Delek Logistics Partners, LP 10-K

ITEM 9A. CONTROLS AND PROCEDURES Evaluation of Disclosure Controls and Procedures 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 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 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. GAAP. Our internal control over financial reporting includes those policies and procedures that: i. Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; ii. Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. GAAP and that receipts and expenditures recorded by us are being made only in accordance with authorizations of our management and the board of directors of our general partner; and iii. Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on our financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. 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. Management's assessment included an evaluation of the design of our internal control over financial reporting and testing the operational effectiveness of our internal control over financial reporting. Management reviewed the results of the assessment with the Audit Committee of the board of directors of our general partner. Based on its assessment and review with the Audit Committee, management concluded that, as of December 31, 2022, we maintained effective internal control over financial reporting. Changes in Internal Control over Financial Reporting 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. 89 | Controls and Procedures, and Other Information ITEM 9B. 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. ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS Not applicable. 90 | Directors, Executive Officers, Corporate Governance, and Security Ownership PART III ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE Our general partner, Delek Logistics GP, LLC, is an indirect subsidiary 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. References in this Part III to the "Board," "directors," or "officers" refer to the Board, directors and officers of our general partner. The Board of Directors The directors oversee our operations. The members of the Board are not elected by our unitholders and will not be subject to re-election by our unitholders in the future. The general partner is a limited liability company and its directors are elected by Delek Logistics Services Company, its sole member, which is a subsidiary of Delek Holdings. The directors hold office for a term of one year or until their successors have been elected or qualified or until their earlier death or removal. Our general partner is liable, as general partner, for all of our debts (to the extent not paid from our assets), except for indebtedness or other obligations that are made expressly without recourse to the general partner. Our general partner therefore may cause us to incur indebtedness or other obligations that are without recourse to the general partner. Our common units are traded on the New York Stock Exchange (the "NYSE"). Because we are a limited partnership, we rely on an exemption from the provisions of Section 303A.01 of the NYSE Listed Company Manual which would require the Board to be composed of a majority of independent directors. Despite this exemption, our Board is currently comprised of a majority of independent directors, though this composition could change in the future. We are not required to establish either a compensation or a nominating and corporate governance committee. We are, however, required to have an audit committee of at least three members, and all of our audit committee members are required to meet the independence and experience tests established by the NYSE and the Exchange Act. At the date of this report, the Board consists of the following nine members: Ezra Uzi Yemin, Sherri A. Brillon, Charles J. Brown, III, Eric D. Gadd, Frederec Charles Green, Ron W. Haddock, Gennifer F. Kelly, Reuven Spiegel and Avigal Soreq. The Board has determined that each of Messrs. Brown, Gadd and Haddock and Mses. Brillon and Kelly qualifies as an independent director under applicable SEC rules and regulations and the rules of the NYSE. Under the NYSE's listing standards, a director will not be deemed independent unless the Board affirmatively determines that the director has no material relationship with us. Based upon information requested from and provided by each director concerning his or her background, employment and affiliations, including commercial, industrial, banking, consulting, legal, accounting, charitable and familial relationships, the Board has determined that each of Messrs. Brown, Gadd and Haddock and Mses. Brillon and Kelly has no material relationship with Delek Holdings or us, either directly or as a partner, stockholder or officer of an organization that has a relationship with Delek Holdings or us, and each of them is therefore independent under the NYSE's listing standards and applicable SEC rules and regulations. Director Experience and Qualifications The members of the general partner are responsible for filling vacancies on the Board at any time during the year and for selecting individuals to serve on the Board. From time to time, the members may utilize the services of search firms or consultants to assist in identifying and screening potential candidates. In accordance with the general partner's governance guidelines, the members consider such qualifications and other factors as they deem appropriate in evaluating potential Board candidates, including the individual’s independence, education, experience, reputation, judgment, skill, integrity and industry knowledge. Directors should have experience in positions with a high degree of responsibility, be leaders in the organizations with which they are affiliated, and have the time, energy, interest and willingness to serve as a member of the Board. While the general partner has no policy requiring consideration of racial or ethnic classifications, gender, religion or sexual orientation, the members give consideration to the diversity of experiences and backgrounds of its directors, the degree to which the individual’s qualities and attributes will complement those of other directors, the extent to which the candidate would be a desirable addition to the Board and committees thereof, and other factors. Executive Officers of Our General Partner Our general partner's executive officers manage the day-to-day affairs of our business and conduct our operations. The executive officers of our general partner are appointed by the Board and serve in that capacity at the discretion of the Board. All of our general partner's executive officers are employees and officers of Delek Holdings. While the amount of time that our general partner's executive officers devote to our business varies in any given year, we currently estimate that approximately 10% to 20% of their productive business time is spent on the management and conduct of our operations, except for Odely Sakazi, who devotes a majority of his time to our operations. The executive officers of our general partner intend to devote as much of their time as is necessary for the proper conduct of our business. We also utilize a significant number of Delek Holdings' employees to operate our business and provide us with general and administrative services. Under the Omnibus Agreement, we pay Delek Holdings an annual fee, indexed for inflation, for Delek Holdings' provision of centralized corporate services, including executive management services of Delek Holdings employees who devote less than 50% of their time to our business, financial and administrative services, information technology services, legal services, health, safety and environmental services, human resource services, 91 | Directors, Executive Officers, Corporate Governance, and Security Ownership and insurance administration. In addition, we reimburse Delek Holdings for allocated expenses of personnel who devote 50% or more of their time performing services for our benefit. Directors and Executive Officers of Our General Partner The following table shows information for the directors and executive officers of our general partner. Name Age Position With Delek Logistics GP, LLC Avigal Soreq 44 Director and President, Delek Logistics Ezra Uzi Yemin 53 Executive Chairman of the Board of Directors Sherri A. Brillon 62 Chair of Audit Committee and Member of Technology and Governance and Compensation Committees Charles J. Brown, III 74 Director, Chair of Conflicts Committee and Member of Audit and Governance and Compensation Committees Eric D. 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 Ron W. Haddock 81 Director, Chair of Governance and Compensation Committee, and Member of Audit and EHS Committee Gennifer F. Kelly 49 Director, Chair of Technology Committee, and Member of Conflicts and EHS Committees Reuven Spiegel 65 Director, Executive Vice President and Chief Financial Officer Denise McWatters 62 Executive Vice President, General Counsel and Secretary Odely Sakazi 38 Senior Vice President, Delek Logistics 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. Mr. 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. Mr. Soreq is a certified public accountant in Israel. Ezra Uzi Yemin has served as the Executive Chairman of the Board since June 2022. Mr. Yemin has served as one of our directors since April 2001 and as the chair of the Board since April 2012. Mr. Yemin previously served as our chief executive officer and president from April 2012 and August 2019, respectively, until June 2022. Mr. 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. Mr. 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. from May 2015 until its acquisition by Delek Holdings in July 2017. Mr. Yemin’s duties include the formulation of our policies and strategic direction, oversight of executive officers and overall responsibility for our operations and performance. The Board believes that, because he has worked for Delek Holdings since its founding, Mr. Yemin brings to the Board a thorough and complete understanding of our business, operations and operating environment, as well as the business, operations and operating environment of Delek Holdings (the owner of over 21% of our units and the customer on whom the Partnership is most dependent). Mr. Yemin also brings to the Board substantial leadership, planning and industry experience. Sherri A. 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. Ms. 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. (NYSE: 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. Ms. 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. (TSX: PSK), which owns properties generating royalty revenues from petroleum and natural gas in Canada. Ms. Brillon attended the University of Calgary, where she graduated with a Bachelor of Arts degree in economics. Ms. 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. 92 | Directors, Executive Officers, Corporate Governance, and Security Ownership Charles J. 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. Mr. Brown is a licensed attorney with more than 30 years of experience in the energy industry. From July 2013 until his retirement on January 1, 2020, Mr. 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. Mr. 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. Brown served as a partner in the energy department of a large international law firm. Mr. 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. Eric D. 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. Mr. Gadd previously served as a member of the Audit Committee from October 2013 to July 2021. Mr. Gadd is currently principal director at Contanda LLC, which is a private company that operates bulk liquid terminals in North America. Mr. 