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Item 9A. Controls and Procedures

2023-03-01 compared with 2022-02-25 · 686 added, 475 removed, 1625 unchanged (42% of the section changed)

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Our disclosure controls and procedures are designed to provide reasonable assurance that the information that we are required to disclose in reports we file under the Securities Exchange Act of 1934, as amended (the "Exchange Act") is accumulated and appropriately communicated to management.

We carried out an evaluation required by Rule 13a-15(b) of the Exchange Act, under the supervision and with the participation of our management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures at the end of the reporting period.

Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of the end of the reporting period.

We carried out an evaluation required by Rule 13a-15(b) of the Exchange Act, under the supervision and with the participation of our management, including the Principal Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures at the end of the reporting period.

Based on that evaluation, the Principal Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of the end of the reporting period.

Management's Annual Report on Internal Control over Financial Reporting

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

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 is a process that is designed under the supervision of our Principal 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.

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Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance with the policies and procedures may deteriorate.

We acquired 3 Bear effective June 1, 2022, and have included the operating results and assets and liabilities of 3 Bear in our consolidated financial statements as of December 31, 2022.

As permitted by SEC guidance for newly acquired businesses, management’s assessment of our disclosure controls and procedures did not include an assessment of those disclosure controls and procedures of 3 Bear that are subsumed by internal control over financial reporting.

3 Bear accounted for approximately 40.7% of the total assets of the Partnership as of December 31, 2022 and approximately 11.9% of net revenues of the Partnership for the year ended December 31, 2022 .

Management has conducted its evaluation of the effectiveness of internal control over financial reporting as of December 31, 2022, based on the framework in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

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Changes in Internal Control over Financial Reporting

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 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.

Except as noted below, 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, 2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

During the quarter ended December 31, 2022, we implemented a new enterprise resource planning (“ERP”) system.

The new ERP system replaced our previous ERP including our accounting system and general ledger.

As a result of this implementation, we modified certain existing controls and implemented new controls and procedures related to the new ERP system to maintain appropriate internal control over financial reporting during and after the system change.

Report of Independent Registered Public Accounting Firm

Our independent registered public accounting firm, Ernst & Young LLP, has audited the effectiveness of our internal control over financial reporting as of December 31, 2022, as stated in their report, which is included in the section beginning on page F-1.

Controls and Procedures, and Other Information

OTHER INFORMATION

On February 26, 2023, the Board of our general partner adopted Amendment No.

1 (“Amendment No.

1”) to the Second Amended and Restated Partnership Agreement, effective upon adoption.

Amendment No.

1 amends Section 1.1(a)(ii) of the Partnership Agreement to revise the definition of “Available Cash” to include cash that is available to be borrowed as Working Capital Borrowing (as such term is defined in the Partnership Agreement) as of the date of determination of Available Cash with respect to a quarter.

A copy of Amendment No.

1 is filed as Exhibit 3.3 to this Annual Report on Form 10-K.

DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

Not applicable.

Directors, Executive Officers, Corporate Governance, and Security Ownership

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Our general partner, Delek Logistics GP, LLC, is an indirect subsidiary of Delek Holdings.

As of December 31, 2021, two individuals (Messrs.

Yemin and Spiegel) serve as both directors and executive officers of the general partner and as officers and, with respect to Mr.

Yemin, a director, of Delek Holdings.

As of December 31, 2022, three individuals (Messrs.

Soreq, Spiegel, and Yemin) serve as both directors and executive officers of the general partner and as officers and, with respect to Messrs.

Soreq and Yemin, directors, of Delek Holdings.

Our general partner manages our operations and activities on our behalf through its officers and directors.

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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 eight members:

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

Ezra Uzi Yemin, Sherri A.

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Haddock, Gennifer F.

Kelly and Reuven Spiegel.

Kelly, Reuven Spiegel and Avigal Soreq.

The Board has determined that each of Messrs.

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Name Age Position With Delek Logistics GP, LLC

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

Avigal Soreq 44 Director and President, Delek Logistics

Ezra Uzi Yemin 53 Executive Chairman of the Board of Directors

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

Gadd 66 Director, Chair of EHS Committee and Member of Governance and Compensation 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

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

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

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Odely Sakazi 38 Senior Vice President, Delek Logistics

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.

Avigal Soreq rejoined the Partnership as President and as one of our directors on June 9, 2022, after serving as the Chief Executive Officer of El Al Israel Airlines, the national airline of Israel, since January 2021.

Soreq also currently serves as the chief executive officer and president of Delek Holdings.

Prior to that, Mr.

Soreq was a member of the Delek Holdings’ executive management team, including as the Chief Operating Officer from March 2020 until January 2021, its Chief Commercial Officer from November 2016 until March 2020, an Executive Vice President from August 2015 until January 2021, and a Vice President from 2012 until 2015.

In addition, Mr.

Soreq served as an Executive Vice President of Delek Logistics GP, LLC from 2015 until 2021, and as its Vice President from 2012 until 2015.

Prior to joining Delek Holdings, Mr.

Soreq worked for SunPower Corporation (NASDAQ:

SPWR), and previously as a senior finance and business consultant for Trabelsy & Co., and as a consultant in the corporate finance department for KPMG’s Tel-Aviv office.

His past experience includes service in the Israeli Air Force in various roles between 1996 and 2004, where he reached the rank of Major.

Soreq is a certified public accountant in Israel.

Ezra Uzi Yemin has served as the Executive Chairman of the Board since June 2022.

Yemin has served as one of our directors since April 2001 and as the chair of the Board since April 2012.

Yemin previously served as our chief executive officer and president from April 2012 and August 2019, respectively, until June 2022.

Yemin also serves as the executive chairman of the board of directors of Delek Holdings, and has served as a director since April 2001 and as the chair since December 2012.

He also previously served as the chief executive officer and president of Delek Holdings, from June 2004 and April 2001, respectively, until June 2022.

Yemin served as the president of Alon USA Partners GP, LLC, from July 2017 until its acquisition by Delek Holdings in February 2018 and the chairman of the board of directors of Alon USA Energy, Inc.

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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 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.

Brillon held various positions of increasing responsibility at Encana Corporation, a leading North American hydrocarbon exploration and marketing company now known as Ovintiv Inc., before retiring as Executive Vice President and Chief Financial Officer in 2019.

Brillon has served as one of our directors since January 2021.

She has served as a member of the Audit Committee since January 2021 and as its Chairperson since January 2022.

She has also served as a member of the Governance and Compensation Committee and the Technology Committee since July 2021.

Brillon has over 35 years of experience in the oil and gas industry.

From 1985 to 2019, Ms.

Brillon held various positions of increasing responsibility at Encana Corporation, a leading North American hydrocarbon exploration and marketing company now known as Ovintiv Inc.

OVV), before retiring as Executive Vice President and Chief Financial Officer in 2019.

At Encana, Ms.

Brillon was responsible for directing the financial operations of the organization and she also implemented Encana’s business strategy through multiple strategic transactions.

Brillon is a past director of the Canadian Chamber of Commerce, Alberta Energy Regulator, Tim Hortons Inc., a Canadian multinational fast food restaurant chain, and PrairieSky Royalty Ltd., which owns properties generating royalty revenues from petroleum and natural gas in Canada.

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 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.

Brillon has served on the Board of Directors for Enerplus (NYSE:

ERF) since October 2022.

She is a past director of the Canadian Chamber of Commerce, Alberta Energy Regulator, Tim Hortons Inc., a Canadian multinational fast food restaurant chain, and PrairieSky Royalty Ltd.

PSK), which owns properties generating royalty revenues from petroleum and natural gas in Canada.

Brillon attended the University of Calgary, where she graduated with a Bachelor of Arts degree in economics.

Brillon was appointed to the Board because the board of directors believed her many years of experience in both the upstream and midstream sectors of the oil and gas industry will be important as the Board navigates rapid developments in the petroleum industry.

Directors, Executive Officers, Corporate Governance, and Security Ownership

Brown, III has served as a member of the Board since November 2012, as a member of the Audit Committee and Conflicts Committee (of which he is Chairperson) since November 2012, as a member of the Governance and Compensation Committee since July 2021, and as a member of the EHS Committee from 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 served as the executive vice president of Apex Clean Energy, Inc., an independent renewable energy company, where he managed legal and business development activities.

Brown is currently the owner of, and since 2011, the chief advisor for, CRW Energy, a consulting firm focused in the international power and utility industries.

Brown is currently the owner of, and since 2011, the chief advisor for, CRW Energy, a consulting firm focused on the international power and utility industries.

From 2008 through 2011, Mr.

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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.

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 has served as a member of the Board since October 2013 and as Chairperson of the EHS Committee since its inception in October 2016.

He has also been a member of the Conflicts Committee since October 2013 and the Governance and Compensation Committee since July 2021.

Gadd previously served as a member of the Audit Committee from October 2013 to July 2021.

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

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.

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.

Frederec Green has served as a member of the Board 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.

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

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, 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.

Haddock has served as a member of the Board since July 2017.

He has served as the Chairperson of the Governance and Compensation Committee since July 2021 and as a member of the EHS Committee and Audit Committee since May 2018 and 2022, respectively.

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

Haddock is currently Chairman and Chief Executive Officer of AEI Services LLC, an international power generation/distribution and natural gas distribution company, positions he has held since 2004 and August 2003, respectively.

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

from December 2000 until its acquisition by Delek Holdings in July 2017 and has served on the board of Petron Corporation, an oil refining and marketing company in the Philippines since December 2008.

from December 2000 until its acquisition by Delek in July 2017 and served on the board of Petron Corporation, an oil refining and marketing company in the Philippines from 2010 to 2022.

From January 1989 to July 2000, Mr.

Haddock served as chief executive officer of FINA, Inc., a Belgian oil company.

Haddock also served as a Chairman and CEO of Safety-Kleen Systems, Inc., a waste management, oil recycling and refining company, from 2003 to 2012, and on the board of Trinity Industries, Inc.

Haddock also served on the boards of Safety‑Kleen Systems, Inc., a waste management, oil recycling and refining company, from 2003 to 2012, and Trinity Industries, Inc.

TRN), a diversified transportation, industrial and construction company, from 2007 to 2013, as well as eight other corporate boards.

The Board believes that Mr.

Haddock’s extensive directorship experience, past executive positions within the refining industry, financial reporting background and expertise qualify him to serve as a member of the Board.

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.

Haddock’s extensive directorship experience, past executive positions within the refining and petrochemical industry, financial reporting background and expertise qualify him to serve as a member of the Board.

Gennifer Kelly has served as a director since July 2020.

She has served as the Chairperson of the Technology Committee since its inception in July 2021 and as a member of the EHS Committee and Conflicts Committee since July 2020.

She also serves on the board of Devon Energy Corp.

DVN) and is a member of Audit and Reserves committees.

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

Kelly previously held the role of Chief Operating Officer and SVP of Western Midstream Partners (NYSE:

WES) and Vice President of Marketing for Anadarko Petroleum Corporation.

WES) and Vice President of Marketing for Anadarko Petroleum Corporation (NYSE:

Prior to her role at Western Midstream, Ms.

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Kelly worked as an engineer for Kerr McGee Corporation and the Louisiana Office of Conservation.

Kelly holds both a Bachelor of Science in Petroleum Engineering and a Master of Business Administration from Louisiana State University.

Kelly is a registered Professional Engineer in the state of Texas and a member of the Society of Petroleum Engineers.

Kelly is currently the board chair of Lone Star College Foundation;

a non‑profit organization aiding Lone Star College students with funding their education.

The Board values Ms.

Kelly’s years of experience in the oil and gas industry and operations experience as well as her technical background.

Reuven Spiegel has served as our Chief Financial Officer since May 8, 2020, and as a member of the Board of our general partner since July 2014.

Prior to becoming our Chief Financial Officer, Mr.

Spiegel was also a member of the Audit Committee and Conflicts Committee since September 2014 and as a member of the EHS Committee since its inception in October 2016.

Spiegel has served in the financial and real estate industry since 1983.

Directors, Executive Officers, Corporate Governance, and Security Ownership

Reuven Spiegel has served as our Chief Financial Officer since May 2020, and as a member of the Board since July 2014.

Spiegel previously served as a member of the Audit Committee from September 2014 until April 2020 and as a member of the EHS Committee from October 2016 until April 2020.

Prior to joining the Board, Mr.

Spiegel served as president, chief executive officer, and senior executive vice president of Israel Discount Bank Ltd.

DSCT) from 2001 through 2014.

Spiegel served as Chief Executive Officer of Israel Discount Bank Ltd.

DSCT) from 2011 through 2014 where he had previously held the position of Executive Vice President from 2001 through 2005.

In 2005 and 2006, Mr.

Spiegel also served as chairman of the board of Discount Mortgage Bank.

Spiegel also served as Chairperson of the board of Discount Mortgage Bank.

Spiegel also served as Chief Executive Officer of IDB Bank of NY from 2006 to 2010.

He also has experience as an executive in the real estate industry.

The Board believes that Mr.

Spiegel’s financial industry experience provides the Board with valuable expertise in the Partnership’s financial and accounting matters.

Denise McWatters has served as the Executive Vice President, General Counsel and Corporate Secretary of our general partner and Delek Holdings since February 2021.

Denise McWatters has served as our Executive Vice President, General Counsel and Corporate Secretary since February 2021.

McWatters previously served as the General Counsel, Chief Compliance Officer and Corporate Secretary of HollyFrontier Corporation, an independent petroleum refiner (NYSE:

HFC), and of the general partner of Holly Energy Partners, L.P.

HEP) from 2008 until August 2019.

HEP) from May 2008 until August 2019.

Prior to joining HollyFrontier, Ms.

McWatters served as the general counsel of The Beck Group, an architecture, construction and design firm, from 2005 to 2007.

McWatters served as the General Counsel of The Beck Group, an architecture, construction and design firm, from 2005 through October 2007.

Todd O’Malley serves as our Executive Vice President and Chief Operating Officer.

Prior to joining the Partnership in 2021, Mr.

O’Malley served as a special advisor to a number of private equity and public company CEOs and boards regarding corporate strategy, M&A/divestments, financial structuring, and commercial optimization.

He has previously held C-suite positions at Citizens Companies (President and CEO), Gulf Oil (EVP and Chief Commercial Officer), PBF Logistics (President), and PBF Energy (SVP and Chief Commercial Officer).

