18 unchanged sentences
• We are exposed to the credit risks and certain other risks of our key customers and other contractual counterparties, including Delek Holdings, and any material nonpayment or nonperformance by our key customers or other counterparties could adversely affect our business.
−Removed: • Restrictions in our revolving credit facility and in the indenture governing the 2025 Notes could adversely affect our business, financial condition, results of operations and ability to make quarterly cash distributions to our unitholders.
+Added: • Restrictions in our revolving credit facility and in the respective indentures governing the 2025 and 2028 Notes could adversely affect our business, financial condition, results of operations and ability to make quarterly cash distributions to our unitholders.
• Our debt levels may limit our flexibility to obtain financing and to pursue other business opportunities.
8 unchanged sentences
• Holders of our common limited partner units have limited voting rights and are not entitled to elect our general partner or its directors.
−Removed: • Our Partnership Agreement restricts the voting rights of unitholders owning 20% or more of our common limited partner units.
+Added: • Our Partnership Agreement restricts the voting rights of certain unitholders owning 20% or more of our common limited partner units.
• The NYSE does not require a publicly traded limited partnership like us to comply with certain of its corporate governance requirements.
2 unchanged sentences
• As a result of investing in our common limited partner units, our unitholders may be subject to state and local taxes and return filing requirements in jurisdictions where we operate or own or acquire properties.
−Removed: • The ongoing COVID-19 Pandemic and certain developments in the global oil market have had, and may continue to have, an adverse impact on our business, our future results of operations and our overall financial performance.
+Added: • The COVID-19 Pandemic, any related subsequent waves of the COVID-19 Pandemic or an additional regional or global disease outbreak, and certain developments in the global oil markets have had, may continue to have, or may have an adverse impact on our business, our future results of operations and our overall financial performance.
Risks Relating to Our Business
1 unchanged sentence
Delek Holdings, directly or indirectly, accounted for approximately 86%, 89% and 87% of our contribution margin for the years ended December 31, 2021, 2020 and 2019, respectively, and is the only customer for a substantial majority of our assets, including but not limited to our assets used to support the Tyler Refinery and the majority of our terminalling assets.
−Removed: In addition, Delek Holdings is, effectively, through supply and offtake agreements with its assignee, the principal customer for our Big Spring Logistics Assets used to support the Big Spring Refinery and our Lion Pipeline System, the Gathering Assets, our El Dorado, Memphis and North Little Rock terminals.
+Added: In addition, Delek Holdings is, effectively, through supply and offtake agreements with its assignee, the principal customer for our Big Spring Logistics Assets used to support the Big Spring Refinery and our Lion Pipeline System, the Gathering Assets, and our El Dorado, Memphis and North Little Rock terminals.
Please see Items 1 and 2.
26 unchanged sentences
See “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.”
−Removed: The current COVID-19 Pandemic, any related “subsequent waves” of the COVID-19 Pandemic or an additional regional or global disease outbreak, and certain developments in the global oil markets have had, may continue to have, or may have an adverse impact on our business, our future results of operations and our overall financial performance.
−Removed: The COVID-19 outbreak and its development into a pandemic in March 2020 (the “COVID-19 Pandemic” or the “Pandemic”) could materially adversely affect our business and operations beyond 2020.
−Removed: In early 2020, global health care systems and economies began to experience strain from the spread of the COVID-19 coronavirus.
−Removed: As the virus spread, global economic activity began to slow and future economic activity was forecast to slow with a resulting forecast of a decline in oil and gas demand.
−Removed: The global COVID-19 Pandemic has resulted in a dramatic reduction in airline flights and has reduced the number of vehicles on the road.
−Removed: Governmental actions in response to the COVID-19 Pandemic have resulted in significant business and economic disruptions in the markets we serve, including business closures, supply chain disruptions, travel restrictions, stay-at-home orders, and limitations on the availability and effectiveness of the workforce.
−Removed: These impacts have negatively impacted and will likely continue to negatively impact worldwide economic and commercial activity, financial markets, and demand for and prices of oil and gas products for the foreseeable future.
−Removed: These impacts may also precipitate a prolonged economic slowdown and recession.
−Removed: In response to the decline in demand, OPEC participating countries have agreed to adjust downwards their overall production of crude oil through April 30, 2022, with the agreement to be reassessed in December 2021.
−Removed: However, uncertainty about the duration of the COVID-19 Pandemic and its effect on economic activity has continued to place downward pressure on commodity prices.
+Added: The COVID-19 Pandemic, any related subsequent waves of the COVID-19 Pandemic or an additional regional or global disease outbreak, and certain developments in the global oil markets have had, may continue to have, or may have an adverse impact on our business, our future results of operations and our overall financial performance.
+Added: The COVID-19 Pandemic and spread of new variants of the virus could materially adversely affect our business and operations for the foreseeable future.
+Added: The COVID-19 Pandemic has significantly destabilized beyond and will likely continue to impact worldwide economic and commercial activity, financial markets, and the demand for and prices of oil and gas products for the foreseeable future.
+Added: In particular, there remains considerable tension in the OPEC-Russia relationship, uncertainty in the global oil markets, substantial global supply chain issues, and significant disruptions in the labor market.
+Added: These impact of the COVID-19 Pandemic may precipitate a prolonged economic slowdown and recession.
Global economic growth drives demand for energy from all sources, including fossil fuels.
1 unchanged sentence
and global economies experience weakness, demand for energy may decline.
−Removed: Similarly, should growth in global energy production outstrip demand, excess supplies may arise.
+Added: Should growth in global energy production outstrip demand, excess supplies may arise.
Declines in demand and excess supplies may result in accompanying declines in commodity prices and deterioration of our financial position along with our ability to operate profitably and our ability to obtain financing to support operations.
+Added: Conversely, should demand for energy outstrip global supply, commodity prices are likely to rise.
With respect to our business, we have experienced periodic declines in demand thought to be associated with slowing economic growth in certain markets, including the effects of the COVID-19 Pandemic, coupled with new oil and gas supplies coming on line and other circumstances beyond our control that resulted in oil and gas supply exceeding global demand which, in turn, resulted in steep declines in prices of oil and natural gas.
−Removed: There can be no assurance as to how long the current price decline will persist or that a recurrence of price weakness will not arise in the future.
+Added: At times, we have also experienced declines in the supply of inputs thought to be associated with supply chain issues and disruptions in the labor market arising from the effects of the COVID-19 Pandemic.
+Added: There can be no assurance as to how long the current uncertainty will persist or that a recurrence of price weakness will not arise in the future.
The COVID-19 Pandemic has resulted in modifications to our business practices, including limiting employee and contractor presence at certain work locations, limiting travel, and reducing capital expenditures.
−Removed: We may take further actions as required by government authorities or that we determine are in the best interests of our employees, contractors, customers, suppliers and communities.
−Removed: However, there is no assurance that such measures will be sufficient to mitigate the risks posed by the virus, and our ability to successfully execute
−Removed: our business operations could be adversely impacted.
−Removed: In addition, while we have had no COVID-related impairments to date, the continued effects of the COVID-19 Pandemic could result in impairments of long-lived or indefinite-lived assets, including goodwill, at some point in the future.
+Added: We may take further actions as required by government authorities or that we determine are in the best interests of our contractors, customers, suppliers and communities.
+Added: However, there is no assurance that such measures will be sufficient to mitigate the risks posed by the virus, and our ability to successfully execute our business operations could be adversely impacted.
