Operating Expenses 2025 vs. 2024 Operating expenses for the wholesale marketing and terminalling segment decreased by $5.5 million or 36.8%, in the year ended December 31, 2025, compared to the year ended December 31, 2024, driven primarily by a decrease in outside service costs. 75 | Management's Discussion and Analysis of Financial Condition and Results of Operations EBITDA 2025 vs. 2024 EBITDA decreased by $28.8 million, or 31.4%, in the year ended December 31, 2025, compared to the year ended December 31, 2024, primarily driven by the following: • lower revenue related to sales-type lease accounting; • lower revenue due to the assignment of the Big Spring refinery marketing agreement to Delek Holdings; and • partially offset by a $0.24 per barrel increase in wholesale margins. 76 | Management's Discussion and Analysis of Financial Condition and Results of Operations Storage and Transportation Segment The table and discussion below present the results of operations and certain operating statistics of the storage and transportation segment for the years ended December 31, 2025 and 2024: Storage and Transportation Year Ended December 31, 2025 2024 Net revenues $ 97,591 $ 124,395 Cost of materials and other $ 53,794 $ 57,539 Operating expenses (excluding depreciation and amortization) $ 18,363 $ 18,299 Segment EBITDA $ 25,853 $ 48,325 Operational Comparison of the Year Ended December 31, 2025 versus the Year Ended December 31, 2024 Net Revenues 2025 vs. 2024 Net revenues for the storage and transportation segment decreased by $26.8 million, or 21.5%, in the year ended December 31, 2025, compared to the year ended December 31, 2024, primarily due to the treatment of certain storage fees, which were accounted for as interest income under sales-type lease rules in the current year, while for most of the prior year, such fees had been recognized as revenue.
The cash receipts from customer activities decreased by $49.9 million and cash payments to suppliers and for allocations to Delek Holdings for salaries increased by $2.5 million. In addition, cash dividends received from equity method investments increased by $14.2 million and cash paid for debt interest decreased by $19.1 million.
The cash receipts from customer activities increased by $81.2 million and cash payments to suppliers and for allocations to Delek Holdings for salaries decreased by $23.7 million. These increases were partially offset by a $18.0 million decrease in cash dividends received from equity method investments, as well as a $56.2 million increase in cash paid for debt interest.
The Partnership prioritizes safe and reliable operation of its assets to maintain financial stability and growth. We have successfully avoided lost time injuries for four years, demonstrating our strong safety protocols and adherence to regulations. This commitment protects employees, assets, and operations, minimizing financial losses and maintaining stakeholder trust.
We believe that opportunities exist in crude, natural gas and water which will continue to enhance our gathering and processing segment. The Partnership prioritizes safe and reliable operation of its assets to maintain financial stability and growth. We have successfully avoided lost time injuries for four years, demonstrating our strong safety protocols and adherence to regulations.
Depending on the magnitude, funding for such projects may include cash generated from operations, borrowings under existing credit facilities, or issuances of additional debt or equity securities. 83 | Management's Discussion and Analysis of Financial Condition and Results of Operations The following table summarizes our actual capital expenditures, including any material capital expenditure payments made or forecasted to be made in advance of receipt of goods and materials, for the year ended December 31, 2024: (in thousands) Full Year 2025 Forecast Year Ended December 31, 2024 (1) Gathering and Processing Regulatory $ — $ — Sustaining 2,715 1,599 Growth 209,300 31,881 Gathering and Processing Segment Total $ 212,015 $ 33,480 Wholesale Marketing and Terminalling Regulatory $ 6,958 $ 791 Sustaining 3,022 1,936 Growth 6,800 — Wholesale Marketing and Terminalling Segment Total $ 16,780 $ 2,727 Storage and Transportation Regulatory $ — $ 1,155 Sustaining 6,515 7,177 Growth — — Storage and Transportation Segment Total $ 6,515 $ 8,332 Total Capital Spending $ 235,310 $ 44,539 (1) 2024 excludes capital spending of $95.5 million related to the new gas processing plant.