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. He has over 40 years of diverse experience in the energy industry including exploration and production field services, mid-stream, renewable energy, commodity trading and risk management, and mergers and acquisitions. Prior to forming Awelon LLC in 2006, Mr. Gadd held various executive positions with multiple leading companies in the energy industry over a 25-year period. Mr. Gadd was appointed to the Board because of his extensive energy industry experience. 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. Mr. Green served as an Executive Vice President of our general partner from May 2009 until November 2020. Mr. Green also served in numerous executive roles at Delek Holdings from January 2005 through November 2020, including serving as the primary operational officer for Delek Holdings’ refineries and as Executive Vice President and Chief Operating Officer from November 2016 until March 2020. He also served on the board of directors of Alon Energy USA, Inc. from May 2015 until July 2017, and served as the Chief Executive Officer of Alon USA Partners, LP from July 2017 until December 2017. Mr. Green has 35 years of experience in the refining and midstream industries, including fourteen years at Murphy Oil USA, Inc. where he served as a senior vice president during his last six years. Mr. 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. Mr. Green is currently an independent consultant serving clients in the midstream and downstream sectors, including Delek Holdings and Delek Logistics. Mr. 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. Ron W. 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. Mr. Haddock has also served as our Lead Independent Director since February 2021. Mr. 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 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. Mr. 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. (NYSE: 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 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. (NYSE: DVN) and is a member of Audit and Reserves committees. Ms. Kelly has 25 years of oil and gas industry experience in both upstream and midstream sectors. Ms. 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 (NYSE: APC). Prior to her role at Western Midstream, Ms. Kelly led Operations Transformation efforts, as well as Strategic Planning, Portfolio Management and Asset Management teams for Anadarko. She has diverse operations experience in production, drilling and completions engineering, working extensively in East Texas, West Texas and the Gulf of Mexico. Prior to joining Anadarko Petroleum, Ms. Kelly worked as an engineer for Kerr McGee Corporation and the Louisiana Office of Conservation. Ms. Kelly holds both a Bachelor of Science in Petroleum Engineering and a Master of Business Administration from Louisiana State University. Ms. Kelly is a registered Professional Engineer in the state of Texas and a member of the Society of Petroleum Engineers. Ms. 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. 93 | 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. Mr. 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 Chief Executive Officer of Israel Discount Bank Ltd. (TLV: 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 Chairperson of the board of Discount Mortgage Bank. Mr. 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 our Executive Vice President, General Counsel and Corporate Secretary since February 2021. Ms. 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. (NYSE: 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 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. He previously served as our Vice President of Business Strategy and corporate development from November 2017 until August 2019, as Senior Director of Business Strategy from January 2017 until November 2017, as Director of Business Strategy from June 2016 until January 2016, and as Director of Corporate Operation from August 2015 until June 2016. He formerly served in the Israeli Navy as an officer in various roles between 2010 and 2014. Board Leadership Structure Mr. 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. Mr. 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 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 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 Independent directors and management have different perspectives and roles in strategy development. Our independent directors bring experience, oversight and expertise from outside the Partnership and our industry, while the other Board members bring experience and expertise specific to us and Delek Holdings. In addition, the independent directors are the sole members of our Audit and Conflicts Committees. The NYSE listing standards require our independent directors to meet at regularly scheduled executive sessions without management. Our independent directors generally conduct such executive sessions in connection with each quarterly meeting of the Audit Committee and otherwise as may be necessary. Mr. Haddock was appointed Lead Independent Director of the Board in February 2021. In this capacity, Mr. Haddock generally presides over these executive sessions. 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 310 Seven Springs Way, Suite 400 and 500, 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. 94 | Directors, Executive Officers, Corporate Governance, and Security Ownership Committees of the Board of Directors of Our General Partner Audit Committee The Board has a standing Audit Committee. The Audit Committee consists of Ms. Brillon (chair) and Messrs. Brown and Haddock. Mr. Brown joined the committee at its inception in November 2012, Mr. Haddock joined the committee in 2022 and Ms. Brillon joined the committee in January 2021. 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 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 Independent Financially Literate Qualifies as an Audit Committee Financial Expert Sherri A. Brillon (Chair) ü ü ü Charles J. Brown III ü ü ü Ron Haddock ü ü 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; (b) the disclosure and financial reporting process, including our financial statements; (c) our internal controls and procedures for financial reporting; (d) the performance of our internal audit function and the independent registered public accounting firm employed by us for the purpose of preparing and issuing an audit report or related work; (e) the qualifications and independence of our independent registered public accounting firm; 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 The Conflicts Committee consists of Messrs. Brown (chair) and Gadd and Ms. Kelly. The Board has determined that each of Messrs. Brown, and Gadd and Ms. Kelly qualifies as independent under applicable SEC rules and regulations and the rules of the NYSE. Mr. Brown joined the committee at its inception in November 2012. Mr. Gadd joined the committee in October 2013. Ms. Kelly joined the committee on July 29, 2020. The Conflicts Committee met 1 time during the year ended December 31, 2022, either in person or telephonically, with each member attending all meetings of the Conflicts Committee. Our Partnership Agreement does not require that the Board seek approval from the Conflicts Committee to determine the resolution of any conflict of interest between us and Delek Holdings or any other person. However, pursuant to the Partnership Agreement and our Related Party Transactions Policy adopted by the Board, the Board or management of our general partner may submit certain related party transactions for review and approval or ratification by the Board or an authorized committee thereof. It is generally expected that the Conflicts Committee will be best suited to review such related party transactions. In certain instances, the Related Party Transactions Policy effectively requires that certain related party transactions be submitted to the Conflicts Committee for review. The members of the Conflicts Committee may not be officers or employees of our general partner or directors, officers or employees of its affiliates, may not hold an ownership interest in the general partner or its affiliates other than common units or awards under any long-term incentive plan, equity compensation plan or similar plan implemented by the general partner or the Partnership and must meet the independence and experience standards established by the NYSE and the SEC to serve on an audit committee of a board of directors. 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. For further discussion of the Conflicts Committee and the Related Party Transactions Policy, see Item 13. "Certain Relationships and Related Transactions and Director Independence—Certain Relationships and Related Transactions—Procedures for Review, Approval or Ratification of Transactions with Related Parties." Environmental, Health and Safety Committee The EHS Committee consists of Messrs. Gadd (chair) and Haddock and Ms. Kelly. Mr. Gadd joined the committee at its inception in October 2016, Mr. Haddock joined the committee in May 2018, and Ms. Kelly joined the committee in July 2020. The EHS Committee met four times in 2022, either in person or telephonically, with each member attending at least 75% of all meetings of the EHS Committee. The purpose of the EHS Committee is to assist the Board in fulfilling certain of the Board’s oversight responsibilities by, among other things, overseeing management’s establishment and administration of the Partnership’s environmental, health and safety policies, programs, procedures and initiatives. These responsibilities are set forth in the EHS Committee's charter, which is available on our corporate website at www.DelekLogistics.com. Governance and Compensation Committee In July 2021 the Board established the Governance and Compensation Committee of the Board. The Governance and Compensation 95 | Directors, Executive Officers, Corporate Governance, and Security Ownership Committee consists of Messrs. Haddock (chair), Brown, and Gadd and Ms. Brillon. 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; (b) periodically review the corporate governance policies applicable to the Partnership (the “Governance Guidelines”) and recommend to the Board any changes deemed necessary or desirable; (c) monitor, oversee and review compliance of the Governance Guidelines and all other applicable policies of the Partnership as the Governance and Compensation Committee or the Board deem necessary or desirable; (d) support the Board and work with management to ensure that compensation practices properly reflect management and Partnership philosophy, competitive practice and regulatory requirements; and (e) review, provide advice on and, where appropriate, approve the following items: (1) executive and employee compensation objectives, plans, and levels; (2) culture and employee engagement; (3) diversity and inclusion; (4) leadership and talent engagement; and (5) executive succession planning. These responsibilities are set forth in the Governance and Compensation Committee's charter, which is available on our corporate website at www.DelekLogistics.com. Technology Committee In July 2021 the Board established the Technology Committee of the Board. The Technology Committee consists of Mses. Kelly (chair) and Brillon and Mr. Green. 