He has also worked extensively in the investment banking, hedge fund, commodity trading, and electric and natural gas sectors.

He holds an undergraduate degree from Colgate University (cum laude) and an MBA from Thunderbird School of Global Management.

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

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Board Leadership Structure

Yemin serves as Chair of the Board.

Our general partner has no policy with respect to the unification or separation of the offices of Chair and CEO.

Rather, the Board's policy is to let the Board make such a determination in the manner it deems most appropriate for the general partner and us at a given point in time.

At this time, the Board believes that our general partner's Chief Executive Officer is best situated to serve as Chair of the Board because he is the director most familiar with our business and industry.

He is also the Chair of the board of directors of Delek Holdings, which provides the Board and us with important interaction with, and access to, our most important customer and majority unitholder.

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

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.

Yemin serves as Executive Chairman of the Board.

He is also the Executive Chairman of the board of directors of Delek Holdings, which provides the Board and us with important interaction with, and access to, our most important customer and majority unitholders.

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

The Board met 26 times in the year ended December 31, 2022, 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.

Because the Chair of the Board is not an independent director, on February 22, 2021, the Board designated Ron W.

Because the Executive Chairman of the Board is not an independent director, on February 22, 2021, the Board designated Ron W.

Haddock to serve in a lead capacity (the "Lead Independent Director") to coordinate the activities of the other independent directors and to perform such other duties and responsibilities as the Board may determine from time to time.

The Lead Independent Director is appointed annually by the Board and may be removed from or replaced at any time.

The Lead Independent Director will chair all meetings of the Board at which the Chair is not present, including executive sessions of the independent directors, call additional meetings of the independent directors as deemed appropriate, and perform such other functions as the Board may direct.

The Lead Independent Director will chair all meeting of the Board at which the Executive Chairman is not present, including executive sessions of the independent directors, call additional meetings of the independent directors as deemed appropriate, and perform such other functions as the Board may direct.

Executive Sessions

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Communications with the Board of Directors of Our General Partner

Unitholders or other interested parties who wish to communicate with any of our directors, any committee chairperson or the Board may do so by writing to the director, committee chairperson or the Board in care of the Secretary of the general partner of Delek Logistics Partners, LP at 7102 Commerce Way, Brentwood, Tennessee 37027.

Any such communication received will be forwarded directly to the director to whom it is addressed.

If the communication is addressed to the Board and no particular director is named, the communication will be forwarded, depending on the subject matter, to the appropriate committee chairperson or to all members of the Board.

Directors, Executive Officers, Corporate Governance, and Security Ownership

Committees of the Board of Directors of Our General Partner

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Brillon (chair) and Messrs.

Brown and Gadd.

Brown and Haddock.

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

Gadd joined the committee in October 2013, and Ms.

Haddock joined the committee in 2022 and Ms.

Brillon joined the committee in January 2021.

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 Audit Committee met four times during the year ended December 31, 2022, 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.

Brown and Gadd and Ms.

Brown and Haddock 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.

Audit Committee Members

Financially Literate

Qualifies as an Audit Committee Financial Expert

Brillon (Chair)

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.

Conflicts Committee

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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

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.

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.

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 (chair), Brown and Haddock and Ms.

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

Gadd (chair) and Haddock and Ms.

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

Haddock joined the committee in May 2018, and Ms.

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

The Governance and Compensation Committee consists of Messrs.

The Governance and Compensation

Directors, Executive Officers, Corporate Governance, and Security Ownership

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 Governance and Compensation Committee met four times in 2022, 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;

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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 Technology Committee met four times in 2022, 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.

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

Director Nominations and Corporate Governance

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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

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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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.

We intend to disclose any amendments to, or waivers of, the Code of Business Conduct & Ethics on behalf of our Chief Executive Officer, Chief Financial Officer and persons performing similar functions on our website, at www.DelekLogistics.com, under the “Investor Relations” caption, promptly following the date of any such amendment or waiver.

We intend to disclose any amendments to, or waivers of, the Code of Business Conduct & Ethics on behalf of our President, Chief Financial Officer and persons performing similar functions on our website, at www.DelekLogistics.com, under the “Investor Relations” caption, promptly following the date of any such amendment or waiver.

Directors, Executive Officers, Corporate Governance, and Security Ownership

EXECUTIVE COMPENSATION

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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, Sakazi and Spiegel and Ms.

Soreq, Yemin, Sakazi and Spiegel and Ms.

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

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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

Directors, Executive Officers, Corporate Governance, and Security Ownership

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 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:

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In 2022 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.

Directors, Executive Officers, Corporate Governance, and Security Ownership

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.

By providing the potential for immediate value to our NEOs in connection with an Exchange Transaction, this provision aligns our NEOs' interests with those of our unitholders and incentivizes our NEOs to work to maximize the value of our units in the event such a transaction was to occur.

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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:

The members of the Governance and Compensation Committee have submitted this Governance and Compensation Committee Report to the Board of Directors as of March 1, 2023:

Haddock (Chair)

Directors, Executive Officers, Corporate Governance, and Security Ownership

2022 Summary Compensation Table

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.

The Summary Compensation Table below summarizes the compensation for the fiscal year ended December 31, 2022 (and the two prior fiscal years) for our general partner's president (Mr.

Soreq), former principal executive officer (Mr.

Yemin), principal financial officer (Mr.

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McWatters) and Senior Vice President (Mr.

Directors, Executive Officers, Corporate Governance, and Security Ownership

Name and Principal Position (1)

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

Avigal Soreq,

President 2022 — — 499,955 — — 499,955

Ezra Uzi Yemin,

Chief Executive Officer 2021 — — 1,049,979 — — 1,049,979

Former Chief Executive Officer 2022 — — 1,233,943 — — 1,233,943

2021 — — 1,049,979 — — 1,049,979

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General Counsel 2022 — — 116,705 — — 116,705

2021 — — 116,648 — — 116,648

Odely Sakazi,

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The fair value of DK PSUs is calculated using a Monte-Carlo simulation model, which assumes a risk-free rate of interest of 1.84%, an expected term of 2.81 years and expected volatility of 74.11%.

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.

Assumptions used in the calculation of these amounts for the 2022 fiscal year are included in footnote 20 to the audited financial statements of Delek Holdings for the 2022 fiscal year included in Delek Holdings’ Annual Report on Form 10-K filed with the SEC on or about March 1, 2023.

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.

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Ezra Uzi Yemin 3/10/2022 29,827 (3)

Avigal Soreq 6/10/2022 9,331 (3)

Reuven Spiegel 3/10/2022 3,225 (3)

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Name Number of Securities Underlying Unexercised Options Exercisable Number of Securities Underlying Unexercised Options Unexercisable Option Exercise Price Option Expiration Date Number of Units That Have Not Vested Market Value of Units That Have Not Vested

President — — n/a n/a 7,776 $351,864

Ezra Uzi Yemin

Chief Executive Officer — — n/a n/a 21,772 $930,318

Former Chief Executive Officer — — n/a n/a 34,467 $1,559,632

Reuven Spiegel

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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 7,257 $317,107 — $—

Avigal Soreq, President — $— 1,555 $69,633

Ezra Uzi Yemin, Former Chief Executive Officer — $— 17,132 $899,706

Reuven Spiegel, Chief Financial Officer — $— 2,609 $138,326

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Name Termination of Employment Change-In-Control

Ezra Uzi Yemin, Chief Executive Officer — $—

Avigal Soreq, President — $—

Ezra Uzi Yemin, Former Chief Executive Officer — $—

Reuven Spiegel, Chief Financial Officer — $—

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In the event of an Exchange Transaction, defined generally under the LTIP to include a merger, consolidation, acquisition or disposition of stock, separation, reorganization, liquidation or other similar event or transaction designated by the Board in which our unitholders receive cash, stock or other property in exchange for or in connection with their units, our NEOs may be entitled, at the discretion of the Board, to the accelerated vesting of phantom units awarded under the LTIP.

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

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.

Compensation of Directors in 2022

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The compensation framework for the Board's other directors during 2022 (Messrs.

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

Brown, Gadd, Green 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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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.

In November 2022, the Board voted to approve a new compensation structure for non-employee directors, which is effective for fiscal year 2023.

The following table shows our non-employee director compensation for 2023, the cash portions of which will be paid ratably each quarter:

Board of Directors Retainer (Per Year) $85,000

Lead Director Fee (Per Year) $15,000

Target Value for Equity Awards (Per Year) $120,000

Committee Retainers (Per Year):

Audit Committee $10,000

Conflicts Committee $7,500

EHS Committee $5,000

Technology Committee $5,000

Governance and Compensation Committee $7,500

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 2022.

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Brown, III 90,600 99,980 — — 190,580

90,900 99,975 — — 190,875

Gadd 87,500 99,980 — — 187,480

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Haddock 129,000 (4)

99,980 — — 228,980

Gennifer Kelly

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(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.

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

(2) This column reports the amount of cash compensation earned in 2022 for Board and committee service and the Lead Director Fee.

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Each of Messrs.

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

Brown, Gadd, Haddock and Green and Mses.

Kelly and Brillon held 1,133 outstanding phantom units at December 31, 2022.

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

(4) This amount includes a one-time retainer fee payment of $25,000 to Mr.

Haddock for his service on the CEO Selection Committee established by the Board of Directors of Delek Holdings.

Compensation Committee Interlocks and Insider Participation

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Brillon served on the Governance and Compensation Committee during 2022, and Messrs.

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

Soreq 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

Principal Executive Officer Pay Ratio

As discussed above, as a master limited partnership, we have no employees.

Rather, all of the employees that conduct our business are employed by our general partner and its non-Partnership affiliates.

Moreover, as disclosed above, we did not pay any compensation amounts to our chief executive officer in 2021.

As a result, we are unable to provide an estimate of the relationship of the median of the annual total compensation of employees that conduct our business and the annual total compensation of our chief executive officer.

We expect the CEO pay ratio disclosure with respect to employees of Delek Holdings, including our NEOs, to be set forth in Delek Holdings’ annual proxy statement.

Moreover, as disclosed above, we did not pay any compensation amounts to our principal executive officer in 2022.

We expect the principal executive officer pay ratio disclosure with respect to employees of Delek Holdings, including our NEOs, to be set forth in Delek Holdings’ annual proxy statement.

SECURITY OWNERSHIP OF CERTAIN OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

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Except as indicated by footnote, the persons named in the table below have sole voting and investment power with respect to all units shown as beneficially owned by them, subject to community property laws where applicable.

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.

Unless otherwise indicated below, each person or entity has an address in care of our principal executive offices at 310 Seven Springs Way, Suite 400 and 500, Brentwood, Tennessee 37027.

Directors, Executive Officers, Corporate Governance, and Security Ownership

Name of Beneficial Owner (1)

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Directors, Director Nominees and NEOs:

Avigal Soreq (5)

1,953 * 19,738 *

Ezra Uzi Yemin (6)

227,013 * 983,020 1.5

Brillon 1,700 n/a — *

Brillon 3,200 * — *

Brown, III 9,819 * — *

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Frederec Charles Green 72,886 * 152,918 *

70,252 * 152,918 *

Haddock 16,553 * 17,517 *

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Denise McWatters (8)

877 n/a 2,556 *

2,371 * 7,578 *

Todd O'Malley (9)

3,876 * 11,801 *

Odely Sakazi (10)

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Common Stock, as applicable.

(1) Unless otherwise indicated, the address for all beneficial owners is 7102 Commerce Way, Brentwood, Tennessee 37027.

(1) Unless otherwise indicated, the address for all beneficial owners is 310 Seven Springs Way, Suite 400 and 500, Brentwood, Tennessee 37027.

(2) For purposes of this table, a person is deemed to have “beneficial ownership” of any securities when such person has the right to acquire them within 60 days after the Measurement Date.

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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.

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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) The number of our common units owned includes 777 phantom units that will vest within 60 days of the Measurement Date.

the number of shares of Delek US Holdings, Inc.

Common Stock includes 2,495 RSUs that will vest within 60 days of the Measurement Date.

(6) 206,684 of our units and 691,945 shares of Delek US Holdings, Inc.

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Common Stock includes 37,136 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) The number of our common units owned includes 845 phantom units that will vest within 60 days of the Measurement Date.

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Common Stock includes 2,798 RSUs that will vest within 60 days of the Measurement Date.

(10) The number of our common units owned includes 144 phantom units that will vest within 60 days of the Measurement Date.

The number of shares of Delek US Holdings, Inc.

Common Stock includes 895 RSUs that will vest within 60 days of the Measurement Date.

Directors, Executive Officers, Corporate Governance, and Security Ownership

EQUITY COMPENSATION PLAN INFORMATION

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In addition, Messrs.

Yemin, Spiegel and Ms.

Soreq, Spiegel, and Yemin and Ms.

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

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For a discussion of a third party's involvement in certain of our agreements, see Items 1 and 2.

"Business and Properties—Commercial Agreements—Delek Holdings' Crude Oil and Refined Products Supply and Offtake Arrangement."

"Business and Properties—Commercial Agreements—Delek Holdings' Crude Oil and Refined Products Intermediation Agreement."

Omnibus Agreement

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Other Related Party Transactions

In addition to the agreements described above, we purchased refined product from Delek Holdings, totaling $309.0 million during the year ended December 31, 2021.

In addition to the agreements described above, we purchased refined products and ethanol from Delek Holdings, totaling $496.2 million during the year ended December 31, 2022.

We sold RINs in the amount of approximately $12.1 million to Delek Holdings during the year ended December 31, 2022.

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").

The obligations under the DKL Credit Facility remain secured by first priority liens on substantially all of the Partnership's and its U.S.

Until October 2022, the Partnership had an $850.0 million senior secured revolving credit agreement with Fifth Third Bank, National Association ("Fifth Third"), as administrative agent, and a syndicate of lenders (the "DKL Credit Facility").

The obligations under the DKL Credit Facility were secured by first priority liens on substantially all of the Partnership's and its U.S.

subsidiaries' tangible and intangible assets.

Additionally, Delek Marketing, a subsidiary of Delek Holdings, had provided a limited guaranty of the Partnership's obligations under the DKL Credit Facility.

Additionally, Delek Marketing and Supply, LLC, a subsidiary of Delek Holdings ("Delek Marketing"), had provided a limited guaranty of the Partnership's obligations under the DKL Credit Facility.