Depending on the magnitude, funding for such projects may include cash generated from operations, borrowings under existing credit facilities, or issuances of additional debt or equity securities. 80 | Management's Discussion and Analysis of Financial Condition and Results of Operations The following table summarizes our actual capital expenditures, including any material capital expenditure payments made or forecasted to be made in advance of receipt of goods and materials, for the year ended December 31, 2025: (in thousands) Full Year 2026 Forecast Year Ended December 31, 2025 (1) Gathering and Processing Regulatory $ — $ 596 Sustaining 17,000 8,249 Growth 209,600 235,909 Gathering and Processing Segment Total $ 226,600 $ 244,754 Wholesale Marketing and Terminalling Regulatory $ 12,000 $ 474 Sustaining — 874 Growth 600 — Wholesale Marketing and Terminalling Segment Total $ 12,600 $ 1,348 Storage and Transportation Regulatory $ — $ 1,657 Sustaining 16,000 2,858 Growth — 1,520 Storage and Transportation Segment Total $ 16,000 $ 6,035 Total Capital Spending $ 255,200 $ 252,137 (1) Amounts exclude capitalized interest and internal labor costs totaling $22.2 million, which consist of $21.7 million in our gathering and processing segment, $0.1 million in our wholesale marketing and terminalling segment, and $0.4 million in our storage and transportation segment.
For example, we may experience increases in the cost of and/or timing to obtain necessary equipment required for our continued compliance with government regulations or to complete improvement projects. Additionally, the scope and cost of employee or contractor labor expense related to installation of that equipment could increase from our projections.
The amount of our capital expenditure forecast is subject to change due to unanticipated increases in the cost, scope and completion time for our capital projects. For example, we may experience increases in the cost of and/or timing to obtain necessary equipment required for our continued compliance with government regulations or to complete improvement projects.
Financial Statements and Supplementary Data, of this Annual Report on Form 10-K. • Distributable cash flow - calculated as net cash flow from operating activities adjusted for changes in assets and liabilities, maintenance capital expenditures net of reimbursements, sales-type lease receipts, net of income recognized and other adjustments not expected to settle in cash.
These financial and operational non-GAAP measures include: • EBITDA - calculated as net income before net interest expense, income tax expense, depreciation, amortization and proportional interest, taxes, depreciation and amortization of equity method investments. • Distributable cash flow - calculated as net cash flow from operating activities adjusted for changes in assets and liabilities, maintenance capital expenditures net of reimbursements, sales-type lease receipts, net of income recognized and other adjustments not expected to settle in cash.
Operational Comparison of the Year Ended December 31, 2024 versus the Year Ended December 31, 2023: Net Revenues 2024 vs. 2023 Net revenues for the wholesale marketing and terminalling segment decreased by $54.2 million, or 10.7%, in the year ended December 31, 2024 compared to the year ended December 31, 2023, primarily driven by the following: • decreased revenue of $47.3 million in our West Texas marketing operations primarily driven by a decrease in average sales prices per gallon and decrease in RINs revenue: ◦ the average sales prices per gallon of gasoline and diesel sold decreased by $0.19 and $0.40 per gallon, respectively; and ◦ RINs revenue decreased from $11.0 million in the year ended December 31, 2023 to $5.0 million in the year ended December 31, 2024, due to decrease in RINs prices. • decrease due to recording certain throughput fees as interest income under sales-type lease accounting that were previously recorded as revenue in the prior year period. 77 | Management's Discussion and Analysis of Financial Condition and Results of Operations The following charts show summaries of the average sales prices per gallon of gasoline and diesel and refined products volume impacting our West Texas operations for the years ended December 31, 2024 and 2023.
Operational Comparison of the Year Ended December 31, 2025 versus the Year Ended December 31, 2024 Net Revenues 2025 vs. 2024 Net revenues for the wholesale marketing and terminalling segment decreased by $33.9 million, or 7.5%, in the year ended December 31, 2025, compared to the year ended December 31, 2024, primarily driven by the following: • decreased revenue of $5.6 million in our West Texas marketing operations primarily driven by decrease in average sales prices per gallon, partially offset by increase in volumes sold and an increase in RINs revenue: ◦ the average sales prices per gallon of gasoline and diesel sold decreased by $0.21 and $0.16 per gallon, respectively; ◦ the average volumes of diesel sold increased by 6.7 million and the average volumes of gasoline sold increased by 2.2 million gallons; and ◦ RINs revenue increased $3.7 million due to increased RINs prices. • decrease due to recording certain throughput fees as interest income under sales-type lease accounting, whereas these fees were recognized as revenue prior to lease commencement in prior year period; and • decrease of $12.1 million due to the assignment of the Big Spring refinery marketing agreement to Delek Holdings in the third quarter of 2024.
