What changed in this filing

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Item 9A. Controls and Procedures

2022-02-25 compared with 2021-03-01 · 464 added, 443 removed, 1636 unchanged (36% of the section changed)

6 unchanged sentences

Our management is responsible for establishing and maintaining adequate internal control over financial reporting.

Controls and Procedures, and Other Information

financial reporting and the preparation of financial statements for external purposes in accordance with U.S.

Our internal control over financial reporting is a process that is designed under the supervision of our Chief Executive Officer and Chief Financial Officer, and implemented by the board of directors of our general partner, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S.

Our internal control over financial reporting includes those policies and procedures that:

Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets;

Controls and Procedures, and Other Information

Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S.

GAAP and that receipts and expenditures recorded by us are being made only in accordance with authorizations of our management and Board of Directors;

GAAP and that receipts and expenditures recorded by us are being made only in accordance with authorizations of our management and the board of directors of our general partner;

Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on our financial statements.

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Management's assessment included an evaluation of the design of our internal control over financial reporting and testing the operational effectiveness of our internal control over financial reporting.

Management reviewed the results of the assessment with the Audit Committee of the Board of Directors.

Management reviewed the results of the assessment with the Audit Committee of the board of directors of our general partner.

Based on its assessment and review with the Audit Committee, management concluded that, as of December 31, 2021, we maintained effective internal control over financial reporting.

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There have been no changes in our internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Exchange Act Rules 13a-15 or 15d-15 that occurred during the quarter ended December 31, 2021 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Although most of our corporate employees have shifted to a remote working environment due to the COVID-19 Pandemic, we have not experienced a material impact to our internal control over financial reporting.

Although most of the corporate employees seconded by Delek Holdings to work for the Partnership have shifted to a remote working environment due to the COVID-19 Pandemic, we have not experienced a material impact to our internal control over financial reporting.

We are continually monitoring and assessing the COVID-19 Pandemic to minimize the impact on the design and operating effectiveness of our internal controls.

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We are, however, required to have an audit committee of at least three members, and all of our audit committee members are required to meet the independence and experience tests established by the NYSE and the Exchange Act.

At the date of this report, the Board consists of the following nine members:

At the date of this report, the Board consists of the following eight members:

Ezra Uzi Yemin, Sherri A.

Brillon, Charles J.

Brown, III, Francis C.

D'Andrea, Eric D.

Brown, III, Eric D.

Gadd, Frederec Charles Green, Ron W.

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The Board has determined that each of Messrs.

Brown, D'Andrea, Gadd and Haddock and Mses.

Brown, Gadd and Haddock and Mses.

Brillon and Kelly qualifies as an independent director under applicable SEC rules and regulations and the rules of the NYSE.

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Based upon information requested from and provided by each director concerning his or her background, employment and affiliations, including commercial, industrial, banking, consulting, legal, accounting, charitable and familial relationships, the Board has determined that each of Messrs.

Brown, D'Andrea, Gadd and Haddock and Mses.

Brown, Gadd and Haddock and Mses.

Brillon and Kelly has no material relationship with Delek Holdings or us, either directly or as a partner, stockholder or officer of an organization that has a relationship with Delek Holdings or us, and each of them is therefore independent under the NYSE's listing standards and applicable SEC rules and regulations.

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We also utilize a significant number of Delek Holdings' employees to operate our business and provide us with general and administrative services.

Under the Omnibus Agreement, we pay Delek Holdings an annual fee, indexed for inflation, for Delek Holdings' provision of centralized corporate services, including executive management services of Delek Holdings employees who devote less than 50% of their time to our business, financial and administrative services, information technology services, legal services, health, safety and environmental services, human resource services,

Directors, Executive Officers, Corporate Governance, and Security Ownership

time to our business, financial and administrative services, information technology services, legal services, health, safety and environmental services, human resource services, and insurance administration.

and insurance administration.

In addition, we reimburse Delek Holdings for allocated expenses of personnel who devote 50% or more of their time performing services for our benefit.

2 unchanged sentences

Name Age Position With Delek Logistics GP, LLC

Ezra Uzi Yemin 52 Chairman of the Board of Directors, Chief Executive Officer and President

Brillon 61 Director and Member of Audit Committee

Brown, III 73 Director, Chairman of Conflicts Committee and Member of Audit and EHS Committees

D'Andrea 67 Director, Chairman of Audit Committee and Member of Conflicts and EHS Committees

Gadd 65 Director, Chairman of EHS Committee and Member of Audit and Conflicts Committees

Frederec Charles Green 55 Director

Haddock 80 Director and Member of EHS Committees

Kelly 48 Director and Member of Conflicts and EHS Committees

Ezra Uzi Yemin 53 Chair of the Board of Directors, Chief Executive Officer and President

Brillon 62 Chair of Audit Committee and Member of Technology and Governance and Compensation Committees

Brown, III 74 Director, Chair of Conflicts Committee and Member of Audit and Governance and Compensation Committees

Gadd 66 Director, Chair of EHS Committee and Member of EHS and Conflicts Committees

Frederec Charles Green 56 Director and Member of Technology Committee

Haddock 81 Director, Chair of Governance and Compensation Committee, and Member of EHS Committee

Kelly 49 Director, Chair of Technology Committee, and Member of Conflicts and EHS Committees

Reuven Spiegel 65 Director, Executive Vice President and Chief Financial Officer

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Odely Sakazi 38 Senior Vice President, Delek Logistics

Ezra Uzi Yemin has served as the Chief Executive Officer and the Chairman of the Board of our general partner since April 2012.

He has also served as the chairman of the board of directors of Delek Holdings since December 2012, its chief executive officer since June 2004 and its president and as a director since April 2001.

Ezra Uzi Yemin has served as the Chief Executive Officer and the Chair of the Board of our general partner since April 2012.

He has also served as the chair of the board of directors of Delek Holdings since December 2012, its chief executive officer since June 2004 and its president and as a director since April 2001.

He has been the President of our general partner since August 2019.

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The Board believes that, because he has worked for Delek Holdings since its founding, Mr.

Yemin brings to the Board a thorough and complete understanding of our business, operations and operating environment, as well as the business, operations and operating environment of Delek Holdings (the owner of approximately 80.0% of our units and the customer on whom the Partnership is most dependent).

Yemin brings to the Board a thorough and complete understanding of our business, operations and operating environment, as well as the business, operations and operating environment of Delek Holdings (the owner of over 79% of our units and the customer on whom the Partnership is most dependent).

Yemin also brings to the Board substantial leadership, planning and industry experience.

Brillon has served as a member of the Board of our general partner and as a member of the Audit Committee since January 2021.

Brillon has served as a member of the Board of our general partner and as a member of the Audit Committee since January 2021 and served as its Chair since January 2022.

Brillon has served as a member of the Technology and Governance and Compensation Committees since July 2021.

Starting in 2008, Ms.

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Brillon provides the Board with financial and strategic experience from her many years in the energy industry.

Brown, III has served as a member of the Board of our general partner since November 2012, as a member of the Audit Committee and Conflicts Committee (of which he is Chairman) since November 2012 and as a member of the Environmental, Health and Safety Committee (the "EHS Committee") since its inception in October 2016.

Brown, III has served as a member of the Board of our general partner since November 2012, as a member of the Audit Committee and Conflicts Committee (of which he is Chair) since November 2012 and as a member of the Governance and Compensation Committee since its inception in July 2021.

Brown previously served as a member of the Environmental, Health and Safety Committee (the "EHS Committee") since its inception in October 2016 to July 2021.

Brown is a licensed attorney with more than 30 years of experience in the energy industry.

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Brown was appointed to the Board because of his experience in the energy industry, and because, as an attorney, he provides the Board with valuable expertise in matters involving the financial, legal, regulatory and risk matters affecting the Partnership.

D'Andrea has served as a member of the Board of our general partner, as Chairman of the Audit Committee and as a member of the Conflicts Committee since August 2015.

He has also been a member of the EHS Committee since its inception in October 2016.

D’Andrea is a certified public accountant.

From 1979 through his retirement in 2012, Mr.

D’Andrea served in various roles with Deloitte & Touche LLP, culminating in the role of senior partner from 2011 through 2012, preceded by his role as managing partner from 2005 through 2011 of Deloitte’s Houston/New Orleans audit practice, and was involved in such capacities with several public companies,

Directors, Executive Officers, Corporate Governance, and Security Ownership

including sponsors of master limited partnerships.

D’Andrea was appointed to the Board of our general partner because the Board believes that his experience as a certified public accountant and partner with Deloitte & Touche LLP provides the Board with valuable experience in matters involving finance and accounting in general and master limited partnerships in particular.

Gadd has served as a member of the Board of our general partner since October 2013 and as Chairman of the EHS Committee since its inception in October 2016.

Gadd is currently principal director at Contanda LLC, which is a private company that operates bulk liquid terminals in North America.

He has also been a member of the Audit Committee and Conflicts Committee since October 2013.

Gadd has served as a member of the Board of our general partner since October 2013 and as Chair of the EHS Committee since its inception in October 2016.

He has also served as a member of the Conflicts Committee and Governance and Compensation Committee since October 2013 and July 2021, respectively, and previously served as a member of the Audit Committee since October 2013 to July 2021.

Gadd is the founder and president of the consulting firm Awelon LLC, which is focused on expanding business development opportunities for both public and private companies in the energy sector.

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Gadd was appointed to the Board because of his extensive energy industry experience.

Frederec Charles Green has served as a member of the Board of our general partner since April 2012.

Green previously served as Delek Holdings' chief operating officer from November 2016 to April 2020 and as an executive vice president from May 2009 until his departure in November 2020.

Green was the primary operational officer for Delek Holdings' refining operations from January 2005 to December 2016.

He served as an executive vice president and chief operating officer of Alon USA Partners GP, LLC from July 2017 until its acquisition by Delek Holdings in February 2018, its chief executive officer from August 2017 until its acquisition by Delek Holdings in February 2018, and a member of the board of directors of Alon USA Energy, Inc.

from May 2015 until its acquisition by Delek Holdings in July 2017.

Green has more than 25 years of experience in the refining industry, including 14 years at Murphy Oil USA, Inc.

MUR), where he served as a senior vice president during his last six years.

Directors, Executive Officers, Corporate Governance, and Security Ownership

Frederec Charles Green has served as a member of the Board of our general partner since April 2012 and has served as a member of our Technology Committee since July 2021.

Green served as an Executive Vice President of our general partner from May 2009 until November 2020.

Green also served in numerous executive roles at Delek Holdings from January 2005 through November 2002, including serving as the primary operational officer for Delek Holdings' refineries and as Executive Vice President and Chief Operating Officer from November 2016 until March 2020.

He also served on the board of directors of Alon Energy USA, Inc.

from May 2015 until July 2017, and served as the Chief Executive Officer of Alon USA Partners, LP from July 2017 until December 2017.

Green has 35 years of experience in the refining and midstream industries, including fourteen years at Murphy Oil USA, Inc.

where he served as a senior vice president during his last six years.

Green has experience in mergers and acquisitions as well as all aspects of managing a refining business, from crude oil and feedstock supply to product trading, transportation, and sales.

Green is currently an independent consultant serving clients in the midstream and downstream sectors, including Delek Holdings and the Partnership.

Green was appointed to the Board because of his extensive energy industry experience and his in-depth knowledge of our and Delek Holdings' businesses and operations.

Haddock has served as a member of the Board of our general partner and as a member of the Environmental, Health and Safety Committee since May 2018.

Haddock has served as a member of the Board of our general partner, as Chair of the Governance and Compensation Committee since July 2021, and as a member of the Environmental, Health and Safety Committee since May 2018.

Haddock has served as our Lead Independent Director since February 2021.

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Kelly has served as a member of the Board of our general partner and as a member of the Conflicts Committee and EHS Committee since July 29, 2020.

Kelly has served as the Chair of our Technology Committee since July 2021.

She has 25 years of oil and gas industry experience in both upstream and midstream sectors.

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Odely Sakazi has served as Senior Vice President, Delek Logistics since August 2019.

He previously served as our Vice President of Business Strategy and corporate development from November 2017 until August 2019, as Senior Director of Business Strategy from

Directors, Executive Officers, Corporate Governance, and Security Ownership

January 2017 until November 2017, as Director of Business Strategy from June 2016 until January 2016, and as Director of Corporate Operation from August 2015 until June 2016.

He previously served as our Vice President of Business Strategy and corporate development from November 2017 until August 2019, as Senior Director of Business Strategy from January 2017 until November 2017, as Director of Business Strategy from June 2016 until January 2016, and as Director of Corporate Operation from August 2015 until June 2016.

He formerly served in the Israeli Navy as an officer in various roles between 2010 and 2014.

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Yemin also brings to the Board and us the perspectives of our majority unitholder and the principal executive officer and chair of the board of a publicly traded company.

As such, the Board feels that combining the roles of Chair and CEO provides the Board with the individual who is most capable of effectively identifying strategic priorities and leading the discussion and execution of strategy and facilitating the information flow between management and the Board and its committees, which are essential to effective governance of the Partnership.

As such, the Board feels that combining the roles of Chair and CEO provides the Board with

Directors, Executive Officers, Corporate Governance, and Security Ownership

the individual who is most capable of effectively identifying strategic priorities and leading the discussion and execution of strategy and facilitating the information flow between management and the Board and its committees, which are essential to effective governance of the Partnership.

The Board met 27 times in the year ended December 31, 2021, with each director attending at least 75% of the aggregate of all meetings of the Board and committees on which he or she served during the year.

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The Board has a standing Audit Committee.

The Audit Committee consists of Messrs.

D'Andrea (chairman), Brown and Gadd and Ms.

D'Andrea joined the committee in August 2015.

The Audit Committee consists of Ms.

Brillon (chair) and Messrs.

Brown and Gadd.

Brown joined the committee at its inception in November 2012, Mr.

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Brillon joined the committee in January 2021.

The Audit Committee met nine times during the year ended December 31, 2020, either in person or telephonically, with each member attending at least 75% of all meetings of the Audit Committee.

Brillon was appointed as Chair of the Audit Committee following the resignation of Francis C.

D’Andrea, who previously served as Chair.

The Audit Committee met eight times during the year ended December 31, 2021, either in person or telephonically, with each member attending at least 75% of all meetings of the Audit Committee.

The Board has determined that (i) each of Messrs.

D'Andrea, Brown and Gadd and Ms.

Brillon qualifies as independent and as financially literate under applicable SEC rules and regulations and the rules of the NYSE, and (ii) Mr.

D'Andrea meets the definition of an “audit committee financial expert” within the meaning of Item 407(d)(5) of Regulation S-K.

Brown and Gadd and Ms.

Brillon qualifies as independent and as financially literate under applicable SEC rules and regulations and the rules of the NYSE, and (ii) Ms.

Brillon meets the definition of an “audit committee financial expert” within the meaning of Item 407(d)(5) of Regulation S-K.

The purpose of the Audit Committee is to provide assistance to the Board in the oversight of (a) the quality and integrity of our financial statements;

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and (f) our compliance with policies under our Code of Business Conduct & Ethics and legal and regulatory requirements.

These responsibilities are set forth in the Audit Committee’s charter, which is available on our corporate website at www.DelekLogistics.com.

Directors, Executive Officers, Corporate Governance, and Security Ownership

Conflicts Committee

The Conflicts Committee consists of Messrs.

Brown (chairman), D'Andrea and Gadd and Ms.

Brown (chair) and Gadd and Ms.

The Board has determined that each of Messrs.

Brown, D'Andrea and Gadd and Ms.

Brown, and Gadd and Ms.

Kelly qualifies as independent under applicable SEC rules and regulations and the rules of the NYSE.

Brown joined the committee at its inception in November 2012.

Gadd and D'Andrea joined the committee in October 2013 and August 2015, respectively.

Gadd joined the committee in October 2013.

Kelly joined the committee on July 29, 2020.

The Conflicts Committee met 19 times during the year ended December 31, 2020, either in person or telephonically, with each member attending at least 75% of all meetings of the Conflicts Committee.

The Conflicts Committee met 1 time during the year ended December 31, 2021, either in person or telephonically, with each member attending all meetings of the Conflicts Committee.

Our Partnership Agreement does not require that the Board seek approval from the Conflicts Committee to determine the resolution of any conflict of interest between us and Delek Holdings or any other person.