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 As a limited partnership, we rely on an exemption from the provisions of the NYSE Listed Company Manual, which would otherwise require us to have a nominating and corporate governance committee. Our general partner is a limited liability company and its directors are not elected by our unitholders, but by its members in their sole discretion. However, in July 2021 the Board established the Governance and Compensation Committee of the Board, which, among other responsibilities, makes recommendations to the Board regarding changes to the size and composition of the committees of the Board and makes recommendation to the Board with respect to the structure of Board committees and nominees for appointment to committees of the Board. Candidates to serve on the Board are reviewed and selected in accordance with our general partner's Governance Guidelines, which are available on our corporate website at www.DelekLogistics.com. Compensation Decisions In July 2021, the Board established the Governance and Compensation Committee of the Board, which, among other responsibilities, oversees director and executive officer compensation for the Partnership. Additionally, our Board believes it is important to promote the interests of the Partnership by providing to employees of the Partnership's affiliates and others who perform services for us or on our behalf, incentive compensation awards for their service. Accordingly, the general partner adopted the Delek Logistics GP, LLC 2012 Long-Term Incentive Plan (the "LTIP"). Due to the fact that several of the members of the Board perform services on our behalf in their roles as executive officers of Delek Holdings, the LTIP is administered by the Conflicts Committee with respect to those awards. The disinterested members of the full Board may also grant awards and the Conflicts Committee may delegate, and has delegated in the past, to an executive officer of the general partner the authority to issue awards to non-Section 16 officers of the general partner. A compensation consultant was not used in the formulation of our executive compensation framework, objectives and philosophy. For a further discussion on the compensation practices of the general partner, see Item 11. Executive Compensation. Governance Guidelines, Code of Business Conduct & Ethics and Committee Charters The Governance Guidelines of the Board of Directors of our general partner, the charters of the standing Board committees of our general partner and our Amended and Restated Code of Business Conduct & Ethics covering all employees, including our principal executive officer, principal financial officer, principal accounting officer and controllers, are available on our website, www.DelekLogistics.com under the "About Us - Corporate Governance" caption. A copy of any of these documents will be mailed upon a request made to Investor Relations, Delek Logistics Partners, LP, or ir@deleklogistics.com. 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. 96 | Directors, Executive Officers, Corporate Governance, and Security Ownership ITEM 11. EXECUTIVE COMPENSATION All of our general partner's executive officers are employees of Delek Holdings. Neither we nor our general partner directly employ any of the executive officers responsible for managing our business. Compensation Discussion and Analysis This Compensation Discussion and Analysis (“CD&A”) discusses the principles underlying our general partner's compensation programs and the key executive compensation decisions that were made for 2022. It also explains the most important factors relevant to such decisions. This CD&A provides context and background for the compensation earned and awarded to the individuals named in the Summary Compensation Table below. Messrs. Soreq, Yemin, Sakazi and Spiegel and Ms. McWatters are referred to collectively herein as our "named executive officers" or "NEOs". Overview - Compensation Decisions and Allocation of Compensation Expenses Under the terms of the Omnibus Agreement, we pay an annual administrative fee of $4.3 million per year to Delek Holdings for the provision of general and administrative services. The general and administrative services covered by the annual administrative fee include, without limitation, executive management services of Delek Holdings employees who devote less than 50% of their time to our business, financial and administrative services, information technology services, legal services, health, safety and environmental services, human resources services and insurance administration. No service covered by the administrative fee is assigned any particular value individually. Additionally, the Omnibus Agreement requires us to reimburse Delek Holdings directly for a proportionate amount of the salary and employee benefits costs of Delek Holdings employees who devote more than 50% of their time to our business and affairs. None of our NEOs other than Mr. Sakazi devoted more than 50% of their total business time to our business and affairs in 2022. Although our NEOs provide services to both Delek Holdings and us, no portion of the administrative fee is specifically allocated to services provided by our NEOs to us except with respect to Mr. Sakazi. Instead, the administrative fee covers all centralized services provided to us by our NEOs other than Mr. Sakazi, and we have not reimbursed Delek Holdings for the cost of such services. Except for awards under the LTIP, Delek Holdings has the ultimate decision-making authority with respect to the compensation of our NEOs. In July 2021, the Board established the Governance and Compensation Committee of the Board, which, among other responsibilities, oversees director and executive officer compensation for the Partnership. While the Governance and Compensation Committee does not establish the compensation paid to our NEOs, it does monitor the compensation program applicable to our NEOs. Additionally, our Board believes it is important to promote the interests of the Partnership and the general partner by providing incentive compensation to employees of the Partnership's affiliates and others who perform services for us or on our behalf. Accordingly, pursuant to our Partnership Agreement, the general partner is allowed to and has adopted the LTIP. Due to the fact that several of the members of the Board perform services on our behalf in their roles as executive officers of Delek Holdings, the awards to these individuals under the LTIP are administered by the Conflicts Committee. The disinterested members of the Board may also grant awards and the Conflicts Committee may delegate, and has delegated in the past, to an executive officer of the general partner the authority to issue awards to non-Section 16 officers of the general partner. Compensation Objectives and Philosophy Because neither we nor our general partner directly employ any of our NEOs, and because our NEOs are compensated by Delek Holdings to manage our business and affairs, we did not provide traditional fixed or discretionary compensation (e.g. salary or bonus) to our NEOs in 2022. However, we believe that our NEOs should have an ongoing stake in our success, that their interests should be aligned with those of our unitholders and that the best interests of our unitholders will be most effectively advanced by enabling our NEOs, who are responsible for our management, growth and success, to receive compensation in the form of long-term incentive awards. Accordingly, our executive compensation program consists of a single element: long-term incentives in the form of awards under the LTIP, which was adopted in connection with our initial public offering and is administered by the Conflicts Committee. The Conflicts Committee’s decisions with respect to the amount of awards made under the LTIP to our NEOs are governed by the following objectives: • to motivate and retain our general partner's key executives; • to align the long-term economic interests of our general partner's executives with those of our unitholders; and • to reward excellence and performance by our general partner's executives that increases the value of our units. Awards may be made under the LTIP to officers, directors and employees of Delek Holdings, our general partner or its affiliates, as well as any consultants or other individuals who perform services for us. Phantom units have been the sole form of award under the LTIP to date, and these awards are accompanied by distribution equivalent rights that provide for a lump sum amount paid in cash on the vesting date that is equal to the accrued distributions from the grant date of the phantom units through the vesting date. 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 97 | 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. For additional detail regarding the amount of compensation our NEOs may be entitled to in the event of their termination or a change-in-control, see “—Potential Payments Upon Termination or Change-In-Control.” Compensation Consultants The Governance and Compensation Committee of the Board did not retain a compensation consultant with respect to compensation paid to our NEOs or to its non-employee directors in 2022. Perquisites Our general partner does not provide any fringe benefits or perquisites to our NEOs. Unit Ownership Requirements Our general partner does not have express unit ownership requirements. Prohibition Against Speculative Transactions Our general partner's Code of Business Conduct & Ethics, which applies to all executive officers and directors of our general partner, prohibits speculative transactions in our units such as short sales, puts, calls or other similar options to buy or sell our units in an effort to hedge certain economic risks or otherwise. Guidelines for Trades by Insiders We maintain policies that govern trading in our units by officers and directors required to report under Section 16 of the Exchange Act, as well as certain other employees who may have regular access to material non-public information about us. These policies include pre-approval requirements for all trades and periodic trading “black-out” periods designed with reference to our quarterly financial reporting schedule. We also require pre-approval of all trading plans adopted pursuant to Rule 10b5-1 promulgated under the Exchange Act. To mitigate the potential for abuse, no trades are allowed under a trading plan within 30 days after adoption. In addition, we discourage termination or amendment of trading plans by prohibiting trades under new or amended plans within 90 days following a plan termination or amendment. Compensation Committee Report 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 March 1, 2023: • Ron W. Haddock (Chair) • Sherri A. Brillon • Charles J. Brown, III • Eric D. Gadd 2022 Summary Compensation Table 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. Spiegel), Executive Vice President, General Counsel, and Secretary (Ms. McWatters) and Senior Vice President (Mr. Sakazi). 