+Added: In addition, while we have not recorded any goodwill impairment to date, the continued effects of the COVID-19 Pandemic could result in impairments of long-lived or indefinite-lived assets, including goodwill, at some point in the future.
Such impairment charges could be material.
−Removed: Also, our relationship with Delek Holdings subjects us to the risk that the COVID-19 Pandemic may impact the financial condition, financial results or cash flows of Delek Holdings, may adversely affect us and our business and, therefore, our ability to sustain or increase cash distributions to our unitholders.
−Removed: The full impact of the ongoing COVID-19 Pandemic is unknown and is rapidly evolving.
−Removed: It is difficult to predict how significant the impact of the COVID-19 Pandemic, “subsequent waves” of the COVID-19 Pandemic, or an additional regional or global disease outbreak, including any responses to such events, will be on the United States and global economies and our business or for how long disruptions are likely to continue.
+Added: The full impact of the ongoing COVID-19 Pandemic is unknown and continues to rapidly evolve.
+Added: It is difficult to predict how significant the impact of the COVID-19 Pandemic, any related subsequent waves of the COVID-19 Pandemic, an additional regional or global disease outbreak, and any responses to such events, will be on the U.S.
+Added: and global economies and our business or for how long disruptions are likely to continue.
The extent of such impact will depend on future developments and factors outside of our control, including new information which may emerge concerning the severity or duration of the COVID-19 Pandemic, the evolving governmental and private sector actions to contain the pandemic or treat its health, economic, and other impacts, and the timing and effectiveness of the ongoing rollout of currently available vaccines.
−Removed: The ultimate extent of the impact of the volatile conditions in the oil and gas industry on our business, financial condition, results of operation and liquidity will also depend largely on future developments, including the extent and duration of any price reductions, any additional decisions by OPEC and the lack of resolution of disputes between the members of OPEC+.
−Removed: To the extent the COVID-19 Pandemic and the developments in the global oil markets adversely affects our or Delek Holdings' business, financial condition, results of operation and liquidity, they may also impact our ability to sustain or increase quarterly distributions to our common unitholders or have the effect of heightening many of the other risks described in this “Risk Factors” section of this Annual Report on Form 10-K.
+Added: The ultimate extent of the impact of the volatile conditions in the oil and gas industry on our business, financial condition, results of operation and liquidity will also depend largely on future developments, including the extent and duration of any price reductions, any additional decisions by OPEC and disputes between the members of OPEC+.
+Added: To the extent COVID-19 and the developments in the global oil markets adversely affects our business, financial condition, results of operation and liquidity, they may also have the effect of heightening many of the other risks described below.
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.
15 unchanged sentences
In addition, Delek Holdings’ refining operations, on which our operations are substantially dependent and over which we have no control, are subject to these and other operational hazards and risks inherent in refining crude oil.
−Removed: A significant accident or event, such as described above at Delek Holdings’ facilities, could damage or destroy our assets, expose us to significant liability and could affect Delek Holdings’ ability and/or obligation to satisfy the minimum volume commitments under our commercial agreements with Delek Holdings, any of which could have a material adverse effect on our business, financial condition and results of operations.
+Added: A significant accident or event, such as described above at Delek Holdings’ facilities, could damage or destroy our assets, expose us to significant liability and affect Delek Holdings’ ability and/or obligation to satisfy the minimum volume commitments under our commercial agreements with Delek Holdings, any of which could have a material adverse effect on our business, financial condition and results of operations.
Further, significant portions of our pipeline systems, including our gathering system, and storage and terminalling facilities have been in service for many decades, which could enhance the risks and operational hazards discussed above.
29 unchanged sentences
Our assets and operations involve the transportation and storage of crude oil and products, which are subject to increasingly stringent and extensive federal, state and local laws and regulations related to the discharge and remediation of materials in the environment, greenhouse gas emissions, waste management, species and habitat preservation, pollution prevention, pipeline integrity and other safety-related regulations, and characteristics and composition of fuels.
−Removed: These laws and regulations require us to comply with various safety
−Removed: requirements regarding the design, installation, testing, construction and operational management of certain of our assets.
+Added: These laws and regulations require us to comply with various safety requirements regarding the design, installation, testing, construction and operational management of certain of our assets.
These requirements have raised operating costs, and compliance with such laws and regulations may cause us to incur potentially material capital expenditures associated with the construction, maintenance and upgrading of equipment and facilities.
10 unchanged sentences
Our failure to comply with these, or any other environmental, pipeline integrity or safety-related laws or regulations, could result in the assessment of administrative, civil or criminal penalties, the imposition of investigatory and remedial liabilities and the issuance of injunctions that may subject us to additional operational constraints.
−Removed: In addition, we could incur potentially significant additional expenses should we determine that any of our assets are not in compliance with such laws or regulations in order to bring our assets into compliance.
+Added: In addition, we could incur potentially significant additional expenses should we determine that any of our assets are not in compliance with such laws or
+Added: regulations in order to bring our assets into compliance.
Any such expenses, penalties or liabilities could have a material adverse effect on our business, financial condition or results of operations.
While we are entitled to reimbursement or indemnification from Delek Holdings for certain environmental liabilities under the Omnibus Agreement, such reimbursement or indemnification may not fully cover any damages we may incur, or Delek Holdings may default on or otherwise fail to satisfy its obligations to us, which could have a material adverse effect on our business, financial condition or results of operations.
−Removed: Further, certain of our pipeline facilities are subject to the pipeline safety regulations of PHMSA at the DOT.
−Removed: PHMSA regulates the design, construction, testing, operation, maintenance, reporting and emergency response of crude oil, petroleum products and other hazardous liquid pipeline facilities.
−Removed: PHMSA has adopted regulations requiring pipeline operators to develop integrity management programs for hazardous liquids pipelines located where a leak or rupture could affect “high consequence areas” that are populated or environmentally sensitive areas, although recent rulemaking is extending certain requirements beyond high consequence areas.
−Removed: PHMSA has also issued regulations that subject certain rural low-stress hazardous liquids pipelines to the integrity management requirements.
+Added: Further, certain of our pipeline facilities are subject to the pipeline safety regulations of the PHMSA.
+Added: The PHMSA regulates the design, construction, testing, operation, maintenance, reporting and emergency response of crude oil, petroleum products and other hazardous liquid pipeline facilities.
+Added: The PHMSA has adopted regulations requiring pipeline operators to develop integrity management programs for hazardous liquids pipelines located where a leak or rupture could affect “high consequence areas” that are populated or environmentally sensitive areas, although recent rulemaking is extending certain requirements beyond high consequence areas.
+Added: The PHMSA has also issued regulations that subject certain rural low-stress hazardous liquids pipelines to the integrity management requirements.
The integrity management regulations require operators, including us, to:
4 unchanged sentences
• implement preventive and mitigating actions.
−Removed: PHMSA also carries out the Pipeline Safety, Regulatory Certainty and Job Creation Act of 2011 (the "2011 Pipeline Safety Act"), which increased penalties for safety violations, established additional safety requirements for newly constructed pipelines, imposed new emergency response and incident notification requirements and required studies of certain safety issues that could result in the adoption of new regulatory requirements for existing pipelines.
−Removed: The Protecting our Infrastructure of Pipelines and Enhancing Safety Act (the "PIPES Act") was finalized in 2016, reauthorizing PHMSA’s pipeline safety programs through 2019 and directing PHMSA to complete unfinished mandates of the 2011 Pipeline Safety Act.