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In certain instances, the Related Party Transactions Policy effectively requires that certain related party transactions be submitted to the Conflicts Committee for review.

The members of the Conflicts Committee may not be officers or employees of our general partner or directors, officers or employees of its affiliates, may not hold an ownership interest in the general partner or its affiliates other than common units or awards under any long-term incentive plan, equity compensation plan or similar plan implemented by the general partner or the Partnership and must meet the independence and experience standards established by the NYSE and the SEC to serve on an audit committee of a board of directors.

The members of the Conflicts Committee may not be officers or

Directors, Executive Officers, Corporate Governance, and Security Ownership

employees of our general partner or directors, officers or employees of its affiliates, may not hold an ownership interest in the general partner or its affiliates other than common units or awards under any long-term incentive plan, equity compensation plan or similar plan implemented by the general partner or the Partnership and must meet the independence and experience standards established by the NYSE and the SEC to serve on an audit committee of a board of directors.

Any unitholder challenging any matter approved by the Conflicts Committee in accordance with the terms of our Partnership Agreement will have the burden of proving that the members of the Conflicts Committee did not act in good faith in accordance with the terms of our Partnership Agreement.

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The EHS Committee consists of Messrs.

Gadd (chairman), D'Andrea, Brown and Haddock and Ms.

Gadd, Brown and D'Andrea joined the committee at its inception in October 2016, Mr.

Gadd (chair), Brown and Haddock and Ms.

Gadd and Brown and joined the committee at its inception in October 2016, Mr.

Haddock joined the committee in May 2018, and Ms.

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The EHS Committee met four times in 2021, either in person or telephonically, with each member attending at least 75% of all meetings of the EHS Committee.

The purpose of the EHS Committee is to assist the Board in fulfilling certain of the Board’s oversight responsibilities by, among other things, overseeing management’s establishment and administration of the Company’s environmental, health and safety policies, programs, procedures and initiatives.

The purpose of the EHS Committee is to assist the Board in fulfilling certain of the Board’s oversight responsibilities by, among other things, overseeing management’s establishment and administration of the Partnership’s environmental, health and safety policies, programs, procedures and initiatives.

These responsibilities are set forth in the EHS Committee's charter, which is available on our corporate website at www.DelekLogistics.com.

Governance and Compensation Committee

In July 2021 the Board established the Governance and Compensation Committee of the Board.

The Governance and Compensation Committee consists of Messrs.

Haddock (chair), Brown, and Gadd and Ms.

The Governance and Compensation Committee met two times in 2021, either in person or telephonically, with each member attending at least 75% of all meetings of the Governance and Compensation Committee.

The purpose of the Governance and Compensation Committee is to (a) recommend to the Board director nominees for each Board committee;

(b) periodically review the corporate governance policies applicable to the Partnership (the “Governance Guidelines”) and recommend to the Board any changes deemed necessary or desirable;

(c) monitor, oversee and review compliance of the Governance Guidelines and all other applicable policies of the Partnership as the Governance and Compensation Committee or the Board deem necessary or desirable;

(d) support the Board and work with management to ensure that compensation practices properly reflect management and Partnership philosophy, competitive practice and regulatory requirements;

and (e) review, provide advice on and, where appropriate, approve the following items:

(1) executive and employee compensation objectives, plans, and levels;

(2) culture and employee engagement;

(3) diversity and inclusion;

(4) leadership and talent engagement;

and (5) executive succession planning.

These responsibilities are set forth in the Governance and Compensation Committee's charter, which is available on our corporate website at www.DelekLogistics.com.

Technology Committee

In July 2021 the Board established the Technology Committee of the Board.

The Technology Committee consists of Mses.

Kelly (chair) and Brillon and Mr.

The Technology Committee met two times in 2021, either in person or telephonically, with each member attending at least 75% of all meetings of the Technology Committee.

The purpose of the Technology Committee is to assist the Board in fulfilling certain of the Board’s oversight responsibilities by, among other things, overseeing management’s establishment and administration of the Partnership’s policies, programs, procedures and initiatives with respect to technology and information security.

Director Nominations and Corporate Governance

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Our general partner is a limited liability company and its directors are not elected by our unitholders, but by its members in their sole discretion.

Accordingly, the Board believes it is unnecessary to have a nominating and corporate governance committee or a committee performing the functions of such a committee.

However, in July 2021 the Board established the Governance and Compensation Committee of the Board, which, among other responsibilities, makes recommendations to the Board regarding changes to the size and composition of the committees of the Board and makes recommendation to the Board with respect to the structure of Board committees and nominees for appointment to committees of the Board.

Candidates to serve on the Board are reviewed and selected in accordance with our general partner's Governance Guidelines, which are available on our corporate website at www.DelekLogistics.com.

Compensation Decisions

Our general partner does not have a compensation committee.

Our general partner has decided that a compensation committee is not necessary at this time, primarily because neither our general partner nor the Partnership regularly provides compensation to the general partner's executive officers.

However, our Board believes it is important to promote the interests of the Partnership by providing to employees of the Partnership's affiliates and others who perform services for us or on our behalf, incentive compensation awards for their service.

In July 2021, the Board established the Governance and Compensation Committee of the Board, which, among other responsibilities, oversees director and executive officer compensation for the Partnership.

Additionally, our Board believes it is important to promote the interests of the Partnership by providing to employees of the Partnership's affiliates and others who perform services for us or on our behalf, incentive compensation awards for their service.

Accordingly, the general partner adopted the Delek Logistics GP, LLC 2012 Long-Term Incentive Plan (the "LTIP").

Due to the fact that several of the members of the Board perform services on our behalf in their roles as executive officers of Delek Holdings, the LTIP is administered by the Conflicts Committee with respect to those awards.

The disinterested members of the full Board may also grant awards and the Conflicts Committee may delegate, and has delegated in the past, to an executive officer of the general partner the authority to issue awards to non-Section 16 officers of the general partner.

Directors, Executive Officers, Corporate Governance, and Security Ownership

general partner.

A compensation consultant was not used in the formulation of our executive compensation framework, objectives and philosophy.

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Executive Compensation.

Directors, Executive Officers, Corporate Governance, and Security Ownership

Governance Guidelines, Code of Business Conduct & Ethics and Committee Charters

The Governance Guidelines of the Board of Directors of our general partner, the charter of the Audit Committee of our general partner and our Amended and Restated Code of Business Conduct & Ethics covering all employees, including our principal executive officer, principal financial officer, principal accounting officer and controllers, are available on our website, www.DelekLogistics.com under the "About Us - Corporate Governance" caption.

The Governance Guidelines of the Board of Directors of our general partner, the charters of the standing Board committees of our general partner and our Amended and Restated Code of Business Conduct & Ethics covering all employees, including our principal executive officer, principal financial officer, principal accounting officer and controllers, are available on our website, www.DelekLogistics.com under the "About Us - Corporate Governance" caption.

A copy of any of these documents will be mailed upon a request made to Investor Relations, Delek Logistics Partners, LP, or ir@deleklogistics.com.

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This CD&A provides context and background for the compensation earned and awarded to the individuals named in the Summary Compensation Table below.

Yemin, Spiegel and Ginzburg are referred to collectively herein as our "named executive officers" or "NEOs".

Yemin, Sakazi and Spiegel and Ms.

McWatters are referred to collectively herein as our "named executive officers" or "NEOs".

Overview - Compensation Decisions and Allocation of Compensation Expenses

Our general partner does not have a compensation committee.

Our general partner has determined that a compensation committee is not necessary at this time, primarily because our general partner's executive officers do not regularly receive material compensation from our general partner or the Partnership.

However, our Board believes it is important to promote the interests of the Partnership and the general partner by providing incentive compensation to employees of the Partnership's affiliates and others who perform services for us or on our behalf.

Accordingly, pursuant to our Partnership Agreement, the general partner is allowed to and has adopted the LTIP.

Due to the fact that several of the members of the Board perform services on our behalf in their roles as executive officers of Delek Holdings, the awards to these individuals under the LTIP a are administered by the Conflicts Committee.

The disinterested members of the Board may also grant awards and the Conflicts Committee may delegate, and has delegated in the past, to an executive officer of the general partner the authority to issue awards to non-Section 16 officers of the general partner.

Under the terms of the Omnibus Agreement, we pay an annual administrative fee of $4.6 million per year to Delek Holdings for the provision of general and administrative services.

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Additionally, the Omnibus Agreement requires us to reimburse Delek Holdings directly for a proportionate amount of the salary and employee benefits costs of Delek Holdings employees who devote more than 50% of their time to our business and affairs.

None of our NEOs devoted more than 50% of their total business time to our business and affairs in 2020.

Although our NEOs provide services to both Delek Holdings and us, no portion of the administrative fee is specifically allocated to services provided by our NEOs to us.

Instead, the administrative fee covers all centralized services provided to us by Delek Holdings, and we have not reimbursed Delek Holdings for the cost of such services.

None of our NEOs other than Mr.

Sakazi devoted more than 50% of their total business time to our business and affairs in 2021.

Although our NEOs provide services to both Delek Holdings and us, no portion of the administrative fee is specifically allocated to services provided by our NEOs to us except with respect to Mr.

Instead, the administrative fee covers all centralized services provided to us by our NEOs other than Mr.

Sakazi, and we have not reimbursed Delek Holdings for the cost of such services.

Except for awards under the LTIP, Delek Holdings has the ultimate decision-making authority with respect to the compensation of our NEOs.

While the Governance and Compensation Committee does not establish the compensation paid to our NEOs, it does monitor the compensation program applicable to our NEOs.

Additionally, our Board believes it is important to promote the interests of the Partnership and the general partner by providing incentive compensation to employees of the Partnership's affiliates and others who perform services for us or on our behalf.

Accordingly, pursuant to our Partnership Agreement, the general partner is allowed to and has adopted the LTIP.

Compensation Objectives and Philosophy

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Accordingly, our executive compensation program consists of a single element:

long-term incentives in the form of awards under the LTIP, which was adopted in connection with our initial public offering and is administered by the Conflicts Committee.

long-term incentives in the form of awards under the LTIP, which was adopted in

Directors, Executive Officers, Corporate Governance, and Security Ownership

connection with our initial public offering and is administered by the Conflicts Committee.

The Conflicts Committee’s decisions with respect to the amount of awards made under the LTIP to our NEOs are governed by the following objectives:

• to motivate and retain our general partner's key executives;

Directors, Executive Officers, Corporate Governance, and Security Ownership

• to align the long-term economic interests of our general partner's executives with those of our unitholders;

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Phantom units have been the sole form of award under the LTIP to date, and these awards are accompanied by distribution equivalent rights that provide for a lump sum amount paid in cash on the vesting date that is equal to the accrued distributions from the grant date of the phantom units through the vesting date.

No phantom units were granted to our executive officers in 2020.

In 2021 our executive officers received time-vesting phantom units under the LTIP.

Pursuant to the terms of the LTIP, upon the occurrence of an Exchange Transaction (as defined in the LTIP, and generally including a merger, consolidation, acquisition, reorganization or similar extraordinary transaction), the Board may, in its discretion, accelerate the vesting of the phantom units, adjust the terms of any outstanding phantom units, or, in the event of an Exchange Transaction in which our unitholders receive equity of another entity, provide for the conversion of the phantom units into comparable awards for such entity's equity.

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Compensation Consultants

Our general partner does not have a compensation committee, and its Board did not retain a compensation consultant with respect to compensation paid to our NEOs or to its non-employee directors in 2020.

The Governance and Compensation Committee of the Board did not retain a compensation consultant with respect to compensation paid to our NEOs or to its non-employee directors in 2021.

Our general partner does not provide any fringe benefits or perquisites to our NEOs.

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Compensation Committee Report

The members of the Conflicts Committee have reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K with management and, based on such review and discussions, the Conflicts Committee recommended to the Board of our general partner that the Compensation Discussion and Analysis be included in this Annual Report on Form 10-K.

The members of the Conflicts Committee have submitted this Compensation Committee Report to the Board of Directors as of March 1, 2021:

Brown, III (Chairman)

• Gennifer F.

The members of the Governance and Compensation Committee have reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K with management and, based on such review and discussions, the Governance and Compensation Committee recommended to the Board of our general partner that the Compensation Discussion and Analysis be included in this Annual Report on Form 10-K.

The members of the Governance and Compensation Committee have submitted this Governance and Compensation Committee Report to the Board of Directors as of February 25, 2022:

Haddock (Chair)

Directors, Executive Officers, Corporate Governance, and Security Ownership

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The Summary Compensation Table below summarizes the compensation for the fiscal year ended December 31, 2021 (and the two prior fiscal years) for our general partner's principal executive officer (Mr.

Yemin), current principal financial officer (Mr.

Spiegel) and former principal financial officer (Mr.

Yemin), principal financial officer (Mr.

Spiegel), Executive Vice President, General Counsel, and Secretary (Ms.

McWatters) and Senior Vice President (Mr.

Name and Principal Position (1)

Fiscal Year Salary ($) Bonus ($) Unit Awards ($) Option Awards ($) Other Compensation ($) Total ($)

Fiscal Year Salary ($) Bonus ($) Unit Awards ($) (2)

Option Awards ($) Other Compensation ($) (3)

Ezra Uzi Yemin,

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2019 — — — — — —

Assaf Ginzburg,

Former Chief Financial Officer 2020 — — — — — —

Denise McWatters,

General Counsel 2021 — — 133,323 — — 133,323

Odely Sakazi,

Senior Vice President 2021 294,231 — 246,645 — 4,370 545,246

2020 310,385 139,087 219,620 — 18,586 687,678

2019 235,754 142 59,982 — 18,230 314,108

(1) Because none of our executive officers received total compensation from us or our general partner in excess of $100,000 in 2020, information is presented only for Messrs.

Yemin, Spiegel and Ginzburg.

(1) As noted above, no compensation other than grants of service phantom units under our LTIP is reported for the NEOs except for Mr.

Sakazi, because none of our executive officers other than Mr.

Sakazi received compensation from us or our general partner in 2021.

(2) Amounts in this column represent the grant date fair value of DK PSUs, DK RSUs, with respect to Mr.

Sakazi, and DKL phantom units, with respect to all NEOs, granted under the 2016 Plan or the LTIP, as applicable.

The fair value of DK PSUs is calculated using a Monte-Carlo simulation model, which assumes a risk-free rate of interest of 2.42%, an expected term of 2.81 years and expected volatility of 39.67%.

Assumptions used in the calculation of these amounts for the 2021 fiscal year are included in footnote 20 to the audited financial statements of Delek Holdings for the 2021 fiscal year included in Delek Holdings’ Annual Report on Form 10-K filed with the SEC on or about February 25, 2022.

The fair value of DK RSUs and DKL phantom units is calculated using the closing price of Delek Holdings’ Common Stock and our common limited partner units, respectively, on the date of the grant.

(3) For fiscal year 2021, this amount includes matching contributions to the Partnership’s 401(k) Plan in the amount of $2,885 for Mr.

Sakazi and group term life insurance premiums of $486 for Mr.

Sakazi, this amount also includes reimbursement in the amount of $910 for phone expenses and $1,000 for HSA employer in 2021.

Grants of Plan Based Awards in 2021

In 2020, our NEOs were not granted plan-based equity awards.

The following table provides information regarding plan-based awards granted to our NEOs during fiscal year 2021:

Estimated Future Payouts Under Equity Incentive Plan Awards (#) (1)

All Other Stock Awards:

Number of Shares of Units (#) Grant Date Fair Value of Units and Option Awards (2)

Name Grant Date Threshold Target Maximum

Ezra Uzi Yemin 3/10/2021 29,029 (3)

Reuven Spiegel 3/10/2021 3,686 (3)

Denise McWatters 3/10/2021 3,225 (3)

Odely Sakazi 3/10/2021 2,681 (4)

3/10/2021 921 (3)

3/10/2021 2,011 4,022 8,044 146,682

(1) The amounts in this column reflect the threshold, target, and maximum shares to be issued upon the vesting of PSUs.

The PSUs granted to Mr.

Sakazi are subject to a performance period beginning January 1, 2021 and ending December 31, 2021.

(2) The amounts in this column reflect the aggregate grant date fair value computed in accordance with FASB ASC Topic 718 for financial statement reporting purposes over the expected term of the grant.

Assumptions used in the calculation of this amount for the 2021 fiscal year are included in footnote 13 to our audited financial statements for the 2021 fiscal year included in this Annual Report on Form 10-K.