Operating Expenses 2024 vs. 2023 Operating expenses increased by $4.6 million, or 3.9%, in the year ended December 31, 2024 compared to the year ended December 31, 2023, primarily driven by the following: • incremental costs of $6.1 million associated with H20 Midstream operations which began in the third quarter of 2024; and • partially offset by a decrease in repairs and maintenance expenses.
Operating Expenses 2025 vs. 2024 Operating expenses increased by $45.6 million, or 37.2%, in the year ended December 31, 2025, compared to the year ended December 31, 2024, primarily driven by the following: • incremental costs associated with the operations of Gravity and H2O Midstream of $31.0 million and $10.6 million, respectively.
Refer to the Refined Products Volume - Gallons chart above for a summary of volumes impacting our West Texas operations. 78 | Management's Discussion and Analysis of Financial Condition and Results of Operations Operating Expenses 2024 vs. 2023 Operating expenses for the wholesale marketing and terminalling segment decreased by $3.0 million, or 16.7%, in the year ended December 31, 2024 compared to the year ended December 31, 2023, driven primarily by a decrease in outside service costs.
The following charts show summaries of the average sales prices per gallon of gasoline and diesel and refined products volume impacting our West Texas operations for the years ended December 31, 2025 and 2024. 74 | Management's Discussion and Analysis of Financial Condition and Results of Operations Cost of Materials and Other 2025 vs. 2024 Cost of materials and other for the wholesale marketing and terminalling segment decreased by $6.9 million, or 2.0% , in the year ended December 31, 2025, compared to the year ended December 31, 2024, primarily driven by the following: • decreased costs of materials and other of $7.2 million in our West Texas marketing operations primarily driven by decrease in average cost per gallon, partially offset by a net increase in volumes of diesel sold: ◦ the average cost per gallon of gasoline and diesel sold decreased by $0.18 per gallon and $0.17 per gallon, respectively; and ◦ the average volumes of gasoline and diesel sold increased by 6.7 million gallons and 2.2 million gallons, respectively.
The decrease was primarily driven by the following: • decreased revenue of $47.3 million in our West Texas marketing operations primarily driven by a decrease in average sales prices per gallon and decrease in RINs revenue: ◦ the average sales prices per gallon of gasoline and diesel sold decreased by $0.19 and $0.40 per gallon, respectively; and ◦ RINs revenue decreased from $11.0 million in the year ended December 31, 2023 to $5.0 million in the year ended December 31, 2024, due to decrease in RINs prices. • decreased revenue in our gathering and processing and storage and transportation segments due to recording certain throughput and storage fees as interest income under sales-type lease accounting that were previously recorded as revenue in the prior year period; and • partially offset by increase in revenue associated with H20 Midstream operations of $19.5 million which began in the third quarter of 2024.
This increase was partially offset by the following: • decreased revenue due to recording certain throughput fees as interest income under sales-type lease accounting, whereas these fees were recognized as revenue during part of the prior year period; • decrease of $12.1 million due to the assignment of the Big Spring Refinery marketing agreement to Delek Holdings in the third quarter of 2024; and • decreased revenue of $5.6 million in our West Texas marketing operations primarily driven by decrease in average sales prices per gallon, partially offset by increase in volumes sold and an increase in RINs revenue.
Cost of Materials and Other 2024 vs. 2023 Cost of materials and other decreased by $48.9 million, or 9.2%, in the year ended December 31, 2024 compared to the year ended December 31, 2023, primarily driven by the following: • decreased costs of materials and other of $40.1 million in our West Texas marketing operations primarily driven by decreased costs per gallon: ◦ the average cost per gallon of gasoline and diesel sold decreased by $0.20 per gallon and $0.36 per gallon, respectively. • decrease of $6.1 million in our gathering and processing segment driven primarily by lower natural gas costs.
Cost of Materials and Other 2025 vs. 2024 Cost of materials and other increased by $25.6 million, or 5.3%, in the year ended December 31, 2025, compared to the year ended December 31, 2024, primarily driven by the following: • incremental costs associated with the operations of Gravity and H2O Midstream of $15.9 million and $3.0 million, respectively; • an increase of $11.2 million associated with the DPG dropdown which occurred on May 1, 2025; and • partially offset by decreased costs of materials and other of $7.2 million in our West Texas marketing operations primarily driven by decrease in average cost per gallon, partially offset by increase in volumes sold.