+Added: The PHMSA also carries out the Pipeline Safety, Regulatory Certainty and Job Creation Act of 2011 (the "2011 Pipeline Safety Act"), which increased penalties for safety violations, established additional safety requirements for newly constructed pipelines, imposed new emergency response and incident notification requirements and required studies of certain safety issues that could result in the adoption of new regulatory requirements for existing pipelines.
+Added: The Protecting our Infrastructure of Pipelines and Enhancing Safety Act (the "PIPES Act") was finalized in 2016, reauthorizing the PHMSA’s pipeline safety programs through 2019 and directing PHMSA to complete unfinished mandates of the 2011 Pipeline Safety Act.
The PIPES Act of 2020 was enacted on December 27, 2020 and reauthorizes the U.S.
1 unchanged sentence
We may incur significant costs and liabilities associated with compliance with pipeline safety regulations, and any corresponding repair, remediation, preventive or mitigation measures required for our non-exempt pipeline facilities, including lost cash flows resulting from shutting down our pipelines during the pendency of such repairs.
−Removed: Moreover, changes to pipeline safety laws and regulations that result in
−Removed: more stringent or costly pipeline integrity management or safety standards could have a material adverse effect on us and similarly situated operators.
+Added: 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.
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.
12 unchanged sentences
Our contract counterparties may suspend, reduce or terminate their obligations under our various commercial agreements in certain circumstances, including events of force majeure, which 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 unitholders.
−Removed: Our commercial agreements with Delek Holdings and third parties provide that the counterparty may, depending on the commercial agreement, suspend, reduce or terminate its obligations to us under the applicable agreement, including the requirement to pay the fees associated with the applicable minimum volume commitments, in the event of (i) a material breach of the agreement by us, (ii) in the case of Delek Holdings, Delek Holdings deciding to permanently or indefinitely suspend refining operations at one or more of its refineries, or (iii) the occurrence of certain force majeure events that would prevent us or the third party from performing our or its obligations under the applicable agreement.
+Added: Our commercial agreements with Delek Holdings and third parties provide that the counterparty may, depending on the commercial agreement, suspend, reduce or terminate its obligations to us under the applicable agreement, including the requirement to pay the fees associated with the applicable minimum volume commitments, in the event of (i) a material breach of the agreement by us, (ii) in the case of Delek Holdings, Delek
+Added: Holdings deciding to permanently or indefinitely suspend refining operations at one or more of its refineries, or (iii) the occurrence of certain force majeure events that would prevent us or the third party from performing our or its obligations under the applicable agreement.
Force majeure events may include any acts or occurrences that prevent services from being performed either by us or such third party under the applicable agreement, such as:
23 unchanged sentences
Any event that renders any Delek Holdings refinery temporarily or permanently unavailable could have a material adverse effect on our financial condition, results of operations, cash flows and ability to make distributions to our unitholders.
−Removed: Due to our lack of diversification in assets and geographic location, an adverse development in our businesses or areas of operations, including adverse developments due to catastrophic events, weather, regulatory action and decreases in demand for crude oil and refined products, could have a significantly greater impact on our results of operations and cash available for distribution to our common unitholders than if we maintained more diverse assets and locations.
+Added: Due to our lack of diversification in assets and geographic location, an adverse development in our businesses or areas of operations, including adverse developments due to catastrophic events, weather, regulatory action and decreases in demand for crude oil and refined products, could have a significantly greater impact on our results of operations and cash available for
+Added: distribution to our common unitholders than if we maintained more diverse assets and locations.
Such events may constitute force majeure events under our commercial agreements, potentially resulting in the suspension, reduction or termination of multiple commercial agreements in the affected geographic area.
9 unchanged sentences
Further, in order to maintain or increase production levels at Delek Holdings’ refineries, Delek Holdings must continually contract for new crude oil supplies or connect to alternative sources of crude oil.
−Removed: Adverse developments in major oil producing regions around the world
−Removed: could have a significant impact on our financial condition, results of operations and cash flows because of our lack of industry and geographic diversity and substantial reliance on Delek Holdings as a direct or indirect customer.
+Added: Adverse developments in major oil producing regions around the world could have a significant impact on our financial condition, results of operations and cash flows because of our lack of industry and geographic diversity and substantial reliance on Delek Holdings as a direct or indirect customer.
Accordingly, in addition to risks related to accessing, gathering, transporting and storing crude oil and refined products, we are disproportionately exposed to risks inherent in the broader oil and gas industry, including:
25 unchanged sentences
The maintenance of required margin accounts, and the settlement of derivative contracts, could cause us to suffer losses or limit gains.
−Removed: In particular, derivative transactions could expose us to the risk of financial loss upon unexpected or unusual variations in the sales prices of wholesale gasoline and diesel relative to the derivative instrument.
+Added: In particular, derivative transactions could expose us to the risk of financial loss upon unexpected or unusual variations in the sales price of wholesale gasoline and diesel relative to the derivative instrument.
We cannot assure you that the strategies underlying these transactions will be successful.
4 unchanged sentences
Our organic growth opportunities will be limited if Delek Holdings is unable to acquire new assets for which our execution of organic projects is needed.
−Removed: Additionally, if Delek Holdings
−Removed: focuses on other growth areas that our business does not serve, or does not make capital expenditures to fund the organic growth of its operations, we may not be able to fully execute our growth strategy.
+Added: Additionally, if Delek Holdings focuses on other growth areas that our business does not serve, or does not make capital expenditures to fund the organic growth of its operations, we may not be able to fully execute our growth strategy.
We may not be able to significantly increase or retain our third-party revenue due to competition and other factors, which could limit our ability to grow and may increase our dependence on Delek Holdings.
9 unchanged sentences
Additionally, labor expense may exceed our expectations.
−Removed: Moreover, pipeline construction projects requiring federal approvals are generally subject to environment review requirements under the National Environmental Policy Act and must also comply with other natural resources review requirements imposed pursuant to the Endangered Species Act, the National Historic Preservation Act and other federal and state laws and regulations.
+Added: Moreover, pipeline construction projects requiring federal approvals are generally subject to environment review requirements under the National Environmental Policy Act and must also comply with other natural resources review requirements imposed pursuant to the Endangered Species Act, the National Historic Preservation Act and other federal and state laws and regulations and potential permitting requirements.
Due to these or other factors beyond our control, we may be unable to complete these projects within anticipated cost parameters and timelines.
4 unchanged sentences
Our business depends on our continuing ability to recruit, train and retain highly qualified employees in all areas of our operations, including engineering, accounting, business operations, finance and other key back-office and mid-office personnel, or those of Delek Holdings that we rely upon.
−Removed: Furthermore, our operations require skilled and experienced employees with proficiency in multiple tasks.
+Added: Furthermore, our operations require skilled and
+Added: experienced employees with proficiency in multiple tasks.
The competition for these employees is intense, and the loss of these executives or employees could harm our business.
24 unchanged sentences
We could experience an interruption or reduction in the supply or delivery of refined products if our suppliers, the refineries who supply us or our suppliers, or the pipelines that deliver that product partially or completely ceased operations, temporarily or permanently, or ceased to supply us with refined products for any reason.
−Removed: The ability of these refineries and our suppliers to supply refined products to us could be disrupted by anticipated events, such as scheduled upgrades or maintenance, as well as events beyond their control, such as unscheduled maintenance, fires, floods, storms, explosions, power outages, accidents, acts of terrorism or other catastrophic events, labor difficulties and work stoppages, governmental or private party litigation, or legislation or regulation that adversely impacts refinery operations.