Delek Marketing's guaranty was (i) limited to an amount equal to the principal amount, plus unpaid and accrued interest, of a promissory note made by Delek Holdings in favor of Delek Marketing (the "Holdings Note") and (ii) secured by Delek Marketing's pledge of the Holdings Note to the lenders under the DKL Credit Facility.

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.

Amendments to DKL Credit Facility

In May 2022, we entered into Second and Third Amendments to our Third Amended and Restated Credit Agreement, which provided for the transition from a LIBOR benchmark to a term Secured Overnight Financing Rate benchmark (“Term SOFR”) and also amended certain financial covenant calculations in order to provide flexibility in connection with the timing of the 3 Bear Acquisition.

Additionally, on May 26, 2022, we entered into a Fourth Amendment to Third Amended and Restated Credit Agreement to, among other things, increase the U.S.

Revolving Credit Commitments (as defined in the Credit Agreement) by an amount equal to $150 million under an existing accordion feature, for an aggregate amount of commitments under our Existing Credit Agreement of $1 billion.

The exercise of the accordion feature gave us the flexibility to utilize borrowings under the Credit Agreement to help fund the acquisition of 3 Bear while continuing to maintain sufficient availability to continue to effectively manage our working capital needs and liquidity risk, and to evaluate longer term capitalization strategies.

Fourth Amended and Restated Credit Agreement

On October 13, 2022, we entered into a Fourth Amended and Restated Credit Agreement with Fifth Third, as administrative agent and a syndicate of lenders (the "2022 DKL Credit Facility").

The DKL Credit Facility, among other things, (i) increased total aggregate commitments to $1.2 billion, comprised of (A) senior secured revolving commitments of $900.0 million in aggregate (eliminating the Canadian dollar tranche), with sublimit of up to $115.0 million for letters of credit and $25.0 million for swing line loans (the “DKL Revolving Facility”) with an extended maturity date of October 13, 2027, and (B) a new senior secured term loan in the original principal amount of $300.0 million (the “DKL Term Facility”), (ii) reset the accordion feature under the DKL Revolving Facility, such that aggregate revolving commitments can be increased to up to $1.15 billion upon the agreement of the Partnership and one or more existing or new lenders and (ii) provided for the DKL Term Facility be drawn in full on October 13, 2022, with a maturity date of October 13, 2024, and with a prepayment requirement for the proceeds obtained from certain senior unsecured notes issuances.

The obligations under the DKL Credit Facility remain secured by first priority liens on substantially all of the Partnership's and its U.S.

subsidiaries' tangible and intangible assets.

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").

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Subject to certain exceptions, the policy requires that related party transactions, as defined by the policy, be approved by the Board or an authorized committee of the Board, subject to the guidelines of the policy.

Pursuant to the policy, the Conflicts Committee of the Board is generally considered the best suited to review related party transactions and has been authorized by the Board to do so.

Pursuant to the policy, the Conflicts Committee of the Board is

Directors, Executive Officers, Corporate Governance, and Security Ownership

generally considered the best suited to review related party transactions and has been authorized by the Board to do so.

If a related party transaction, that would otherwise require approval under the policy, is not approved prior to entry into such transaction, management may enter into such transaction, subject to ratification by the Board or an authorized committee of the Board.

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Exhibits - See below.

1.1 Equity Distribution Agreement, dated as of November 14, 2022, by and among the Partnership, Delek Logistics GP, LLC, and RBC Capital Markets, LLC (incorporated by reference to Exhibit 1.1 of the Partnership’s Form 8-K filed on November 14, 2022).

2.1 Contribution and Subscription Agreement, dated as of May 24, 2019, by and among Plains Pipeline, L.P., DKL Pipeline, LLC, and Red River Pipeline Company LLC (incorporated by reference to Exhibit 2.1 to the Partnership's Current Report on Form 8-K filed on May 28, 2019).

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2.4 Exchange Agreement, dated August 13, 2020, between Delek Logistics and Delek Logistics GP, LLC (incorporated by reference to Exhibit 10.2 of the Partnership's Form 8-K filed on August 14, 2020).

2.5 Membership Interest Purchase Agreement, dated as of April 8, 2022, by and between 3 Bear Energy - New Mexico LLC and DKL Delaware Gathering, LLC (incorporated by reference to Exhibit 2.1 to the Partnership’s Current Report on Form 8-K filed on April 11, 2022).

3.1 Certificate of Limited Partnership of Delek Logistics Partners, LP (incorporated by reference to Exhibit 3.1 to the Partnership's Form S-1 (File No.

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3.2 Second Amended and Restated Agreement of Limited Partnership of Delek Logistics Partners, LP, dated August 13, 2020 (incorporated by reference to Exhibit 3.1 of the Partnership's Form 8-K filed on August 14, 2020).

3.3 # Amendment No.

1 to the Second Amended and Restated Agreement of Limited Partnership of Delek Logistics Partners, LP, dated February 26, 2023.

3.4 Certificate of Formation of Delek Logistics GP, LLC (incorporated by reference to Exhibit 3.3 to the Partnership's Registration Statement on Form S-1 (File No.

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3.5 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).

4.1 # Description of the Common Units.

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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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).

4.9 # Supplemental Indenture, dated as of May 27, 2022, among DKL Delaware Gathering, the Partnership, Delek Logistics Finance Corp., the other guarantors, and U.S.

Bank Trust Company, National Association.

4.10 # Fourth Supplemental Indenture, dated as of May 27, 2022, among DKL Delaware Gathering, the Partnership, Delek Logistics Finance Corp., the other guarantors, and U.S.

Bank Trust Company, National Association.

4.11 # Second Supplemental Indenture, dated as of July 8, 2022, among the Partnership, Delek Logistics Finance Corp., the other guarantors, and U.S.

Bank Trust Company, National Association.

4.12 # Fifth Supplemental Indenture, dated as of July 8, 2022, among the Partnership, Delek Logistics Finance Corp., the other guarantors, and U.S.

Bank Trust Company, National Association.

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

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and Delek Marketing & Supply, LP (incorporated by reference to Exhibit 10.1 to the Partnership's Form 10-K filed on February 28, 2017).

10.4 Marketing Agreement, dated as of March 20, 2018 and effective as of March 1, 2018, by and among Alon USA, LP, DKL Big Spring, LLC, and for the limited purposes specified therein, Delek US Holdings, Inc.

(incorporated by reference to Exhibit 10.3 to the Partnership’s Form 8-K filed on March 26, 2018).

10.5 Throughput and Tankage Agreement (El Dorado Terminal and Tankage), dated as of February 10, 2014, by and among Lion Oil Company and Delek Logistics Operating, LLC, and for limited purposes, J.

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10.7 First Amendment to Throughput and Tankage Agreement (El Dorado Terminal and Tankage), dated as of December 14, 2018, by and between Lion Oil Company and Delek Logistics Operating, LLC (incorporated by reference to Exhibit 10.10 to the Partnership's Form 10-K filed on March 1, 2019).

10.7 * General Terms and Conditions for Phantom Unit Awards under the Delek Logistics GP, LLC 2012 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.2 to the Partnership's Form 10-Q filed on August 5, 2016).

10.8 Third Amended and Restated Omnibus Agreement, dated as of March 31, 2015, by and among Delek US Holdings, Inc., Lion Oil Company, Delek Logistics Operating, LLC, Delek Marketing & Supply, LP, Delek Refining, Ltd., Delek Logistics Partners, LP, Paline Pipeline Company, LLC, SALA Gathering Systems, LLC, Magnolia Pipeline Company, LLC, El Dorado Pipeline Company, LLC, Delek Crude Logistics, LLC, Delek Marketing-Big Sandy, LLC, DKL Transportation, LLC and Delek Logistics GP, LLC (incorporated by reference to Exhibit 10.3 to the Partnership’s Form 8-K filed on April 6, 2015).

10.9 First Amendment to Third Amended and Restated Omnibus Agreement, dated as of August 3, 2015, by and among Delek US Holdings, Inc., Lion Oil Company, Delek Logistics Operating, LLC, Delek Marketing & Supply, LP, Delek Refining, Ltd., Delek Logistics Partners, LP, Paline Pipeline Company, LLC, SALA Gathering Systems, LLC, Magnolia Pipeline Company, LLC, El Dorado Pipeline Company, LLC, Delek Crude Logistics, LLC, Delek Marketing-Big Sandy, LLC, DKL Transportation, LLC and Delek Logistics GP, LLC (incorporated by reference to Exhibit 10.2 to the Partnership’s Form 10-Q filed on August 6, 2015).

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 * 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).

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

(incorporated by reference to Exhibit 10.3 to the Partnership’s Form 8-K filed on August 1, 2013).

10.9 First Amendment to Throughput and Tankage Agreement (Tyler Terminal and Tankage), dated as of December 14, 2018, by and between Delek Refining, LTD.

and Delek Marketing & Supply, LP (incorporated by reference to Exhibit 10.29 to the Partnership's Form 10-K filed on March 1, 2019).

10.10 Throughput Agreement (El Dorado Rail Offloading Facility), dated as of March 31, 2015, among Lion Oil Company, Lion Oil Trading & Transportation, LLC and Delek Logistics Operating, LLC (incorporated by reference to Exhibit 10.2 to the Partnership’s Form 8-K filed on April 6, 2015).

10.11 Pipelines, Storage and Throughput Facilities Agreement (Big Spring Refinery Logistics Assets and Duncan Terminal), dated March 20, 2018 and effective as of March 1, 2018, by and among Alon USA, LP, DKL Big Spring, LLC, for the limited purposes specified therein, Delek US Holdings, Inc., and for the limited purposes specified therein, J.

Aron & Company LLC (incorporated by reference to Exhibit 10.1 to the Partnership’s Form 8-K filed on March 26, 2018).

10.12 Pipelines and Tankage Agreement (East Texas Crude Logistics System), dated November 7, 2012, by and between Delek Refining, Ltd.

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Aron & Company (incorporated by reference to Exhibit 10.23 to the Partnership's Form 10-K filed on March 1, 2019).

10.18 * Form of Director Phantom Unit Award (incorporated by reference to Exhibit 10.6 to the Partnership's Amendment No.

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

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

10.19 * Form of Employee Phantom Unit Award (incorporated by reference to Exhibit 10.7 to the Partnership's Amendment No.

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

333-182631), filed on October 16, 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.

(incorporated by reference to Exhibit 10.3 to the Partnership’s Form 8-K filed on August 1, 2013).

10.21 First Amendment to Throughput and Tankage Agreement (Tyler Terminal and Tankage), dated as of December 14, 2018, by and between Delek Refining, LTD.

and Delek Marketing & Supply, LP (incorporated by reference to Exhibit 10.29 to the Partnership's Form 10-K filed on March 1, 2019).

10.18 Amended and Restated Site Services Agreement (Tyler Terminal and Tankage), dated March 31, 2015, by and between Delek Marketing & Supply, LP and Delek Refining, Ltd.

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10.19 Amended and Restated Site Services Agreement (El Dorado Terminal and Tankage), dated as of March 31, 2015, by and between Lion Oil Company and Delek Logistics Operating, LLC (incorporated by reference to Exhibit 10.5 to the Partnership’s Form 10-Q filed on May 8, 2015).

10.24 Throughput Agreement (El Dorado Rail Offloading Facility), dated as of March 31, 2015, among Lion Oil Company, Lion Oil Trading & Transportation, LLC and Delek Logistics Operating, LLC (incorporated by reference to Exhibit 10.2 to the Partnership’s Form 8-K filed on April 6, 2015).

10.20 Big Spring Asphalt Services Agreement, dated March 20, 2018 and effective as of March 1, 2018, by and among Alon USA, LP, DKL Big Spring, LLC, for the limited purposes specified therein, Delek US Holdings, Inc., and for the limited purposes specified therein, J.

Aron & Company LLC (incorporated by reference to Exhibit 10.2 to the Partnership’s Form 8-K filed on March 26, 2018).

10.21 Third Amended and Restated Omnibus Agreement, dated as of March 31, 2015, by and among Delek US Holdings, Inc., Lion Oil Company, Delek Logistics Operating, LLC, Delek Marketing & Supply, LP, Delek Refining, Ltd., Delek Logistics Partners, LP, Paline Pipeline Company, LLC, SALA Gathering Systems, LLC, Magnolia Pipeline Company, LLC, El Dorado Pipeline Company, LLC, Delek Crude Logistics, LLC, Delek Marketing-Big Sandy, LLC, DKL Transportation, LLC and Delek Logistics GP, LLC (incorporated by reference to Exhibit 10.3 to the Partnership’s Form 8-K filed on April 6, 2015).

10.22 First Amendment to Third Amended and Restated Omnibus Agreement, dated as of August 3, 2015, by and among Delek US Holdings, Inc., Lion Oil Company, Delek Logistics Operating, LLC, Delek Marketing & Supply, LP, Delek Refining, Ltd., Delek Logistics Partners, LP, Paline Pipeline Company, LLC, SALA Gathering Systems, LLC, Magnolia Pipeline Company, LLC, El Dorado Pipeline Company, LLC, Delek Crude Logistics, LLC, Delek Marketing-Big Sandy, LLC, DKL Transportation, LLC and Delek Logistics GP, LLC (incorporated by reference to Exhibit 10.2 to the Partnership’s Form 10-Q filed on August 6, 2015).

10.23 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).

10.24 ++ First Amended and Restated Limited Liability Company Agreement of Rangeland RIO Pipeline, LLC, dated March 20, 2015, by and between Rangeland Energy II, LLC and DKL RIO, LLC (incorporated by reference to Exhibit 10.6 to the Partnership’s Form 10-Q filed on May 8, 2015).

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and DKL Caddo, LLC (incorporated by reference to Exhibit 10.7 to the Partnership’s Form 10-Q filed on May 8, 2015).

10.27 Pipelines, Storage and Throughput Facilities Agreement (Big Spring Refinery Logistics Assets and Duncan Terminal), dated March 20, 2018 and effective as of March 1, 2018, by and among Alon USA, LP, DKL Big Spring, LLC, for the limited purposes specified therein, Delek US Holdings, Inc., and for the limited purposes specified therein, J.

Aron & Company LLC (incorporated by reference to Exhibit 10.1 to the Partnership’s Form 8-K filed on March 26, 2018).