98 | Directors, Executive Officers, Corporate Governance, and Security Ownership Name and Principal Position (1) Fiscal Year Salary ($) Bonus ($) Unit Awards ($) (2) Option Awards ($) Other Compensation ($) (3) Total ($) Avigal Soreq, President 2022 — — 499,955 — — 499,955 Ezra Uzi Yemin, Former Chief Executive Officer 2022 — — 1,233,943 — — 1,233,943 2021 — — 1,049,979 — — 1,049,979 2020 — — — — — — Reuven Spiegel, Chief Financial Officer 2022 — — 133,418 — — 133,418 2021 — — 133,323 — — 133,323 2020 — — — — — — Denise McWatters, General Counsel 2022 — — 116,705 — — 116,705 2021 — — 116,648 — — 116,648 Odely Sakazi, Senior Vice President 2022 300,000 — 250,091 — 12,781 562,872 2021 294,231 — 246,645 — 4,370 545,246 2020 310,385 139,087 219,620 — 18,586 687,678 (1) As noted above, no compensation other than grants of service phantom units under our LTIP is reported for the NEOs except for Mr. Sakazi, because none of our executive officers other than Mr. Sakazi received compensation from us or our general partner in 2022. (2) Amounts in this column represent the grant date fair value of DK PSUs, DK RSUs, with respect to Mr. Sakazi, and DKL phantom units, with respect to all NEOs, granted under the 2016 Plan or the LTIP, as applicable. The fair value of DK PSUs is calculated using a Monte-Carlo simulation model, which assumes a risk-free rate of interest of 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 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. (3) For fiscal year 2022, this amount includes matching contributions to the Partnership’s 401(k) Plan in the amount of $10,385 for Mr. Sakazi and group term life insurance premiums of $486 for Mr. Sakazi. For Mr. Sakazi, this amount also includes reimbursement in the amount of $910 for phone expenses and $1,000 for HSA employer in 2022. Grants of Plan Based Awards in 2022 The following table provides information regarding plan-based awards granted to our NEOs during fiscal year 2022: Estimated Future Payouts Under Equity Incentive Plan Awards (#) (1) All Other Stock Awards: Number of Shares of Units (#) Grant Date Fair Value of Units and Option Awards (2) Name Grant Date Threshold Target Maximum Ezra Uzi Yemin 3/10/2022 29,827 (3) 1,233,943 Avigal Soreq 6/10/2022 9,331 (3) 499,955 Reuven Spiegel 3/10/2022 3,225 (3) 133,418 Denise McWatters 3/10/2022 2,821 (3) 116,705 Odely Sakazi 3/10/2022 3,047 (4) 66,668 3/10/2022 806 (3) 33,344 3/10/2022 2,285 4,570 9,140 4,570 (4) 150,079 (1) The amounts in this column reflect the threshold, target, and maximum shares to be issued upon the vesting of PSUs. The PSUs granted to Mr. Sakazi are subject to a performance period beginning January 1, 2022 and ending December 31, 2022. (2) The amounts in this column reflect the aggregate grant date fair value computed in accordance with FASB ASC Topic 718 for financial statement reporting purposes over the expected term of the grant. Assumptions used in the calculation of this amount for the 2022 fiscal year are included in footnote 13 to our audited financial statements for the 2022 fiscal year included in this Annual Report on Form 10-K. Because the fair value of PSUs is calculated differently than the fair value of RSUs, the grant date fair values for PSUs and RSUs covering identical quantities of shares may differ. (3) The amounts in this column reflect the Delek Logistics common units to be issued upon the vesting of RSUs granted under the Delek Logistics 2012 Long-Term Incentive Plan. The RSUs vest quarterly for three years, pro rata. (4) The amounts in this column reflect the Delek Holdings shares to be issued upon the vesting of RSUs granted under the 2016 Plan. The RSUs vest quarterly for three years, pro rata. 99 | Outstanding Equity Awards at December 31, 2022 The following table provides information regarding the number of outstanding equity awards held by our NEOs at December 31, 2022. Option Awards Unit Awards 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 Avigal Soreq President — — n/a n/a 7,776 $351,864 Ezra Uzi Yemin Former Chief Executive Officer — — n/a n/a 34,467 $1,559,632 Reuven Spiegel Chief Financial Officer — — n/a n/a 3,381 $152,990 Denise McWatters General Counsel — — n/a n/a 3,461 $156,610 Odely Sakazi Senior Vice President — — n/a n/a 990 $44,798 Option Exercises and Stock Vested in 2022 The following table provides information about the vesting of phantom units for our NEOs during fiscal year 2022. Option Awards Stock Awards Name Number of Shares Acquired on Exercise Value Realized on Exercise Number of Shares Acquired on Vesting Value Realized on Vesting 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 Denise McWatters, General Counsel — $— 1,780 $93,111 Odely Sakazi, Senior Vice President — $— 508 $26,579 Potential Payments Upon Termination or Change-In-Control The following table discloses the estimated payments and benefits that would be provided by us to each of our NEOs, assuming that each of the triggering events relating to termination of employment or change in control described in their respective employment agreements with Delek Holdings and the LTIP took place on December 31, 2022 and their last day of employment with our general partner or its affiliates was December 31, 2022. Due to a number of factors that affect the nature and amount of any benefits provided upon the events discussed below, actual amounts paid or distributed may differ. Factors that could affect these amounts include the timing during the year of such event and our stock price. Name Termination of Employment Change-In-Control Avigal Soreq, President — $— Ezra Uzi Yemin, Former Chief Executive Officer — $— Reuven Spiegel, Chief Financial Officer — $— Denise McWatters, General Counsel — $— Odely Sakazi, Senior Vice President $894,859 (1) $1,552,457 (2) (1) Assumes acceleration of 2,534 unvested DK RSUs, 288 unvested DKL RSUs, and 6,704 unvested PSUs. (2) Assumes acceleration of 4,659 unvested DK RSUs, 990 unvested DKL RSUs, and 11,091 unvested PSUs. 2012 Long-Term Incentive Plan Under the terms of the LTIP and the applicable awards, phantom units that have not vested at the time the participant’s employment with our general partner or its affiliates terminates will generally be immediately forfeited, unless the Board determines otherwise. 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 100 | 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 Officers and employees of Delek Holdings or its subsidiaries do not receive additional compensation for services on the Board or its committees. The compensation framework for the Board's other directors during 2022 (Messrs. Brown, Gadd, Green and Haddock and Mses. Brillon and Kelly) (the "Compensated Directors") was determined by the Board. 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. From time to time, the Board also engages an independent compensation consultant to provide an analysis of compensation paid to directors of entities considered by the Board to be peers of the Partnership at the time. For 2021, the Board did not engage a compensation consultant to evaluate Compensated Director compensation, and instead considered the other factors outlined above. The Board determined to maintain the same levels of compensation for the Compensated Directors in 2022 as the compensation paid in 2021. This compensation includes a cash retainer for services on the Board and its Committees (and a lead director fee), payable quarterly, and an annual equity award of phantom units under the LTIP that vests semi-annually over a one-year period, as set forth below: Board of Directors Retainer (Per Year) $72,000 Lead Director Fee (Per Year) $12,000 Target Value for Equity Awards (Per Year) $100,000 Committee Retainers (Per Year): Chair Others Audit Committee $12,000 $5,600 Conflicts Committee $5,000 $2,500 EHS Committee $8,000 $4,400 Technology Committee $8,000 $4,400 Governance and Compensation Committee $10,000 $5,000 In addition, each director is reimbursed for out-of-pocket expenses in connection with attending meetings of the Board and committee meetings. Each director is fully indemnified by us for actions associated with being a director to the fullest extent permitted under Delaware law pursuant to our Partnership Agreement. 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): Chair Audit Committee $10,000 Conflicts Committee $7,500 EHS Committee $5,000 Technology Committee $5,000 Governance and Compensation Committee $7,500 101 | Directors, Executive Officers, Corporate Governance, and Security Ownership The following table sets forth a summary of the compensation we paid to the Compensated Directors for service during 2022. Director Compensation Name (1) Fees Earned or Paid in Cash ($) (2) Stock Awards ($) (3) Option Awards ($) All Other Compensation ($) Total ($) Sherri A. Brillon 93,400 99,980 — — 193,380 Charles J. Brown, III 90,600 99,980 — — 190,580 Eric D. Gadd 87,500 99,980 — — 187,480 Frederec C. Green 76,400 99,980 — — 176,380 Ron W. Haddock 129,000 (4) 99,980 — — 228,980 Gennifer Kelly 86,900 99,980 — — 186,880 (1) Because they are officers and employees of Delek Holdings or its subsidiaries, Messrs. 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. (3) Amounts in this column represent the aggregate grant date fair value computed in accordance with FASB ASC Topic 718 for financial statement reporting purposes. Assumptions used in the calculation of this amount for the 2022 fiscal year are included in Note 13 to our audited financial statements for the 2022 fiscal year included in this Annual Report on Form 10-K. The grant date fair value of $53.58 per unit is equal to the NYSE closing price of our common units as of June 10, 2022. Each of Messrs. Brown, Gadd, Haddock and Green and Mses. Kelly and Brillon held 1,133 outstanding phantom units at December 31, 2022. (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 Messrs. Brown, Gadd and Haddock and Ms. Brillon served on the Governance and Compensation Committee during 2022, and Messrs. 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. 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 principal executive officer in 2022. 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 principal executive officer. 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. ITEM 12. SECURITY OWNERSHIP OF CERTAIN OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT The following table sets forth, as of February 24, 2023 (the "Measurement Date"), (i) the beneficial ownership of our units representing limited partnership interests and Common Stock of Delek Holdings by all directors and director nominees of our general partner, our NEOs and all of our executive officers as a group and (ii) the beneficial ownership of our units representing limited partnership interests by each person known by us to own more than five percent of such units or more than five percent of any class of our units. The amounts and percentage of units beneficially owned are reported on the basis of regulations of the SEC governing the determination of beneficial ownership of securities. Under the rules of the SEC, a person is deemed to be a “beneficial owner” of a security if that person has or shares “voting power,” which includes the power to vote or to direct the voting of such security, or “investment power,” which includes the power to dispose of or to direct the disposition of such security. 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 310 Seven Springs Way, Suite 400 and 500, Brentwood, Tennessee 37027. 102 | Directors, Executive Officers, Corporate Governance, and Security Ownership Name of Beneficial Owner (1) Amount, Nature and Percentage of Beneficial Ownership of Common Units (2) Amount and Nature of Beneficial Ownership of Common Stock (2) Delek Logistics Partners, LP Delek US Holdings, Inc. (#) (%) (#) (3) (%) Beneficial Owners of More Than 5% of Units: Delek US Holdings, Inc. (4) 34,311,278 78.8 n/a n/a Directors, Director Nominees and NEOs: Avigal Soreq (5) 1,953 * 19,738 * Ezra Uzi Yemin (6) 227,013 * 983,020 1.5 Sherri A. Brillon 3,200 * — * Charles J. Brown, III 9,819 * — * Eric D. Gadd 24,644 * — * Frederec Charles Green 72,886 * 152,918 * Ron W. Haddock 16,553 * 17,517 * Gennifer F. Kelly 6,014 * — * Reuven Spiegel (7) 10,068 * 11,491 * Denise McWatters (8) 2,371 * 7,578 * Todd O'Malley (9) 3,876 * 11,801 * Odely Sakazi (10) 1,024 * 5,743 * All directors, all director nominees, all NEOs and all executive officers as a group (12 persons) 379,421 * 1,209,806 1.8 * Less than 1% of our issued and outstanding common units of Delek Logistics Partners, LP or issued and outstanding shares of Delek US Holdings, Inc. Common Stock, as applicable. (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. The percentage of our units beneficially owned is based on a total of 43,568,583 common units representing limited partner interests issued and outstanding on the Measurement Date. The percentage ownership of Delek US Holdings, Inc. Common Stock is based on a total of 66,941,871 shares issued and outstanding on the Measurement Date (excluding securities held by or for the account of the registrant or its subsidiaries). 