+Added: The ability of these refineries and our suppliers to supply refined products to us could be disrupted by anticipated events, such as scheduled upgrades or maintenance, as well as events beyond their control, such as unscheduled maintenance, the COVID-19 Pandemic, fires, floods, storms, explosions, power outages, accidents, acts of terrorism or other catastrophic events, labor difficulties and work stoppages, governmental or private party litigation, or legislation or regulation that adversely impacts refinery operations.
An interruption or reduction in the volume of refined products supplied to our wholesale business could adversely affect our sales and profitability.
1 unchanged sentence
We are subject to risks of loss resulting from nonpayment or nonperformance by our customers and other contractual counterparties.
−Removed: Any material nonpayment or nonperformance or default by our key customers or other contractual counterparties, including Delek Holdings or its assignees, could adversely affect our business, financial condition, results of operations and our ability to make distributions to our unitholders.
+Added: Any material nonpayment or nonperformance or default by our key customers or other contractual counterparties, including Delek Holdings or its
+Added: assignees, could adversely affect our business, financial condition, results of operations and our ability to make distributions to our unitholders.
Furthermore, some of our customers may be highly leveraged and subject to their own operating and regulatory risks.
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.
−Removed: Restrictions in our revolving credit facility and in the indenture governing the 2025 Notes could adversely affect our business, financial condition, results of operations and ability to make quarterly cash distributions to our unitholders.
−Removed: Our revolving credit facility and the indenture governing the 2025 Notes 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.
+Added: Restrictions in our revolving credit facility and in the respective indentures governing the 2025 Notes and 2028 Notes could adversely affect our business, financial condition, results of operations and ability to make quarterly cash distributions to our unitholders.
+Added: Our revolving credit facility and the respective indentures governing the 2025 Notes and 2028 Notes 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.
For example, our revolving credit facility limits our ability to, among other things:
9 unchanged sentences
In addition, our revolving credit facility contains events of default customary for agreements of this nature, including the occurrence of certain change of control events.
−Removed: Similarly, the indenture governing the 2025 Notes contains 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;
+Added: Similarly, the respective indentures governing the 2025 Notes and 2028 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;
1 unchanged sentence
(iv) make investments;
−Removed: (v) restrict distributions, loans or other asset transfers from our restricted subsidiaries;
+Added: (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;
1 unchanged sentence
and (viii) enter into transactions with affiliates.
−Removed: The provisions of our revolving credit facility and of the indenture governing the 2025 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.
−Removed: In addition, a failure to comply with the provisions of our revolving credit facility or the 2025 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.
+Added: The provisions of our revolving credit facility and of the respective indentures governing the 2025 Notes and 2028 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.
+Added: In addition, a failure to comply with the provisions of our revolving credit facility or the indentures governing the 2025 Notes and 2028 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.
Such event of default would also permit our lenders to foreclose on our assets serving as collateral for our obligations under the revolving credit facility.
If the payment of our debt is accelerated, our assets may be insufficient to repay such debt in full, and our unitholders could experience a partial or total loss of their investment.
−Removed: The revolving credit facility and the indenture governing the 2025 Notes also have cross-default provisions that would apply to certain other indebtedness we may have.
+Added: The revolving credit facility and the respective indentures governing the 2025 Notes and 2028 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.
1 unchanged sentence
We have the ability to incur additional debt;
−Removed: however, such ability is subject to limitations under our revolving credit facility and the indenture governing the 2025 Notes.
+Added: however, such ability is subject to limitations under our revolving credit facility and the respective indentures governing the 2025 Notes and 2028 Notes.
Our level of debt could have important consequences to us, including the following:
6 unchanged sentences
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.
−Removed: In addition, certain of our other contracts are eligible for fee increases tied to other inflationary indexes, which could adversely affect financial condition, results of operations, cash flows, ability to service our indebtedness and ability to make distributions to unitholders.
−Removed: Certain of our pipelines provide services that may be subject to regulation by the FERC and/or state regulators.
+Added: In addition, certain of our other contracts are eligible for fee increases tied to other inflationary indexes, which could adversely affect our financial condition, results of operations, cash flows, ability to service our indebtedness and ability to make distributions to unitholders.
+Added: Certain of our pipelines provide services subject to regulation by the FERC and/or state regulators.
The FERC uses prescribed rate methodologies for developing regulated tariff rates for interstate oil and product pipelines.
1 unchanged sentence
if the methodology changes, the new methodology may result in tariffs that generate lower revenues and cash flows.
−Removed: The indexing method allows a pipeline to increase its rates based on a percentage change in the producer price index for refined goods and is not based on pipeline-specific costs.
−Removed: If the index falls, we will be required to reduce our rates that are based on the FERC's price indexing methodology if they exceed the new maximum available rate.
+Added: The indexing method annually adjusts the maximum rate for a given transportation service based on a percentage change in the producer price index for refined goods and is not based on pipeline-specific costs.
+Added: If the index in a given year results in an increase in the applicable rate ceiling, pipelines are allowed to raise rate to the new ceiling.
+Added: If the index in a given year results in a decrease in the applicable rate ceiling, we will be required to reduce our rates that are based on the FERC's price indexing methodology if they exceed the new maximum available rate.
In addition, changes in the index might not be large enough to fully reflect actual increases in our costs.
2 unchanged sentences
We note that the FERC index has been set at a level for the period from 2021-2025 that is lower than that which was in effect from 2016-2021;
−Removed: this is likely to result in lower annual rate increases for the coming 2020-2021 period for our transportation and other rates that are subject to the FERC index for annual adjustments, compared to the previous five-year period, and indeed the index level for the 2016 index rate adjustment required a decrease in certain of our interstate transportation rates to comply with the reduced ceiling level.
+Added: this is likely to result in lower annual rate increases, where there are increases permitted, for the coming period for our transportation rates that are subject to the FERC index for annual adjustments, compared to the previous five-year period, and has in the past and may in the future require us to decrease our interstate transportation rates to comply with the reduced ceiling level.
Shippers may protest, and the FERC may investigate, the lawfulness of new or changed tariff rates.
5 unchanged sentences
A successful challenge of our rates could adversely affect our revenues.
−Removed: In addition, on December 15, 2016, the FERC issued a Notice of Inquiry Regarding the Commission’s Policy for Recovery of Income Tax Costs (the “NOI”).
−Removed: The FERC issued a final order on March 15, 2018 (Docket No.
+Added: In addition, the FERC issued a final order on March 15, 2018 (Docket No.
PL17-1-000) in which the FERC found that an impermissible double recovery results from granting a Master Limited Partnership pipeline, such as the Partnership, both an income tax allowance and a return on equity pursuant to the discounted cash flow methodology.
4 unchanged sentences
Whether a pipeline provides service in interstate commerce or intrastate commerce is highly fact-dependent and determined on a case-by-case basis.
−Removed: We cannot provide assurance that the FERC will not, at some point, assert that some or all of the transportation service we provide is within its jurisdiction.
+Added: We cannot provide assurance that the FERC will not, at some point, assert that some or all of the transportation service we provide that is not currently subject to our FERC tarrifs is within its jurisdiction.
If the FERC were successful with any such assertion, we may be required to pay refunds to customers and the FERC's rate-making methodologies may limit our ability to set rates based on our actual costs, delay the use of rates that reflect increased costs and subject us to potentially burdensome and expensive operational, reporting and other requirements.
5 unchanged sentences
In addition, regulation by the FERC may subject us to potentially burdensome and expensive operational, reporting and other requirements.
−Removed: We own pipeline assets in Texas, Arkansas and Louisiana.