10.28 Big Spring Asphalt Services Agreement, dated March 20, 2018 and effective as of March 1, 2018, by and among Alon USA, LP, DKL Big Spring, LLC, for the limited purposes specified therein, Delek US Holdings, Inc., and for the limited purposes specified therein, J.

Aron & Company LLC (incorporated by reference to Exhibit 10.2 to the Partnership’s Form 8-K filed on March 26, 2018).

10.29 Marketing Agreement, dated as of March 20, 2018 and effective as of March 1, 2018, by and among Alon USA, LP, DKL Big Spring, LLC, and for the limited purposes specified therein, Delek US Holdings, Inc.

(incorporated by reference to Exhibit 10.3 to the Partnership’s Form 8-K filed on March 26, 2018).

10.26 Transportation Services Agreement dated May 15, 2020 and effective May 1, 2020, between Delek Refining, Ltd., Lion Oil Company and DKL Transportation, LLC (incorporated by reference to Exhibit 10.1 of the Partnership's Form 8-K filed on May 18, 2020).

10.27 Third Amended and Restated Credit Agreement, dated as of September 28, 2018, among Delek Logistics Partners, LP and each other borrower referenced therein, as borrowers;

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10.29 Second Amendment and Restatement of Schedules to Third Amended and Restated Omnibus Agreement, dated and effective as of May 31, 2020 (incorporated by reference to the Exhibit 10.2 of the Partnership's Form 8-K filed on April 6, 2020).

10.33 Transportation Services Agreement dated May 15, 2020 and effective May 1, 2020, between Delek Refining, Ltd., Lion Oil Company and DKL Transportation, LLC (incorporated by reference to Exhibit 10.1 of the Partnership's Form 8-K filed on May 18, 2020).

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).

10.30 Third Amendment to Third Amended and Restated Credit Agreement, dated as of May 26, 2022, by and among the Partnership and each other borrower referenced therein, as borrowers, Fifth Third Bank, National Association, as Administrative Agent, and the Lenders party thereto (incorporated by reference to Exhibit 10.2 of the Partnership’s Form 10-Q filed on August 5, 2022).

10.31 Fourth Amendment to Third Amended and Restated Credit Agreement, dated as of May 26, 2022, by and among the Partnership and each other borrower referenced therein, as borrowers, Fifth Third Bank, National Association, as Administrative Agent, and the Lenders party thereto (incorporated by reference to Exhibit 10.3 of the Partnership’s Form 10-Q filed on August 5, 2022).

10.32 Fourth Amended and Restated Senior Secured Revolving Credit Facility, dated October 13, 2022, by and among the Partnership, Fifth Third Bank, National Association, as administrative agent;

a syndicate of lenders;

Fifth Third, BofA Securities Inc., PNC Bank Capital Markets LLC, MUFG Bank, Ltd., Wells Fargo Bank, N.A., Citizens Bank, N.A.

and Royal Bank of Canada, as co-syndication agents;

and Barclays Bank PLC, U.S.

Bank National Association, Regions Bank and Truist Bank as co-documentation agents (incorporated by reference to Exhibit 10.1 of the Partnership’s Form 8-K filed on October 17, 2022).

10.33 Assignment and Assumption Agreement and Guaranty, dated as of March 22, 2022, by and among Lion Oil Trading & Transportation, LLC, DK Trading & Supply, LLC, Delek Logistics Operating, LLC, Lion Oil Company, LLC, and Delek US Energy, Inc.

(incorporated by reference to Exhibit 10.1 of the Partnership’s Form 10-Q filed on November 8, 2022).

10.34 Partial Assignment and Assumption Agreement, dated as of March 23, 2022, by and among Lion Oil Company, LLC, DK Trading & Supply, LLC, and the Partnership (incorporated by reference to Exhibit 10.2 of the Partnership’s Form 10-Q filed on November 8, 2022).

10.35 Omnibus Assignment and Assumption Agreement, dated as of September 12, 2022, by and among Alon USA, LP, DK Trading & Supply, LLC, and the parties set forth on Schedule 1 thereto (incorporated by reference to Exhibit 10.3 of the Partnership’s Form 10-Q filed on November 8, 2022).

10.36 Omnibus Assignment and Assumption Agreement, dated as of September 12, 2022, by and among Lion Oil Company, LLC, DK Trading & Supply, LLC, and the parties set forth on Schedule 1 thereto (incorporated by reference to Exhibit 10.4 of the Partnership’s Form 10-Q filed on November 8, 2022).

10.37 Omnibus Assignment and Assumption Agreement, dated as of September 13, 2022, by and among Delek Refining Ltd., DK Trading & Supply, LLC, and the parties set forth on Schedule 1 thereto (incorporated by reference to Exhibit 10.5 of the Partnership’s Form 10-Q filed on November 8, 2022).

10.38 Omnibus Assignment and Assumption Agreement, dated as of September 13, 2022, by and among Lion Oil Trading & Transportation, LLC, DK Trading & Supply, LLC, and the parties set forth on Schedule 1 thereto (incorporated by reference to Exhibit 10.6 of the Partnership’s Form 10 Q filed on November 8, 2022).

10.39 * General Terms and Conditions for Phantom Unit Awards under the Delek Logistics GP, LLC 2012 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.2 to the Partnership's Form 10-Q filed on August 5, 2016).

10.40 * 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).

10.41 * Form of Director Phantom Unit Award (incorporated by reference to Exhibit 10.6 to the Partnership's Amendment No.

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

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

10.42 * Form of Employee Phantom Unit Award (incorporated by reference to Exhibit 10.7 to the Partnership's Amendment No.

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

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

10.43 * 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.

10.44 Form of Indemnification Agreement for Directors and Officers of Delek Logistics GP, LLC (incorporated by reference to Exhibit 10.36 to the Partnership's Form 10-K filed on February 25, 2022).

10.45 # Delek Logistics GP, LLC 2012 Long-Term Incentive Plan Terms and Conditions.

21.1 # Subsidiaries of Registrant.

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

32.1 ## Certification by Chief Executive Officer pursuant to 18 U.S.C.

32.1 ## Certification by Principal Executive Officer pursuant to 18 U.S.C.

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

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We did not audit the financial statements of Red River Pipeline Company LLC, an entity in which the Partnership has a 33% interest.

In the consolidated financial statements, the Partnership’s investment in Red River Pipeline Company, LLC is stated at $144.0 million and $141.8 million as of December 31, 2021 and 2020, respectively, and the Partnership’s equity in the net income of Red River Pipeline Company, LLC is stated at $14.4 million in 2021 and $8.9 million in 2020.

In the consolidated financial statements, the Partnership’s investment in Red River Pipeline Company LLC is stated at $149.6 million and $144.0 million as of December 31, 2022 and 2021, respectively, and the Partnership’s equity in the net income of Red River Pipeline Company LLC is stated at $20.5 million in 2022, $14.4 million in 2021 and $8.9 million in 2020.

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, 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.

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, 2022, 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, 2023 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.

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.

Accounting for Business Combinations

Description of the Matter During 2022, the Partnership completed its acquisition of 3 Bear Delaware Holding – NM, LLC (“3 Bear”) for net consideration of approximately $628.3 million as disclosed in Note 3 to the consolidated financial statements.

The transaction was accounted for as a business combination.

The Partnership allocated the purchase price, to the assets acquired and liabilities assumed based on their respective fair values, including a customer relationships intangible asset of $210.0 million.

Auditing the Partnership's accounting for its acquisition of 3 Bear was complex due to the significant estimation required by management to determine the fair value of the customer relationships intangible asset acquired.

The Partnership used the income approach in estimating the initial fair value of the acquired customer relationships intangible asset.

There was a high degree of subjective auditor judgment in evaluating the assumptions used in the income approach as changes to the assumptions used could have a significant effect on the determination of the initial fair value.

Assumptions used included projected revenue attributable to customer relationships, forecasted operating margins, and the discount rate, which are forward-looking and could be affected by future economic and market conditions.

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 accounting for business combinations, including controls over the assumptions identified above.

To test the estimated fair values, we performed audit procedures that included, among others, evaluating the Partnership's use of the income approach and testing the assumptions discussed above and the completeness and accuracy of the underlying data used by the Partnership in its analysis.

Our audit procedures also included evaluating the professional qualifications and objectivity of the Partnership's external consultant that assessed the projected revenue assumptions.

In addition, in evaluating whether we could use the work of the Partnership’s external consultant, we assessed the reasonableness of the projected revenue assumptions by identifying and evaluating corroborative and contrary evidence.

We involved our valuation specialists to assist in evaluating the appropriateness of the valuation methods and the reasonableness of certain significant assumptions, including the evaluation of the discount rate used in the income approach.

/s/ Ernst & Young LLP

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Nashville, Tennessee

February 25, 2022

March 1, 2023

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, 2022, 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, 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.

As indicated in the accompanying Management’s Annual Report on Internal Control over Financial Reporting, management’s assessment of and conclusion on the effectiveness of internal control over financial reporting did not include the internal controls of 3 Bear Delaware Holding – NM, LLC (“3 Bear”), which is included in the 2022 consolidated financial statements of the Partnership and constituted 40.7% of total assets as of December 31, 2022, and 11.9% of net revenues for the year then ended.

Our audit of internal control over financial reporting of the Partnership also did not include an evaluation of the internal control over financial reporting of 3 Bear.

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, 2022 and 2021, 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, 2022, and the related notes, and our report dated March 1, 2023 expressed an unqualified opinion thereon.

Basis for Opinion

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Nashville, Tennessee

February 25, 2022

March 1, 2023

Exhibits and Financial Statement Schedules

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(in thousands, except unit and per unit data)

December 31, 2022 December 31, 2021

Current assets:

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Accounts receivable 53,314 15,384

Accounts receivable from related parties — 5,932

Inventory 1,483 2,406

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Equity method investments 257,022 250,030

Operating lease right-of-use assets 20,933 24,199

Goodwill 12,203 12,203

Customer relationship intangible, net 199,440 —

Marketing contract intangible, net 109,366 116,577

Rights-of-way 37,280 36,316

Rights-of-way, net 55,990 37,280

Goodwill 27,051 12,203

Operating lease right-of-use assets 24,788 20,933

Other non-current assets 16,408 25,627

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Accounts payable to related parties 6,055 64,423

Current portion of long-term debt 15,000 —

Interest payable 5,308 5,024

Excise and other taxes payable 8,230 5,280

Accrued expenses and other current liabilities 7,117 5,529

Current portion of operating lease liabilities 8,020 6,811

Accrued expenses and other current liabilities 6,202 7,117

Total current liabilities 106,218 96,815

Non-current liabilities:

Long-term debt 898,970 992,291

Asset retirement obligations 6,476 6,015

Long-term debt, net of current portion 1,646,567 898,970

Operating lease liabilities, net of current portion 12,114 14,071

Asset retirement obligations 9,333 6,476

Other non-current liabilities 15,767 22,731

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Total liabilities and deficit $ 1,679,299 $ 935,071

See accompanying notes to the consolidated financial statement

See accompanying notes to the consolidated financial statements

Exhibits and Financial Statement Schedules

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2022 2021 2020

Net revenues:

Affiliate (1)

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Cost of sales:

Cost of materials and other 384,409 269,094 336,473

Cost of materials and other - affiliate (1)

496,184 321,939 205,581

Cost of materials and other - third party 145,179 62,470 63,513

Operating expenses (excluding depreciation and amortization presented below) 85,438 59,483 53,846

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Depreciation and amortization 2,778 1,825 1,994

Other operating (income) expense, net ( 59 ) ( 66 ) 34

Other operating income, net ( 114 ) ( 59 ) ( 66 )

Total operating costs and expenses 826,725 510,400 383,625

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General partner's interest in net income, including incentive distribution rights (2)

— 18,724 33,080

Limited partners' interest in net income $ 159,052 $ 164,822 $ 140,532

Net income per limited partner unit:

Common units - basic $ 3.79 $ 4.18 $ 2.61

Common units - diluted $ 3.79 $ 4.18 $ 2.61

Basic $ 3.66 $ 3.79 $ 4.18

Diluted $ 3.66 $ 3.79 $ 4.18

Weighted average limited partner units outstanding:

Common units - basic 43,447,739 33,594,284 24,413,294

Common units - diluted 43,460,470 33,597,418 24,418,641

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

(1) See Note 4 for a description of our material affiliate revenue transactions.

Basic 43,487,910 43,447,739 33,594,284

Diluted 43,511,650 43,460,470 33,597,418

Cash distributions per common limited partner unit $ 3.975 $ 3.785 $ 3.605

(1) See Note 4 for a description of our material affiliate revenue and purchases transactions.

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

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Balance at December 31, 2019

Cash distributions (1)

$ 164,436 $ ( 310,513 ) $ ( 5,042 ) ( 151,119 )

GP units issued to maintain 2 % interest

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

Other 226 379 10 615

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

Cash distributions (1)

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

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

Issuance of units in connection with the Midland 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)

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Balance at December 31, 2021

(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.

$ 166,067 $ ( 270,059 ) $ — $ ( 103,992 )

Cash distributions (1)

( 35,868 ) ( 135,219 ) — ( 171,087 )

Net income attributable to partners 33,617 125,435 — 159,052

Delek Holdings unit sale to public 5,110 ( 5,110 ) — —

Issuance of units pursuant to the Equity Distribution Agreement 3,096 — — 3,096

Other 97 2,134 — 2,231

Balance at December 31, 2022

$ 172,119 $ ( 282,819 ) $ — $ ( 110,700 )

(1) Cash distributions include $ 0.2 million related to distribution equivalents on vested phantom units for the year ended December 31, 2022.