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. (3) For non-qualified stock options (“NQSOs”) and restricted stock units (“RSUs”) under the Delek US Holdings, Inc. 2016 Long-Term Incentive Plan, we report shares equal to the number of RSUs that are vested or that will vest within 60 days of the Measurement Date. (4) Subsidiaries of Delek US Holdings, Inc. hold the common limited partner units. Delek US Energy, Inc. and Delek Logistics Services Company directly held 20,745,868 and 13,565,410 common limited partner units, respectively. Delek US Holdings, Inc. is the ultimate parent of each of these entities and may, therefore, be deemed to beneficially own the units held by each such entity. Delek US Holdings, Inc. files information with, or furnishes information to, the SEC pursuant to the information requirements of the Exchange Act, as amended. (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. Common Stock are held of record by Yemin Investments, L.P., a limited partnership of which Mr. Yemin is the sole general partner. The number of our common units owned includes 4,904 phantom units that will vest within 60 days of the Measurement Date. The number of shares of Delek US Holdings, Inc. Common Stock includes 37,136 RSUs that will vest within 60 days of the Measurement Date. (7) The number of our common units owned includes 845 phantom units that will vest within 60 days of the Measurement Date. the number of shares of Delek US Holdings, Inc. Common Stock includes 2,858 RSUs that will vest within 60 days of the Measurement Date. (8) The number of our common units owned includes 504 phantom units that will vest within 60 days of the Measurement Date. The number of shares of Delek US Holdings, Inc. Common Stock includes 1,670 RSUs that will vest within 60 days of the Measurement Date. (9) The number of our common units owned includes 811 phantom units that will vest within 60 days of the Measurement Date. the number of shares of Delek US Holdings, Inc. Common Stock includes 2,798 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. 103 | Directors, Executive Officers, Corporate Governance, and Security Ownership EQUITY COMPENSATION PLAN INFORMATION The following table provides certain information as of December 31, 2022 regarding our general partner's equity compensation plans. Plan Category Number of securities to be issued upon exercise of outstanding options, warrants and rights Weighted-average exercise price of outstanding options, warrants and rights Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (a) (b) (c) Equity compensation plans approved by security holders 749,024 N/A 222,233 Equity compensation plans not approved by security holders — N/A — TOTAL 749,024 N/A 222,233 (a) The amounts in column (a) of this table reflect only phantom units that have been granted under the LTIP. No Awards (as defined under the LTIP) have been made other than the phantom units, each of which represent rights to receive (upon vesting and payout) one common unit in the Partnership or an amount of cash equal to the fair market value of such unit. These phantom units vest over one- to five-year service periods from the date of grant. (b) Column (b) of this table is not applicable because phantom units do not have an exercise price. (c) The LTIP was adopted by our general partner in connection with the closing of the initial public offering and provides for the making of certain awards, including common units, restricted units, phantom units, unit appreciation rights and distribution equivalent rights. For information about the LTIP, which did not require approval by our limited partners, refer to Item 11 of this Annual Report on Form 10-K. Additionally, On June 9, 2021, the LTIP was amended to increase the number of units representing limited partner interest in the Partnership (the "Common Units") authorized for issuance by 300,000 Common Units to 912,207 Common Units. Additionally, the term of the LTIP was extended to June 9, 2031. 104 | Directors, Executive Officers, Corporate Governance, and Security Ownership ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE Certain Relationships and Related Transactions As of February 24, 2023, Delek Holdings and its affiliates owned 34,311,278 of our common limited partner units, which represents a 78.8% ownership interest in the Partnership. Certain transactions with Delek Holdings and its affiliated entities are considered to be related party transactions under Item 404 of Regulation S-K because Delek Holdings and its affiliates own more than five percent of our equity interests. In addition, Messrs. Soreq, Spiegel, and Yemin and Ms. McWatters serve as executive officers of both Delek Holdings and our general partner. Distributions and Payments to Delek Holdings Pursuant to our Partnership Agreement, we are required to make quarterly cash distributions of 100% of our "available cash" to limited partners, including Delek Holdings. During 2022, we made cash distributions totaling $171.1 million to our unitholders, of which $135.2 million was paid to Delek Holdings and our general partner. Commercial Agreements, Omnibus Agreement and Operations and Management Services Agreement The Partnership has a number of long-term, fee-based commercial agreements with Delek Holdings under which we provide various services, including crude oil gathering and crude oil, intermediate and refined products transportation and storage services, and marketing, terminalling and offloading services to Delek Holdings. In return, Delek Holdings commits to minimum monthly throughput volumes of crude oil, intermediate and refined products. See Note 4 to the consolidated financial statements in Item 8, Financial Statements and Supplementary Data, of this Annual Report on Form 10-K for a discussion of and the amounts paid under our material commercial agreements and other non-contractual arrangements with Delek Holdings during 2022. 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 Intermediation Agreement." Omnibus Agreement The Omnibus Agreement (as defined in Note 4 to our consolidated financial statements) governs a number of important aspects of the Partnership’s business relationship with Delek Holdings. For a more extensive summary of this agreement and its amendment history, see Items 1 and 2. “Business and Properties—Commercial Agreements—Other Agreements with Delek Holdings.” The Omnibus Agreement addresses, among other things, the following matters: • an agreement whereby Delek Holdings will not compete with us under certain circumstances; • our right of first offer to acquire certain of Delek Holdings' logistics assets, including certain terminals, storage facilities and other related assets located at the Tyler and El Dorado Refineries and, under specified circumstances, logistics and marketing assets that Delek Holdings may acquire or construct in the future; • Delek Holdings' right of first refusal to purchase our assets that serve its refineries; • our obligation to pay an annual fee to Delek Holdings for Delek Holdings' provision of centralized corporate services, including executive management services of Delek Holdings employees who devote less than 50% of their time to our business, financial and administrative services, information technology services, legal services, health, safety and environmental services, human resource services, and insurance administration; • Delek Holdings' reimbursement to us for certain operating expenses and certain maintenance capital expenditures and Delek Holdings' indemnification of us for certain matters, including environmental, title and tax matters; • reimbursement to us for certain designated periods of time related to the date of acquisition of the relevant asset for any operating expenses in excess of certain thresholds per year that we incur for inspections, maintenance and repairs to any of the storage tanks contributed to us by Delek Holdings that are necessary to comply with the DOT pipeline integrity rules and certain API storage tank standards; and • reimbursement to us for certain designated periods of time related to the date of acquisition of the relevant asset for all non-discretionary maintenance capital expenditures, other than those required to comply with applicable environmental laws and regulations, in excess of certain thresholds per year that we make with respect to the assets contributed to us by Delek Holdings for which we have not been reimbursed as described above. See Note 4 and Note 17 to the consolidated financial statements in Item 8, Financial Statements and Supplementary Data, of this Annual Report on Form 10-K, for a discussion of and the amounts paid under the Omnibus Agreement during 2022. Other Related Party Transactions 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. 105 | Directors, Executive Officers, Corporate Governance, and Security Ownership 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 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"). The majority of the gathering systems has been constructed, however, additional costs pertaining to a pipeline connection that was not acquired by the Partnership continue to be incurred and are still subject to the terms of the DPG Management Agreement. The Partnership is also considered the operator for the project and is responsible for the oversight of the project design, procurement and construction of project segments and for providing other related services. See Note 4 to the consolidated financial statements in Item 8, Financial Statements and Supplementary Data, of this Annual Report on Form 10-K, for a discussion of and the amounts paid under the DPG Management Agreement during 2022. Procedures for Review, Approval or Ratification of Transactions with Related Party Our Board has adopted a formal written related party transactions policy to establish procedures for the notification, review, approval, ratification and disclosure of related party transactions. The Board reviews this policy annually. For the purposes of this policy, a related party is defined as follows: I. any director or executive officer of our general partner; II. any unitholder owning in excess of 5% of our common units or an affiliate of our general partner; III. any immediate family member of an individual of any such person; IV. any entity in which we have an investment that is accounted for under the equity method of accounting; and V. any entity that is owned or controlled by someone listed in I - IV above or any entity in which someone listed in I - IV above has a substantial ownership interest or control of such entity. Other transactions that are undertaken pursuant to existing agreements and the ongoing performance of which meet criteria prior to filing or approval requirements, a related party transaction under the policy is generally expected to be a transaction in which we are a participant with a related party and which requires disclosure under Item 404 of Regulation S-K. Transactions that are otherwise resolved under Section 7.9 of the Partnership Agreement are not required to be reviewed or approved under the policy. 