+Added: We own pipeline assets in Texas, Arkansas, Louisiana and Oklahoma.
In Texas, a pipeline, with some exceptions, is required to operate as a common carrier and provide transportation without discrimination.
1 unchanged sentence
In Louisiana, all pipelines conveying petroleum from a point of origin within the state to a destination within the state are declared common carriers.
−Removed: The Louisiana Public Service Commission is empowered with the authority to establish reasonable rates and regulations for the transport of petroleum by a common carrier, mandating public tariffs and providing of transportation without discrimination.
+Added: T he Louisiana Public Service Commission is empowered with the authority to establish reasonable rates and regulations for the transport of petroleum by a common carrier, mandating public tariffs and providing of transportation without discrimination.
+Added: In Oklahoma, oil and gas companies engaged in transporting oil or gas by pipeline within the state operate as common carriers, and are not permitted to engage in unlawful discrimination.
State commissions have generally not been aggressive in regulating common carrier pipelines, have generally not investigated the rates or practices of petroleum pipelines in the absence of shipper complaints and generally resolve complaints informally.
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.
−Removed: The Federal Trade Commission, the FERC and the CFTC hold statutory authority to monitor certain segments of the physical and futures energy commodities markets.
+Added: 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.
These agencies have imposed broad regulations prohibiting fraud and manipulation of such markets.
26 unchanged sentences
Therefore, changes in interest rates, either positive or negative, may affect the yield requirements of investors who invest in our common units, and a rising interest rate environment could have an adverse impact on the price of our common units, our ability to issue equity or incur debt for acquisitions or other purposes and our ability to make cash distributions at our intended levels.
−Removed: Further, the London Interbank Offered Rate (“LIBOR”) and certain other interest rate "benchmarks" are the subject of recent proposals for reform.
−Removed: These reforms may cause such benchmarks to perform differently than in the past or have other consequences which cannot be predicted.
−Removed: The United Kingdom’s Financial Conduct Authority, which regulates LIBOR, has publicly announced that it intends to discontinue the reporting of certain LIBOR rates after 2021, with a complete cessation for all USD LIBOR rates after June 2023.
+Added: Further, the administrator for LIBOR ceased publishing one-week and two-month U.S.
+Added: dollar LIBOR at the end of 2021 and will cease publishing all remaining U.S.
+Added: dollar LIBOR tenors in mid-2023.
+Added: Concurrently, the United Kingdom’s Financial Conduct Authority announced the cessation or loss of representativeness of the U.S.
+Added: dollar LIBOR tenors from those dates.
+Added: Federal Reserve, in conjunction with the Alternative Reference Rates Committee, a steering committee comprised of, among other entities, large U.S.
+Added: financial institutions, has recommended replacing U.S.
+Added: dollar LIBOR with a new index, the Secured Overnight Financing Rate ("SOFR"), that measures the cost of borrowing cash overnight, backed by U.S.
+Added: Treasury securities.
+Added: SOFR is observed and backward-looking, which stands in contrast with LIBOR under the current methodology, which is an estimated forward-looking rate and relies, to some degree, on the expert judgement of submitting panel members.
+Added: We are evaluating the potential impact of the eventual replacement of the LIBOR benchmark interest rate, including the
+Added: possibility of SOFR as the dominant replacement.
Certain of our agreements use LIBOR as a “benchmark” or “reference rate” for various terms.
2 unchanged sentences
While we do not expect the transition to an alternative rate to have a significant impact on our business or operations, it is possible that the move away from LIBOR could materially impact our borrowing costs on our variable rate indebtedness.
−Removed: Fixed rate debt, such as the 2025 Notes, exposes us to changes in the fair value of our debt due to changes in market interest rates.
+Added: Fixed rate debt, such as the 2025 Notes and 2028 Notes, exposes us to changes in the fair value of our debt due to changes in market interest rates.
Fixed rate debt also exposes us to the risk that we may need to refinance maturing debt with new debt at higher rates.
5 unchanged sentences
In addition, our right of first offer may be terminated by Delek Holdings at any time in the event that it no longer controls our general partner.
−Removed: If we are unable to make investments in joint ventures or acquisitions on economically acceptable terms from Delek Holdings or third parties, our future growth could be limited, and any investments or acquisitions we may make may reduce, rather than increase, our financial condition, results of operations, cash flows, ability to service our indebtedness and ability to make distributions to unitholders.
+Added: 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.
A portion of our strategy to grow our business and increase distributions to unitholders is dependent on our ability to make acquisitions or invest in joint ventures that result in an increase in cash flow.
−Removed: If we are unable to make acquisitions from Delek Holdings or third parties or invest in joint ventures, because we are unable to identify attractive acquisition or project candidates or negotiate acceptable purchase contracts, we are unable to obtain financing for these acquisitions or investments on economically acceptable terms, we are outbid by competitors or we or the seller are unable to obtain any necessary consents, our future growth and ability to increase distributions to unitholders may be limited.
+Added: If we are unable to make acquisitions from Delek Holdings or third parties or invest in joint ventures, because we are unable to identify attractive acquisition or project candidates or negotiate acceptable purchase contracts, or if we are unable to obtain financing for these acquisitions or investments on economically acceptable terms, or if we are outbid by competitors or if we or the seller are unable to obtain any necessary consents, our future growth and ability to increase distributions to unitholders may be limited.
Furthermore, even if we do consummate acquisitions or investments in joint ventures that we believe will be accretive, they may in fact result in a decrease in cash flow.
9 unchanged sentences
If we consummate any future acquisitions or investments in joint ventures, our capitalization and results of operations may change significantly, and unitholders will not have the opportunity to evaluate the economic, financial and other relevant information that we will consider in determining the application of these funds and other resources.
−Removed: We may be unsuccessful in integrating the operations of the assets we have acquired or of any future acquisitions with our existing operations and in realizing all or any part of the anticipated benefits of any such acquisitions.
−Removed: From time to time, we evaluate and acquire assets and businesses that we believe complement our existing assets and businesses.
−Removed: Acquisitions may require substantial capital or the incurrence of substantial indebtedness.
−Removed: Our capitalization and results of operations may change significantly as a result of future acquisitions.
−Removed: Acquisitions and business expansions involve numerous risks, including difficulties in the assimilation of the assets and operations of the acquired businesses, inefficiencies and difficulties that arise because of improper assumptions regarding the new assets, unfamiliarity with new assets and the businesses associated with them and new geographic areas and the diversion of management’s attention from other business concerns.
−Removed: Further, unexpected costs and challenges may arise whenever businesses with different operations or management are combined, and we may experience unanticipated delays in realizing the benefits of an acquisition, if at all.
−Removed: Also, following an acquisition, we may discover previously unknown liabilities associated with the acquired business or assets for which we have limited or no recourse under applicable indemnification provisions.
−Removed: The expansion of existing assets and construction of new assets, including through joint venture investments, may not result in revenue increases and will be subject to regulatory, environmental, political, legal, economic and other risks, which could adversely affect financial condition, results of operations, cash flows, ability to service our indebtedness and ability to make distributions to unitholders.
+Added: The expansion of existing assets and construction of new assets, including through joint venture investments, may not result in revenue increases and will be subject to regulatory, environmental, political, legal, economic and other risks, which could adversely affect our financial condition, results of operations, cash flows, ability to service our indebtedness and ability to make distributions to unitholders.
A portion of our strategy to grow and increase distributions to unitholders is dependent on our ability to expand existing assets and to construct additional assets, including through investments in joint ventures.