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

See accompanying notes to the consolidated financial statements

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

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

Purchases of property, plant and equipment ( 141,098 ) ( 23,052 ) ( 13,271 )

Proceeds from sales of property, plant and equipment 143 275 107

Purchases of intangible assets ( 5,597 ) ( 964 ) ( 13 )

Business Combination, net of cash acquired ( 625,622 ) — —

Distributions from equity method investments 1,737 8,774 2,741

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Cash flows from financing activities:

Proceeds from issuance of common units, net of underwriters' discount 3,096 — —

Proceeds from issuance of additional units to maintain 2 % general partner interest

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Distribution to general partner for conversion of its interest and IDR elimination — — ( 45,000 )

Proceeds from term loan debt 298,511 — —

Proceeds from revolving credit facility 1,752,300 341,000 599,600

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Proceeds from issuance of senior notes — 400,000 —

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

Deferred financing costs paid ( 8,206 ) ( 6,216 ) —

Payments on financing lease liabilities ( 2,867 ) ( 2,219 ) —

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

Net cash provided by (used in) financing activities 581,947 ( 258,753 ) ( 71,180 )

Net increase (decrease) in cash and cash equivalents 3,678 49 ( 1,302 )

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Non-cash investing activities:

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 $ —

(Decrease) increase in accrued capital expenditures and other $ ( 10,428 ) $ 3,850 $ 198

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

Non-cash financing activities:

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Non-cash lease liability arising from obtaining right of use assets during the period $ 12,717 $ 9,457 $ 32,090

Non-cash lease liability arising from recognition of right of use assets upon adoption of ASU 2016-02 $ — $ — $ 2,654

See accompanying notes to the consolidated financial statements

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Delek Logistics Partners, LP

Notes to Consolidated Financial Statements

Notes to the Consolidated Financial Statements

As used in this report, the terms "Delek Logistics Partners, LP," the "Partnership," "we," "us," or "our" may refer to Delek Logistics Partners, LP, one or more of its consolidated subsidiaries or all of them taken as a whole.

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("Delek Holdings") and its subsidiary Delek Logistics GP, LLC, our general partner (our "general partner").

On April 8, 2022, DKL Delaware Gathering, LLC, a subsidiary of the Partnership, entered into a Membership Interest Purchase Agreement (the “3 Bear Purchase Agreement”) with 3 Bear Energy – New Mexico LLC (the “Seller”) to purchase 100 % of the limited liability company interests in 3 Bear Delaware Holding – NM, LLC (“3 Bear”), related to the Seller’s crude oil and natural gas gathering, processing and transportation businesses, as well as water disposal and recycling operations, in the Delaware Basin of New Mexico (the “3 Bear Acquisition”).

The 3 Bear Acquisition was completed on June 1, 2022 (the "Acquisition Date").

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

Effective August 13, 2020, the Partnership closed the transaction contemplated by a definitive exchange agreement with the general partner to eliminate all of the incentive distribution rights ("IDRs") held by the general partner and convert the 2.0 % economic general partner interest into a non-economic general partner interest, all in exchange for 14.0 million newly issued common limited partner units and $ 45.0 million in cash ("IDR Restructuring Transaction").

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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 "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").

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 "Midland Gathering Assets", formerly referred to as the "Permian Gathering Assets"), and certain related assets, such transaction the "Midland Gathering Assets Acquisition" (formerly referred to as the "Permian Gathering Assets Acquisition").

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

Description of Business

The Partnership primarily owns and operates crude oil, intermediate and refined products logistics and marketing assets.

We gather, transport, offload and store crude oil and intermediate products and market, distribute, transport and store refined products primarily in select regions of the southeastern United States and Texas for Delek Holdings and third parties.

The Partnership provides gathering, pipeline and other transportation services primarily for crude oil and natural gas customers, storage, wholesale marketing and terminalling services primarily for intermediate and refined product customers, and water disposal and recycling services through its owned assets and joint ventures located primarily in the Permian Basin (including the Delaware sub-basin) and other select areas in the Gulf Coast region.

A substantial majority of our existing assets are both integral to and dependent upon the success of Delek Holdings' refining operations, as many of our assets are contracted exclusively to Delek Holdings in support of its Tyler, El Dorado and Big Spring refineries.

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Actual results could differ from those estimates.

In the opinion of management, all adjustments necessary for a fair presentation of the financial position and the results of operations have been included.

All intercompany accounts and transactions have been eliminated.

Such intercompany transactions do not include those with Delek Holdings' or our general partner, which are presented as related party in these accompanying consolidated financial statements.

All adjustments are of a normal, recurring nature.

Notes to Consolidated Financial Statements

Reclassifications

Certain immaterial reclassifications have been made to prior period presentation in order to conform to the current year presentation.

Risks and Uncertainties Arising from the COVID-19 Pandemic

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.

Certain prior period amounts have been reclassified in order to conform to the current period presentation.

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 three reportable segments:

(i) pipelines and transportation;

We are an energy business focused on crude oil, natural gas, intermediate and refined products pipeline and storage activities and wholesale marketing, terminalling and offloading activities as well as water disposal and recycling.

Management reviews operating results in four reportable segments:

(i) gathering and processing;

(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.

(iii) storage and transportation;

and (iv) investments in pipeline joint ventures.

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

• 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.

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

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

During the fourth quarter 2022, we realigned our reportable segments for financial reporting purposes to reflect changes in the manner in which our chief operating decision maker ("CODM") assesses financial information for decision-making purposes.

The primary change in our segmentation as compared to prior presentations is that our pipeline operations are now viewed separately from our storage and transportation segment because of the integral nature of the pipeline operations in relation to our expanded gathering operations, and certain legacy gathering activities and operations are now managed as part of the Gathering and Processing segment.

Additionally, we are now segregating out certain non-segment specific costs and expenses and, when applicable, immaterial operating segments that may not fit into our existing reportable segments as Corporate and Other activities.

While this reporting change did not change our consolidated results, segment data for previous years has been restated and is consistent with the current year presentation throughout the financial statements and the accompanying notes.

The CODM evaluates performance based upon earnings before interest, taxes, depreciation and amortization ("EBITDA").

We define EBITDA for any period as net income (loss) to add back interest expense, income tax expense (benefit), depreciation and amortization (including amortization of customer contract intangible assets, which is included as a component of net revenues in our accompanying consolidated statements of income and comprehensive income).

Segment reporting is discussed in more detail in Note 15.

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Accordingly, no allowance for doubtful accounts has been established as of December 31, 2022 and 2021.

Delek Holdings accounted for approximately 32.8 % of the consolidated accounts receivable balance as of December 31, 2022.

One third-party customer accounted for approximately 33.1 % and 47.4 % of the consolidated accounts receivable balance as of December 31, 2022 and December 31, 2021, respectively.

Inventory consists of refined products, which are stated at the lower of cost or net realizable value, with cost determined on a first-in, first-out ("FIFO") basis .

Delek Holdings accounted for approximately 99.7 % and 91.8 % of our inventory purchases in our wholesale marketing and terminalling segment during the year ended December 31, 2021 and December 31, 2020, respectively.

We are not subject to concentration risk with specific suppliers, since our refined products inventory purchases are commodities that are readily available from a large selection of suppliers.

Property, Plant and Equipment

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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.

Notes to Consolidated Financial Statements

Betterments, renewals and extraordinary repairs that extend the life of an asset are capitalized.

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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Other equipment 3 - 15

Intangible Assets

Intangible assets consist of indefinite-lived rights of way and a marketing contract intangible.

Other Intangible Assets

Other intangible assets acquired in a business combination and determined to be finite-lived are amortized over their respective estimated useful lives.

The finite-lived intangible assets are amortized on straight-line basis over the estimated useful lives of 8 to 35 years.

The amortization expense, with the exception of the marketing contract intangible, is included in depreciation and amortization on the accompanying consolidated statements of income.

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 circumstances indicate that the assets might be impaired.

Acquired intangible assets determined to have an indefinite useful life are not amortized, but are instead tested for impairment in connection with our evaluation of long-lived assets as events and circumstances indicate that the asset 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 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 goodwill, exceeds its fair value, limited to the total amount of goodwill allocated to that reporting unit.

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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Details of goodwill balances by segment are included in Note 9.

Business Combinations

We recognize and measure the assets acquired and liabilities assumed in a business combination based on their estimated fair values at the acquisition date in accordance with the provisions of ASC 805.

Any excess or surplus of the purchase consideration when compared to the fair value of the net tangible assets acquired, if any, is recorded as goodwill or gain from a bargain purchase.

The fair value of assets and liabilities as of the acquisition date are often estimated using a combination of approaches, including the income approach, which requires us to project future cash flows and apply an appropriate discount rate;

the cost approach, which requires estimates of replacement costs and depreciation and obsolescence estimates;

and the market approach which uses market data and adjusts for entity-specific differences.

We use all available information to make these fair value determinations and engage third-party consultants for valuation assistance.

The estimates used in determining fair values are based on assumptions believed to be reasonable but which are inherently uncertain.

Accordingly, actual results may differ materially from the projected results used to determine fair value.

Equity Method Investments

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Our judgment regarding the level of influence over an equity method investment includes considering key factors such as our ownership interest, participation in policy-making and other significant decisions and material intercompany transactions.

Equity investments for which we determine we have significant influence are accounted for as equity method investments.

Equity investments for which we determine we have significant influence

Notes to Consolidated Financial Statements

are accounted for as equity method investments.

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.

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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.

An 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.

There were no impairment losses recorded on equity method investments for the years ended December 31, 2022, 2021 or 2020 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

The fair values of financial instruments are estimated based upon current market conditions and quoted market prices for the same or similar instruments.

Management estimates that the carrying value approximates fair value for all of our assets and liabilities that fall under the scope of ASC 825, Financial Instruments ("ASC 825").

Management estimates that the carrying value approximates fair value for all of our assets and liabilities that fall under the scope of ASC 825, Financial Instruments ("ASC 825"), with the exception of our fixed rate debt.

Self-Insurance Reserves

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Beginning balance $ 6,476 $ 6,015

Liabilities acquired 2,261 —

Accretion expense 596 461

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In order to determine fair value, management must make certain estimates and assumptions including, among other things, projected cash flows, a credit-adjusted risk-free rate and an assessment of market conditions that could significantly impact the estimated fair value of the asset retirement obligation.

Notes to Consolidated Financial Statements

Revenue Recognition

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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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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 % 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.

Deferred financing costs associated with our term loan facilities and are included as a reduction to the associated debt balance in the accompanying consolidated balance sheets.

These costs represent expenses related to issuing our long-term debt and obtaining our lines of credit.

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.

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For all leases that include fixed rental rate increases, these are included in our fixed lease payments.

Our leases may include variable payments, based on changes on price or other indices, that are expensed as incurred.

Our leases may include variable payments, based on changes on price or other indices, which are expensed as incurred.

Notes to Consolidated Financial Statements

We calculate the total lease expense for the entire noncancelable lease period, considering renewals for all periods for which it is reasonably certain to be exercised, and record lease expense on a straight-line basis in the accompanying consolidated statements of income.

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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

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 Partnership's policy is to exclude from revenue all taxes assessed by a governmental authority, including sales, use and excise taxes, that are both imposed on and concurrent with a specific revenue-producing transaction and collected on behalf of a customer.

Notes to Consolidated Financial Statements

New Accounting Pronouncements Adopted During 2022

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 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 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 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.

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.

This guidance is effective for all entities at 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.

We adopted this guidance during 2022 and the adoption did not have a material impact on our business, financial condition or results of operations.

3 Bear Acquisition

We completed the 3 Bear Acquisition on June 1, 2022, in which we acquired crude oil and natural gas gathering, processing, and transportation and storage operations, as well as water disposal and recycling operations, located in the Delaware Basin of New Mexico.

The purchase price for the 3 Bear Acquisition was $ 628.3 million.

The 3 Bear Acquisition was financed through a combination of cash on hand and borrowings under the DKL Credit Facility.

For the year ended December 31, 2022, we incurred $ 10.6 million, in incremental direct acquisition and integration costs that principally consist of legal, advisory and other professional fees.

Such costs are included in general and administrative expenses in the accompanying consolidated statements of income.

Our consolidated financial and operating results reflect the 3 Bear Acquisition operations beginning June 1, 2022.

Our results of operations included revenue and net income of $ 123.7 million and $ 14.2 million, respectively, for the year ended December 31, 2022.

The 3 Bear Acquisition was accounted for using the acquisition method of accounting, whereby the purchase price was allocated to the tangible and intangible assets acquired and the liabilities assumed based on their fair values.

The excess of the consideration paid over the fair value of the net assets acquired was recorded as goodwill.

Determination of Purchase Price

The table below presents the purchase price (in thousands):

Base purchase price:

closing net working capital (as defined in the 3 Bear Purchase Agreement)

closing indebtedness (as defined in the 3 Bear Purchase Agreement)

Cash paid for the adjusted purchase price 547,682

Cash paid to payoff 3 Bear credit agreement (as defined in the 3 Bear Purchase Agreement) 80,618

Purchase price $ 628,300

Purchase Price Allocation

The following table summarizes the preliminary fair values of assets acquired and liabilities assumed in the 3 Bear Acquisition as of June 1, 2022 (in thousands):

Assets acquired:

Cash and cash equivalents $ 2,678

Accounts receivables, net 28,859

Inventories 1,836

Other current assets 986

Property, plant and equipment 382,799

Operating lease right-of-use assets 7,427

Goodwill 14,848

Customer relationships intangible, net (1)

Rights-of-way (1)

Other non-current assets 500

Total assets acquired 663,423

Liabilities assumed:

Accounts payable 8,020

Accrued expenses and other current liabilities 22,382

Current portion of operating lease liabilities 1,029

Asset retirement obligations 2,261

Operating lease liabilities, net of current portion 1,431

Total liabilities assumed 35,123

Fair value of net assets acquired $ 628,300

(1) The acquired intangible assets amount includes the following identified intangibles:

• Customer relationship intangible that is subject to amortization with a preliminary fair value of $ 210.0 million, which will be amortized over an 11.6 -year useful life.

• Rights-of-way intangible that is subject to amortization with a preliminary fair value of $ 13.5 million, which will be amortized over the weighted-average useful life of 25.4 years.

These fair value estimates are preliminary and therefore, the final fair value of assets acquired and liabilities assumed and the resulting effect on our financial position may change once all necessary information has become available and we finalize our valuations.

To the extent possible, estimates have been considered and recorded, as appropriate, for the items above based on the information available as of December 31, 2022.

We will continue to evaluate these items until they are satisfactorily resolved and adjust our purchase price allocation accordingly, within the allowable measurement period (not to exceed one year from the date of acquisition), as defined by Accounting Standards Codification ("ASC") 805, Business Combinations ("ASC 805").

The fair value of property, plant and equipment was based on the combination of the cost and market approaches.

Key assumptions in the cost approach include determining the replacement cost by evaluating recently published data and adjusting replacement cost for physical deterioration, functional and economic obsolescence.