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 106 | 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. The policy further sets forth certain categories of transactions between the Partnership and its subsidiaries on one hand and Delek Holdings and its subsidiaries on the other hand that are deemed to be approved by the Board and are therefore able to be effected by management of the general partner under the relevant general authorization policies and procedures and after taking into account all relevant facts and circumstances. Additionally, the policy effectively requires that all related party transactions that: I. involve the purchase and sale of products or services that are effected at either (x) cost (including, when relevant, a nominal fee for services) or (y) the then-prevailing market prices that we would pay or charge to third parties ("Market Based Transactions") undertaken outside the ordinary course of business and involve an aggregate amount of more than $2.5 million annually; or II. are not Market Based Transactions and are undertaken outside the ordinary course of business; or III. are not Market Based Transactions and are undertaken within the ordinary course of business and involve an aggregate amount of more than $2.5 million annually be approved by the Board of Directors or an authorized committee thereof. Pursuant to the policy, the Conflicts Committee is generally the best suited to review these transactions and it is expected they will be the committee that does so. The Board has also adopted a written code of business conduct and ethics, under which a director or officer of the general partner or of any of our subsidiaries would be expected to bring to the attention of the Audit Committee or the Board or the general partner's General Counsel, any conflict or potential conflict of interest that may arise between such party, on the one hand, and us, on the other hand. 107 | Principal Accountant Fees and Services ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES Audit fees Audit fees of $1,141,600 and $907,625 paid for the services of Ernst & Young LLP during fiscal years 2022 and 2021, respectively, include services related to the audits of our consolidated financial statements and internal controls over financial reporting, reviews of our quarterly condensed consolidated financial statements and audit services provided in connection with acquisitions, investments and regulatory filings. Fees and expenses are for services in connection with the audit of our fiscal years ended 2022 and 2021, regardless of when the fees and expenses were paid. Audit-related fees No audit-related fees were paid for the services of Ernst & Young LLP during fiscal years 2022 and 2021. Tax Fees and All Other Fees No tax fees or other fees were paid for the services of Ernst & Young LLP during fiscal years 2022 and 2021. All of the fees described above were approved in accordance with the Audit Committee pre-approval policy described below. Pre-Approval Policies and Procedures In general, all engagements performed by our independent registered public accounting firm, whether for auditing or non-auditing services, must be pre-approved by the Audit Committee. The Audit Committee has adopted a pre-approval policy that provides guidelines for the audit, audit-related, tax and other non-audit services that may be provided by the independent registered public accounting firm to the Partnership. The policy (a) identifies the guiding principles that must be considered by the Audit Committee in approving services to ensure that the independent registered public accounting firm’s independence is not impaired; (b) describes the audit, audit-related, tax and other services that may be provided and the non-audit services that are prohibited; and (c) sets forth pre-approval requirements for all permitted services. During the years ended 2022 and 2021, all of the services performed for us by Ernst & Young LLP were pre-approved by the Audit Committee. 108 | Exhibits and Financial Statement Schedules PART IV ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES (a) Certain Documents Filed as Part of this Annual Report on Form 10-K: 1. Financial Statements. The accompanying Index to Financial Statements and Schedule on page F-1 of this Annual Report on Form 10-K is provided in response to this item. 2. List of Financial Statement Schedules. All schedules are omitted because the required information is either not present, not present in material amounts or included within the Consolidated Financial Statements. 3. Exhibits - See below. F-1 EXHIBITS Exhibit No. Description 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). 2.2 Contribution, Conveyance, and Assumption Agreement, dated as of March 31, 2020, between several Delek subsidiaries (incorporated by reference to Exhibit 2.1 of the Partnership's Form 8-K filed April 6, 2020). 2.3 Throughput and Deficiency Agreement, dated as of March 31, 2020, by and between Lion Oil Trading & Transportation, LLC and DKL Permian Gathering, LLC (incorporated by reference to Exhibit 10.1 of the Partnership's Form 8-K filed on April 6, 2020). 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. 333-182631) filed on July 12, 2012). 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. 333-182631) filed on July 12, 2012). 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. 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. Bank, National Association, as trustee (incorporated by reference to Exhibit 4.1 to the Partnership's Form 8-K filed on May 24, 2017). 4.3 Form of 6.750% Senior Notes due 2025 (incorporated by reference to Exhibit A to Exhibit 4.1 to the Partnership's Form 8-K filed on May 24, 2017). 4.4 Supplemental Indenture, dated March 22, 2018, among DKL Big Spring, LLC, Delek Logistics Partners, LP, Delek Logistics Finance Corp., the other guarantors and U.S. Bank, National Association (incorporated by reference to Exhibit 4.1 to the Partnership’s Form 8-K filed on March 26, 2018). 4.5 Second Supplemental Indenture, dated February 28, 2020, among DKL Pipeline, LLC, Delek Logistics Partners, LP, Delek Logistics Finance Corp., the other guarantors and U.S. Bank, N.A. (incorporated by reference to Exhibit 4.1 of the Partnership's Form 8-K filed on April 6, 2020). 4.6 Third Supplemental Indenture, dated March 26, 2020, among DKL Permian Gathering, LLC, Delek Logistics Partners, LP, Delek Logistics Finance Corp., the other guarantors and U.S. Bank, N.A. (incorporated by reference to Exhibit 4.2 of the Partnership's Form 8-K filed on April 6, 2020). 4.7 Indenture, dated as of May 24, 2021, among Delek Logistics Partners, LP, Delek Logistics Finance Corp., the other guarantors, and U.S. Bank, N.A. (incorporated by reference to Exhibit 4.1 of the Partnership’s Form 8-K filed on May 25, 2021). 4.8 Form of 7.125% Senior Note due 2028 (incorporated by reference to Exhibit A to Exhibit 4.1 to the Partnership’s Form 8-K filed on May 25, 2021). 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. and Delek Marketing & Supply, LP (incorporated by reference to Exhibit 10.6 to the Partnership's Form 8-K filed on November 7, 2012, SEC File No. 001-35721). 10.2 First Amendment to Marketing Agreement, dated July 26, 2013, by and between Delek Refining, Ltd. and Delek Marketing & Supply, LP (incorporated by reference to Exhibit 10.1 to the Partnership's Form 10-Q filed on November 3, 2016). 10.3 Second Amendment to Marketing Agreement, dated as of December 19, 2016, but effective as of October 1, 2016, by and between Delek Refining, Ltd. and Delek Marketing & Supply, LP (incorporated by reference to Exhibit 10.1 to the Partnership's Form 10-K filed on February 28, 2017). F-2 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. Aron & Company (incorporated by reference to Exhibit 10.3 to the Partnership’s Form 8-K filed on February 14, 2014). 10.6 Amendment to Throughput and Tankage Agreement (El Dorado Terminal and Tankage), dated as of July 22, 2016, but effective as of February 11, 2014, by and between Lion Oil Company and Delek Logistics Operating, LLC (incorporated by reference to Exhibit 10.1 to the Partnership's Form 10-Q filed on August 5, 2016). 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). 10.8 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. and Delek Crude Logistics, LLC (incorporated by reference to Exhibit 10.7 to the Partnership's Form 8-K filed on November 7, 2012, SEC File No. 001-35721). 10.13 First Amendment to Pipelines and Tankage Agreement (East Texas Crude Logistics System), dated as of December 14, 2018, by and between Delek Refining, LTD and Delek Crude Logistics, LLC (incorporated by reference to Exhibit 10.19 to the Partnership's Form 10-K filed on March 1, 2019). 10.14 Amended and Restated Services Agreement (Big Sandy Terminal and Pipeline), dated July 25, 2013, by and between Delek Refining, Ltd. and Delek Marketing-Big Sandy, LLC (incorporated by reference to Exhibit 10.1 to the Partnership’s Form 8-K/A filed on July 31, 2013). 10.15 First Amendment to Amended and Restated Services Agreement (Big Sandy Terminal and Pipeline), dated as of December 14, 2018, by and between Delek Refining, LTD and Delek Marketing-Big Sandy, LLC (incorporated by reference to Exhibit 10.21 to the Partnership's Form 10-K filed on March 1, 2019). 10.16 Pipelines and Storage Facilities Agreement, dated November 7, 2012, by and among Lion Oil Company, Delek Logistics Partners, LP, SALA Gathering Systems, LLC, El Dorado Pipeline Company, LLC, Magnolia Pipeline Company, LLC and J. Aron & Company (incorporated by reference to Exhibit 10.9 to the Partnership's Form 8-K filed on November 7, 2012, SEC File No. 001-35721). 10.17 First Amendment to Pipelines and Storage Facilities Agreement, dated as of December 14, 2018, by and among Lion Oil Company, Delek Logistics Partners, LP, SALA Gathering Systems, LLC, El Dorado Pipeline Company, LLC, Magnolia Pipeline Company, LLC and J. Aron & Company (incorporated by reference to Exhibit 10.23 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. (incorporated by reference to Exhibit 10.4 to the Partnership’s Form 10-Q filed on May 8, 2015). 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). 10.20 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). F-3 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). 10.25 ++ Amended and Restated Limited Liability Company Agreement of Caddo Pipeline LLC, dated March 20, 2015, by and between Plains Pipeline, L.P. and DKL Caddo, LLC (incorporated by reference to Exhibit 10.7 to the Partnership’s Form 10-Q filed on May 8, 2015). 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; Fifth Third Bank, as administrative agent; a syndicate of lenders; Bank of America, N.A., BBVA Compass, MUFG Bank, Ltd. And Royal Bank of Canada as co-syndication agents; and Barclays Bank PLC, Citizens Bank, N.A., PNC Bank, National Association, U.S. Bank National Association, Bank Hapoalim B.M., Regions Bank and SunTrust Bank as co-documentation agents (incorporated by reference to Exhibit 10.1 to the Partnership’s Form 8-K filed on October 4, 2018). 10.28 First Amendment to Third Amended and Restated Credit Agreement, dated August 12, 2020, by and among Delek Logistics Partners, LP and each other borrower referenced therein, as borrowers, Fifth Third Bank, N.A., as Administrative Agent, and the Lenders party thereto (incorporated by reference to Exhibit 10.1 of the Partnership's Form 8-K filed on August 14, 2020). 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). 10.30 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). 10.44 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. 