−Removed: The construction of a new pipeline or terminal, or the
−Removed: expansion of an existing pipeline or terminal, involves numerous regulatory, environmental, political and legal uncertainties, most of which are beyond our control.
+Added: The construction of a new pipeline or terminal, or the expansion of an existing pipeline or terminal, involves numerous regulatory, environmental, political and legal uncertainties, most of which are beyond our control.
If we, or joint ventures we invest in, undertake these types of projects, they may not be completed on schedule, or at all, or at the budgeted cost.
3 unchanged sentences
In addition, we, or the joint ventures we invest in, may construct facilities to capture anticipated future growth in production in a region or gain access to crude supplies at lower costs, and such growth or access may not materialize.
−Removed: As a result, new facilities may not be able to attract enough throughput to achieve the expected return on investment, which could adversely affect our results of operations and financial condition and our ability to make distributions to our unitholders.
+Added: As a result, new facilities may not be able to attract enough throughput to
+Added: achieve the expected return on investment, which could adversely affect our results of operations and financial condition and our ability to make distributions to our unitholders.
We do not own all of the land on which most of our pipelines and several of our facilities are located, which could result in disruptions to our operations.
16 unchanged sentences
Additionally, various states and groups of states have adopted or are considering adopting legislation, regulations or other regulatory initiatives that are focused on such areas as GHG cap and trade programs, carbon taxes, reporting and tracking programs, and restriction of GHG emissions.
−Removed: At the international level, there is a non-binding agreement, the United Nations-sponsored “Paris Agreement,” for nations to limit their GHG emissions through individually-determined reduction goals every five years after 2020.
−Removed: The United States officially withdrew from the Paris Agreement on November 4, 2020.
−Removed: However, under the new administration, the United States re-joined the Paris Agreement in February 2021.
+Added: At the international level, in April 2016, the U.S.
+Added: became a signatory to the 2015 United Nations Conference on Climate Change, which led to the creation of the Paris Agreement.
+Added: After beginning the process to withdraw from participation in the Paris Agreement in 2017, in 2021 the U.S.
+Added: rejoined 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.
1 unchanged sentence
Separately, increased attention to climate change risks has increased the possibility of claims brought by public and private entities against oil and gas companies in connection with their GHG emissions.
−Removed: While courts have generally declined to assign direct liability for climate change to large sources of GHG emissions, new claims for damages and increased government scrutiny, especially from state and local governments, will likely
+Added: While courts have generally declined to assign direct liability for climate change to large sources of GHG emissions, new claims for damages and increased government scrutiny, especially from state and local governments, will likely continue.
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.
1 unchanged sentence
Institutional lenders who provide financing to fossil-fuel energy companies also have become more attentive to sustainable lending practices and some of them may elect not to provide funding for fossil fuel energy companies.
−Removed: Additionally, the lending practices of institutional lenders have been the subject of intensive lobbying efforts in recent years, oftentimes public in nature, by environmental activists, proponents of the international Paris Agreement, and foreign citizenry concerned about climate change not to provide funding for fossil fuel producers.
+Added: Additionally, the lending practices of institutional lenders have been the subject of intensive lobbying efforts in recent years, oftentimes public in nature, by environmental activists, proponents of the international Paris Agreement, and foreign citizenry concerned about climate change.
Limitation of investments in and financings for fossil fuel energy companies could result in the restriction, delay or cancellation of drilling programs or development or production activities.
9 unchanged sentences
In August 2016, the EPA and the NHTSA jointly finalized standards for medium- and heavy-duty vehicles regulating fuel efficiency and carbon pollution.
+Added: On 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.
Such increases in fuel economy standards and potential electrification of the vehicle fleet, along with mandated increases in use of renewable fuels discussed above, could result in decreasing demand for petroleum fuels.
11 unchanged sentences
These activities include increasing attention and demands for action related to climate change, promoting the use of substitutes to fossil fuel products, and encouraging the divestment of companies in the fossil fuel industry.
−Removed: These activities could reduce demand for our products, reduce our profits, increase the potential for investigations and litigation, impair our brand and have negative impacts on our common or limited partner unit price and access to capital markets.
+Added: These activities could reduce demand for our products, reduce our profits, increase the potential for investigations and litigation, impair our brand and have negative impacts on our common limited partner unit price and access to capital markets.
In addition, organizations that provide information to investors on corporate governance and related matters have developed ratings systems for evaluating companies on their approach to ESG matters.
1 unchanged sentence
Unfavorable ESG ratings may lead to increased negative investor sentiment toward us and our industry and to the diversion of investment to other industries, which could have a negative impact on our stock price and our access to and costs of capital.
−Removed: A terrorist attack or other acts of sabotage on our assets, or threats of war or actual war, may hinder or prevent us from conducting our business.
−Removed: Terrorist attacks or other acts of sabotage (including cyber-attacks) in the United States, as well as events occurring in response to or in connection with them, including political instability in various energy-producing countries, may harm our business.
−Removed: Energy-related assets (which could include refineries and pipelines and terminals such as ours) may be at greater risk of future attacks than other possible targets in the United States.
+Added: Acts of terror or sabotage, threats of war, armed conflict or war may hinder or prevent us from conducting our business.
+Added: Acts of sabotage or terrorist attacks (including cyber-attacks) in the U.S., as well as events occurring in response to or in connection with them, including political instability in significant oil producing regions such as the Middle East, Africa, the former Soviet Union and South America, may harm our business.
+Added: Energy-related assets (which could include refineries, pipelines and terminals) may be at greater risk of future terrorist attacks than other possible targets in the U.S.
In addition, the State of Israel, where Delek Holdings Group, the former parent company of Delek Holdings, is based, has suffered armed conflicts and political instability in recent years.
We may be more susceptible to a direct attack as a result of our connection to Israel.
−Removed: A direct attack on our assets, Delek Holdings’ assets or the assets of others used by us could have a material adverse effect on our business, financial condition and results of operations.
−Removed: In addition, any terrorist attack or continued political instability in the various energy-producing countries could have an adverse impact on energy prices, including prices for crude oil, other feedstocks and refined petroleum products, and an adverse impact on the margins from our refining and petroleum product marketing operations.
−Removed: Disruption or significant increases in energy prices could also result in government-imposed price controls.
+Added: 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.
+Added: 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.
+Added: In addition, any terrorist attack, armed conflict, war or political
+Added: instability in the significant oil producing regions such as the Middle East, Africa, the former Soviet Union and South America could have an adverse impact on energy prices, including prices for crude oil, other feedstocks and refined petroleum products, and an adverse impact on the margins from our petroleum product marketing operations.
+Added: The long-term impacts of terrorist attacks and the threat of future terrorist on the energy transportation terrorist attacks or vandalism could result in increased costs to our business.
+Added: In addition, disruption or significant increases in energy prices could result in government-imposed price controls.
+Added: Any one of, or a combination of, these occurrences could have a material adverse effect on our business, financial condition and results of operations.
Further, changes in the insurance markets attributable to terrorist attacks or acts of sabotage could make certain types of insurance more difficult for us to obtain.
4 unchanged sentences
The volume and throughput of crude oil and refined products transported through our pipelines and sold through our terminals and to third parties is directly affected by the level of supply and demand for all of such products in the markets served directly or indirectly by our assets.
−Removed: Supply and demand for such products fluctuate during the calendar year.
+Added: Supply and demand for such products fluctuates during the calendar year.
Demand for gasoline, for example, is generally higher during the summer months than during the winter months due to seasonal increases in motor vehicle traffic and demand for asphalt products, which is a substantial product of Delek Holdings' El Dorado Refinery, is lower in the winter months.