Because the fair value of PSUs is calculated differently than the fair value of RSUs, the grant date fair values for PSUs and RSUs covering identical quantities of shares may differ.

(3) The amounts in this column reflect the Delek Logistics common units to be issued upon the vesting of RSUs granted under the Delek Logistics 2012 Long-Term Incentive Plan.

The RSUs vest quarterly for three years, pro rata.

(4) The amounts in this column reflect the Delek Holdings shares to be issued upon the vesting of RSUs granted under the 2016 Plan.

The RSUs vest quarterly for three years, pro rata.

Outstanding Equity Awards at December 31, 2021

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Chief Financial Officer — — n/a n/a 2,765 $118,148

Assaf Ginzburg

Former Chief Financial Officer — — n/a n/a — $—

Denise McWatters

General Counsel — — n/a n/a 2,420 $103,407

Senior Vice President — — n/a n/a 692 $29,569

Option Exercises and Stock Vested in 2021

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Name Number of Shares Acquired on Exercise Value Realized on Exercise Number of Shares Acquired on Vesting Value Realized on Vesting

Ezra Uzi Yemin, Chief Executive Officer — n/a — $—

Reuven Spiegel, Chief Financial Officer — n/a — $—

Assaf Ginzburg, Former Chief Financial Officer — n/a — $—

Ezra Uzi Yemin, Chief Executive Officer 7,257 $317,107 — $—

Reuven Spiegel, Chief Financial Officer 2,748 $120,815 — $—

Denise McWatters, General Counsel 805 $35,176 — $—

Odely Sakazi, Senior Vice President 229 $10,007 — $—

Potential Payments Upon Termination or Change-In-Control

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Reuven Spiegel, Chief Financial Officer — $—

Assaf Ginzburg, Former Chief Financial Officer — $—

Denise McWatters, General Counsel — $—

Odely Sakazi, Senior Vice President $732,315 (1)

$1,316,158 (2)

(1) Assumes acceleration of 1,973 unvested DK RSUs, 153 unvested DKL RSUs, and 4,256 unvested PSUs.

(2) Assumes acceleration of 5,851 unvested DK RSUs, 692 unvested DKL RSUs, and 7,770 unvested PSUs.

2012 Long-Term Incentive Plan

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The LTIP and applicable awards provide that the Board may, in its discretion, (i) accelerate the vesting of the phantom units, (ii) make other adjustments to the terms of the phantom units, or (iii) in the event the Exchange Transaction involves the receipt of equity of another entity in exchange for units, convert the phantom units into comparable awards relating to such entity's equity.

Directors, Executive Officers, Corporate Governance, and Security Ownership

Compensation of Directors in 2021

Officers and employees of Delek Holdings or its subsidiaries do not receive additional compensation for service on the Board or its committees.

Officers and employees of Delek Holdings or its subsidiaries do not receive additional compensation for services on the Board or its committees.

The compensation framework for the Board's other directors during 2021 (Messrs.

Brown, D'Andrea, Gadd and Haddock and Ms.

Kelly) (the "Compensated Directors") was determined by the Board.

Brillon was appointed to the Board in January 2021 and therefore was not compensated in 2020.

Brown, D'Andrea, Gadd and Haddock and Mses.

Brillon and Kelly) (the "Compensated Directors") was determined by the Board.

D'Andrea resigned from the Board, effective December 31, 2021.

In setting compensation for the Compensated Directors, the Board considers various factors and objectives, including aligning the interests of Compensated Directors with the interests of unitholders and attracting and retaining qualified directors to serve on the Board.

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The Board determined to maintain the same levels of compensation for the Compensated Directors in 2022 as the compensation paid in 2021.

This compensation includes a cash retainer for service on the Board and its Committees (and a lead director fee), payable quarterly, and an annual equity award of phantom units under the LTIP that vests semi-annually over a one-year period, as set forth below:

This compensation includes a cash retainer for services on the Board and its Committees (and a lead director fee), payable quarterly, and an annual equity award of phantom units under the LTIP that vests semi-annually over a one-year period, as set forth below:

Board of Directors Retainer (Per Year) $72,000

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Committee Retainers (Per Year):

Chairman Others

Audit Committee $12,000 $5,600

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EHS Committee $8,000 $4,400

Technology Committee $8,000 $4,400

Governance and Compensation Committee $10,000 $5,000

In addition, each director is reimbursed for out-of-pocket expenses in connection with attending meetings of the Board and committee meetings.

Each director is fully indemnified by us for actions associated with being a director to the fullest extent permitted under Delaware law pursuant to our Partnership Agreement.

Directors, Executive Officers, Corporate Governance, and Security Ownership

The following table sets forth a summary of the compensation we paid to the Compensated Directors for service during 2021.

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Option Awards ($) All Other Compensation ($) Total ($)

Brillon 54,548 99,975 — — 154,523

Brown, III 87,861 99,975 — — 187,836

D'Andrea 90,900 99,973 — — 190,873

90,900 99,975 — — 190,875

Gadd 87,989 99,975 — — 187,964

Green 77,913 99,975 — — 177,888

Haddock 85,181 99,975 — — 185,156

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80,378 99,975 — — 180,353

Reuven Spiegel 27,306 99,973 — — 127,279

(1) Because they are officers and employees of Delek Holdings or its subsidiaries, Messrs.

Yemin and Spiegel do not receive any compensation for their service as directors.

The director fees reported above for Mr.

Spiegel were paid prior to becoming an employee of Delek Holdings in April 2020.

Green resigned on November 11, 2020 and is no longer an officer and employee of Delek Holdings.

He did not receive any compensation for his services as director in 2020.

Brillon was not appointed to the Board until 2021.

(2) This column reports the amount of cash compensation earned in 2021 for Board and committee service and the Lead Director Fee.

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Each of Messrs.

Brown, D'Andrea, Gadd, Haddock and Spiegel held 1,827 outstanding phantom units at December 31, 2020.

(4) The grant date fair value of $31.15 per unit is equal to the NYSE closing price of our common units as of December 10, 2020.

Kelly held 1,407 outstanding phantom units at December 31, 2020.

Brown, D'Andrea, Gadd, Haddock and Green and Mses.

Kelly and Brillon held 1,133 outstanding phantom units at December 31, 2021.

D'Andrea resigned from the Board, effective December 31, 2021.

Compensation Committee Interlocks and Insider Participation

Brown, D'Andrea, Gadd and Haddock and Ms.

Kelly served on the Conflicts Committee during 2020 and Mr.

Yemin and the Board assisted the committee with respect to compensation matters.

Spiegel resigned from the Conflicts Committee upon becoming Chief Financial Officer in May 2020, and Ms.

Kelly was appointed to the Conflicts Committee in July 2020.

Brown, Gadd and Haddock and Ms.

Brillon served on the Governance and Compensation Committee during 2021, and Messrs.

Yemin and Spiegel, as well as the Board, assisted the committee with respect to compensation matters.

There are no interlocking relationships requiring disclosure pursuant to Item 407(e)(4)(iii) of Regulation S-K.

Directors, Executive Officers, Corporate Governance, and Security Ownership

CEO Pay Ratio

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Unless otherwise indicated below, each person or entity has an address in care of our principal executive offices at 7102 Commerce Way, Brentwood, Tennessee 37027.

Directors, Executive Officers, Corporate Governance, and Security Ownership

Name of Beneficial Owner (1)

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274,342 * 903,945 1.2

Brillon — n/a — n/a

Brown, III 18,792 * — n/a

D'Andrea 10,678 * — n/a

Gadd 19,617 * — n/a

Brillon 1,700 n/a — *

Brown, III 16,319 * — *

Gadd 23,144 * — *

Frederec Charles Green (6)

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Haddock 13,919 * 17,517 *

Kelly 1,407 * — n/a

Reuven Spiegel 11,191 * — n/a

Denise McWatters — n/a — n/a

Kelly 4,514 * — *

Reuven Spiegel (7)

9,576 * 2,920 *

Denise McWatters (8)

877 n/a 2,556 *

Odely Sakazi (9)

Assaf Ginzburg (7)

579 * 5,743 *

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For purposes of computing the percentage of outstanding securities held by each person named above, any securities which such person has the right to acquire within 60 days after the Measurement Date are deemed to be outstanding but are not deemed to be outstanding for the purpose of computing the percentage ownership of any other person.

For each of Mmes.

Brillon and Kelly and Messrs.

Brown, Gadd, Green and Haddock, beneficial ownership of our units includes 567 phantom units that will vest within 60 days of the Measurement Date.

(3) For non-qualified stock options (“NQSOs”) and restricted stock units (“RSUs”) under the Delek US Holdings, Inc.

2006 Long-Term Incentive Plan, or 2016 Long-Term Incentive Plan, we report shares equal to the number of NQSOs or RSUs that are vested or that will vest within 60 days of the Measurement Date.

For stock appreciation rights (“SARs”) under the Delek US Holdings, Inc.

2006 Long-Term Incentive Plan, or 2016 Long-Term Incentive Plan, we report the shares that would be delivered upon exercise of SARs that are vested or that will vest within 60 days of the Measurement Date (which is calculated by multiplying the number of SARs by the difference between the $24.00 fair market value of Delek US Holdings, Inc.

Common Stock on the Measurement Date and the exercise price divided by $24.00).

2016 Long-Term Incentive Plan, we report shares equal to the number of RSUs that are vested or that will vest within 60 days of the Measurement Date.

(4) Subsidiaries of Delek US Holdings, Inc.

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Delek US Energy, Inc.

and Delek Logistics Services Company directly hold 20,745,868 and 14,000,000 common limited partner units, respectively.

and Delek Logistics Services Company directly held 20,745,868 and 13,692,864 common limited partner units, respectively.

Delek US Holdings, Inc.

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files information with, or furnishes information to, the SEC pursuant to the information requirements of the Exchange Act, as amended.

Directors, Executive Officers, Corporate Governance, and Security Ownership

(5) 155,170 of our units and 691,945 shares of Delek US Holdings, Inc.

1 unchanged sentence

Yemin is the sole general partner.

Delek US Holdings, Inc.

Common Stock includes 20,702 RSUs that will vest within 60 days of the Measurement Date and 622,795 performance-vesting RSUs for completed performance periods that will vest within 60 days of the Measurement Date.

Additionally, of the Delek Logistics Partners, LP units owned by Mr.

Yemin, 97,000 are pledged as security for a full recourse loan.

(6) Additionally, of the Delek US Holdings, Inc.

The number of our common units owned includes 2,419 phantom units that will vest within 60 days of the Measurement Date.

The number of shares of Delek US Holdings, Inc.

Common Stock includes 35,040 RSUs that will vest within 60 days of the Measurement Date.

(6) Of the Delek US Holdings, Inc.

Common Stock owned by Mr.

Green, 29,500 are pledged as security for a full recourse loan.

(7) Beneficial ownership for Mr.

Ginzburg, our former chief financial officer, is based on his most recent Form 4 filing with the SEC.

Directors, Executive Officers, Corporate Governance, and Security Ownership

(7) The number of our common units owned includes 307 phantom units that will vest within 60 days of the Measurement Date.

the number of shares of Delek US Holdings, Inc.

Common Stock includes 894 RSUs that will vest within 60 days of the Measurement Date.

(8) The number of our common units owned includes 269 phantom units that will vest within 60 days of the Measurement Date.

The number of shares of Delek US Holdings, Inc.

Common Stock includes 782 RSUs that will vest within 60 days of the Measurement Date.

(9) The number of our common units owned includes 77 phantom units that will vest within 60 days of the Measurement Date.

The number of shares of Delek US Holdings, Inc.

Common Stock includes 904 RSUs that will vest within 60 days of the Measurement Date.

EQUITY COMPENSATION PLAN INFORMATION

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For information about the LTIP, which did not require approval by our limited partners, refer to Item 11 of this Annual Report on Form 10-K.

Additionally, On June 9, 2021, the LTIP was amended to increase the number of units representing limited partner interest in the Partnership (the "Common Units") authorized for issuance by 300,000 Common Units to 912,207 Common Units.

Additionally, the term of the LTIP was extended to June 9, 2031.

Directors, Executive Officers, Corporate Governance, and Security Ownership

4 unchanged sentences

In addition, Messrs.

Yemin, Spiegel and Serff, and Ms.

Yemin, Spiegel and Ms.

McWatters serve as executive officers of both Delek Holdings and our general partner.

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During 2021, we made cash distributions totaling $161.7 million to our unitholders, of which $129.3 million was paid to Delek Holdings and our general partner.

The total consideration is subject to certain post-closing adjustments and was approximately $48.0 million in cash.

We financed this acquisition with a combination of cash on hand and borrowings under the DKL Credit Facility (as defined in Note 7).

This transaction is described in greater detail in Note 3 to our consolidated financial statements included in Item 8, Financial Statements and Supplementary Data, of this Annual Report on Form 10-K.

Effective March 31, 2020, the Partnership, through its wholly-owned subsidiary DKL Permian Gathering, LLC, acquired the Big Spring Gathering Assets from Delek Holdings, located in Howard, Borden and Martin Counties, Texas.

The total consideration was subject to certain post-closing adjustments and was comprised of $100.0 million in cash and 5.0 million of our common limited partner units.

We financed the cash component of this acquisition with borrowings from the DKL Credit Facility.

This transaction is described in greater detail in Note 3 to our consolidated financial statements included in Item 8, Financial Statements and Supplementary Data, of this Annual Report on Form 10-K.

Commercial Agreements, Omnibus Agreement and Operations and Management Services Agreement

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• an agreement whereby Delek Holdings will not compete with us under certain circumstances;

• our right of first offer to acquire certain of Delek Holdings' logistics assets, including certain terminals, storage facilities and other related assets located at the Tyler and El Dorado Refineries and, under specified circumstances, logistics and marketing assets that Delek may acquire or construct in the future;

• Delek Holdings' right of first refusal to purchase our assets that serve its refineries;

1 unchanged sentence

• Delek Holdings' reimbursement to us for certain operating expenses and certain maintenance capital expenditures and Delek Holdings' indemnification of us for certain matters, including environmental, title and tax matters;

Directors, Executive Officers, Corporate Governance, and Security Ownership

contributed to us by Delek Holdings that are necessary to comply with the DOT pipeline integrity rules and certain API storage tank standards;

• reimbursement to us for certain designated periods of time related to the date of acquisition of the relevant asset for any operating expenses in excess of certain thresholds per year that we incur for inspections, maintenance and repairs to any of the storage tanks contributed to us by Delek Holdings that are necessary to comply with the DOT pipeline integrity rules and certain API storage tank standards;

• reimbursement to us for certain designated periods of time related to the date of acquisition of the relevant asset for all non-discretionary maintenance capital expenditures, other than those required to comply with applicable environmental laws and regulations, in excess of certain thresholds per year that we make with respect to the assets contributed to us by Delek Holdings for which we have not been reimbursed as described above.

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We sold RINs in the amount of approximately $10.3 million to Delek Holdings during the year ended December 31, 2021.

Directors, Executive Officers, Corporate Governance, and Security Ownership

The Partnership has an $850.0 million senior secured revolving credit agreement with Fifth Third Bank, as administrative agent, and a syndicate of lenders (the "DKL Credit Facility").

4 unchanged sentences

Effective March 30, 2020, Delek Marketing's limited guaranty and pledge of the Holdings Note was terminated pursuant to a guaranty and pledge release approved by the required lenders under the DKL Credit Facility.

The Partnership currently manages a long-term capital project on behalf of Delek Holdings pursuant to a construction management and operating services agreement (the "DPG Management Agreement") for the construction of a 250-mile gathering system in the Permian Basin (the "Delek Permian Gathering Project").

The majority of the gathering system has been constructed, however additional costs pertaining to a pipeline connection that was not contributed to the Partnership continue to be incurred and are still subject to the terms of the DPG Management Agreement.

The Partnership is also considered the operator for the project and is responsible for oversight of the project design, procurement and construction of project segments and provides other related services.

The Partnership manages long-term capital projects on behalf of Delek Holdings pursuant to a construction management and operating agreement (the "DPG Management Agreement") for the construction of gathering systems in the Permian Basin (the "Delek Permian Gathering Project").

The majority of the gathering systems has been constructed, however, additional costs pertaining to a pipeline connection that was not acquired by the Partnership continue to be incurred and are still subject to the terms of the DPG Management Agreement.