22.1 # Subsidiary Guarantors of Delek Logistics Partners LP. F-4 23.1 # Consent of Independent Registered Public Accounting Firm (Ernst & Young LLP). 23.2 # Consent of Independent Public Accounting Firm (Weaver and Tidwell, L.L.P.). 31.1 # Certification of Delek Logistics GP, LLC's Chief Executive Officer pursuant to Rule 13a-14(a) or 15(d)-14(a) under the Securities Exchange Act of 1934, as amended. 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 Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 32.2 ## Certification by Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 99.1 # Report of Independent Public Accounting Firm - Red River Pipeline Company LLC Weaver and Tidwell, L.L.P. (PCAOB ID: 410) - Houston, Texas 101 < The following materials from Delek Logistics Partners, LP's Annual Report on Form 10-K for the annual period ended December 31, 2022, formatted in XBRL (Inline eXtensible Business Reporting Language): (i) Consolidated Balance Sheets as of December 31, 2022 and 2021; (ii) Consolidated Statements of Income and Comprehensive Income for the years ended December 31, 2022, 2021 and 2020; (iii) Consolidated Statements of Changes in Partners’ Equity for the years ended December 31, 2022, 2021 and 2020; (iv) Consolidated Statements of Cash Flows for the years ended December 31, 2022, 2021 and 2020; and (v) Notes to Consolidated Financial Statements. 104 The cover page from Delek Logistics Partners, LP's Annual Report on Form 10-K for the annual period ended December 31, 2022, has been formatted in Inline XBRL. * Management contract or compensatory plan or arrangement. # Filed herewith. ## Furnished herewith. ++ Confidential treatment has been requested and granted with respect to certain portions of this exhibit pursuant to Rule 24b-2 of the Securities Exchange Act of 1934. Omitted portions have been filed separately with the Securities and Exchange Commission. < Pursuant to Rule 406T of Regulation S-T, the Interactive Data Files in Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections. F-5 Exhibits and Financial Statement Schedules Delek Logistics Partners, LP Consolidated Financial Statements As of December 31, 2022 and 2021 and For Each of the Three Years Ended December 31, 2022, 2021 and 2020 INDEX TO FINANCIAL STATEMENTS Reports of Independent Registered Public Accounting Firm (PCAOB ID: 42 ) F- 2 Audited Financial Statements: Consolidated Balance Sheets F- 5 Consolidated Statements of Income and Comprehensive Income F- 6 Consolidated Statements of Partners' Equity (Deficit) F- 7 Consolidated Statements of Cash Flows F- 8 Notes to Consolidated Financial Statements F- 9 All other financial schedules are not required under related instructions, or are inapplicable and therefore have been omitted. F-1 Report of Independent Registered Public Accounting Firm To the Unitholders of Delek Logistics Partners, LP and the Board of Directors of Delek Logistics GP, LLC Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Delek Logistics Partners, LP (the Partnership) as of December 31, 2022 and 2021, and 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 (collectively referred to as the “consolidated financial statements”). In our opinion, based on our audits and the report of other auditors, the consolidated financial statements present fairly, in all material respects, the financial position of the Partnership at December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2022, in conformity with U.S. generally accepted accounting principles. 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 $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, 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 These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on the Partnership’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Partnership in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits and the report of other auditors provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. 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. F-2 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 We have served as the Partnership’s auditor since 2012. Nashville, Tennessee March 1, 2023 Report of Independent Registered Public Accounting Firm F-3 To the Unitholders of Delek Logistics Partners, LP and the Board of Directors of Delek Logistics GP, LLC Opinion on Internal Control over Financial Reporting We have audited Delek Logistics Partners, LP’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) (the COSO criteria). 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. 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 The Partnership’s management is responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Partnership’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Partnership in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Definition and Limitations of Internal Control Over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. 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 or procedures may deteriorate. /s/ Ernst & Young LLP Nashville, Tennessee March 1, 2023 F-4 Exhibits and Financial Statement Schedules Delek Logistics Partners, LP Consolidated Balance Sheets (in thousands, except unit and per unit data) December 31, 2022 December 31, 2021 ASSETS Current assets: Cash and cash equivalents $ 7,970 $ 4,292 Accounts receivable 53,314 15,384 Inventory 1,483 2,406 Other current assets 2,463 951 Total current assets 65,230 23,033 Property, plant and equipment: Property, plant and equipment 1,240,684 715,870 Less: accumulated depreciation ( 316,680 ) ( 266,482 ) Property, plant and equipment, net 924,004 449,388 Equity method investments 257,022 250,030 Customer relationship intangible, net 199,440 — Marketing contract intangible, net 109,366 116,577 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 Total assets $ 1,679,299 $ 935,071 LIABILITIES AND DEFICIT Current liabilities: Accounts payable $ 57,403 $ 8,160 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 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, 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 Total non-current liabilities 1,683,781 942,248 Equity (Deficit): Common unitholders - public; 9,257,305 units issued and outstanding at December 31, 2022 ( 8,774,053 at December 31, 2021) 172,119 166,067 Common unitholders - Delek Holdings; 34,311,278 units issued and outstanding at December 31, 2022 ( 34,696,800 at December 31, 2021) ( 282,819 ) ( 270,059 ) Total deficit ( 110,700 ) ( 103,992 ) Total liabilities and deficit $ 1,679,299 $ 935,071 See accompanying notes to the consolidated financial statements F-5 Exhibits and Financial Statement Schedules Delek Logistics Partners, LP Consolidated Statements of Income and Comprehensive Income (In thousands, except unit and per unit data) Year Ended December 31, 2022 2021 2020 Net revenues Affiliate (1) $ 479,411 $ 418,826 $ 382,666 Third Party 556,996 282,076 180,752 Net revenues 1,036,407 700,902 563,418 Cost of sales: 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 Depreciation and amortization 60,210 40,945 33,737 Total cost of sales 787,011 484,837 356,677 Operating expenses related to wholesale business (excluding depreciation and amortization presented below) 2,869 2,337 2,433 General and administrative expenses 34,181 21,460 22,587 Depreciation and amortization 2,778 1,825 1,994 Other operating income, net ( 114 ) ( 59 ) ( 66 ) Total operating costs and expenses 826,725 510,400 383,625 Operating income 209,682 190,502 179,793 Interest expense, net 82,304 50,221 42,874 Income from equity method investments ( 31,683 ) ( 24,575 ) ( 22,693 ) Other (income) expense, net ( 373 ) ( 119 ) 133 Total non-operating expenses, net 50,248 25,527 20,314 Income before income tax expense 159,434 164,975 159,479 Income tax expense 382 153 223 Net income attributable to partners $ 159,052 $ 164,822 $ 159,256 Comprehensive income attributable to partners $ 159,052 $ 164,822 $ 159,256 Less: General partner's interest in net income, including incentive distribution rights (2) — — 18,724 Limited partners' interest in net income $ 159,052 $ 164,822 $ 140,532 Net income per limited partner unit: Basic $ 3.66 $ 3.79 $ 4.18 Diluted $ 3.66 $ 3.79 $ 4.18 Weighted average limited partner units outstanding: 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. See accompanying notes to the consolidated financial statements F-6 Exhibits and Financial Statement Schedules Delek Logistics Partners, LP Consolidated Statements of Partners' Equity (Deficit) (in thousands) Partnership Common - Public Common - Delek Holdings General Partner - Delek Holdings Total Balance at December 31, 2019 $ 164,436 $ ( 310,513 ) $ ( 5,042 ) ( 151,119 ) Cash distributions (1) ( 31,532 ) ( 77,665 ) ( 27,635 ) ( 136,832 ) GP units issued to maintain 2 % interest — — 10 10 Net income attributable to partners 36,324 104,208 18,724 159,256 Delek Holdings unit purchases from public ( 4,979 ) 4,979 — — Issuance of units in connection with the Midland Gathering Assets Acquisition — 107,323 2,190 109,513 Cash distribution to Delek Holdings for Trucking Assets Acquisition — ( 46,607 ) ( 951 ) ( 47,558 ) Cash distribution to general partner for conversion of its economic interest and IDR elimination — — ( 45,000 ) ( 45,000 ) Conversion of GP economic interest — ( 57,702 ) 57,702 — Sponsor contribution of fixed assets — 2,938 — 2,938 Other 365 124 2 491 Balance at December 31, 2020 $ 164,614 $ ( 272,915 ) $ — $ ( 108,301 ) Cash distributions (1) ( 32,462 ) ( 129,255 ) — ( 161,717 ) Net income attributable to partners 33,086 131,736 — 164,822 Delek Holdings unit sale to public 650 ( 650 ) — — Other 179 1,025 — 1,204 Balance at December 31, 2021 $ 166,067 $ ( 270,059 ) $ — $ ( 103,992 ) 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 F-7 Exhibits and Financial Statement Schedules Delek Logistics Partners, LP Consolidated Statements of Cash Flows (in thousands) Year Ended December 31, 2022 2021 2020 Cash flows from operating activities: Net income $ 159,052 $ 164,822 $ 159,256 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 62,988 42,770 35,731 Non-cash lease expense 16,254 9,652 6,075 Amortization of customer contract intangible assets 7,211 7,211 7,211 Amortization of deferred revenue ( 1,775 ) ( 1,953 ) ( 1,888 ) Amortization of deferred financing costs and debt discount 3,872 3,016 2,412 Income from equity method investments ( 31,683 ) ( 24,575 ) ( 22,693 ) Dividends from equity method investments 22,954 20,831 25,436 Other non-cash adjustments 2,718 1,959 1,253 Changes in assets and liabilities: Accounts receivable ( 9,071 ) 292 ( 2,472 ) Inventories and other current assets 2,233 55 11,363 Accounts payable and other current liabilities 18,564 ( 1,913 ) ( 13,479 ) Accounts receivable/payable to related parties ( 58,368 ) 67,161 ( 14,628 ) Non-current assets and liabilities, net ( 2,781 ) ( 14,166 ) ( 561 ) Net cash provided by operating activities 192,168 275,162 193,016 Cash flows from investing activities: Asset acquisitions from Delek Holdings, net of assumed liabilities — — ( 100,527 ) 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 Equity method investment contributions — ( 1,393 ) ( 12,175 ) Net cash used in investing activities ( 770,437 ) ( 16,360 ) ( 123,138 ) 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 — — 10 Distributions to general partner — — ( 27,635 ) Distributions to common unitholders - public ( 35,868 ) ( 32,462 ) ( 31,532 ) Distributions to common unitholders - Delek Holdings ( 135,219 ) ( 129,255 ) ( 77,665 ) Distributions to Delek Holdings unitholders and general partner related to Trucking Assets Acquisition — — ( 47,558 ) 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 Payments on revolving credit facility ( 1,289,800 ) ( 829,601 ) ( 441,400 ) Proceeds from issuance of senior notes — 400,000 — Deferred financing costs paid ( 8,206 ) ( 6,216 ) — Payments on financing lease liabilities ( 2,867 ) ( 2,219 ) — 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 ) Cash and cash equivalents at the beginning of the period 4,292 4,243 5,545 Cash and cash equivalents at the end of the period 7,970 4,292 4,243 Year Ended December 31, 2022 2021 2020 Supplemental disclosures of cash flow information: Cash paid during the period for: Interest $ 78,148 $ 44,633 $ 40,582 Income taxes $ 43 $ 34 $ 98 Non-cash investing activities: (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: Sponsor contribution of property, plant and equipment $ — $ — $ 2,938 Non-cash lease liability arising from obtaining right of use assets during the period $ 12,717 $ 9,457 $ 32,090 See accompanying notes to the consolidated financial statements F-8 Notes to Consolidated Financial Statements Delek Logistics Partners, LP Notes to the Consolidated Financial Statements 1. General Organization 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. The Partnership is a Delaware limited partnership formed in April 2012 by Delek US Holdings, Inc. ("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"). Contemporaneously, Delek Holdings purchased a 5.2 % ownership interest in our general partner from certain affiliates, who were also members of our general partner's management and board of directors. See Note 4 of the accompanying consolidated financial statements for further information. 