1 unchanged sentence
Accordingly, these factors can affect the need for crude oil or refined products by our customers, and therefore limit our volumes or throughput during these periods, and could adversely affect our customers’ business, financial condition and results of operations, which may adversely affect our business, financial condition and results of operations.
−Removed: Regulations adopted by the Commodity Futures Trading Commission could have an adverse effect on our ability to use derivative instruments to reduce the effect of commodity price, interest rate and other risks associated with our business.
−Removed: Congress has adopted the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”), which is comprehensive financial reform legislation that, among other things, establishes new federal oversight and regulation of over-the-counter derivatives and many of the entities that participate in that market.
−Removed: The Dodd-Frank Act was enacted in 2010, and the Commodity Futures Trading Commission (“CFTC”), and the SEC, along with certain other regulators, have promulgated final rules to implement many of the Dodd-Frank Act’s provisions relating to over-the-counter derivatives.
−Removed: Most of these rules have been finalized, while others have not;
−Removed: as a result, the final form and timing of the implementation of certain parts of the regulatory regime affecting commodity derivatives remains uncertain.
−Removed: Among other consequences of the new regulations, entities that enter into derivatives (including futures and exchange-traded and over-the-counter swaps) are expected to be subject to aggregate position limits for certain futures, options and swaps (under regulations adopted October 15, 2020 and regulations re-proposed in December 2016 that have not been finalized to date and the ultimate form, timing and implementation of which remains uncertain), and are currently subject to recordkeeping and reporting requirements.
−Removed: There can be no assurance that, when fully implemented, this regulatory regime will not have a material adverse effect on our ability to hedge our exposure to commodity prices, interest rates and other risks to the extent that we use derivatives to do so.
+Added: Legislative and regulatory measures could have an adverse effect on our ability to use derivative instruments to reduce the effect of commodity price, interest rate and other risks associated with our business.
+Added: Provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act and certain rules and regulations promulgated by the CFTC, the SEC, and other governmental bodies may have a material adverse effect on our ability to hedge our exposure to commodity prices, interest rates and other risks to the extent that we use derivatives to do so.
We rely on information technology in our operations, and any material failure, inadequacy, interruption, cyber-attack or security failure of that technology could harm our business.
−Removed: We rely on information technology systems across our operations, including management of our supply chain, point of sale processing at our retail sites and various other processes and transactions.
−Removed: Disruption, failure or cyber security events affecting or targeting our computer, telecommunications systems, and infrastructure may materially impact our business and operations.
−Removed: We utilize information technology systems and controls that monitor the movement of petroleum products through our pipelines and terminals.
−Removed: An undetected failure of these systems because of power loss, unsuccessful transition to upgraded or replacement systems, unauthorized access, ransomware attacks or other cyber breach could result in disruption to our business operations, access, disclosure or loss of data and/or proprietary information, injury to people and environmental damage, which could have an adverse impact on our business, reputation and competitiveness.
−Removed: We could also be subject to resulting investigation and remediation costs as well as regulatory enforcement or private litigation and related costs, which could have an adverse impact on our cash flow and results of operations.
+Added: We rely on information technology across our operations, including in the monitoring of the movement of petroleum through our pipelines and terminals and of various other processes and transactions.
+Added: We utilize information technology systems and controls throughout our operations to capture accounting, technical and regulatory data for subsequent archiving, analysis and reporting.
+Added: Disruption, failure, or cyber security breaches affecting or targeting our computer and telecommunications, our infrastructure, or the infrastructure of our cloud-based IT service providers may materially impact our business and operations.
+Added: An undetected failure of these systems, because of power loss, unsuccessful transition to upgraded or replacement systems, unauthorized access or other cyber breach or attack could result in disruption to our business operations, access to or disclosure or loss of data and/or proprietary information, personal injuries and environmental damage, which could have an adverse effect on our business, reputation, and effectiveness.
+Added: We could also be subject to resulting investigation and remediation costs as well as regulatory enforcement of private litigation and related costs, which could have a material adverse impact on our cash flow and results of operations.
+Added: We rely on commercially available systems, software, tools and monitoring to provide security for processing, transmission and storage of confidential customer information, such as payment card and personal credit information.
+Added: The implementation of social distancing measures and other limitations on the workforce of our affiliates in response to the COVID-19 Pandemic have necessitated portions of the workforce of our affiliates switching to remote work arrangements.
+Added: The increase in companies and individuals working remotely has increased the frequency and scope of cyber-attacks and the risk of potential cybersecurity incidents, both deliberate attacks and unintentional events.
Despite our security measures, we experience attempts by external parties to penetrate and attack our networks and systems.
−Removed: Although such attempts to date have not resulted in any known material breaches, disruptions, or loss of business-critical information, our systems and procedures for protecting against such attacks and mitigating such risks may prove to be insufficient in the future and such attacks could have an adverse impact on our business and operations, including damage to our reputation and competitiveness, remediation costs, litigation or regulatory actions.
+Added: Although such attempts to date have not, to our knowledge, resulted in any material breaches, disruptions, or loss of business-critical information, our systems and procedures for protecting against such attacks and mitigating such risks may prove to be insufficient in the future and such attacks could have an adverse impact on our business and operations, including damage to our reputation and competitiveness, remediation costs, litigation or regulatory actions.
In addition, as technologies evolve, and cyber-attacks become more sophisticated, we may incur significant costs to upgrade or enhance our security measures to protect against such attacks and we may face difficulties in fully anticipating or implementing adequate preventive measures or mitigating potential harm.
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.
+Added: We may be adversely affected by the effects of inflation.
+Added: 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.
+Added: The existence of inflation in the economy has the potential to result in higher interest rates and capital costs, supply shortages, increased costs of labor, weakening exchange rates and other similar effects.
+Added: As a result of inflation, we have experienced and may continue to experience, cost increases.
+Added: Although we may take measures to mitigate the impact of this inflation, if these measures are not effective our business, financial condition, results of operations and liquidity could be materially adversely affected.
+Added: Even if such measures are effective, there could be a difference between the timing of when these beneficial actions impact our results of operations and when the cost inflation is incurred.
+Added: Our business could be adversely impacted as a result of Delek Holdings’ and our general partner’s failure to retain or attract key talent.
+Added: We are dependent on the services of Delek Holdings’ and our general partner’s employees.
+Added: Their failure to retain or attract key talent with specific capabilities could interfere with our ability to execute our business strategy, and could diminish our ability to execute and integrate strategic transactions.
+Added: As a result, our ability to remain competitive in our industry sector and/or to operate effectively could be adversely impacted.
+Added: Evolving employee preferences and values, inflationary pressures, shortages in the labor market, increased employee turnover, and changes in the availability of workers could make it more difficult for Delek Holdings and our general partner to retain or attract key talent and could increase their labor costs, which could have a material adverse effect on our liquidity, business, financial condition and results of operations.
+Added: Inflation, and other factors, could increase Delek Holdings’ and our general partner’s costs of providing employee benefits.
+Added: Their failure, or any perceived failure to provide such benefits, could impact our competitive position, which could in turn negatively affect our liquidity, business, financial condition and results of operations.
Risks Relating to Our Partnership Structure
60 unchanged sentences
Our Partnership Agreement requires that we distribute all of our available cash, which could limit our ability to grow and make acquisitions.
−Removed: We expect that we will distribute all of our available cash quarterly to our unitholders and, to the extent not otherwise reserved for, will rely primarily upon cash flows from operations, borrowings under our revolving credit facility and potential future issuances of debt and equity securities, to fund our acquisitions and expansion capital expenditures.