The Partnership is also considered the operator for the project and is responsible for the oversight of the project design, procurement and construction of project segments and for providing other related services.

See Note 4 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 and the amounts paid under the DPG Management Agreement during 2021.

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Additionally, the policy effectively requires that all related party transactions that:

Directors, Executive Officers, Corporate Governance, and Security Ownership

involve the purchase and sale of products or services that are effected at either (x) cost (including, when relevant, a nominal fee for services) or (y) the then-prevailing market prices that we would pay or charge to third parties ("Market Based Transactions") undertaken outside the ordinary course of business and involve an aggregate amount of more than $2.5 million annually;

36 unchanged sentences

333-182631) filed on July 12, 2012).

3.4 Fourth Amended and Restated Limited Liability Company Agreement of Delek Logistics GP, LLC, dated August 1 3 , 20 2 0 (incorporated by reference to Exhibit 3.

2 of the Partnership’s Form 8-K filed on August 1 4 , 20 20 ).

4.1 # Description of the Common Units.

3.4 Fourth Amended and Restated Limited Liability Company Agreement of Delek Logistics GP, LLC, dated August 13, 2020 (incorporated by reference to Exhibit 3.2 of the Partnership’s Form 8-K filed on August 14, 2020).

4.1 Description of the Common Units (incorporated by reference to Exhibit 4.1 of the Partnership's Form 10-K filed on March 1, 2021).

4.2 Indenture, dated as of May 23, 2017, among Delek Logistics Partners, LP, Delek Logistics Finance Corp., the Guarantors named therein and U.S.

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(incorporated by reference to Exhibit 4.2 of the Partnership's Form 8-K filed on April 6, 2020).

4.7 Indenture, dated as of May 24, 2021, among Delek Logistics Partners, LP, Delek Logistics Finance Corp., the other guarantors, and U.S.

(incorporated by reference to Exhibit 4.1 of the Partnership’s Form 8-K filed on May 25, 2021).

4.8 Form of 7.125% Senior Note due 2028 (incorporated by reference to Exhibit A to Exhibit 4.1 to the Partnership’s Form 8-K filed on May 25, 2021).

10.1 ++ Marketing Agreement, dated November 7, 2012, by and between Delek Refining, Ltd.

12 unchanged sentences

10.10 Amendment and Restatement of Schedules to Third Amended and Restated Omnibus Agreement, dated March 20, 2018 and effective as of March 1, 2018 (incorporated by reference to Exhibit 10.4 to the Partnership's Form 8-K filed on March 26, 2018).

10.11 * Delek Logistics GP, LLC 2012 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.5 to the Partnership's Form 8-K filed on November 7, 2012, SEC File No.

10.11 * Form of Phantom Unit Agreement for Directors under the Delek Logistics GP, LLC 2012 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.1 to the Partnership’s Form 10-Q filed on August 6, 2015).

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333-182631), filed on October 16, 2012).

10.21 * Form of Indemnification Agreement for Directors and Officers of Delek Logistics GP, LLC (incorporated by reference to Exhibit 10.13 to the Partnership's Amendment No.

4 to Registration Statement on Form S-1 (File No.

333-182631), filed on October 24, 2012).

10.20 Throughput and Tankage Agreement (Tyler Terminal and Tankage), dated July 26, 2013, by and between Delek Marketing & Supply, LP and Delek Refining, Ltd.

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10.34 Third Amendment and Restatement to Schedules to Third Amended and Restated Omnibus Agreement, dated and effective as of May 15, 2020 (incorporated by reference to Exhibit 10.2 of the Partnership's Form 8-K filed on May 18, 2020).

10.35 Delek Logistics GP, LLC Amended and Restated 2012 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.1 to the Partnership’s Registration Statement on Form S-8 (Registration No.

333-256954) filed on June 10, 2021).

10.36 # Form of Indemnification Agreement for Directors and Officers of Delek Logistics GP, LLC.

21.1 # Subsidiaries of Registrant.

22.1 # Subsidiary Guarantors of Delek Logistics Partners LP.

23.1 # Consent of Independent Registered Public Accounting Firm (Ernst & Young LLP).

23.2 # Consent of Independent Registered Public Accounting Firm (Weaver and Tidwell, L.L.P.).

23.2 # Consent of Independent Public Accounting Firm (Weaver and Tidwell, L.L.P.).

31.1 # Certification of Delek Logistics GP, LLC's Chief Executive Officer pursuant to Rule 13a-14(a) or 15(d)-14(a) under the Securities Exchange Act of 1934, as amended.

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Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

99.1 # Report of Independent Registered Public Accounting Firm - Red River Pipeline Company LLC.

99.1 # Report of Independent Public Accounting Firm - Red River Pipeline Company LLC

Weaver and Tidwell, L.L.P.

410 ) - Houston, Texas

101 < The following materials from Delek Logistics Partners, LP's Annual Report on Form 10-K for the annual period ended December 31, 2021, formatted in XBRL (Inline eXtensible Business Reporting Language):

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INDEX TO FINANCIAL STATEMENTS

Reports of Independent Registered Public Accounting Firm

Reports of Independent Registered Public Accounting Firm (PCAOB ID:

Audited Financial Statements:

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Those statements were audited by other auditors whose report has been furnished to us, and our opinion, insofar as it relates to the amounts included for Red River Pipeline Company, LLC, is based solely on the report of other auditors.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Partnership’s internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated March 1, 2021 expressed an unqualified opinion thereon.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Partnership’s internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated February 25, 2022 expressed an unqualified opinion thereon.

Basis for Opinion

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The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Presentation and Disclosure of Related Party Transactions

Description of the Matter As described in Note 4 to the consolidated financial statements, the Partnership engages, in the ordinary course of business, in related party transactions with Delek US Holdings, Inc.

and certain of its subsidiaries (collectively “Delek Holdings”).

Auditing the completeness of the related party transactions, and the corresponding presentation and disclosure, was challenging due to Delek Holdings’ involvement in many aspects of the Partnership’s business, including the revenue earned by the Partnership from providing gathering, transportation, storage, marketing and terminalling services under various commercial agreements with Delek Holdings.

Additionally, the Partnership and Delek Holdings have entered into other agreements which govern the provision of certain operational services, reimbursement obligations and fees charged for the provision of centralized corporate services.

How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design, and tested the operating effectiveness of controls that address the risks of material misstatement related to the Partnership’s process of identifying and disclosing related party transactions, including controls to verify the completeness of related party transactions and disclosures.

To test the completeness of related party transactions, we obtained a listing of all related party relationships and compared the listing to the Delek Holdings’ legal structure and evidence obtained from other audit procedures including, among others, inquiries of management and the audit committee, review of the board of directors and other committee meeting minutes, review of contracts, and testing of revenue and expense transactions.

In addition, to evaluate the presentation and disclosure of related party transactions, we used the related party listing obtained to perform procedures to test material related party account activity and account balances including, among others, testing the related and third-party classification of transactions in revenue, expense and balance sheet accounts by inspecting source documentation and evaluating the aggregation and presentation of related party financial statement line items.

Impairment review of equity method investments

Description of the Matter As discussed in Notes 2 and 14 to the consolidated financial statements, the Partnership has investments in nonconsolidated entities accounted for using the equity method totaling $250 million as of December 31, 2021, which included an equity method investment in Andeavor Logistics of $44.3 million.

The carrying value of each equity method investment is evaluated for impairment when indicators of a loss in value below the carrying value exist, which may include the loss of a key contract, lack of sustained earnings or a deterioration of market conditions, among others.

When indicators of impairment are identified, the Partnership estimates the fair value of the equity method investment.

The estimated fair value of the investment is determined using a combination of a discounted cash flow analysis based upon projected financial information and a market approach.

When the estimated fair value is lower than the carrying value, the Partnership considers whether that impairment is other-than-temporary.

Auditing the Partnership’s impairment assessment for Andeavor Logistics was complex and required significant judgment, as the valuation included subjective estimates and assumptions in determining the estimated fair value of the investment.

In particular, the discounted cash flow analysis is sensitive to significant assumptions such as the weighted average cost of capital and the estimate of future cash flows including the related revenue and EBITDA projections.

How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Partnership’s equity method impairment review process, including controls over the identification of factors that may indicate an equity method investment is impaired, and as necessary, the subsequent determination of fair value.

In order to test whether an impairment was indicated, we tested the Partnership’s evaluation of the Andeavor Logistics’ earnings history and sustainability under current and expected market conditions.

To test the estimated fair value of Andeavor Logistics, our audit procedures included, among others, assessing valuation methodologies, performing recalculations, and testing the significant assumptions discussed above and the underlying data used by the Partnership.

We compared the significant assumptions in the prospective financial data used by management to current industry and economic trends, historical performance, and other relevant factors.

We performed sensitivity analyses of significant assumptions to evaluate the change in the fair value of the investment resulting from changes in the significant assumptions.

We also involved our valuation specialists to assist in evaluating the fair value methodologies, testing the weighted average cost of capital used and assessing the market multiples used to calculate the fair value estimate.

/s/ Ernst & Young LLP

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Nashville, Tennessee

March 1, 2021

February 25, 2022

Report of Independent Registered Public Accounting Firm

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In our opinion, Delek Logistics Partners, LP (the Partnership) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2021, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of Delek Logistics Partners, LP as of December 31, 2020 and 2019, the related consolidated statements of income and comprehensive income, partners’ equity (deficit) and cash flows for each of the three years in the period ended December 31, 2020, and the related notes, and our report dated March 1, 2021 expressed an unqualified opinion thereon.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of Delek Logistics Partners, LP as of December 31, 2021 and 2020, the related consolidated statements of income and comprehensive income, partners’ equity (deficit) and cash flows for each of the three years in the period ended December 31, 2021, and the related notes, and our report dated February 25, 2022 expressed an unqualified opinion thereon.

Basis for Opinion

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Nashville, Tennessee

March 1, 2021

February 25, 2022

Exhibits and Financial Statement Schedules

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Asset retirement obligations 6,476 6,015

Deferred tax liabilities 616 215

Operating lease liabilities, net of current portion 14,071 15,418

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( 270,059 ) ( 272,915 )

General partner - no units issued and outstanding at December 31, 2020 ( 498,482 at December 31, 2019) (1)

Total deficit ( 103,992 ) ( 108,301 )

Total liabilities and deficit $ 935,071 $ 956,417

(1) See Note 4 for a description of the IDR Restructuring Transaction.

See accompanying notes to the consolidated financial statement

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Income from equity method investments ( 24,575 ) ( 22,693 ) ( 19,832 )

Other expense, net 133 600 8

Other (income) expense, net ( 119 ) 133 600

Total non-operating expenses, net 25,527 20,314 28,096

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Balance at December 31, 2018 $ 171,023 $ ( 299,360 ) $ ( 6,486 ) ( 134,823 )

Distributions to Delek Holdings for Big Spring Asset Acquisition — ( 96,822 ) ( 1,976 ) ( 98,798 )

Cash distributions (1)

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GP units issued to maintain 2 % interest

Sponsorship contribution of fixed assets — 151 3 154

Net income attributable to partners 23,813 39,856 33,080 96,749

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Net income attributable to partners 36,324 104,208 18,724 159,256

Other 226 379 10 615

Balance at December 31, 2019 $ 164,436 $ ( 310,513 ) $ ( 5,042 ) $ ( 151,119 )

Cash distributions (1)

( 31,532 ) ( 77,665 ) ( 27,635 ) ( 136,832 )

GP Units Issued to maintain 2 % interest

Net income attributable to partners 36,324 104,208 18,724 159,256

Delek Holdings unit purchases from public ( 4,979 ) 4,979 — —

Issuance of units in connection with the Big Spring Gathering Assets Acquisition — 107,323 2,190 109,513

Issuance of units in connection with the Permian Gathering Assets Acquisition — 107,323 2,190 109,513

Cash distribution to Delek Holdings for Trucking Assets Acquisition — ( 46,607 ) ( 951 ) ( 47,558 )

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Balance at December 31, 2020 $ 164,614 $ ( 272,915 ) $ — $ ( 108,301 )

Cash distributions (1)

( 32,462 ) ( 129,255 ) — ( 161,717 )

Net income attributable to partners 33,086 131,736 — 164,822

Delek Holdings unit sale to public 650 ( 650 ) — —

Other 179 1,025 — 1,204

Balance at December 31, 2021 $ 166,067 $ ( 270,059 ) $ — $ ( 103,992 )

(1) Cash distributions include a nominal amount for the years ended December 31, 2021, 2020 and 2019, respectively, related to distribution equivalents on vested phantom units.

Cash distributions include $ 0.1 million for the year ended December 31, 2018 related to distribution equivalents on vested phantom units.

See accompanying notes to the consolidated financial statements

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Amortization of deferred financing costs and debt discount 3,016 2,412 2,629

Accretion of asset retirement obligations 427 397 359

(Gain) loss on disposal of assets ( 66 ) ( 197 ) 891

Deferred income taxes 401 496 152

Income from equity method investments ( 24,575 ) ( 22,693 ) ( 19,832 )

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Asset acquisitions from Delek Holdings, net of assumed liabilities — ( 100,527 ) —

Purchases of property, plant and equipment ( 13,271 ) ( 9,070 ) ( 12,931 )

Purchases of property, plant and equipment and intangible assets ( 24,016 ) ( 13,284 ) ( 9,070 )

Proceeds from sales of property, plant and equipment 275 107 144

Purchases of intangible assets ( 13 ) — ( 144,219 )

Distributions from equity method investments 8,774 2,741 804

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Distributions to common unitholders - Delek Holdings ( 129,255 ) ( 77,665 ) ( 51,388 )

Distributions to Delek Holdings unitholders and general partner related to Big Spring Logistics Assets Acquisition — — ( 98,798 )

Distributions to Delek Holdings unitholders and general partner related to Trucking Assets Acquisition — ( 47,558 ) —

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Payments on revolving credit facility ( 829,601 ) ( 441,400 ) ( 433,000 )

Deferred financing costs paid — — ( 5,264 )

Net cash (used in) provided by financing activities ( 71,180 ) 18,040 74,928

Net (decrease) increase in cash and cash equivalents ( 1,302 ) 1,023 ( 153 )

Proceeds from issuance of senior notes 400,000 — —

Deferred financing costs paid in connection with debt issuances ( 6,216 ) — —

Payments on financing lease liabilities ( 2,219 ) — —

Net cash used in financing activities ( 258,753 ) ( 71,180 ) 18,040

Net increase (decrease) in cash and cash equivalents 49 ( 1,302 ) 1,023

Cash and cash equivalents at the beginning of the period 4,243 5,545 4,522

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Non-cash investing activities:

Increase (decrease) in accrued capital expenditures $ 198 $ 917 $ ( 1,363 )

Equity issuance to Delek Holdings unitholders in connection with Big Spring Gathering Assets Acquisition $ 109,513 $ — $ —

Increase in accrued capital expenditures and other $ 3,850 $ 198 $ 917

Equity issuance to Delek Holdings unitholders in connection with Permian Gathering Assets Acquisition $ — $ 109,513 $ —

Non-cash financing activities:

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Effective May 1, 2020, the Partnership, through its wholly-owned subsidiary DKL Transportation, LLC, acquired Delek Trucking, LLC consisting of certain leased and owned tractors and trailers and related assets (the "Trucking Assets") from Delek Holdings, such transaction the "Trucking Assets Acquisition." See Note 3 of the accompanying consolidated financial statements for further information.

Effective March 31, 2020, the Partnership, through its wholly-owned subsidiary DKL Permian Gathering, LLC, acquired from Delek Holdings a crude oil gathering system located in Howard, Borden and Martin Counties, Texas (the "Big Spring Gathering Assets"), and certain related assets, such transaction the "Big Spring Gathering Assets Acquisition." See Note 3 of the accompanying consolidated financial statements for further information.

Effective March 1, 2018, the Partnership, through its wholly-owned subsidiary DKL Big Spring, LLC, acquired from Delek Holdings certain logistics assets primarily located at or adjacent to Delek Holdings' refinery near Big Spring, Texas (the "Big Spring Refinery") and Delek Holdings' light products distribution terminal located in Stephens County, Oklahoma (collectively, the "Big Spring Logistics Assets" and such transaction the "Big Spring Logistics Assets Acquisition").