We used the market approach to measure the value of certain assets through an analysis of recent sales or offerings of comparable properties.

The fair value of customer relationships was based on the income approach.

Key assumptions in the income approach include projected revenue attributable to customer relationships, operating margins and discount rates.

The fair values discussed above were based on significant inputs that are not observable in the market and, therefore, represent Level 3 measurements.

The fair values of all other current assets and liabilities were equivalent to their carrying values due to their short-term nature.

The goodwill recognized in the 3 Bear Acquisition is primarily attributable to enhancing our third-party revenues, further diversification of our customer and product mix, expanding our footprint into the Delaware basin and bolstering our Environmental, Social and Governance ("ESG") optionality through furthering carbon capture opportunities and greenhouse gas reduction projects currently underway.

This goodwill is deductible for income tax purposes.

Goodwill related to the 3 Bear Acquisition is included in the gathering and processing segment.

Unaudited Pro Forma Financial Information

The following table summarizes the unaudited pro forma financial information of the Partnership assuming the 3 Bear Acquisition had occurred on January 1, 2021.

The unaudited pro forma financial information has been adjusted to give effect to certain pro forma adjustments that are directly related to the 3 Bear Acquisition based on available information and certain assumptions that management believes are factually supportable.

The most significant pro forma adjustments relate to (i) incremental interest expense and amortization of deferred financing costs associated with revolving credit facility borrowings incurred in connection with the 3 Bear Acquisition, (ii) incremental depreciation resulting from the estimated fair values of acquired property, plant and equipment, (iii) incremental amortization resulting from the estimated fair value of the acquired customer relationships intangible, (iv) accounting policy alignment and (v) transaction costs.

The unaudited pro forma financial information excludes any expected cost savings or other synergies as a result of the 3 Bear Acquisition.

The unaudited pro forma financial information is not necessarily indicative of the results of operations that would have been achieved had the 3 Bear Acquisition been effective as of the date presented, nor is it indicative of future operating results of the combined company.

Actual results may differ significantly from the unaudited pro forma financial information.

Year Ended December 31,

(in thousands, except per unit data) 2022 2021

Net sales $ 1,134,925 $ 859,156

Net income attributable to partners $ 156,810 $ 114,977

Net income per limited partner unit:

Basic income per unit $ 3.61 $ 2.65

Diluted income per unit $ 3.60 $ 2.65

Trucking Assets Acquisition

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

The Trucking Assets are recorded in our pipelines and transportation segment and include approximately 150 trucks and trailers, which are primarily leased or owned, respectively.

The Trucking Assets are recorded in our storage and transportation segment and include approximately 150 trucks and trailers, which are primarily leased or owned, respectively.

In connection with the closing of the transaction, Delek Holdings, the Partnership and various of their respective subsidiaries entered into a Transportation Services Agreement (the “Trucking Assets TSA Agreement”).

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

Midland Gathering Assets Acquisition (formerly Permian Gathering Assets Acquisition)

Effective March 31, 2020, the Partnership, through its wholly-owned subsidiary DKL Permian Gathering, LLC, acquired the Midland 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 Permian Gathering Assets are recorded in our pipelines and transportation segment and include:

The Midland Gathering Assets are recorded in our gathering and processing 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 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.

Under the Big Spring T&D Agreement, the Partnership will operate and maintain the Midland 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 4 for more detailed descriptions of these agreements.

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.

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

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

The carrying value of the Midland 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 Midland 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 Permian Gathering Assets Acquisition.

Notes to Consolidated Financial Statements

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

Related Party Transactions

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Most of these agreements have an initial term ranging from five to ten years , which may be extended for various renewal terms at the option of Delek Holdings.

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 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");

provided, however, that in no event will the fees be adjusted below the amount initially set forth in the applicable agreement.

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.

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

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, however, in no event will the fees be adjusted below the amount initially set forth in the applicable agreement.

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 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.

Material commercial agreements with Delek Holdings:

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Dedicated Terminalling and storage 50,000

Notes to Consolidated Financial Statements

Storage July 2013 8 / 16

N/A $ 1,034,886 /month

Notes to Consolidated Financial Statements

Memphis Pipeline June 1, 2018 5

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$ 0.59 - $ 0.84

Throughput and Deficiency Agreement (Permian Gathering Assets)

Throughput and Deficiency Agreement (Midland Gathering Assets)

Gathering System March 31, 2020 10 / 20

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(1) Maximum term gives effect to the extension of the commercial agreement pursuant to the terms thereof.

(2) The current term of the agreement was extended through March 31, 2024 in connection with the amendment and restatement of the DKL Credit Facility (as defined in Note 11).

While the current terms of the agreement were extended, the upcoming renewal terms were reduced.

Therefore, the overall duration of the maximum term remains unchanged.

(2) Excludes volumes gathered on the El Dorado Gathering System (the "El Dorado Gathering System").

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(6) The throughput agreement provides for a minimum throughput fee of $ 1.8 million per quarter for throughput of a combination of light and heavy crude.

(7) For any volumes in excess of 120,000 , the throughput fee will be $ 0.55 /bbl.

(8) These volumes are associated with a connection expansion project completed in fourth quarter 2022 to construct additional receipt points on our gathering pipeline.

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.

Aron & Company ("J.

Aron"), Delek Holdings assigned to J.

Aron certain of its rights under our specific terminalling agreements, pipelines, storage and throughput facilities agreements, and asphalt services agreements.

Accordingly, even though this is effectively a financing arrangement for Delek Holdings whereby J.

Aron sells the product back to Delek Holdings, J.

Aron is technically our primary customer under each of these agreements.

Aron retains these storage and transportation rights for the term of the financing arrangement, which currently runs through December 30, 2022, with J.

Aron having the sole discretion to further extend to May 30, 2025, by giving at least six months prior notice to the maturity date.

Aron pays us for the transportation, throughput and storage services we provide to it.

The rights assigned to J.

Aron do not alter the obligations of Delek Holding to meet certain throughput minimum volumes under our agreements with respect to the transportation, gathering and storage of crude oil, intermediate and refined products through our facilities, but J.

Aron's throughput is credited toward minimum throughput commitments of Delek Holdings.

Accordingly, Delek Holdings is responsible for making any shortfall payments incurred under the pipelines and storage agreement or the terminalling agreement which may result from minimum throughputs or volumes not being met.

Other Agreements with Delek Holdings

In addition to the commercial agreements described above, the Partnership has entered into the following agreements with Delek Holdings:

Slurry Clarifying Services Agreement

We executed a series of agreements, effective January 1, 2022, with DK Trading & Supply, LLC (“DKT&S”) and Alon Refining Krotz Springs, Inc.

whereby the Partnership will operate and maintain a facility, located within the Krotz Springs, Louisiana refinery, to process slurry for DKT&S.

Using a process that incorporates horizontal and vertical centrifuges, we remove metals, ash, and other solids from the slurry.

The clarified product can then be sold to DKT&S or one of its affiliates.

As consideration for the processing services, we will receive a fixed rate per barrel processing fee in addition to a margin-based payment.

The Partnership and DKT&S have agreed to a minimum delivery commitment volume to be processed in the facility.

The initial term of the agreement is for a period of three years , and thereafter, will continue a year-to-year basis unless canceled by either party.

Omnibus Agreement

The Partnership entered into an omnibus agreement with Delek Holdings, our general partner, Delek Logistics Operating, LLC, Lion Oil Company, LLC and certain of the Partnership’s and Delek Holdings' other subsidiaries on November 7, 2012, which has been amended from time to time in connection with acquisitions from Delek Holdings (collectively, as amended, the "Omnibus Agreement").

The Partnership entered into an omnibus agreement with Delek Holdings, our general partner, Delek Logistics Operating, LLC, Lion Oil Company, LLC and certain of the Partnership’s and Delek Holdings' other subsidiaries on November 7, 2012, which has been amended and restated from time to time in connection with acquisitions from Delek Holdings (collectively, as amended, the "Omnibus Agreement").

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 $ 4.3 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 of a nominal amount, $ 0.6 million and $ 3.7 million during the years ended December 31, 2021, 2020 and 2019, respectively.

Pursuant to the terms of the Omnibus Agreement, we were reimbursed by Delek Holdings for certain capital expenditures.

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.

There were no reimbursements by Delek Holdings during the year ended December 31, 2022.

We were reimbursed a nominal amount and $ 0.6 million during the years ended December 31, 2021 and 2020, respectively.

Additionally, we are reimbursed or indemnified, as the case may be, for costs incurred in excess of certain amounts related to certain asset failures, pursuant to the terms of the Omnibus Agreement.

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.

As of December 31, 2022, there was no receivable from related parties for these matters and a nominal receivable from related parties for these matters as of December 31, 2021.

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.

There were no reimbursements for these matters during the year ended December 31, 2022.

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

Other Agreements

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Unregistered Sale of Equity Securities

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

In connection with the Partnership's issuance of the common limited partner units under the Midland 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 connection with the Midland Gathering Assets Acquisition is exempt from registration under Section 4(a)(2) of the Securities Act of 1933, as amended.

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 Permian 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 Midland 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.

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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.

For the years ended December 31, 2022 and 2021, Delek Holdings sold 385,522 and 49,068 units, respectively, for gross proceeds of $ 16.4 million ($ 13.6 million, net of taxes) and $ 2.1 million ($ 1.7 million, net of taxes).

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 Permian Gathering Assets Acquisition, the Board of the general partner adopted Amendment No.

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

2 (“Amendment No.

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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

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

During the years ended December 31, 2022, 2021 and 2020, we paid quarterly cash distributions of $ 170.9 million, $ 161.6 million and $ 136.8 million, respectively, of which $ 135.2 million, $ 129.3 million and $ 105.3 million, respectively, were paid to Delek Holdings and our

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.

general partner.

On January 23, 2023, the board of directors of our general partner declared a quarterly cash distribution totaling $ 44.4 million based on the available cash as of the date of determination for the end of the fourth quarter of 2022.

The distribution was paid on February 9, 2023 to unitholders of record on February 2, 2023, of which $ 35.0 million was paid to Delek Holdings .

We generate revenue by charging fees for gathering, transporting, offloading and storing crude oil;

for storing intermediate products and feed stocks;

for distributing, transporting and storing refined products;

for marketing refined products output of Delek Holdings' Tyler and Big Spring refineries;

and for wholesale marketing in the West Texas area.

We generate revenue by charging fees for crude oil gathering, transporting and storage of crude oil and natural gas;

marketing, distributing, transporting and storing intermediate and refined products and disposing and recycling of water in select regions of the southeastern United States, the Delaware Basin in New Mexico and West Texas.

A significant portion of our revenue is derived from long-term commercial agreements with Delek Holdings, which provide for annual fee adjustments for increases or decreases in the CPI, PPI or the FERC index (refer to Note 4 for a more detailed description of these agreements).

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Delek Holdings, directly or indirectly, accounted for 46.3 %, 59.8 % and 67.4 % of our total revenues for the years ended December 31, 2022, 2021 and 2020, 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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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 the pipeline and transportation and wholesale marketing and terminalling segments for the periods indicated (in thousands):

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

Year Ended December 31, 2022

Pipelines and Transportation Wholesale Marketing and Terminalling Consolidated

Gathering and Processing Wholesale Marketing and Terminalling Storage and Transportation Consolidated

Service Revenue - Third Party $ 29,199 $ — $ 21,614 $ 50,813

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Year Ended December 31, 2021

Pipelines and Transportation Wholesale Marketing and Terminalling Consolidated

Gathering and Processing Wholesale Marketing and Terminalling Storage and Transportation Consolidated

Service Revenue - Third Party $ 4,670 $ 490 $ 11,942 $ 17,102

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Notes to Consolidated Financial Statements

Year ended December 31, 2020

Gathering and Processing Wholesale Marketing and Terminalling Storage and Transportation Consolidated

Service Revenue - Third Party $ 1,035 $ 634 $ 16,561 $ 18,230

Service Revenue - Affiliate 17,768 33,632 — 51,400

Product Revenue - Third Party — 162,522 — 162,522

Product Revenue - Affiliate — 71,178 — 71,178

Lease Revenue - Affiliate (1)

121,485 44,925 93,678 260,088

Total Revenue $ 140,288 $ 312,891 $ 110,239 $ 563,418

(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.

As of December 31, 2022, we expect to recognize approximately $ 1.3 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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2023 $ 293,303

2026 and thereafter 572,441

Total expected revenue on remaining performance obligations $ 1,298,595

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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 Permian 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 Midland 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.

An additional waiver letter was signed that waived all of the distributions for the first quarter of 2020 on the Additional Units with respect to base distributions and the IDRs.

Refer to Note 4 for additional details.

Subsequently, the IDRs were eliminated in the IDR Restructuring Transaction on August 13, 2020.

Refer to Note 4 for additional details.

Diluted net income per unit applicable to common limited partners includes the effects of potentially dilutive units on our common units.

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General partner's distribution (including IDRs) (1)

— 18,618 33,492

Limited partners' distribution 172,933 164,484 127,070

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(2) There were 7,511 , 4,458 and 5,201 outstanding common unit equivalents excluded from the diluted earnings per unit calculation during the years ended December 31, 2022, 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 $ 1.5 million and $ 2.4 million of refined petroleum products as of December 31, 2022 and 2021, 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 $ 924,004 $ 449,388

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

Pipelines and Transportation Wholesale Marketing and Terminalling Consolidated

Property, plant and equipment $ 595,031 $ 120,839 $ 715,870

accumulated depreciation ( 205,825 ) ( 60,657 ) ( 266,482 )

Property, plant and equipment, net $ 389,206 $ 60,182 $ 449,388

Depreciation expense $ 30,982 $ 11,788 $ 42,770

As of and For the Year Ended December 31, 2020

Pipelines and Transportation Wholesale Marketing and Terminalling Consolidated

Property, plant and equipment $ 580,631 $ 111,651 $ 692,282

Accumulated depreciation ( 176,020 ) ( 51,450 ) ( 227,470 )

Property, plant and equipment, net $ 404,611 $ 60,201 $ 464,812

Depreciation expense $ 27,682 $ 8,049 $ 35,731

Goodwill represents the excess of the aggregate purchase price over the fair value of the identifiable net assets acquired and is not amortized.