Contractual Rate Adjustments to Keep Pace with Inflation On July 1, 2024, the tariffs on certain of our FERC regulated pipelines and the throughput fees and storage fees under certain of our agreements with Delek Holdings and third parties that are subject to adjustments using FERC indexing increased by approximately 1.3%, which was the amount of the change in the FERC oil pipeline index.
See further discussion on macroeconomic factors and market trends, including the impact on 2025, in the ‘Market Trends’ section below. 59 | Management's Discussion and Analysis of Financial Condition and Results of Operations Other Developments Contractual Rate Adjustments to Keep Pace with Inflation On July 1, 2025, the tariffs on certain of our FERC regulated pipelines and the throughput fees and storage fees under certain of our agreements with Delek Holdings and third parties that are subject to adjustments using FERC indexing increased 2.0%.
General and Administrative Expenses 2024 vs. 2023 General and administrative expenses increased by $11.2 million, or 45.1%, in the year ended December 31, 2024 compared to the year ended December 31, 2023, primarily driven by transaction costs associated with the Gravity and H2O Midstream acquisitions, the W2W Investment acquisition, and amendments of certain agreements with Delek Holdings of $11.4 million. 73 | Management's Discussion and Analysis of Financial Condition and Results of Operations Depreciation and Amortization 2024 vs. 2023 Depreciation and amortization increased by $4.0 million, or 4.3%, in the year ended December 31, 2024 compared to the year ended December 31, 2023, primarily driven by the following: • increase of $3.7 million associated with the H20 Midstream assets acquired in the third quarter of 2024; • depreciation associated with new projects in-serviced during the period.; and • partially offset by the derecognition of fixed assets in connection with the recognition of sales-type leases in the third quarter of 2024.
General and Administrative Expenses 2025 vs. 2024 General and administrative expenses decreased by $7.3 million, or 20.3%, in the year ended December 31, 2025, compared to the year ended December 31, 2024, primarily driven by following: • decrease in outside services. 70 | Management's Discussion and Analysis of Financial Condition and Results of Operations Depreciation and Amortization 2025 vs. 2024 Depreciation and amortization increased by $29.2 million, or 30.3%, in the year ended December 31, 2025, compared to the year ended December 31, 2024, primarily driven by the following: • increase of $22.2 million associated with additional fixed asset base from the Gravity and H2O Midstream Acquisitions; • increase of $8.0 million associated with the gas plant expansion; • increase of $5.3 million due to additional finance leases; and • partially offset by a $5.9 million decrease as a result of sales-type leases entered into during the third quarter of 2024.
Furthermore, our dedicated acreage agreements provide significant growth opportunities in strong economic conditions (e.g., high demand/high commodity prices) without incremental customer acquisition cost.
Also, our recent expansion of our gas processing capabilities has improved both our customer and geographic diversification, which lowers concentration risk in those areas, in addition to adding service offerings to our portfolio. Furthermore, our dedicated acreage agreements provide significant growth opportunities in strong economic conditions (e.g., high demand/high commodity prices) without incremental customer acquisition cost.
Additionally, in the Delaware Basin, we are expanding our natural gas processing capabilities by constructing a new natural gas processing plant and adding AGI and sour gas processing capabilities. Our positioning allows our customers the ability to control quality and adds optionality to place barrels in a variety of markets.
Additionally, in the Delaware Basin, we are expanding our natural gas processing capabilities by constructing a new natural gas processing plant and adding AGI and sour gas processing capabilities. Currently, the gas plant is in its initial phase of operation, and we foresee it increasing throughput throughout 2026.
The partnership is in the middle of pursuing several attractive organic growth opportunities enabled by its advantageous position in the prolific Permian Basin. The gas plant expansion and addition of AGI and sour gas processing capabilities is enabling several additional growth options for the Partnership in the Delaware Basin.
The gas plant expansion and addition of AGI and sour gas processing capabilities are enabling several additional growth opportunities for the Partnership in the Delaware Basin. In the Midland Basin combined crude and water offering is appealing for our customers and brings additional growth opportunities to our system.