+Added: We expect that we will distribute all of our available cash quarterly to our unitholders and, to the extent not otherwise reserved for, will rely primarily upon cash flows from operations, borrowings under our revolving credit facility and potential future issuances of debt and equity
+Added: securities, to fund our acquisitions and expansion capital expenditures.
As a result, to the extent we are unable to finance growth, our cash distribution policy could significantly impair our ability to grow.
51 unchanged sentences
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.
−Removed: Delek Holdings holds 34,745,868 common limited partner units.
+Added: As of February 18, 2021, Delek Holdings held 34,452,148 common limited partner units.
In addition, we have agreed to provide Delek Holdings with certain registration rights on a portion of these units.
29 unchanged sentences
Our common limited partner units are listed on the New York Stock Exchange (the "NYSE").
−Removed: Because we are a publicly traded limited partnership, the NYSE does not require us to have, and we do not intend to have, a majority of independent directors on our general partner’s board of directors or to establish a compensation committee or a nominating and corporate governance committee.
−Removed: Accordingly, unitholders will not have the same protections afforded to certain corporations that are subject to all of the NYSE corporate governance requirements.
+Added: Because we are a publicly traded limited partnership, the NYSE does not require us to have a majority of independent directors on our general partner’s board of directors or to establish and maintain a compensation committee or a nominating and corporate governance committee.
+Added: Accordingly, unitholders may not have the same protections afforded to certain corporations that are subject to all of the NYSE corporate governance requirements.
Tax Risks to Common Unitholders
2 unchanged sentences
From time to time, members of the U.S.
−Removed: Congress propose and consider substantive changes to the existing federal income tax laws that affect publicly traded partnerships, such as with the "Clean Energy for America Act", introduced on May 2, 2019, which is similar to legislation that was commonly proposed during the Obama Administration.
−Removed: If successful, such a proposal could eliminate the qualifying income exception to the treatment of all publicly traded partnerships as corporations upon which we rely for our treatment as a partnership for federal income tax purposes.
+Added: Congress propose and consider substantive changes to the existing federal income tax laws that affect publicly traded partnerships, such as with the "Clean Energy for America Act", which is similar to legislation that was commonly proposed during the Obama Administration.
+Added: If successful, such a proposal could eliminate the qualifying income exception to the treatment of publicly traded partnerships as corporations upon which we rely for our treatment as a partnership for federal income tax purposes.
We are unable to predict whether any changes or proposals will ultimately be enacted, but it is possible that a change in law could affect us and may, if enacted, be applied retroactively.
13 unchanged sentences
Changes in current state law may subject us to additional entity-level taxation by individual states.
−Removed: Because of widespread state budget deficits and other reasons, several states are evaluating ways to subject partnerships to entity-level taxation through the imposition of state income, franchise and other forms of taxation.
+Added: Because of widespread state budget deficits and other reasons, several states are evaluating ways to subject partnerships to entity-level taxation through the imposition of state income or franchise taxes, and other forms of taxation.
Imposition of such additional tax on us by a state will reduce the cash available for distribution to our unitholders.
3 unchanged sentences
A unitholder’s allocable share of our taxable income will be taxable to it, which may require it to pay federal income taxes and, in some cases, state and local income taxes, even if it receives cash distributions from us that are less than the actual tax liability that results from that income or no cash distributions at all.
−Removed: A unitholder's share of our taxable income, and its relationship to any distributions we make, may be affected by a variety of factors, including our economic performance, which may be affected by numerous business, economic, regulatory, legislative, competitive and political uncertainties beyond our control, and certain transactions in which we might engage.
+Added: A unitholder's share of our taxable income, and its relationship to any distributions we make, may be affected by a variety of factors, including our economic performance and certain transactions in which we might engage, which may be affected by numerous business, economic, regulatory, legislative, competitive and political uncertainties beyond our control.
For example, we may engage in transactions that produce substantial taxable income allocations to some or all of our unitholders without a corresponding increase in cash distributions to our unitholders, such as a sale or exchange of assets, the proceeds of which are reinvested in our business or used to reduce our debt, or an actual or deemed satisfaction of our indebtedness for an amount less than the adjusted issue price of the debt.
A unitholder's ratio of its share of taxable income to the cash received by it may also be affected by changes in law.
−Removed: For instance, under the recently enacted tax
−Removed: reform law known as the Tax Cuts and Jobs Act (the "Tax Reform Act"), the net interest expense deductions of certain business entities, including us, are limited to 30% of such entity's "adjusted taxable income", which is generally taxable income with certain modifications.
+Added: For instance, under the recently enacted tax reform law known as the Tax Cuts and Jobs Act (the "Tax Reform Act"), the net interest expense deductions of certain business entities, including us, are limited to 30% of such entity's "adjusted taxable income", which is generally taxable income with certain modifications.
If the limit applies, a unitholder's taxable income allocations will be more (or its net loss allocations will be less) than would have been the case absent the limitation.
30 unchanged sentences
persons may also be subject to additional withholding under these rules to the extent a portion of a distribution is attributable to an amount in excess of our cumulative net income that has not previously been distributed.
−Removed: The Department of the Treasury and the IRS have determined that these withholding requirements should not apply to transfers of publicly traded interests in a publicly traded partnership (such as us) that occur prior to January 1, 2022.
If you are a tax-exempt entity or a non-U.S.
16 unchanged sentences
Pursuant to the Bipartisan Budget Act of 2015, if the IRS makes audit adjustments to our income tax returns for tax years beginning after 2017, it may collect any resulting taxes (including any applicable penalties and interest) directly from us.
−Removed: We will generally have the ability to shift any such tax liability to our general partner and our unitholders in accordance with their interests in us during the year under audit, but there can be no assurance that we will be able to do so (and will choose to do so) under all circumstances, or that we will be able to (or choose to) effect corresponding shifts in state income or similar tax liability resulting from the IRS adjustment in states in which we do business in the year under audit or in the adjustment year.
+Added: We will generally have the ability to shift any such tax liability to our general partner and our unitholders in accordance with their interests in us during the year under audit, but there can be no assurance that we will be able to do so (and will choose to do so) under all circumstances, or that we will be able to (or choose to) effect corresponding shifts in state income or similar tax liability resulting from the IRS adjustment in states in which we do business in the year under
+Added: audit or in the adjustment year.
If we make payments of taxes, penalties and interest resulting from audit adjustments, our cash available for distribution to our unitholders would be reduced, perhaps substantially.
11 unchanged sentences
Our methodology may be viewed as understating the value of our assets.
−Removed: In that case, there may be a shift of income, gain, loss and deduction between certain
−Removed: unitholders and our general partner, which may be unfavorable to such unitholders.
+Added: In that case, there may be a shift of income, gain, loss and deduction between certain unitholders and our general partner, which may be unfavorable to such unitholders.
Moreover, under our valuation methods, subsequent purchasers of common limited partner units may have a greater portion of their Code Section 743(b) adjustment allocated to our tangible assets and a lesser portion allocated to our intangible assets.
16 unchanged sentences
In general, we are entitled to a deduction for interest paid or accrued on indebtedness properly allocable to our trade or business during our taxable year.
−Removed: However, under the Tax Cuts and Jobs 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, and in the case of taxable years beginning before January 1, 2022, any deduction allowable for depreciation, amortization or depletion.
+Added: 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.
UNRESOLVED STAFF COMMENTS
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.