See Note 3 of the accompanying consolidated financial statements for further information regarding the Big Spring Logistics Assets Acquisition.

Effective March 31, 2020, the Partnership, through its wholly-owned subsidiary DKL Permian Gathering, LLC, acquired from Delek Holdings a crude oil gathering system located in Howard, Borden and Martin Counties, Texas (the "Permian Gathering Assets", formerly referred to as the"Big Spring Gathering Assets"), and certain related assets, such transaction the "Permian Gathering Assets Acquisition" (formerly referred to as the "Big Spring Gathering Assets Acquisition").

See Note 3 of the accompanying consolidated financial statements for further information.

Description of Business

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The preparation of our financial statements in conformity with U.S.

generally accepted accounting principles (“GAAP”) and in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the

Notes to Consolidated Financial Statements

financial statements and the reported amounts of revenues and expenses during the reporting period.

generally accepted accounting principles (“GAAP”) and in accordance with the rules and regulations of the Securities and Exchange Commission (the “SEC”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.

Actual results could differ from those estimates.

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All adjustments are of a normal, recurring nature.

Notes to Consolidated Financial Statements

Reclassifications

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Risks and Uncertainties Arising from the COVID-19 Pandemic

The outbreak of COVID-19 and its development into a pandemic in March 2020 (the "COVID-19 Pandemic") has resulted in significant economic disruption globally, including in the U.S.

and specific geographic areas where we operate.

Actions taken by various governmental authorities, individuals and companies around the world to prevent the spread of COVID-19 through social distancing have restricted travel, many business operations, public gatherings and the overall level of individual movement and in-person interaction across the globe.

This has in turn significantly reduced global economic activity and resulted in airlines dramatically cutting back on flights and a decrease in motor vehicle use.

As a result, there has also been a decline in the demand for, and thus also the market prices of, crude oil and certain products, particularly refined petroleum products that we receive revenue for the transportation and storage services we provide.

In addition, the decline in demand impacted the sales volumes in our wholesale marketing business.

As of December 31, 2020, there is continued uncertainty about the duration and future impact of the COVID-19 Pandemic.

Therefore, downward pressure on commodity prices has remained and could continue for the foreseeable future.

The broader market environment was extremely challenging in 2020, and impacted worldwide demand for oil and gas and increased downward pressure on oil prices.

economic activity continued on a recovery trend during the year ended December 31, 2021 albeit remaining subject to heightened levels of uncertainty related to the on-going impact of the COVID-19 Pandemic, and the spread of new variants of the virus.

Most of the restrictions imposed in the prior year to prevent its spread have been eased.

Compared to the prior year, the economic recovery trends in the year ended December 31, 2021, included a resumption of flights by major airlines and increased motor vehicle use.

This has in turn resulted in increased demand and market prices for crude oil and certain of our products.

Nonetheless, there remains continued uncertainty about the duration and future impact of the COVID-19 Pandemic.

Uncertainties related to the impact of the COVID-19 Pandemic and other events exist that could impact our future results of operations and financial position, the nature of which and the extent to which are currently unknown.

To the extent these uncertainties have been identified and are believed to have an impact on our current period results of operations or financial position based on the requirements for assessing such financial statement impact under GAAP, we have considered them in the preparation of our financial statements as of and for the year ended December 31, 2020.

The application of accounting policies impacted by such considerations include (but are not necessarily limited to) the following:

• The evaluation of indefinite-lived intangibles and goodwill for potential impairment, during our annual assessment or where indicators exist, as defined by GAAP;

• The evaluation of long-lived assets for potential impairment, where indicators exist, as defined by GAAP;

• The evaluation of joint ventures for potential impairment, where indicators exist, as defined by GAAP;

• The evaluation of inventory valuation allowances that may be warranted under the lower of cost or net realizable value analysis, pursuant to GAAP;

• The consideration of debt modifications and or covenant requirements, as applicable;

• The evaluation of commitments and contingencies, including changes in concentrations, as applicable;

• The evaluation of the risk of credit losses and the determination of our allowance for credit losses, pursuant to GAAP;

• The evaluation of our ability to continue as a going concern.

Segment Reporting

We are an energy business focused on crude oil, intermediate and refined products pipeline and storage activities and wholesale marketing, terminalling and offloading activities.

Management reviews operating results in two reportable segments:

(i) pipelines and transportation and (ii) wholesale marketing and terminalling.

Management reviews operating results in three reportable segments:

(i) pipelines and transportation;

(ii) wholesale marketing and terminalling;

and (iii) investments in pipeline joint ventures.

• The assets and investments reported in the pipeline and transportation segment provide crude oil gathering and crude oil, intermediate and refined products transportation and storage services to Delek Holdings' refining operations and independent third parties.

• The wholesale marketing and terminalling segment provides marketing services for the refined products output of the Delek Holdings' refineries, engages in wholesale activity at our terminals and terminals owned by third parties, whereby we purchase light product for sale and exchange to third parties, and provides terminalling services at our refined products terminals to independent third parties and Delek Holdings.

• The investments in pipeline joint ventures segment include the Partnership's joint ventures investments discussed in Note 14.

Decisions concerning the allocation of resources and assessment of operating performance are made based on this segmentation.

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Segment contribution margin is defined as net revenues less cost of materials and other and operating expenses, excluding depreciation and amortization.

Segment reporting is more fully discussed in Note 15.

Notes to Consolidated Financial Statements

Segment reporting is discussed in more detail in Note 15.

Cash and Cash Equivalents

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Property, Plant and Equipment

Property, plant and equipment primarily consists of crude oil pipelines, tanks, terminals and gathering systems, and trucking assets.

Property and equipment is stated at the lower of historical cost less accumulated depreciation, or fair value, if impaired.

Assets acquired in conjunction with business acquisitions are recorded at estimated fair market value in accordance with the purchase method of accounting as prescribed in Accounting Standards Codification ("ASC") 805, Business Combinations ("ASC 805").

Other acquisitions of property and equipment are carried at cost.

Acquisitions of net assets that do not constitute a business are accounted for by allocating the cost of the acquisition to individual assets acquired and liabilities assumed on a relative fair value basis and shall not give rise to goodwill as prescribed in ASC 805.

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Maintenance and repairs are charged to expense as incurred.

Notes to Consolidated Financial Statements

Depreciation is computed using the straight-line method over management’s estimated useful lives of the related assets.

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The marketing contract intangible is amortized on a straight-line basis over a 20 year period as a component of net revenues from affiliates.

Acquired intangible assets determined to have an indefinite useful life are not amortized, but are tested for impairment in connection with our evaluation of long-lived assets as events and circumnstances indicate that the assets might be impaired.

Acquired intangible assets determined to have an indefinite useful life are not amortized, but are tested for impairment in connection with our evaluation of long-lived assets as events and circumstances indicate that the assets might be impaired.

Property, Plant and Equipment and Intangibles Impairment

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Goodwill is evaluated for impairment by comparing the carrying amount of the reporting unit to its estimated fair value.

The Company adopted ASU 2017-04, Goodwill and Other (Topic 350);

The Partnership adopted ASU 2017-04, Goodwill and Other (Topic 350);

Simplifying the Test for Goodwill Impairment , during the fourth quarter of 2018.

In accordance with this guidance, a goodwill impairment charge is recognized for the amount that the carrying amount of a reporting unit, including

Notes to Consolidated Financial Statements

goodwill, exceeds its fair value, limited to the total amount of goodwill allocated to that reporting unit.

In accordance with this guidance, a goodwill impairment charge is recognized for the amount that the carrying amount of a reporting unit, including goodwill, exceeds its fair value, limited to the total amount of goodwill allocated to that reporting unit.

In assessing the recoverability of goodwill, assumptions are made with respect to future business conditions and estimated expected future cash flows to determine the fair value of a reporting unit.

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Amounts recognized for equity method investments are included in equity method investments in our consolidated balance sheets and adjusted for our share of the net earnings and losses of the investee, dividends received and cash distributions from the investee, which are separately stated in our consolidated statements of income and comprehensive income and our consolidated statements of cash flows.

We evaluate our equity method investments presented for impairment whenever events or changes in circumstances indicate that the carrying amounts of such investments may be impaired.

A loss is recorded in earnings in the current period if a decline in the value of an equity method investment is determined to be other than temporary.

The carrying value of each equity method investment is evaluated for impairment when conditions exist that indicate it is more likely than not that an impairment may have occurred, which may include the loss of a key contract, lack of sustained earnings or a deterioration of market conditions, among others.

When impairment triggers are present, the fair value of the equity method investment is estimated using the income approach and the market approach.

The income approach utilizes a discounted cash flow model incorporating management’s expectations of the investee’s future revenue (including the throughput barrel per day sold and related reduced tariff rates), operating expenses and earnings before interest, taxes, depreciation and amortization, capital expenditures and an anticipated tax rate (“EBITDA”), the estimated long term growth rate and weighted average cost of capital (“WACC”) as the discount rate.

The market approach uses estimated EBITDA multiples for guideline comparable companies to estimate the fair value of the equity method investment.

A impairment loss is recorded in earnings in the current period if a decline in the value of an equity method investment is determined to be other than temporary.

We performed an impairment assessment on one of our equity method investments as of December 31, 2021 and the assessment did not result in an impairment loss.

Equity method investments are reported as part of the investments in pipeline joint ventures segment.

See Note 14 for further information on our equity method investments.

Notes to Consolidated Financial Statements

Fair Value of Financial Instruments

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The reconciliation of the beginning and ending carrying amounts of asset retirement obligations as of December 31, 2021 and 2020 is as follows (in thousands):

Notes to Consolidated Financial Statements

Beginning balance $ 6,015 $ 5,588

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Refer to Note 5 for further information.

Notes to Consolidated Financial Statements

Up-Front payments to Customers.

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Revenues Related to Reimbursements.

In addition to the agreements noted above, we have cost reimbursement provisions in certain of our agreements with Delek Holdings that provide for reimbursement to the Company for certain costs, including certain capital expenditures.

In addition to the agreements noted above, we have cost reimbursement provisions in certain of our agreements with Delek Holdings that provide for reimbursement to the Partnership for certain costs, including certain capital expenditures.

Such reimbursements are recorded in other long-term liabilities and are amortized to revenue over the life of the underlying revenue agreement corresponding to the asset.

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Deferred financing costs are included in other non-current assets in the accompanying consolidated balance sheets and represent expenses related to issuing and amending our revolving credit facility.

Deferred financing costs associated with our 6.750 % Senior Notes are included as a reduction to the associated debt balance in the accompanying consolidated balance sheets.

Deferred financing costs associated with our 6.750 % and 7.125 % Senior Notes are included as a reduction to the associated debt balance in the accompanying consolidated balance sheets.

These costs represent expenses related to issuing the senior notes.

These amounts are amortized ratably over the remaining term of the respective financing and are included in interest expense in the accompanying consolidated statements of income and comprehensive income.

Notes to Consolidated Financial Statements

In accordance with ASC 842-20, Leases - Lessee ("ASC 842-20"), we classify leases with contractual terms longer than twelve months as either operating or finance.

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These taxes are accounted for under the provisions of ASC 740, Income Taxes ("ASC 740").

This statement generally requires the Partnership to record deferred income taxes for the differences between the book and tax bases of its assets and liabilities, which are measured using enacted tax rates and laws that will be in effect when the differences are expected to reverse.

Notes to Consolidated Financial Statements

will be in effect when the differences are expected to reverse.

Deferred income tax expense or benefit represents the net change during the year in our deferred income tax assets and liabilities, exclusive of the amounts held in other comprehensive income.

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The estimated fair value of our phantom units is amortized over the vesting period using the straight line method.

Awards vest over one - to five -year service periods, unless such awards are amended in accordance with the LTIP (as defined in Note 13).

Awards vest over one - to five-year service periods, unless such awards are amended in accordance with the 2012 Long-Term Incentive Plan (the "LTIP") (see Note 13).

It is our practice to issue new units when phantom units vest.

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As of December 31, 2021, the only potentially dilutive units outstanding consist of unvested phantom units.

Notes to Consolidated Financial Statements

Comprehensive Income

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New Accounting Pronouncements Adopted During 2021

ASU 2018-13, Fair Value Measurement - Changes to the Disclosure Requirements for Fair Value Measurement

In August 2018, the Financial Accounting Standards Board (the "FASB") issued guidance related to disclosure requirements for fair value measurements.

The pronouncement eliminates, modifies and adds disclosure requirements for fair value measurements.

The pronouncement is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2019.

We adopted this guidance on January 1, 2020 and the adoption did not have a material impact on our business, financial condition or results of operations.

ASU 2016-13, Financial Instruments - Measurement of Credit Losses on Financial Instruments

In June 2016, the FASB issued guidance requiring the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts.

Organizations will now use forward-looking information to better inform their credit loss estimates.

This guidance is effective for interim and annual periods beginning after December 15, 2019.

We adopted this guidance on January 1, 2020 using the modified retrospective approach as of the adoption date.

The adoption did not have a material impact on the Partnership’s operating results, financial position or disclosures.

ASU 2018-15, Intangible - Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract

In August 2018, the FASB issued guidance related to customers' accounting for implementation costs incurred in a cloud computing arrangement that is considered a service contract.

This pronouncement aligns the requirements for capitalizing implementation costs in such arrangements with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software.

This pronouncement is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2019.

Entities can choose to adopt the new guidance prospectively or retrospectively.

We adopted this guidance on January 1, 2020 and elected the prospective method.

The adoption did not have a material impact on the Partnership's financial condition or results of operations.

New Accounting Pronouncements Not Yet Adopted

ASU 2019-12, Simplifying the Accounting for Income Taxes

In December 2019, the FASB issued guidance which is intended to simplify various aspects related to accounting for income taxes, eliminate certain exceptions within Accounting Standard Codification ("ASC") 740 and clarify certain aspects of the current guidance to promote consistency among reporting entities.

The pronouncement is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2020.

We expect to adopt this guidance on the effective date and do not expect adopting this new guidance will have a material impact on our business, financial condition and results of operations.

ASU 2020-01, Investments—Equity Securities (Topic 321), Investments—Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815)—Clarifying the Interactions between Topic 321, Topic 323, and Topic 815

In January 2020, the FASB issued ASU 2020-01 which is intended to clarify interactions between the guidance to account for certain equity securities under Topics 321, 323 and 815, and improve current GAAP by reducing diversity in practice and increasing comparability of accounting.

The pronouncement is effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2020.

We expect to adopt this guidance on the effective date and do not expect adopting this new guidance will have a material impact on our business, financial condition and results of operations.

In January 2020, the Financial Accounting Standards Board (the "FASB") issued Accounting Standards Codification (" ASU") 2020-01 which is intended to clarify interactions between the guidance to account for certain equity securities under Topics 321, 323 and 815, and improve current GAAP by reducing diversity in practice and increasing comparability of accounting.

The pronouncement is effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2020, and early adoption is permitted.

We adopted this guidance prospectively on January 1, 2021.

The adoption of this guidance did not have a material impact on our business, financial condition or results of operations.

New Accounting Pronouncements Not Yet Adopted

2021-05, Leases (Topic 842):

Lessors—Certain Leases with Variable Lease Payments

In July 2021, the FASB issued an amendment which is intended to provide lease classification guidance for Lessors on how to classify and account for a lease with variable lease payments that do not depend on a reference index or a rate.

The amendments are effective for fiscal years beginning after December 15, 2021, for all entities, and interim periods within those fiscal years for public business entities.

The Partnership is evaluating the impact of this guidance but does not believe this new guidance will have a material impact on its consolidated financial statements and related disclosures.

ASU 2020-04, Facilitation of the Effects of Reference Rate Reform on Financial Reporting (Topic 848)

In March 2020, the FASB issued an amendment which is intended to provide temporary optional expedients and exceptions to GAAP guidance on contracts, hedge accounting and other transactions affected by the expected market transition from the London Interbank Offered Rate (LIBOR) and other interbank rates.

In March 2020, the FASB issued an amendment which is intended to provide temporary optional expedients and exceptions to GAAP guidance on contracts, hedge accounting and other transactions affected by the market transition from the London Interbank Offered Rate ("LIBOR") and

Notes to Consolidated Financial Statements

other interbank rates.

This guidance is effective for all entities any time beginning on March 12, 2020 through December 31, 2022 and may be applied from the beginning of an interim period that includes the issuance date of the ASU.