Our goodwill relates to the West Texas assets contributed to us by Delek Marketing & Supply, LLC ("Delek Marketing"), a direct wholly owned subsidiary of Delek Holdings, in connection with our initial public offering and to the purchase price allocation of certain of our third party acquisitions.

We perform an annual assessment of whether goodwill retains its value.

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In 2022, 2021 and 2020, the annual impairment review resulted in the determination that no indicators of impairment of goodwill were present.

Our goodwill in our wholesale marketing and terminalling segment amounted to $ 7.5 million as of December 31, 2021, 2020 and 2019.

Our goodwill in our pipelines and transportation segment amounted to $ 4.7 million as of December 31, 2021, 2020 and 2019.

A summary of our goodwill by segment is as follows (in millions):

Gathering and Processing Wholesale Marketing and Terminalling Storage and Transportation Total

Balance, December 31, 2020 $ 4,155 $ 7,499 $ 549 $ 12,203

Goodwill Impairment — — — —

Balance, December 31, 2021 4,155 7,499 549 12,203

Acquisition 14,848 — — 14,848

Goodwill Impairment — — — —

Balance, December 31, 2022 $ 19,003 $ 7,499 $ 549 $ 27,051

Other Intangible Assets

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Intangible assets subject to amortization:

Marketing contract 20 $ 144,219 $ ( 27,642 ) $ 116,577

Customer relationships 11.6 years $ 210,000 $ ( 10,560 ) $ 199,440

Marketing contract 20 years 144,219 ( 34,853 ) 109,366

Rights-of-way assets 8 - 35 years

13,490 ( 377 ) 13,113

Intangible assets not subject to amortization:

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Intangible assets subject to amortization:

Marketing contract 20 $ 144,219 $ ( 20,431 ) $ 123,788

Marketing contract 20 years $ 144,219 $ ( 27,642 ) $ 116,577

Intangible assets not subject to amortization:

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Total $ 181,499 $ ( 27,642 ) $ 153,857

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.

Amortization expense is estimated to be $ 7.2 million for each of the years ended December 31, 2022 through 2026.

Amortization of the rights-of-way assets and customer relationships intangible asset was $ 10.9 million for the year ended December 31, 2022, and is included in depreciation and amortization on the accompanying consolidated statements of income and comprehensive income.

Amortization of the marketing contract was $ 7.2 million during the years ended December 31, 2022, 2021 and 2020, and is included as a reduction of net revenue on the accompanying consolidated statements of income and comprehensive income.

Amortization expense is estimated to be $ 0.6 million $ 7.2 million and $ 18.1 million for the rights-of-way assets, marketing contract intangible and the customer relationship intangible, respectively, for each of the years ended December 31, 2023 through 2027.

Notes to Consolidated Financial Statements

Long-Term Obligations

Outstanding borrowings, net of unamortized debt discounts and certain deferred financing costs, under the Partnership’s existing debt instruments are as follows (in thousands):

December 31, 2022 December 31, 2021

Delek Logistics 2028 Notes (1)

$ 395,190 $ 394,302

DKL Revolving Facility (2)

720,129 258,000

DKL Term Facility (3)

Delek Logistics 2025 Notes (4)

247,643 246,668

$ 1,661,567 $ 898,970

(1) Net of deferred financing costs of $ 4.8 million and $ 5.7 million at December 31, 2022 and December 31, 2021, respectively.

(2) Net of deferred financing costs of $ 0.4 million at December 31, 2022.

(3) Net of debt discount of $ 1.4 million at December 31, 2022.

(4) Net of deferred financing costs of $ 1.8 million and $ 2.5 million and debt discount of $ 0.6 million and $ 0.8 million at December 31, 2022 and December 31, 2021, respectively.

7.125 % Senior Notes due 2028

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As of December 31, 2022, we had $ 400.0 million in outstanding principal amount under the 2028 Notes, and the effective interest rate was 7.40 %.

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

The estimated fair value of the 2028 Notes was $ 359.7 million and $ 414.0 million as of December 31, 2022 and December 31, 2021, respectively, measured based upon quoted market prices in an active market, defined as Level 1 in the fair value hierarchy.

DKL Credit Facility

On September 28, 2018, the Partnership entered into a third amended and restated senior secured revolving credit agreement (hereafter, the "DKL Credit Facility") with Fifth Third Bank ("Fifth Third"), as administrative agent, and a syndicate of lenders with total lender commitments of $ 850.0 million.

On September 28, 2018, the Partnership entered into a third amended and restated senior secured revolving credit agreement (hereafter, the "DKL Credit Facility") with Fifth Third Bank, National Association ("Fifth Third"), as administrative agent, and a syndicate of lenders with total lender commitments of $ 850.0 million.

The DKL Credit Facility contains a dual currency borrowing tranche that permits draw downs in U.S.

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The obligations under the DKL Credit Facility remain secured by first priority liens on substantially all of the Partnership's and its subsidiaries' tangible and intangible assets.

Additionally, Delek Marketing, a subsidiary of Delek Holdings, had provided a limited guaranty of the Partnership's obligations under the DKL Credit Facility.

In connection with the IDR Restructuring Transaction, the Partnership entered into a First Amendment to the DKL Credit Facility (the "First Amendment") which, among other things, permitted the exchange of the IDRs and the general partner interest in the Partnership for the non-economic general partner interest, the newly issued limited partner interests in the Partnership, plus $ 45.0 million in cash.

The First Amendment also modified the total leverage and senior leverage ratios (as defined in the DKL Credit Facility) calculations to reduce the total funded debt (as defined in the DKL Credit Facility) component thereof by the total amount of unrestricted consolidated cash and cash equivalents on the balance sheet of the Partnership and its subsidiaries up to $ 20.0 million.

The DKL Credit Facility has a maturity date of September 28, 2023.

The DKL Credit Facility had a maturity date of September 28, 2023.

Borrowings denominated in U.S.

dollars bear interest at either a U.S.

dollar prime rate, plus an applicable margin, or the London Interbank Offered Rate ("LIBOR") plus an applicable margin, at the election of the borrowers.

dollar prime rate, plus an applicable margin, or Secured Overnight Financing Rate ("SOFR"), plus an applicable margin, at the election of the borrowers.

Borrowings denominated in Canadian dollars bear interest at either a Canadian dollar prime rate, plus an applicable margin, or the Canadian Dealer Offered Rate, plus an applicable margin, at the election of the borrowers.

Notes to Consolidated Financial Statements

The applicable margin in each case and the fee payable for any unused revolving commitments vary based upon the Partnership's most recent total leverage ratio calculation delivered to the lenders, as called for and defined under the terms of the DKL Credit Facility.

At December 31, 2022, the weighted average interest rate for our borrowings under the facility was approximately 7.55 %.

Additionally, the DKL Credit Facility requires us to pay a leverage ratio dependent quarterly fee on the average unused revolving commitment.

Additionally, the DKL Credit Facility

Notes to Consolidated Financial Statements

requires us to pay a leverage ratio dependent quarterly fee on the average unused revolving commitment.

As of December 31, 2022, this fee was 0.50 % per year.

As of December 31, 2021, we had $ 258.0 million of outstanding borrowings under the DKL Credit Facility, with no letters of credit in place.

In August 2020, the Partnership entered into a First Amendment to the DKL Credit Facility which, among other things, permitted the transfer of cash and equity consideration for the elimination of incentive distribution rights held by Delek Logistics GP, LLC, our general partner.

It also modified the total leverage ratio and the senior leverage ratio (each as defined in the DKL Credit Facility) calculations to reduce the total funded debt (as defined in the DKL Credit Facility) component thereof by the total amount of unrestricted consolidated cash and cash equivalents on the balance sheet of the Partnership and its subsidiaries up to $ 300.0 million.

In May 2022, the Partnership entered into Second and Third Amendments to the DKL Credit Facility which, among other things, provided for the transition from a LIBOR benchmark to a term Secured Overnight Financing Rate benchmark (“Term SOFR”) with credit spread adjustments for 1-month and 3-month Term SOFR loans, and provided consent and flexibility related to the previously announced 3 Bear Acquisition with respect to certain covenants in the DKL Credit Facility.

We believe we were in compliance with all covenant requirements as of December 31, 2022.

Further, on May 26, 2022, the Partnership entered into a Fourth Amendment (the “Fourth Amendment”) to the DKL Credit Facility.

Among other things, the Fourth Amendment:

(i) increased the U.S.

Revolving Credit Commitments (as defined in the DKL Credit Facility) by an amount equal to $ 150.0 million, for an aggregate amount of $ 1,000.0 million, (ii) increased the U.S.

L/C Sublimit (as defined in the DKL Credit Facility) to an aggregate amount equal to $ 90.0 million and (iii) increased the U.S.

Swing Line Sublimit (as defined in the DKL Credit Facility) to an aggregate amount equal to $ 18.0 million.

On October 13, 2022, the Partnership entered into a fourth amended and restated DKL Credit Facility (the "2022 DKL Credit Facility") with Fifth Third, as administrative agent and a syndicate of lenders.

The 2022 DKL Credit Facility, among other things, (i) increased total aggregate commitments to $ 1.2 billion, comprised of (A) senior secured revolving commitments of $ 900.0 million in aggregate (eliminating the Canadian dollar tranche), with sublimit of up to $ 115.0 million for letters of credit and $ 25.0 million for swing line loans (the “DKL Revolving Facility”) with an extended maturity date of October 13, 2027, and (B) a new senior secured term loan in the original principal amount of $ 300.0 million (the “DKL Term Facility”), (ii) reset the accordion feature under the DKL Revolving Facility, such that aggregate revolving commitments can be increased to up to $ 1.15 billion upon the agreement of the Partnership and one or more existing or new lenders and (ii) provided for the DKL Term Facility be drawn in full on October 13, 2022, with a maturity date of October 13, 2024 and with a prepayment requirement for the proceeds obtained from certain senior unsecured notes issuances.

The DKL Term Facility requires four quarterly amortization payments of $ 3.8 million in 2023 and three quarterly amortization payments of $ 7.5 million in 2024.

Borrowings under the DKL Revolving Facility bear interest at the election of the Partnership at either a U.S.

dollar prime rate, plus an applicable margin ranging from 1.00 % to 2.00 % depending on the Partnership’s Total Leverage Ratio (as defined in the DKL Credit Agreement), or a SOFR rate plus a credit spread adjustment of 0.10 % for one-month interest periods and 0.25 % for three-month interest periods plus an applicable margin ranging from 2.00 % to 3.00 % depending on the Partnership’s Total Leverage Ratio.

Unused revolving commitments under the DKL Revolving Facility incur a commitment fee that ranges from 0.30 % to 0.50 % depending on the Partnership’s Total Leverage Ratio.

Borrowings under the DKL Term Facility bear interest at the election of the Partnership at either a U.S.

dollar prime rate, plus an applicable margin of 2.50 % for the first year of the DKL Term Facility and 3.00 % for the second year of the DKL Term Facility, or a SOFR rate plus a credit spread adjustment of 0.10 % for one-month interest periods and 0.25 % for three-month interest periods plus an applicable margin of 3.50 % for the first year of the Term Facility and 4.00 % for the second year of the DKL Term Facility.

The 2022 DKL Credit Facility contains affirmative and negative covenants and events of default, which the Partnership considers customary and are similar to those in our predecessor DKL Credit Facility.

Under the financial covenants in the 2022 DKL Credit Facility, the Partnership cannot:

• permit, as of the last day of each fiscal quarter, the Total Leverage Ratio (as defined in the DKL Credit Facility) to be greater than 5.25 to 1.00;

provided, that during any Temporary Increase Period (as defined in the DKL Credit Facility, the Partnership cannot permit the foregoing ratio to be greater than 5.50 to 1.00 (a Temporary Increase Period with respect to the 3 Bear Acquisition (as defined in the DKL Credit Facility) is in effect through March 31, 2023);

• permit, as of the last day of each fiscal quarter, the Senior Leverage Ratio (as defined in the DKL Credit Facility) to be greater than 3.75 to 1.00;

• permit, as of the last day of each fiscal quarter, the interest coverage ratio to be equal to or less than 2.00 to 1.00.

The obligations under the 2022 DKL Credit Facility remain secured by a first priority lien on substantially all of the Partnership’s and its subsidiaries’ tangible and intangible assets.

As of December 31, 2022 and 2021, we had outstanding borrowings under the DKL Revolving Facility of $ 720.5 million and $ 258.0 million with weighted average borrowing rates of 7.55 % and 2.46 %, respectively.

As of December 31, 2022 there were no letters of credit in place.

Unused credit commitments under the DKL Credit Facility as of December 31, 2022 were $ 179.5 million.

At December 31, 2022, the weighted average borrowing rate under the DKL Term Loan Facility was approximately 7.92 %, comprised entirely of SOFR borrowings.

The principal amount outstanding thereunder was $ 300.0 million, and the effective interest rate was 8.22 %.

Notes to Consolidated Financial Statements

6.750 % Senior Notes Due 2025

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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.

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.

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.

The Issuers may, subject to certain conditions and limitations, redeem all or part of the 2025 Notes at a redemption price of 101.688 % of the redeemed principal during 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, 2022, the effective interest rate related to the 2025 Notes was approximately 7.21 %.

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.

The estimated fair value of the 2025 Notes was $ 243.4 million and $ 253.8 million as of December 31, 2022 and December 31, 2021, respectively, measured based upon quoted market prices in an active market, defined as Level 1 in the fair value hierarchy.

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, 2022 (in thousands):

2022 2023 2024 2025 2026 Thereafter Total

DKL Credit Facility

$ — $ 258,000 $ — $ — $ — $ — $ 258,000

Year Ended December 31, Total

2023 $ 15,000

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

Thereafter 400,000

Total $ 1,670,500

We had 9,257,305 common limited partner units held by the public outstanding as of December 31, 2022.

Additionally, as of December 31, 2022, Delek Holdings owned an 78.8 % limited partner interest in us, consisting of 34,311,278 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.

On November 14, 2022, we entered into an Equity Distribution Agreement with RBC Capital Markets, LLC (the “Manager”) under which we may issue and sell, from time to time, to or through the Manager, as sales agent and/or principal, as applicable, common units representing limited partner interests, having an aggregate offering price of up to $ 100.0 million.

The Equity Distribution Agreement provides us the right, but not the obligation, to sell common units in the future, at prices we deem appropriate.

The net proceeds from any sales under this agreement will be used for general partnership purposes.