Although our Partnership Agreement requires that we distribute all of our available cash each quarter, we do not otherwise have a legal obligation to distribute any particular amount per common unit. 81 | Management's Discussion and Analysis of Financial Condition and Results of Operations The table below summarizes the quarterly distributions related to our quarterly financial results: Quarter Ended Total Quarterly Distribution Per Limited Partner Unit Total Cash Distribution (in thousands) March 31, 2023 $1.025 $44,664 June 30, 2023 $1.035 $45,112 September 30, 2023 $1.045 $45,558 December 31, 2023 $1.055 $46,010 March 31, 2024 $1.070 $50,521 June 30, 2024 $1.090 $51,263 September 30, 2024 $1.100 $56,613 December 31, 2024 $1.105 $59,302 Equity Offerings On March 12, 2024, the Partnership completed a public offering of its common units in which it sold 3,584,416 common units (including an overallotment option of 467,532 common units) to the underwriters of the offering at a price to the public of $38.50 per unit.
Although our Partnership Agreement requires that we distribute all of our available cash each quarter, we do not otherwise have a legal obligation to distribute any particular amount per common unit. 78 | Management's Discussion and Analysis of Financial Condition and Results of Operations The table below summarizes the quarterly distributions related to our quarterly financial results: Quarter Ended Total Quarterly Distribution Per Limited Partner Unit Total Cash Distribution (in thousands) March 31, 2024 $1.070 $50,521 June 30, 2024 $1.090 $51,263 September 30, 2024 $1.100 $56,613 December 31, 2024 $1.105 $59,302 March 31, 2025 $1.110 $59,320 June 30, 2025 $1.115 $59,612 September 30, 2025 $1.120 $59,898 December 31, 2025 $1.125 $60,201 Unit Repurchase On February 24, 2025, the Partnership and Delek Holdings entered into a Common Unit Purchase Agreement whereby the Partnership may repurchase common units from time to time from Delek Holdings in one or more transactions for an aggregate purchase price of up to $150.0 million through December 31, 2026 (each such repurchase, a “Repurchase”).The Partnership may fund Repurchases using cash on hand or borrowings under its existing credit facility, subject to compliance with applicable covenants.
This decrease is largely attributable to a change in classification of certain of our commercial agreements with Delek, which meet the criteria to be classified as sales-type leases. As such, certain throughput and storage fees that were previously recorded as revenue are now recorded as interest income under sales-type lease accounting.
As such, certain throughput and storage fees that were previously recorded as revenue are now recorded as interest income under sales-type lease accounting. Our gathering and processing segment saw a $52.4 million increase in segment EBITDA, largely due to the H2O Midstream and Gravity acquisitions.
Long-term Cash Requirements Information regarding our known contractual obligations of the types described below, as of December 31, 2024, is set forth in the following table (in thousands): 1-3 Years 3-5 Years >5 Years Total Long term debt and notes payable $ — $ 435,400 $ 1,450,000 $ — $ 1,885,400 Interest (1) 151,219 294,581 223,875 — 669,675 Finance Lease Obligation 283 526 154 — 963 Operating lease commitments (2) 5,924 4,777 1,139 984 12,824 Total $ 157,426 $ 735,284 $ 1,675,168 $ 984 $ 2,568,862 (1) Includes expected interest payments on debt balances outstanding under the DKL Credit Facility and the 2028 and 2029 Notes at December 31, 2024.
Long-term Cash Requirements Information regarding our known contractual obligations of the types described below, as of December 31, 2025, is set forth in the following table (in thousands): 1-3 Years 3-5 Years >5 Years Total Long term debt and notes payable $ — $ 611,850 $ 1,050,000 $ 700,000 $ 2,361,850 Interest (1) 184,630 352,300 193,813 154,875 885,618 Finance lease obligations 10,108 16,833 5,334 — 32,275 Operating lease commitments (2) 3,384 2,880 356 851 7,471 Total $ 198,122 $ 983,863 $ 1,249,503 $ 855,726 $ 3,287,214 (1) Includes expected interest payments on debt balances outstanding under the DKL Credit Facility and the 2028, 2029 and 2033 Notes at December 31, 2025.
Financing Activities Net cash provided by financing activities increased by $319.8 million for the year ended December 31, 2024 compared to the year ended December 31, 2023.
Also, the Partnership executed the Gravity Acquisition for $181.2 million in the current year, as compared to H2O Acquisition in the prior year for $182.5 million. Financing Activities Net cash provided by financing activities increased by $32.7 million for the year ended December 31, 2025, compared to the year ended December 31, 2024.
Therefore, we are not directly exposed to changes in commodity prices with respect to this operating segment. The combination of these operational assets provides a comprehensive, integrated midstream service offering to producers and customers.
In providing these services, we do not take ownership of the refined products or crude oil that we transport. The combination of these operational assets provides a comprehensive, integrated midstream service offering to producers and customers.