The Partnership is currently evaluating the impact this guidance may have on its consolidated financial statements and related disclosures.

The Partnership is evaluating the impact of this guidance but does not currently expect that adopting this new guidance will have a material impact on its consolidated financial statements and related disclosures.

Trucking Assets Acquisition

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We capitalized approximately $ 0.3 million of acquisition costs related to the Trucking Assets Acquisition.

Big Spring Gathering Assets Acquisition

Permian Gathering Assets Acquisition

Effective March 31, 2020, the Partnership, through its wholly-owned subsidiary DKL Permian Gathering, LLC, acquired the Permian Gathering Assets from Delek Holdings, located in Howard, Borden and Martin Counties, Texas.

The total consideration was subject to certain post-closing adjustments and was comprised of $ 100.0 million in cash and 5.0 million of our common limited partner units (the "Additional Units").

We financed the cash component of this acquisition with borrowings from the DKL Credit Facility.

The Big Spring Gathering Assets are recorded in our pipelines and transportation segment and include:

The Permian Gathering Assets are recorded in our pipelines and transportation segment and include:

• Crude oil pipelines;

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In connection with the closing of the transaction, Delek Holdings, the Partnership and various of their respective subsidiaries entered into a Throughput and Deficiency Agreement (the “Big Spring T&D Agreement”).

Under the Big Spring T&D Agreement, the Partnership will operate and maintain the Big Spring Gathering Assets connecting Delek Holdings' interests in and to certain crude oil with the Partnership's Big Spring, Texas terminal and provide gathering, transportation and other related services with respect to any and all crude produced from shipper’s and certain other producers’ respective interests for delivery at the Big Spring Terminal.

Under the Big Spring T&D Agreement, the Partnership will operate and maintain the Permian Gathering Assets connecting Delek Holdings' interests in and to certain crude oil with the Partnership's Big Spring, Texas terminal and provide gathering, transportation and other related services with respect to any and all crude produced from shipper’s and certain other producers’ respective interests for delivery at the Big Spring Terminal.

The transaction and related agreements were approved by the Conflicts Committee of the Partnership's general partner, which is comprised solely of independent directors.

See Note 3 for more detailed descriptions of these agreements.

The Big Spring Gathering Assets Acquisition was considered a transaction between entities under common control.

Accordingly, the Big Spring Gathering Assets were recorded at amounts based on Delek Holdings' historical carrying value as of the acquisition date.

The carrying value of the Big Spring Gathering Assets as of the acquisition date was $ 209.5 million.

Pursuant to the common control guidance, the 5.0 million units issued (which had a closing market price of $ 9.10 per unit on the transaction date) were recorded in equity at $ 109.5 million, representing the net carrying value of the Big Spring Gathering Assets purchased of $ 209.5 million less the $ 100.0 million cash consideration.

The Permian Gathering Assets Acquisition was considered a transaction between entities under common control.

Accordingly, the Permian Gathering Assets were recorded at amounts based on Delek Holdings' historical carrying value as of the acquisition date.

The carrying value of the Permian Gathering Assets as of the acquisition date was $ 209.5 million.

Pursuant to the common control guidance, the 5.0 million units issued (which had a closing market price of $ 9.10 per unit on the transaction date) were recorded in equity at $ 109.5 million, representing the net carrying value of the Permian Gathering Assets purchased of $ 209.5 million less the $ 100.0 million cash consideration.

Prior periods have not been recast as these assets do not constitute a business in accordance with ASU 2017-01.

We capitalized approximately $ 0.7 million of acquisition costs related to the Big Spring Gathering Assets Acquisition.

Big Spring Logistics Assets Acquisition

Effective March 1, 2018, the Partnership, through its wholly-owned subsidiary DKL Big Spring, LLC, acquired the Big Spring Logistics Assets from Delek Holdings, which are primarily located at or adjacent to the Big Spring Refinery.

The total purchase price was $ 170.8 million, financed through borrowings under the Partnership’s revolving credit facility.

The Big Spring Logistics Assets include (i) approximately 70 storage tanks and certain ancillary assets (such as tank pumps and piping) primarily located adjacent to the Big Spring

Refinery, (ii) an asphalt terminal and a light products terminal, (iii) certain crude oil and refined product pipelines and (iv) other logistics assets, such as 4 underground saltwells used for natural gas liquids storage.

In connection with the closing of the transaction, Delek Holdings, the Partnership and various of their respective subsidiaries entered into and amended certain existing contracts, including entering into new pipelines, storage and throughput facilities and asphalt services agreements.

The transaction and related agreements were approved by the Conflicts Committee of the Partnership's general partner, which is comprised solely of independent directors.

See Note 4 for more detailed descriptions of these agreements.

The Big Spring Logistics Assets Acquisition was considered a transaction between entities under common control.

Accordingly, the Big Spring Logistics Assets were recorded at amounts based on Delek Holdings' historical carrying value as of the acquisition date.

The excess of the cash paid over the historical carrying value of the assets acquired from Delek Holdings amounted to $ 98.8 million and was recorded as a reduction in equity.

The historical carrying value of the Big Spring Logistics Assets as of the acquisition date was $ 72.0 million, which is net of $ 0.8 million of assumed asset retirement obligations.

Prior periods have not been recast, as these assets did not constitute a business in accordance with ASU 2017-01.

We capitalized approximately $ 0.4 million of acquisition costs related to the Big Spring Logistics Assets Acquisition.

Marketing Contract Intangible Acquisition

Additionally, concurrent with the Big Spring Logistics Assets Acquisition, Delek Holdings, the Partnership and various of their respective subsidiaries entered into a new marketing agreement, whereby the Partnership markets certain refined products produced at or sold from the Big Spring Refinery to various customers in return for a marketing fee (the "Marketing Contract Intangible Acquisition").

We recorded a related contract intangible asset in the amount of $ 144.2 million based on the amount paid to enter into the contract, which represents the fair value of the intangible asset.

The contract intangible asset is amortized over a twenty year period as a component of net revenues from affiliates.

The total consideration paid was financed through borrowings under the Partnership's revolving credit facility.

This transaction and related marketing agreement were approved by the Conflicts Committee of the board of the Partnership's general partner, which is comprised solely of independent directors.

See Note 4 for a more detailed description of this marketing agreement.

We capitalized approximately $ 0.7 million of acquisition costs related to the Permian Gathering Assets Acquisition.

Notes to Consolidated Financial Statements

Related Party Transactions

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In November 2017, Delek Holdings opted to renew certain of these agreements for subsequent five-year terms expiring in November 2022.

In the case of our marketing agreement with Delek Holdings in respect to the Tyler Refinery, the initial term has been extended through 2026.

The current term of certain of our agreements with Delek Holdings were required to be further extended pursuant to the amended and restated DKL Credit Facility (as defined in Note 11), which extensions were effective in the fourth quarter of 2018.

In the case of our marketing agreement with Delek Holdings with respect to the Tyler Refinery, the initial term was extended through 2026.

Effective fourth quarter of 2018, the term of certain of our agreements with Delek Holdings were further extended pursuant to the requirements of the amended and restated DKL Credit Facility (as defined in Note 11).

The fees under each agreement are payable to us monthly by Delek Holdings or certain third parties to whom Delek Holdings has assigned certain of its rights and are generally subject to increase or decrease on July 1 of each year, by the amount of any change in various inflation-based indices, including the Federal Energy Regulatory Commission (the "FERC") oil pipeline index or various iterations of the consumer price index ("CPI") and the producer price index ("PPI");

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In most circumstances, if Delek Holdings or the applicable third party assignee fails to meet or exceed the minimum volume or throughput commitment during any calendar quarter, Delek Holdings, and not any third party assignee, will be required to make a quarterly shortfall payment to us equal to the volume of the shortfall multiplied by the applicable fee, subject to certain exceptions as specified in the applicable agreement.

With the exception of the Big Spring T&D Agreement executed in March 2020, carry-over of any volumes or revenue in excess of such commitment to any subsequent quarter is not permitted.

Carry-over of any volumes or revenue in excess of such commitment to any subsequent quarter is not permitted.

Under each of these agreements, we are required to maintain the capabilities of our pipelines and terminals, such that Delek Holdings may throughput and/or store, as the case may be, specified volumes of crude oil, intermediate and refined products.

To the extent that Delek Holdings is prevented by our failure to maintain such capacities from throughputting or storing such specified volumes for more than 30 days per year, Delek Holdings' minimum throughput commitment will be reduced proportionately and prorated for the portion of the quarter during which the specified throughput capacity was unavailable, and/or the storage fee will be reduced, prorated for the portion of the month during which the specified storage capacity was unavailable.

To the extent that Delek Holdings is prevented by our failure to maintain such capacities to throughput or from storing such specified volumes for more than 30 days per year, Delek Holdings' minimum throughput commitment will be reduced proportionately and prorated for the portion of the quarter during which the specified throughput capacity was unavailable, and/or the storage fee will be reduced, prorated for the portion of the month during which the specified storage capacity was unavailable.

Such reduction would occur even if actual throughput or storage amounts were below the minimum volume commitment levels.

Notes to Consolidated Financial Statements

Our material commercial agreements with Delek Holdings include the following:

Material commercial agreements with Delek Holdings:

Asset/Operation Initiation Date Initial/Maximum Term (years) (1)

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Dedicated Terminalling and storage 50,000

Notes to Consolidated Financial Statements

Storage July 2013 8 / 16

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Storage March 1, 2018 10 / 15

Storage NA $ 1,411,406 /month

Storage N/A $ 1,473,508 /month

Asphalt Services Agreement (Big Spring Logistics Assets):

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$ 0.54 - $ 0.76

Throughput and Deficiency Agreement (Big Spring Gathering Assets)

Throughput and Deficiency Agreement (Permian Gathering Assets)

Gathering System March 31, 2020 10 / 20

1 unchanged sentence

Re-delivery System March 30, 2020 10 / 20

Notes to Consolidated Financial Statements

Pipelines, Throughput and Offloading Facilities Agreement (Big Spring Logistics Assets)

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(7) The throughput agreement provides for a minimum throughput fee of $ 1.6 million per quarter for throughput of a combination of light and heavy crude.

Notes to Consolidated Financial Statements

Pursuant to financing arrangements between Delek Holdings and its subsidiaries, Lion Oil Company, LLC, Lion Oil Trading & Transportation, LLC and Alon USA LP, (all hereinafter referred to together as "Delek Holdings"), to which we are not a party, and J.

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The Omnibus Agreement governs the provision of certain operational services and reimbursement obligations, among other matters, between the Partnership and Delek Holdings, and obligates us to pay an annual fee of $ 4.6 million to Delek Holdings for its provision of centralized corporate services to the Partnership.

Pursuant to the terms of the Omnibus Agreement, we were reimbursed by Delek Holdings for certain capital expenditures in the amount of $ 0.6 million, $ 3.7 million and $ 5.0 million during the years ended December 31, 2020, 2019 and 2018, respectively.

Pursuant to the terms of the Omnibus Agreement, we were reimbursed by Delek Holdings for certain capital expenditures of a nominal amount, $ 0.6 million and $ 3.7 million during the years ended December 31, 2021, 2020 and 2019, respectively.

These amounts are recorded in other long-term liabilities and are amortized to revenue over the life of the underlying revenue agreement corresponding to the asset.

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As of December 31, 2021 and 2020, we have recorded a nominal receivable from related parties for these matters for which we expect to be reimbursed.

These reimbursements are recorded as reductions

Notes to Consolidated Financial Statements

to operating expenses.

We were reimbursed $ 0.1 million, $ 6.3 million and $ 8.2 million for these matters during the year ended December 31, 2020, 2019 and 2018, respectively.

These reimbursements are recorded as reductions to operating expenses.

We were reimbursed a nominal amount, $ 0.1 million and $ 6.3 million for these matters during the year ended December 31, 2021, 2020 and 2019, respectively.

Other Agreements

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Other Transactions

The Partnership manages a long-term capital project on behalf of Delek Holdings pursuant to a construction management and operating agreement (the "DPG Management Agreement") for the construction of a 250-mile gathering system in the Permian Basin.

The majority of the gathering system has been constructed, however, additional costs pertaining to a pipeline connection that was not acquired by the Partnership continue to be incurred and are still subject to the terms of the DPG Management Agreement.

The majority of the gathering systems have been constructed, however, additional costs pertaining to a pipeline connection that was not acquired by the Partnership continue to be incurred and are still subject to the terms of the DPG Management Agreement.

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Unregistered Sale of Equity Securities

In connection with the Partnership's issuance of the common limited partner units under the Big Spring Gathering Assets Acquisition and in accordance with the Partnership's First Amended and Restated Agreement of Limited Partnership, as amended (the "Partnership Agreement"), the Partnership issued general partner units to the general partner in an amount necessary to maintain its 2% general partner interest as defined in the Partnership Agreement.

The sale and issuance of the Additional Units and such general partner units in connection with the Big Spring Gathering Assets Acquisition is exempt from registration under Section 4(a)(2) of the Securities Act of 1933, as amended.

In connection with the Partnership's issuance of the common limited partner units under the Permian Gathering Assets Acquisition and in accordance with the Partnership's First Amended and Restated Agreement of Limited Partnership, as amended (the "Previous Partnership Agreement"), the Partnership issued general partner units to the general partner in an amount necessary to maintain its 2 % general partner interest as defined in the Previous Partnership Agreement.

The sale and issuance of the Additional Units and such general partner units in

Notes to Consolidated Financial Statements

connection with the Permian Gathering Assets Acquisition is exempt from registration under Section 4(a)(2) of the Securities Act of 1933, as amended.

Additionally, in March 2020, Delek Marketing & Supply, LLC ("Delek Marketing") repurchased 451,822 common limited partner units from an unaffiliated investor pursuant to a Common Unit Purchase Agreement between Delek Marketing and such investor.

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As a result of the transaction, Delek Holdings' ownership in our common limited partner units increased to 64.5 % from 62.6 %.

Delek Holdings' ownership in our common limited partner units was further increased to 70.5 % as a result of the issuance of 5.0 million Additional Units in connection with the Big Spring Gathering Assets Acquisition described above.

Delek Holdings' ownership in our common limited partner units was further increased to 70.5 % as a result of the issuance of 5.0 million Additional Units in connection with the Permian Gathering Assets Acquisition described above.

In August 2020, Delek Holdings ownership in our common limited partner units was further increased to approximately 80 % in connection with the IDR Restructuring Transaction, when the Partnership issued 14.0 million of the Partnership's newly issued common limited partner units to Delek Holdings.

On December 22, 2021, Delek Holdings issued a press release regarding a program to sell up to 434,590 common limited partner units representing limited partner interests in the Partnership.

We will not sell any securities under this program and we will not receive any proceeds from the sale of the securities by Delek Holdings.

Amendment No.

2 to the First Amended and Restated Agreement of Limited Partnership of Delek Logistics Partners, LP

On March 31, 2020, in connection with the completion of the Big Spring Gathering Assets Acquisition, the Board of the general partner adopted Amendment No.

On March 31, 2020, in connection with the completion of the Permian Gathering Assets Acquisition, the Board of the general partner adopted Amendment No.

2 (“Amendment No.

2”) to the Partnership Agreement, effective upon adoption.

2”) to the Previous Partnership Agreement, effective upon adoption.

Amendment No.

2 amended the Partnership Agreement to provide for a waiver of distributions in respect of the Incentive Distribution Rights ("IDRs") for General Partner Additional Units ("GP Additional Units") associated with the 5.0 million Additional Units for at least two years, through at least the distribution for the quarter ending March 31, 2022 ( the “IDR Waiver”).

2 amended the Previous Partnership Agreement to provide for a waiver of distributions in respect of the Incentive Distribution Rights ("IDRs") for General Partner Additional Units ("GP Additional Units") associated with the 5.0 million Additional Units for at least two years, through at least the distribution for the quarter ending March 31, 2022 ( the “IDR Waiver”).

The IDR Waiver essentially reduced the distribution made to the holders of the IDRs during this period, as the holders would not receive a share of the distribution made on the GP Additional Units.

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Contemporaneously, Delek Holdings purchased a 5.2 % ownership interest in our general partner from certain affiliates who were also members of our general partner's management and board of directors.

Delek Holdings now owns 100 % interest in the general partner and owns approximately

Notes to Consolidated Financial Statements

34.7 million common limited partner units, representing approximately 80 % of the Partnership's outstanding common limited partner units.