For the year ended December 31, 2022, we sold 59,192 common units under the Equity Distribution Agreement for net proceeds of $ 3.1 million.

Underwriting discounts were immaterial.

On April 14, 2022, we filed a shelf registration statement with the SEC, which was declared effective on April 29, 2022, which provides the Partnership the ability to offer up to $ 200.0 million of our common limited partner units from time to time and through one or more methods of distribution, subject to market conditions and our capital needs.

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

Notes to Consolidated Financial Statements

management and board of directors, at fair market value.

Delek Holdings now owns 100 % of the outstanding ownership interest in our general partner.

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

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

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

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

6 unchanged sentences

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

Delek Holdings resale of units 385,522 ( 385,522 ) — —

Unit-based compensation awards (1)

38,538 — — 38,538

Issuance of units pursuant to the Equity Distribution Agreement 59,192 — — 59,192

Balance at December 31, 2022 9,257,305 34,311,278 — 43,568,583

(1) Unit-based compensation awards are presented net of 12,224 , 5,315 and 926 units withheld for taxes as of December 31, 2022, 2021 and 2020, respectively.

There were no units withheld for taxes as of December 31, 2019.

Issuance of Additional Securities

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General partner's allocated interest in net income

— 1,092 1,299

General partner's IDRs

— 17,632 31,781

Total general partner's interest in net income

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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.

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.

Subsequently, the IDRs were eliminated in the IDR Restructuring Transaction on August 13, 2020.

Cash Distributions

Our Partnership Agreement sets forth the calculation to be used to determine the amount and priority of available cash distributions that our limited partner unitholders and general partner will receive.

The cash distributions for periods before August 13, 2020 include distributions to the 2 % general partner interest which was converted to non-economic general partner interest and IDRs which were permanently eliminated.

Our distributions earned with respect to a given period are declared subsequent to quarter end.

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

Quarter Ended Total Quarterly Distribution Per Limited Partner Unit Total Cash Distribution, 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 (in thousands) Date of Distribution Unitholders Record Date

December 31, 2020 $ 0.910 $ 39,533 February 9, 2021 February 2, 2021

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Equity Method Investments

In May 2019, the Partnership, through its wholly owned indirect subsidiary DKL Pipeline, LLC (“DKL Pipeline”), entered into a Contribution and Subscription Agreement (the “Contribution Agreement”) with Plains Pipeline, L.P.

(“Plains”) and Red River Pipeline Company LLC (“Red River”).

Pursuant to the Contribution Agreement, DKL Pipeline contributed $ 124.7 million, substantially all of which was financed by borrowings under the DKL Credit Facility, to Red River in exchange for a 33 % membership interest in Red River and DKL Pipeline’s admission as a member of Red River.

In addition, we contributed $ 0.4 million of start up capital pursuant to the Amended and Restated Limited Liability Company Agreement.

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 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.

The Partnership owns a 33 % membership interest in Red River Pipeline Company LLC ("Red River"), a joint venture operated with Plains Pipeline, L.P.

Red River owns a 16 -inch crude oil pipeline running from Cushing, Oklahoma to Longview, Texas with prior capacity of 150,000 bpd and increased capacity of 235,000 bpd after completion of an expansion project in October 2020 .

During the years ended December 31, 2021 and 2020, we made capital contributions to Red River of $ 1.4 million and $ 12.2 million, respectively.

We made no capital contributions during the year ended December 31, 2022

Summarized financial information for Red River on a 100% basis is shown below (in thousands):

Year Ended Year Ended

December 31, 2021 December 31, 2020

As of December 31, 2022 As of December 31, 2021

Current Assets $ 33,365 $ 28,735

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Current liabilities $ 5,144 $ 10,040

Year Ended Year Ended For the period

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

Years Ended December 31,

2022 2021 2020

Revenues $ 95,525 $ 68,057 $ 51,001

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("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):

Year Ended Year Ended

December 31, 2021 December 31, 2020

As of December 31, 2022 As of December 31, 2021

Current assets $ 18,888 $ 15,010

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Current liabilities $ 1,973 $ 1,492

Year Ended Year Ended Year Ended

December 31, 2021 December 31, 2020 December 31, 2019

Years Ended December 31,

2022 2021 2020

Revenues $ 45,109 $ 46,335 $ 55,482

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

Year Ended Year Ended

December 31, 2021 December 31, 2020

Notes to Consolidated Financial Statements

As of December 31, 2022 As of December 31, 2021

Red River $ 149,635 $ 144,041

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Andeavor Logistics 43,331 44,319

Total Equity Method Investments $ 257,022 $ 250,030

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

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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;

We aggregate our operating segments into four reportable segments:

(i) gathering and processing;

(ii) wholesale marketing and terminalling;

and (iii) investment in pipeline joint ventures.

(iii) storage and transportation;

and (iv) investment in pipeline joint ventures.

Operations that are not specifically included in the reportable segments are included in Corporate and other segment.

During the fourth quarter 2022, we realigned our reportable segments for financial reporting purposes to reflect changes in the manner in which our chief operating decision maker, or CODM, assesses financial information for decision-making purposes.

The change primarily represents reporting the operating results of our pipeline operations and legacy gathering assets and the operating results of the 3 Bear assets within a new reportable segment called gathering and processing.

Prior to this change, the pipeline operations and legacy gathering assets were reported as part of pipelines and transportation segment.

The former pipelines and transportation reportable segment was renamed to storage and transportation.

Additionally, we are also now segregating out certain non-segment specific costs and expenses and, when applicable, immaterial operating segments that may not fit into our existing reportable segments as Corporate and Other activities.

Corporate and other primarily includes general and administrative expenses, interest expense and depreciation and amortization.

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, 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.

Through September 30, 2022, the CODM believed that contribution margin was a meaningful measure of performance, and it was used by the CODM to analyze the Partnership and stand-alone operating segment performance.

During the fourth quarter 2022, the CODM determined that EBITDA is the key performance measure for planning and forecasting purposes and discontinued the use of contribution margin as a measure of performance.

Segment EBITDA should not be considered a substitute for results prepared in accordance with U.S.

GAAP and should not be considered alternatives to net income (loss), which is the most directly comparable financial measure to EBITDA that is in accordance with U.S.

Segment EBITDA, as determined and measured by us, should also not be compared to similarly titled measures reported by other companies.

Assets by segment is not a measure used to assess the performance of the Partnership by the CODM and thus is not disclosed.

Notes to Consolidated Financial Statements

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):

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

Year Ended December 31, 2022

2021 2020 2019

Pipelines and Transportation

(In thousands) Gathering and Processing Wholesale Marketing and Terminalling Storage and Transportation Investments in Pipeline Joint Ventures Corporate and Other Consolidated

Net revenues:

Affiliate (1)

$ 185,845 $ 173,084 $ 120,482 $ — $ — $ 479,411

Third party 119,582 415,800 21,614 — — 556,996

Total pipelines and transportation 287,645 251,469 178,318

Cost of materials and other 59,821 45,934 22,826

Operating expenses (excluding depreciation and amortization) 43,818 42,267 54,827

Segment contribution margin $ 184,006 $ 163,268 $ 100,665

Total revenue $ 305,427 $ 588,884 $ 142,096 $ — $ — $ 1,036,407

Segment EBITDA $ 175,250 $ 83,098 $ 56,269 $ 31,683 $ ( 34,363 ) $ 311,937

Depreciation and amortization 47,206 6,308 8,591 883 62,988

Amortization of customer contract intangible — 7,211 — — — 7,211

Interest expense, net — — — — 82,304 82,304

Income tax expense 382

Net income $ 159,052

Capital spending (2) (3)

$ 122,594 $ 1,548 $ 6,528 $ — $ — $ 130,670

Wholesale Marketing and Terminalling

Year Ended December 31, 2021

(In thousands) Gathering and Processing Wholesale Marketing and Terminalling Storage and Transportation Investments in Pipeline Joint Ventures Corporate and Other Consolidated

Net revenues:

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Third party 4,670 265,464 11,942 — — 282,076

Total wholesale marketing and terminalling 413,257 311,949 405,674

Cost of materials and other 324,588 223,160 313,647

Operating expenses (excluding depreciation and amortization) 16,917 14,012 19,330

Segment contribution margin $ 71,752 $ 74,777 $ 72,697

Total revenue $ 161,852 $ 413,257 $ 125,793 $ — $ — $ 700,902

Segment EBITDA $ 126,818 $ 79,597 $ 56,929 $ 24,575 $ ( 22,742 ) $ 265,177

Depreciation and amortization 22,394 5,547 8,588 — 6,241 42,770

Amortization of customer contract intangible — 7,211 — — — 7,211

Interest expense, net — — — — 50,221 50,221

Income tax expense 153

Net income $ 164,822

Capital spending (2) (3)

$ 22,262 $ 3,622 $ 1,567 $ — $ — $ 27,451

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 )

Notes to Consolidated Financial Statements

Year ended December 31, 2020

(In thousands) Gathering and Processing Wholesale Marketing and Terminalling Storage and Transportation Investments in Pipeline Joint Ventures Corporate and Other Consolidated

Net revenues:

Affiliate (1)

$ 139,253 $ 149,735 $ 93,678 $ — $ — $ 382,666

Third party 1,035 163,156 16,561 — — 180,752

Total Consolidated 700,902 563,418 583,992

Cost of materials and other 384,409 269,094 336,473

Operating expenses (excluding depreciation and amortization presented below) 60,735 56,279 74,157

Contribution margin 255,758 238,045 173,362

General and administrative expenses 22,545 22,587 20,815

Total revenue $ 140,288 $ 312,891 $ 110,239 $ — $ — $ 563,418

Segment EBITDA $ 108,752 $ 79,602 $ 51,704 $ 22,693 $ ( 17,456 ) $ 245,295

Depreciation and amortization 18,415 5,520 9,205 — 2,591 35,731

Other operating (income) expense, net ( 59 ) ( 66 ) 34

Operating income 190,502 179,793 125,812

Amortization of customer contract intangible — 7,211 — — — 7,211

Interest expense, net — — — — 42,874 42,874

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 223

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

Net income $ 159,256

Capital spending (2) (3)

$ 5,384 $ 5,962 $ 4,087 $ — $ 16 $ 15,449

(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.

(1) Affiliate revenue for the wholesale marketing and terminalling segment is presented net of amortization expense pertaining to the Marketing Contract Intangible Acquisition.

See Note 3 for additional information.

Notes to Consolidated Financial Statements

The following table summarizes the total assets for each segment as of December 31, 2021 and 2020 (in thousands).

Assets for each segment includes property, plant and equipment, equity method investments, intangible assets and inventory.

Year Ended December 31,

Pipelines and transportation $ 452,690 $ 469,642

Wholesale marketing and terminalling 211,723 206,918

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.

(2) 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 Midland Gathering Assets Acquisition.

(3) Capital spending for the years ended December 31, 2021 and 2020 excludes contributions to equity method investments amounting to $ 1.4 million and $ 12.2 million, respectively.

There were no contributions made during the year ended December 31, 2022.

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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These amounts are included in other non-current liabilities in our accompanying consolidated balance sheets.

The majority component of our non-current deferred tax liabilities as of December 31, 2021 and 2020, respectively, was depreciation and amortization.

The majority component of our non-current deferred tax liabilities as of December 31, 2022 and 2021 was depreciation and amortization.

Notes to Consolidated Financial Statements

The difference between the actual income tax expense and the tax expense computed by applying the statutory federal income tax rate to income before income taxes is attributable to the following (in thousands):

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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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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 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 governmental agencies or other persons for personal injury, property damage, response costs, or natural resources damages.

Notes to Consolidated Financial Statements

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

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").

During the year ended December 31, 2022, there were no significant releases.

In August 2021, a 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 where such costs incurred as of December 31, 2022 totaled $ 4.7 million.

The affected area is currently being treated to bring it to acceptable residential levels protective of groundwater.

We believe additional costs associated with this release will be nominal.

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.

Cleanup operations, site maintenance and remediation on this release have been completed with closure granted and ground water monitoring wells removed.

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.

Those matters were settled during the third quarter of 2022, for an amount of $ 3.7 million paid to the Partnership.

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.

We expect regulatory closure in 2022 for the release sites that have not yet received it and do not anticipate material costs associated with any fines or penalties or to complete 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, 2022, we have accrued $ 0.3 million for remediation and other such matters related to these releases.

Notes to Consolidated Financial Statements

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.

The majority of our releases have been subsequently reimbursed by Delek Holdings pursuant to the terms of the Omnibus Agreement, with the exception of the Sulphur Springs Release above as it is not covered under the Omnibus Agreement.

The majority of our releases have been subsequently reimbursed by Delek Holdings pursuant to the terms of the Omnibus Agreement, with the exception of the Greenville Dixon Release noted above as it is not covered under the Omnibus Agreement.

Reimbursements are recorded as a reduction to operating expense.

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, 2021 and 2020, the crude oil and other releases remediation expenses, net of reimbursable costs, were immaterial.

During the year ended December 31, 2022, we recorded $ 1.7 million of crude oil and other releases remediation expenses, net of reimbursable expenses.

During the year ended December 31, 2021 crude oil and other releases remediation expenses, net of reimbursable costs, were immaterial.

We lease certain pipeline and transportation equipment.

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Our lease agreements do not contain any material residual value guarantees or material restrictive covenants.

Notes to Consolidated Financial Statements

The following table presents additional information related to our operating leases in accordance ASC 842:

Year Ended December 31, Year Ended December 31,

Years Ended December 31,

(in thousands) 2022 2021

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Leased assets obtained in exchange for new financing lease liabilities $ 35 $ 3,071

December 31, 2021 December 31, 2020

Years Ended December 31,

Weighted-average remaining lease term (years) for operating leases 3.3 3.3

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Present value of lease liabilities $ 20,134

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, 2022 (in thousands) under ASC 842:

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Director, Executive Vice President and Chief Financial Officer

February 25, 2022

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 February 25, 2022:

/s/ Ezra Uzi Yemin

Ezra Uzi Yemin

Chair of the Board of Directors and Chief

Executive Officer

March 1, 2023

/s/ Avigal Soreq

(Principal Executive Officer)

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(Principal Accounting Officer)

/s/ Ezra Uzi Yemin

Ezra Uzi Yemin

Executive Chairman of the Board of Directors

/s/ Sherri A.

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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