Interest Expense 2024 vs. 2023 Interest expense increased by $7.7 million, or 5.4%, in the year ended December 31, 2024 compared to the year ended December 31, 2023, primarily driven by the following: • debt extinguishment costs of $3.6 million associated with the payoff of the DKL Term Loan Facility and the 2025 Notes with proceeds from the 2029 Notes issued in March 2024; • interest associated with the 2029 Notes issued in the first quarter of 2024; and • partially offset by a decrease in interest associated with the DKL Revolving Facility due to lower average outstanding borrowings.
Interest Expense 2025 vs. 2024 Interest expense increased by $28.3 million, or 18.8%, in the year ended December 31, 2025, compared to the year ended December 31, 2024, primarily driven by • increased interest due to the issuance of the $700 million senior note during the second quarter 2025; • partially offset by a decrease in interest on our outstanding revolver due to a decreased average balance; and • decreased interest due to the pay off of a term loan during 2024.
Focus on Growing Our Business through Acquisitions and Investments in Joint Ventures III. Engage in Mutually Beneficial Transactions with Delek Holdings IV. Pursue Attractive Expansion and Construction Opportunities V. Optimize Our Existing Assets and Expand Our Customer Base VI.
Pursue Attractive Expansion Opportunities III. Engage in Mutually Beneficial Transactions with Delek Holdings IV. Optimize Our Existing Assets and Expand Our Customer Base V. Enhance our Commitment to Sustainability and Minimize our Carbon Emissions We continue to be focused on growth opportunities in the Permian Basin given our advantageous location in the Midland and the Delaware Basins.
This financial stability also allows us to seize emerging opportunities that align with our strategic goals, ensuring that we can continue to deliver value to our unitholders. 2024 Strategic Scorecard Description of Strategic Success Generate Stable Cash Flow Focus on Growing Our Business through Acquisitions and Investments in Joint Ventures Engage in Mutually Beneficial Transactions with Delek Holdings Pursue Attractive Expansion and Construction Opportunities Optimize Our Existing Assets and Expand Our Customer Base Expand our ESG Consciousness and Lower our Carbon Footprint Acquisition of Gravity and H2O Midstream ü ü ü ü Acquisition of indirect interest in Wink to Webster ü ü ü ü Expansion of natural gas processing plant and sour gas processing capabilities ü ü ü Implemented measures to reduce our overall debt profile ü ü ü ü Amended and extended commercial agreements with Delek Holdings ü ü Expansion of dedicated crude acreage in our gathering operations ü ü ü Zero lost time injuries ü Continue in Co-Developing our ESG Strategy with our General Partner ü 66 | Management's Discussion and Analysis of Financial Condition and Results of Operations Looking Forward: 2025 Strategic Focus Areas We continue to believe that our strategic focus areas are the right ones.
This financial stability also allows us to seize emerging opportunities that align with our strategic goals, ensuring that we can continue to deliver value to our unitholders. 2025 Strategic Scorecard Description of Strategic Success Achieve Strong Cash Flow Growth Pursue Attractive Expansion Opportunities Engage in Mutually Beneficial Transactions with Delek Holdings Optimize Our Existing Assets and Expand Our Customer Base Completion of debt offering, increasing our liquidity to over $1.0 billion ü ü ü DPG Dropdown ü ü ü ü Acquisition of Gravity ü ü ü Repurchase of common units from Delek Holdings ü ü Began initial phase of operations of the natural gas processing plant expansion ü ü ü Executed agreements with Delek Holdings to further our economic separation and increase third-party revenue ü ü ü Looking Forward: 2026 Strategic Focus Areas We continue to believe that our strategic focus areas are the right ones to support our long-term objectives.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA The information required by Item 8 is incorporated by reference to the section beginning on page F-1.
Biggest changeITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA The information required by Item 8 is incorporated by reference to the section beginning on page F-1. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None.
The outstanding floating rate borrowings totaled approximately $435.4 million as of December 31, 2024. The annualized impact of a hypothetical one percent change in interest rates on our floating rate debt outstanding as of December 31, 2024 would be to change interest expense by approximately $4.4 million.
The outstanding floating rate borrowings totaled approximately $211.9 million as of December 31, 2025. The annualized impact of a hypothetical one percent change in interest rates on our floating rate debt outstanding as of December 31, 2025, would be to change interest expense by approximately $2.1 million.

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