As a result of the transaction, Delek Holdings owned 100 % interest in the general partner and approximately 34.7 million common limited partner units, representing approximately 80 % of the Partnership's outstanding common limited partner units.

To implement the transaction, our Partnership Agreement was amended and restated.

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Prior to August 13, 2020, our common and general partner unitholders and the holders of IDRs were entitled to receive quarterly distributions of available cash as it was determined by the board of directors of our general partner in accordance with the terms and provisions of our Partnership Agreement.

Pursuant to the IDR Restructuring Transaction on August 13, 2020, the general partner will no longer receive any cash distributions.

Pursuant to the IDR Restructuring Transaction on August 13, 2020, the general partner will no longer receive any cash

Notes to Consolidated Financial Statements

distributions.

During the years ended December 31, 2021, 2020 and 2019, we paid quarterly cash distributions of $ 161.6 million, $ 136.8 million and $ 113.7 million, respectively, of which $ 129.3 million, $ 105.3 million and $ 83.0 million, respectively, were paid to Delek Holdings and our general partner.

On January 22, 2021, our board of directors declared a quarterly cash distribution totaling $ 39.5 million based on the available cash as of the date of determination for the end of the fourth quarter of 2020.

On January 21, 2022, the board of directors of our general partner declared a quarterly cash distribution totaling $ 42.4 million based on the available cash as of the date of determination for the end of the fourth quarter of 2021.

The distribution was paid on February 8, 2022 to unitholders of record on February 1, 2022, of which $ 33.8 million was paid to Delek Holdings .

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Delek Holdings, directly or indirectly, accounted for 59.8 %, 67.4 % and 44.8 % of our total revenues for the years ended December 31, 2021, 2020 and 2019, respectively.

Sunoco LP accounted for 5.6 %, 14.5 % and 15.9 % of our total revenues for the years ended December 31, 2020, 2019 and 2018, respectively.

Sunoco, LLC accounted for 5.2 %, 5.6 % and 14.5 % of our total revenues for the years ended December 31, 2021, 2020 and 2019, respectively.

The majority of our commercial agreements with Delek Holdings meet the definition of a lease because:

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We have determined that the predominant component of the related agreements currently in effect is the lease component.

Therefore, the combined component is accounted for

Notes to Consolidated Financial Statements

under the applicable lease accounting guidance.

Therefore, the combined component is accounted for under the applicable lease accounting guidance.

Of our $ 449.4 million net property, plant, and equipment balance as of December 31, 2021, $ 433.1 million is subject to operating leases under our commercial agreements.

These agreements do not include options for the lessee to purchase our leased assets, nor do they include any material residual value guarantees or material restrictive covenants.

The following table represents a disaggregation of revenue for each reportable segment for the periods indicated (in thousands):

The following table represents a disaggregation of revenue for the pipeline and transportation and wholesale marketing and terminalling segments for the periods indicated (in thousands):

Year Ended December 31, 2021

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(1) Net of $ 7.2 million of amortization expense for the year ended December 31, 2020, related to a customer contract intangible asset recorded in the wholesale marketing and terminalling segment.

Notes to Consolidated Financial Statements

As of December 31, 2021, we expect to recognize approximately $ 1.5 billion in lease revenues related to our unfulfilled performance obligations pertaining to the minimum volume commitments and capacity utilization under the non-cancelable terms of our commercial agreements with Delek Holdings.

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Total expected revenue on remaining performance obligations $ 1,474,076

Notes to Consolidated Financial Statements

Net Income Per Unit

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As discussed in Note 4 - Related Party Transactions, pursuant to Amendment No.

2 to the Partnership Agreement, an agreement was reached for a waiver of distributions in respect of the IDRs for the GP Additional Units associated with the 5.0 million Additional Units issued in connection with the Big Spring Gathering Assets Acquisition for at least two years, through at least the distribution for the quarter ending March 31, 2022.

2 to the Partnership Agreement, an agreement was reached for a waiver of distributions in respect of the IDRs for the GP Additional Units associated with the 5.0 million Additional Units issued in connection with the Permian Gathering Assets Acquisition for at least two years, through at least the distribution for the quarter ending March 31, 2022.

The IDR Waiver essentially reduced the distribution made to the holders of the IDRs during this period, as the holders would not receive a share of the distribution made on the GP Additional Units.

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See Note 12 for further discussion related to IDRs.

(2) There were 5,201 and 1,776 outstanding common unit equivalents excluded from the diluted earnings per unit calculation during both years ended December 31, 2020 and 2018.

There were no outstanding common unit equivalents excluded from the diluted earnings per unit calculation for the year ended December 31, 2019, as these common unit equivalents did not have a dilutive effect under the treasury stock method.

(2) There were 4,458 and 5,201 outstanding common unit equivalents excluded from the diluted earnings per unit calculation during the years ended December 31, 2021 and 2020, respectively.

There were no outstanding common unit equivalents excluded from the diluted earnings per unit calculation during the year ended December 31, 2019.

Inventories consisted of $ 2.4 million and $ 3.1 million of refined petroleum products as of December 31, 2021 and 2020, respectively, each of which are net of lower of cost or net realizable value reserve of a nominal amount.

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Property, plant and equipment, net $ 449,388 $ 464,812

Property, plant and equipment, accumulated depreciation and depreciation expense by reporting segment as of and for the years ended December 31, 2020 and 2019 are as follows (in thousands):

Property, plant and equipment, accumulated depreciation and depreciation expense for the pipelines and transportation and wholesale marketing and terminalling reportable segments as of and for the years ended December 31, 2021 and 2020 are as follows (in thousands):

As of and For the Year Ended December 31, 2021

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Total $ 180,535 $ ( 20,431 ) $ 160,104

Amortization of intangible assets was $ 7.2 million during both the years ended December 31, 2020 and 2019.

Amortization of intangible assets was $ 6.1 million during the year ended December 31, 2018.

Amortization of intangible assets was $ 7.2 million during the years ended December 31, 2021, 2020 and 2019.

It is included as a reduction of net revenue on the accompanying consolidated statements of income and comprehensive income.

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Long-Term Obligations

7.125 % Senior Notes due 2028

On May 24, 2021, the Partnership and our wholly owned subsidiary Delek Logistics Finance Corp.

("Finance Corp." and together with the Partnership, the "Issuers") issued $ 400.0 million in aggregate principal amount of 7.125 % senior notes due 2028 (the "2028 Notes") at par, pursuant to an indenture with U.S.

Bank, National Association as trustee.

The 2028 Notes are general unsecured senior obligations of the Issuers and are unconditionally guaranteed jointly and severally on a senior unsecured basis by the Partnership's subsidiaries other than Finance Corp., and will be unconditionally guaranteed on the same basis by certain of the Partnership’s future subsidiaries.

The 2028 Notes rank equal in right of payment with all existing and future senior indebtedness of the Issuers, and senior in right payment to any future subordinated indebtedness of the Issuers.

The 2028 Notes will mature on June 1, 2028, and interest on the 2028 Notes is payable semi-annually in arrears on each June 1 and December 1, commencing December 1, 2021.

At any time prior to June 1, 2024, the Issuers may redeem up to 35 % of the aggregate principal amount of the 2028 Notes with the net cash proceeds of one or more equity offerings by the Partnership at a redemption price of 107.125 % of the redeemed principal amount, plus accrued and unpaid interest, if any, subject to certain conditions and limitations.

Prior to June 1, 2024, the Issuers may also redeem all or part of the 2028 Notes at a redemption price of the principal amount plus accrued and unpaid interest, if any, plus a "make whole" premium, subject to certain conditions and limitations.

In addition, beginning on June 1, 2024, the Issuers may, subject to certain conditions and limitations, redeem all or part of the 2028 Notes, at a redemption price of 103.563 % of the redeemed principal for the twelve-month period beginning on June 1, 2024, 101.781 % for the twelve-month period beginning on June 1, 2025, and 100.00 % beginning on June 1, 2026 and thereafter, plus accrued and unpaid interest, if any.

In the event of a change of control, accompanied or followed by a ratings downgrade within a certain period of time, subject to certain conditions and limitations, the Issuers will be obligated to make an offer for the purchase of the 2028 Notes from holders at a price equal to 101.00 % of the principal amount thereof, plus accrued and unpaid interest.

As of December 31, 2021, we had $ 400.0 million in outstanding principal amount under the 2028 Notes, and the effective interest rate was 7.41 %.

Outstanding debt balances under the 2028 Notes are net of deferred financing costs amounting to $ 5.7 million as of December 31, 2021.

DKL Credit Facility

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The 2025 Notes rank equal in right of payme nt with all existing and future senior indebtedness of the Issuers, and senior in right of payment to any future subordinated indebtedness of the Issuers.

Interest on the 2025 Notes is payable semi-annually in arrears on each May 15 and November 15, commencing November 15, 2017.

Beginning on May 15, 2020, th e Issuers may, subject to certain conditions and limitations, redeem all or part of the 2025 Notes at a redemption price of 105.063 % of the redeemed principal for the twelve-month period beginning on May 15, 2020, 103.375 % for the twelve-month period beginning on May 15, 2021, 101.688 % for the twelve-month period beginning on May 15, 2022 and 100.00 % beginning on May 15, 2023 and thereafter, plus accrued and unpaid interest, if any.

The 2025 Notes will mature on May 15, 2025, and Interest on the 2025 Notes is payable semi-annually in arrears on each May 15 and November 15, commencing November 15, 2017.

Beginning on May 15, 2021, th e Issuers may, subject to certain conditions and limitations, redeem all or part of the 2025 Notes at a redemption price of 103.375 % of the redeemed principal for the twelve-month period beginning on May 15, 2021, 101.688 % for the twelve-month period beginning on May 15, 2022 and 100.00 % beginning on May 15, 2023 and thereafter, plus accrued and unpaid interest, if any.

In the event of a change of control, accompanied or followed by a ratings downgrade within a certain period of time, subject to certain conditions and limitations, the Issuers will be obligated to make an offer for the purchase of the 2025 Notes from holders at a price equal to 101 % of the principal amount thereof, plus accrued and unpaid interest.

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As of December 31, 2021, the effective interest rate related to the 2025 Notes was approximately 7.20 %.

Outstanding borrowings under the 2025 Notes are net of deferred financing costs and debt discount of $ 3.3 million and $ 1.0 million, respectively, as of December 31, 2020.

Outstanding debt balances under the 2025 Notes are net of deferred financing costs and debt discount of $ 2.5 million and $ 0.8 million, respectively, as of December 31, 2021.

Principal maturities of the Partnership's existing third party debt instruments for the next five years and thereafter are as follows as of December 31, 2021 (in thousands):

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$ — $ — $ — $ 250,000 $ — $ — $ 250,000

Notes to Consolidated Financial Statements

2028 Notes $ — $ — $ — $ — $ — $ 400,000 $ 400,000

We had 8,774,053 common limited partner units held by the public outstanding as of December 31, 2021.

Additionally, as of December 31, 2021, Delek Holdings owned an 79.8 % limited partner interest in us, consisting of 34,696,800 common limited partner units.

On December 22, 2021, Delek Holdings issued a press release regarding a program to sell certain common limited partner units representing limited partner interests in the Partnership.

As of December 31, 2021, we did not sell any securities under this program and we will not receive any proceeds from the sale of the securities by Delek Holdings.

Effective August 13, 2020, the Partnership closed on the IDR Restructuring Transaction, and contemporaneous with this transaction, Delek Holdings purchased a 5.2 % ownership interest in our general partner from certain affiliates, who were also members of our general partner's management and board of directors, at fair market value.

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As part of this transaction, we expensed approximately $ 1.1 million of transaction costs.

Notes to Consolidated Financial Statements

In August 2020, we filed a shelf registration statement with the U.S.

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General partner units issued to maintain 2 % interest

Unit-based compensation awards (1)

— — 102,196 102,196

Balance at December 31, 2019 9,131,579 15,294,046 498,482 24,924,107

General partner units issued to maintain 2 % interest

— — 102,196 102,196

Unit-based compensation awards (1)

17,711 — — 17,711

Big Spring Gathering Assets Acquisition equity issuance — 5,000,000 — 5,000,000

Permian Gathering Assets Acquisition equity issuance — 5,000,000 — 5,000,000

Delek Holdings unit purchases from public ( 451,822 ) 451,822 — —

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Balance at December 31, 2020 8,697,468 34,745,868 — 43,443,336

Delek Holdings resale of units 49,068 ( 49,068 ) — —

Unit-based compensation awards (1)

27,517 — — 27,517

Balance at December 31, 2021 8,774,053 34,696,800 — 43,470,853

(1) Unit-based compensation awards are presented net of 5,315 and 926 units withheld for taxes as of December 31, 2021 and 2020, respectively.

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The following table presents the allocation of the general partner's interest in net income (in thousands, except percentage of ownership interest):

Notes to Consolidated Financial Statements

Year Ended December 31,

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$ — $ 18,724 $ 33,080

Notes to Consolidated Financial Statements

Incentive Distribution Rights

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As of August 12, 2020, the IDRs held by our general partner were entitled to receive the maximum distribution.

Pursuant to Amendment No.

2 to the Prior Partnership Agreement, prior to the IDR Restructuring Transaction, an agreement was reached for a waiver of distributions in respect of the IDRs associated with the 5.0 million Additional Units for at least two years, through at least the distribution for the quarter ending March 31, 2022 (the "IDR Waiver").

Refer to Note 4 for additional details.

Cash Distributions

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The table below summarizes the quarterly distributions related to our quarterly financial results:

Quarter Ended Total Quarterly Distribution Per Limited Partner Unit Total Quarterly Distribution Per Limited Partner Unit, Annualized Total Cash Distribution, including general partner interest and IDRs (in thousands) Date of Distribution Unitholders Record Date

Quarter Ended Total Quarterly Distribution Per Limited Partner Unit Total Cash Distribution, including general partner interest and IDRs (in thousands) Date of Distribution Unitholders Record Date

December 31, 2019 $ 0.885 $ 30,634 February 12, 2020 February 4, 2020

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December 31, 2021 $ 0.975 $ 42,384 February 8, 2022 February 1, 2022

Notes to Consolidated Financial Statements

The allocations of total quarterly cash distributions made to general and limited partners for the years ended December 31, 2021, 2020 and 2019 are set forth in the table below.

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Cash distributions per limited partner unit $ 3.785 $ 3.605 $ 3.440

Notes to Consolidated Financial Statements

Equity Based Compensation

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See Note 2 for additional information on terms and measurement considerations.

On June 9, 2021, the LTIP was amended to increase the number of units representing limited partner interest in the Partnership (the "Common Units") authorized for issuance by 300,000 Common Units to 912,207 Common Units.

Additionally, the term of the LTIP was extended to June 9, 2031.

Equity Method Investments

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During the third quarter of 2020, Red River, which owns a crude oil pipeline running from Cushing, Oklahoma to Longview, Texas, completed a planned expansion project to increase the pipeline capacity and commenced operations on the completed expansion project on October 1, 2020.

We contributed $ 3.5 million related to such expansion project in May 2019.

We contributed $ 3.5 million related to such expansion project in May 2019 and during 2020 made additional capital contributions of $ 12.2 million based on capital calls received.

During the year ended December 31, 2021, we made additional capital contributions totaling $ 1.4 million based on capital calls received.

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Current liabilities $ 10,040 $ 7,789

Year Ended For the period

December 31, 2020 April 24, 2019 - December 31, 2019

Year Ended Year Ended For the period

December 31, 2021 December 31, 2020 April 24, 2019 - December 31, 2019

Revenues $ 68,057 $ 51,001 $ 38,352

2 unchanged sentences

Net income $ 40,390 $ 30,404 $ 25,548

Notes to Consolidated Financial Statements

We have two joint ventures that have constructed separate crude oil pipeline systems and related ancillary assets, which are serving third parties and subsidiaries of Delek Holdings.

We have two additional joint ventures that have constructed separate crude oil pipeline systems and related ancillary assets, which are serving third parties and subsidiaries of Delek Holdings.

We own a 50 % membership interest in the entity formed with an affiliate of Plains All American Pipeline, L.P.

("CP LLC") to operate one of these pipeline systems and a 33 % membership interest in the entity formed with Rangeland Energy II, LLC ("Rangeland Energy") to operate the other pipeline system.

During 2018, Rangeland Energy was acquired by Andeavor and the legal entity in which we have an equity investment became Andeavor Logistics RIO Pipeline LLC ("Andeavor Logistics").

("CP LLC") to operate one of these pipeline systems and a 33 % membership interest in the entity formed with Andeavor Logistics RIO Pipeline LLC ("Andeavor Logistics"), formerly known as Rangeland Energy II, LLC ("Rangeland Energy") to operate the other pipeline system.

Notes to Consolidated Financial Statements

Combined summarized financial information for these two equity method investees on a 100% basis is shown below (in thousands):

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Current liabilities $ 1,492 $ 1,496

Non-current liabilities $ — $ 8

Year Ended Year Ended Year Ended

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The Partnership's investments in these three entities were financed through a combination of cash from operations and borrowings under the DKL Credit Facility.

As of December 31, 2020 and December 31, 2019, the Partnership's investment balance in these joint ventures was $ 253.7 million and $ 247.0 million, respectively.

The Partnership's investment balances in these joint ventures were as follows (in thousands):

Year Ended Year Ended

December 31, 2021 December 31, 2020

Red River 144,041 141,803

CP LLC 61,670 62,771

Andeavor Logistics 44,319 49,101

We do not consolidate any part of the assets or liabilities or operating results of our equity method investees.

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However, since all significant decisions require the consent of the other investor(s) without regard to economic interest, we have determined that we have joint control and have applied the equity method of accounting.

Our investment in these joint ventures is reflected in our pipelines and transportation segment.

We aggregate our operating segments into two reportable segments:

Our investment in these joint ventures is reflected in our investments in pipeline joint ventures segment.

We aggregate our operating segments into three reportable segments:

(i) pipelines and transportation;

and (ii) wholesale marketing and terminalling.

(ii) wholesale marketing and terminalling;

and (iii) investment in pipeline joint ventures.

Our operating segments adhere to the accounting policies used for our consolidated financial statements.

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Decisions concerning the allocation of resources and assessment of operating performance are made based on this segmentation.

Management measures the operating performance of each of its reportable segments based on segment contribution margin.

Management measures the operating performance of each of its reportable segments based on segment contribution margin, with the exception of investments in pipeline joint ventures segment, which is measured based on net income.

Segment contribution margin is defined as net revenues less cost of materials and other and operating expenses, excluding depreciation and amortization.

Notes to Consolidated Financial Statements

The following is a summary of business segment operating performance as measured by contribution margin for the periods indicated (in thousands):

The following is a summary of business segment operating performance as measured by contribution margin, with the exception of investments in pipeline joint ventures segment, which is measured based on net income, for the periods indicated (in thousands):

Year Ended December 31,

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$ 5,109 $ 7,818 $ 3,387

Investments in Pipeline Joint Ventures

Income from equity method investments $ ( 24,575 ) $ ( 22,693 ) $ ( 19,832 )

Equity method investments contributions $ ( 1,393 ) $ ( 12,175 ) $ ( 139,294 )

Net revenues:

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Operating income 190,502 179,793 125,812

Interest expense, net 50,221 42,874 47,328

Income from equity method investments ( 24,575 ) ( 22,693 ) ( 19,832 )

Other (income) expense, net ( 119 ) 133 600

Total non-operating expenses, net 25,527 20,314 28,096

Income before income tax expense 164,975 159,479 97,716

Income tax expense 153 223 967

Net income attributable to partners $ 164,822 $ 159,256 $ 96,749

Capital spending (1) (2)

$ 27,451 $ 15,449 $ 9,987

(1) Capital spending excludes transaction costs capitalized in the amount of $ 0.4 million that relate to the Big Spring Logistics Assets Acquisition for the year ended December 31, 2018.

Additionally, capital spending for the year ended December 31, 2020, excludes transaction costs capitalized in the amount of $ 0.3 million that relate to the Trucking Assets Acquisition and $ 0.7 million that relate to the Big Spring Gathering Assets Acquisition.

(1) Capital spending for the year ended December 31, 2020, excludes transaction costs capitalized in the amount of $ 0.3 million that relate to the Trucking Assets Acquisition and $ 0.7 million that relate to the Permian Gathering Assets Acquisition.

(2) Capital spending for the years ended December 31, 2021, 2020 and 2019 excludes contributions to equity method investments amounting to $ 1.4 million, $ 12.2 million and $ 139.3 million, respectively.

(3) Affiliate revenue for the wholesale marketing and terminalling segment is presented net of amortization expense pertaining to the Marketing Contract Intangible Acquisition.

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Wholesale marketing and terminalling 211,723 206,918

Other 26,182 20,522

Investments in pipeline joint ventures 250,030 253,675

20,628 26,182

Total assets $ 935,071 $ 956,417

(1) Other includes cash and cash equivalents and related party receivables and other assets which are recorded at the corporate level.

For tax purposes, each partner of the Partnership is required to take into account its share of income, gain, loss and deduction in computing its federal and state income tax liabilities, regardless of whether cash distributions are made to such partner by the Partnership.

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We recognize accrued interest and penalties related to unrecognized tax benefits as an adjustment to the current provision for income taxes.

There were no uncertain tax positions recorded as of December 31, 2020 or 2019, and there were no interest or penalties

Notes to Consolidated Financial Statements

recognized related to uncertain tax positions for the years ended December 31, 2020, 2019 or 2018.

There were no uncertain tax positions recorded as of December 31, 2021 or 2020, and there were no interest or penalties recognized related to uncertain tax positions for the years ended December 31, 2021, 2020 or 2019.

We have examined uncertain tax positions for any material changes in the next 12 months and none are expected.

Notes to Consolidated Financial Statements

Commitments and Contingencies

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Numerous permits or other authorizations are required under these laws and regulations for the operation of our terminals, pipelines, saltwells, trucks and related operations, and may be subject to revocation, modification and renewal.

These laws and permits raise potential exposure to future claims and lawsuits involving environmental and safety matters, which could include soil and water contamination, air pollution, personal injury and property damage allegedly caused by substances which we handled, used, released or disposed of, transported, or that relate to pre-existing conditions for which we have assumed responsibility.

These laws and permits raise potential exposure to future claims and lawsuits involving environmental and safety matters, which could include soil, surface water and groundwater contamination, air pollution, personal injury and property damage allegedly caused by substances which we may have handled, used, released or disposed of, transported, or that relate to pre-existing conditions for which we may have assumed responsibility.

We believe that our current operations are in substantial compliance with existing environmental and safety requirements.

However, there have been and we expect that there will continue to be ongoing discussions about environmental and safety matters between us and federal and state authorities, including notices of violations, citations and other enforcement actions, some of which have resulted or may result in changes to operating procedures and in capital expenditures.

While it is often difficult to quantify future environmental or safety related expenditures, we anticipate that continuing capital investments and changes in operating procedures will be required to comply with existing and new requirements, as well as evolving interpretations and more strict enforcement of existing laws and regulations.

Releases of hydrocarbons or hazardous substances into the environment could, to the extent the event is not insured, or is not a reimbursable event under the Omnibus Agreement, subject us to substantial expenses, including costs to respond to, contain and remediate a release, to comply with applicable laws and regulations and to resolve claims by third parties for personal injury, property damage or natural resources damages.

However, there have been and we expect that there will continue to be ongoing discussions about environmental and safety matters between us and federal and state authorities, including the receipt and response to notices of violations, citations and other enforcement actions, some of which have resulted or may result in changes to operating procedures and in capital expenditures.

Releases of hydrocarbons or hazardous substances into the environment could, to the extent the event is not insured, or is not a reimbursable event under the Omnibus Agreement, subject us to substantial expenses, including costs to respond to, contain and remediate a release, to comply with applicable laws and regulations and to resolve claims by governmental agencies or other persons for personal injury, property damage, response costs, or natural resources damages.

Crude Oil and Other Releases

We have experienced several crude oil and other releases involving our assets.

There were no material releases that occurred during the year ended December 31, 2020, and there were five releases that occurred throughout the year 2019.

Cleanup operations and site maintenance and remediation efforts on these and other releases are at various stages of completion.

The majority of the remediation efforts for these releases are substantially completed or have received regulatory closure.

With the exception of the Sulphur Springs release defined below, we expect regulatory closure in 2021 for the release sites that have not yet received it.

Many of the releases have occurred on our system of common carrier pipelines which gather crude in southern Arkansas and northern Louisiana, and which are primarily located within 60 miles of Delek Holdings’ El Dorado refinery ("El Dorado Gathering System").

During the year ended December 31, 2019, we decommissioned certain sections of the El Dorado Gathering System in an effort to improve the safety and integrity of the system.

The decommissioning of these sections was completed in August 2019.

The project did not have a material effect on our financial results.

During the year ended December 31, 2021, there was one significant release of finished product, involving one of our pipelines and it occurred in August 2021.

This release of finished product from our Greenville pipeline occurred near Dixon, Texas (the "Greenville Dixon Release").

Cleanup operations, site maintenance and remediation on this release are currently on-going.

Costs incurred as of December 31, 2021 totaled $ 2.7 million.

Additionally, as of December 31, 2021 we have accrued $ 0.8 million for remediation and other potential costs related to this release.

The impacted area is undergoing remedial measures that will be protective of human health and the environment, including groundwater, under the oversight of Texas Commission of Environmental Quality (the "TCEQ").

On October 3, 2019, a release of diesel fuel involving one of our pipelines occurred near Sulphur Springs, Texas (the "Sulphur Springs Release").

Cleanup operations and site maintenance and remediation on this release have been substantially completed.

Remedial costs incurred totaled $ 7.1 million during 2019 and $ 0.5 million during 2020.

In the fourth quarter of 2020 we submitted an actual property assessment report that assessed site conditions and recommended closure of the site.

Closure of the site was approved in the fourth quarter of 2020 by the TCEQ.

The groundwater monitoring wells were abandoned and removed in the second quarter of 2021 in accordance with applicable regulatory requirements.

We filed suit in January 2020 against a third party contractor, seeking damages related to this release;

two related actions were filed in November and December 2020 by and against the contractor's insurance company seeking judgments related to insurance coverage.

We have not received notification that any legal action with respect to fines and penalties will be pursued by the regulatory agencies.

For other releases that occurred in prior years, we have received regulatory closure or a majority of the cleanup and remediation efforts are substantially complete.

We expect regulatory closure in 2021 for the release sites that have not yet received it and do not anticipate material costs associated with any fines or penalties or additional remedial activities that may be needed to achieve regulatory closure.

Regulatory authorities could require additional remediation based on the results of our remediation efforts.

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As of December 31, 2021, we have accrued $ 0.3 million for remediation and other such matters related to these releases.

On October 3, 2019, a release of diesel fuel involving one of our pipelines occurred near Sulphur Springs, Texas (the "Sulphur Springs Release").

Cleanup operations and site maintenance and remediation on this release have been substantially completed where such costs incurred totaled $ 7.1 million during 2019.

During the year ended December 31, 2020, we incurred approximately $ 0.5 million of additional costs related to final clean-up of this release.

Ground water monitoring wells were installed in the third quarter of 2020 and will be monitored quarterly until the site is closed.

Additionally, in the third quarter of 2020 we conducted creek bed sediment sampling and the results indicated no issues with the groundwater.

In the fourth quarter of 2020 we submitted an actual property assessment report (the

Notes to Consolidated Financial Statements

"APAR") that assessed site conditions and recommends closure of the site.

We filed suit in January 2020 against a third party contractor, seeking damages related to this release.

We have not received notification that any legal action with respect to fines and penalties will be pursued by the regulatory agencies.

Expenses incurred for the remediation of these crude oil and other releases are included in operating expenses in our consolidated statements of income and comprehensive income.

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We do not believe the total costs associated with these events, whether alone or in the aggregate, including any fines or penalties and net of available insurance, indemnification or reimbursement, will have a material adverse effect upon our business, financial condition or results of operations

During the years ended December 31, 2020 and 2019, we recorded approximately $ 0.1 million and $ 0.4 million of expense, respectively, which is net of total reimbursable costs of $ 0.1 million and $ 4.8 million for the years ended December 31, 2020 and 2019, respectively, from Delek Holdings pursuant to the terms of the Omnibus Agreement.

In March 2013, a release of crude oil occurred from a pumping facility at our Magnolia Station located West of Delek Holdings' El Dorado Refinery (the "Magnolia Release").

On July 13, 2018, the United States Department of Justice (the "DOJ") and the State of Arkansas filed a civil action against two of our wholly-owned subsidiaries, Delek Logistics Operating, LLC and SALA Gathering Systems, LLC, in the United States District Court (the "Court") for the Western District of Arkansas related to the Magnolia Release.

In December 2018, the Partnership, the United States and the State of Arkansas reached an agreement to settle the claims related to the Magnolia Release abandoning the demand for a compliance audit at the Magnolia terminal in exchange for settlement payments totaling $ 2.2 million.

On November 8, 2019, a consent decree was entered with the Court and on November 20, 2019 final payments were made to the State of Arkansas in the amount of $ 0.6 million and to the DOJ in the amount of $ 1.7 million, which amounts include a nominal amount of interest.

During the years ended December 31, 2021 and 2020, the crude oil and other releases remediation expenses, net of reimbursable costs, were immaterial.

We lease certain pipeline and transportation equipment.

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Weighted-average discount rate (2) finance lease

(1) Includes an immaterial amount of financing lease cost.

(2) Includes an immaterial amount of variable lease cost.

(1) Includes an immaterial amount of financing lease.

(2) Our discount rate is primarily based on our incremental borrowing rate in accordance with ASC 842.

Notes to Consolidated Financial Statements

The following is an estimate of the maturity of our lease liabilities for operating leases having remaining noncancellable terms in excess of one year as of December 31, 2021 (in thousands) under ASC 842:

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Present value of lease liabilities $ 20,882

The following is an estimate of the maturity of our lease liabilities for financing lease having remaining noncancellable terms in excess of one year as of December 31, 2020 (in thousands) under ASC 842:

Notes to Consolidated Financial Statements

The following is an estimate of the maturity of our lease liabilities for financing leases having remaining noncancellable terms in excess of one year as of December 31, 2021 (in thousands) under ASC 842:

Total lease payment $ 6,116

Present values of lease liabilities $ 6,000

Selected Quarterly Financial Data (Unaudited)

Quarterly financial information for the years ended December 31, 2020 and 2019 is summarized below.

The quarterly financial information summarized below has been prepared by management and is unaudited (in thousands, except per unit data).

For the Three Month Periods Ended

March 31, 2020 June 30, 2020 September 30, 2020 December 31, 2020

Net revenues $ 163,401 $ 117,637 $ 142,268 $ 140,112

Operating income $ 35,042 $ 47,881 $ 51,765 $ 45,105

Net income $ 27,796 $ 44,415 $ 46,328 $ 40,717

Limited partners' interest in net income $ 18,719 $ 34,768 $ 46,328 $ 40,717

Net income per limited partner unit:

Common - basic $ 0.76 $ 1.18 $ 1.26 $ 0.94

Common - diluted $ 0.76 $ 1.18 $ 1.26 $ 0.94

For the Three Month Periods Ended

March 31, 2019 June 30, 2019 September 30, 2019 December 31, 2019

Net revenues $ 152,483 $ 155,342 $ 137,556 $ 138,610

Operating income $ 29,111 $ 32,256 $ 34,729 $ 29,715

Net income $ 19,696 $ 24,885 $ 30,530 $ 21,638

Limited partners' interest in net income $ 12,426 $ 16,806 $ 21,635 $ 12,804

Net income per limited partner unit:

Common - basic $ 0.51 $ 0.69 $ 0.89 $ 0.52

Common - diluted $ 0.51 $ 0.69 $ 0.89 $ 0.52

Subsequent Events

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Director, Executive Vice President and Chief Financial Officer

March 1, 2021

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by or on behalf of the following persons on behalf of the registrant and in the capacities indicated on March 1, 2021:

February 25, 2022

/s/ Ezra Uzi Yemin

Ezra Uzi Yemin

Chairman of the Board of Directors and Chief

Chair of the Board of Directors and Chief

Executive Officer

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(Principal Financial Officer)

/s/ Nilah Staskus

Nilah Staskus

/s/ Robert Wright

Robert Wright

Senior Vice President, Chief Accounting Officer

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/s/ Charles J.

/s/ Francis C.

/s/ Frederec Charles Green

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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.

What changed 10-K

Item 9A. Controls and Procedures