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 "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 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. The Partnership is not a taxable entity for federal income tax purposes or the income taxes of those states that follow the federal income tax treatment of partnerships. Instead, for purposes of such income taxes, each partner of the Partnership is required to take into account its share of items 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. The taxable income reportable to each partner takes into account differences between the tax basis and the fair market value of our assets and financial reporting bases of assets and liabilities, the acquisition price of the partner's units and the taxable income allocation requirements under the Partnership's Second Amended and Restated Agreement of Limited Partnership (the "Partnership Agreement"). 2. Accounting Policies Basis of Presentation Our consolidated financial statements include the accounts of the Partnership and its subsidiaries. We have evaluated subsequent events through the filing of this Annual Report on Form 10-K. Any material subsequent events that occurred during this time have been properly recognized or disclosed in our financial statements. The preparation of our financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) and in accordance with the rules and regulations of the Securities and Exchange Commission (the “SEC”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. F-9 Notes to Consolidated Financial Statements Reclassifications 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, 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; (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. 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. Cash and Cash Equivalents We maintain cash and cash equivalents in accounts with large U.S. financial institutions. Any highly liquid investments purchased with an original maturity of three months or less are considered to be cash equivalents. Accounts Receivable Accounts receivable primarily consists of trade receivables generated in the ordinary course of business. We perform on-going credit evaluations of our customers and generally do not require collateral on accounts receivable. All accounts receivable amounts are considered to be fully collectible. 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 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 . 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 Property, plant and equipment primarily consists of crude oil pipelines, tanks, terminals and gathering systems, and trucking assets. Property and equipment is stated at the lower of historical cost less accumulated depreciation, or fair value, if impaired. Assets acquired in conjunction with business acquisitions are recorded at estimated fair market value in accordance with the purchase method of accounting as prescribed in Accounting Standards Codification ("ASC") 805, Business Combinations ("ASC 805"). 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. F-10 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. Depreciation is computed using the straight-line method over management’s estimated useful lives of the related assets. The estimated useful lives are as follows: Years Buildings and building improvements 15 - 40 Pipelines, tanks and terminals 15 - 40 Asset retirement obligation assets 15 - 50 Other equipment 3 - 15 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 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 Property, plant and equipment and intangibles are evaluated for impairment whenever indicators of impairment exist. In accordance with ASC 360, Property, Plant and Equipment and ASC 350, Intangibles - Goodwill and Other , we evaluate the realizability of these long-lived assets as events occur that might indicate potential impairment. In doing so, we assess whether the carrying amount of the asset is recoverable by estimating the sum of the future cash flows expected to result from the use of the asset, undiscounted and without interest charges. If the carrying amount is more than the recoverable amount, an impairment charge must be recognized based on the fair value of the asset. Goodwill and Potential Impairment Goodwill in an acquisition represents the excess of the aggregate purchase price over the fair value of the identifiable net assets. Goodwill is reviewed at least annually during the fourth quarter for impairment, or more frequently if indicators of impairment exist, such as disruptions in our business, unexpected significant declines in operating results or a sustained market capitalization decline. Goodwill is evaluated for impairment by comparing the carrying amount of the reporting unit to its estimated fair value. 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. We elected to perform a qualitative assessment for purposes of our annual goodwill impairment test during the fourth quarter in 2022, 2021 and 2020. Our annual assessment of goodwill did not result in an impairment charge during the years ended December 31, 2022, 2021 or 2020. 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 For equity investments that are not required to be consolidated under the variable or voting interest model, we evaluate the level of influence we are able to exercise over an entity’s operations to determine whether to use the equity method of accounting. 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 F-11 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. The carrying value of each equity method investment is evaluated for impairment when conditions exist that indicate it is more likely than not that an impairment may have occurred, which may include the loss of a key contract, lack of sustained earnings or a deterioration of market conditions, among others. When impairment triggers are present, the fair value of the equity method investment is estimated using the income approach and the market approach. The income approach utilizes a discounted cash flow model incorporating management’s expectations of the investee’s future revenue (including the throughput barrel per day sold and related reduced tariff rates), operating expenses and earnings before interest, taxes, depreciation and amortization, capital expenditures and an anticipated tax rate (“EBITDA”), the estimated long term growth rate and weighted average cost of capital (“WACC”) as the discount rate. The market approach uses estimated EBITDA multiples for guideline comparable companies to estimate the fair value of the equity method investment. 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. 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"), with the exception of our fixed rate debt. Self-Insurance Reserves We have no employees. Rather, we are managed by the directors and officers of our general partner. However, Delek Holdings employees providing services to the Partnership are covered under Delek Holdings’ insurance programs. Delek Holdings has workers' compensation and liability insurance with varying retentions and deductibles with limits that management considers adequate. Environmental Expenditures It is our policy to accrue environmental and clean-up related costs of a non-capital nature when it is both probable that a liability has been incurred and the amount can be reasonably estimated. Environmental liabilities represent the current estimated costs to investigate and remediate contamination at sites where we have environmental exposure. This estimate is based on assessments of the extent of the contamination, the selected remediation technology and review of applicable environmental regulations, typically considering estimated activities and costs for 15 years, and up to 30 years if a longer period is believed reasonably necessary. Such estimates may require judgment with respect to costs, time frame and extent of required remedial and clean-up activities. Accruals for estimated costs from environmental remediation obligations generally are recognized no later than completion of the remedial feasibility study and include, but are not limited to, costs to perform remedial actions and costs of machinery and equipment that are dedicated to the remedial actions and that do not have an alternative use. Such accruals are adjusted as further information develops or circumstances change. We discount environmental liabilities to their present value if payments are fixed or reliably determinable. Expenditures for equipment necessary for environmental issues relating to ongoing operations are capitalized. Estimated recoveries of costs from other parties are recorded on an undiscounted basis as assets when their realization is deemed probable. See Note 17 for further information on crude oil releases impacting our properties and related accruals. Asset Retirement Obligations We recognize liabilities which represent the fair value of a legal obligation to perform asset retirement activities, including those that are conditional on a future event, when the amount can be reasonably estimated. These obligations are related to the required cleanout of our pipelines and terminal tanks and removal of certain above-grade portions of our pipelines situated on right-of-way property. The reconciliation of the beginning and ending carrying amounts of asset retirement obligations as of December 31, 2022 and 2021 is as follows (in thousands): December 31, 2022 2021 Beginning balance $ 6,476 $ 6,015 Liabilities acquired 2,261 — Accretion expense 596 461 Ending balance $ 9,333 $ 6,476 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. F-12 Notes to Consolidated Financial Statements Revenue Recognition Revenue is measured based on consideration specified in a contract with a customer. The Partnership recognizes revenue when it satisfies a performance obligation by transferring control over a product or by providing services to a customer. Service, Product and Lease Revenues. Revenues for products sold are generally recognized upon delivery of product, which is when title and control of the product is transferred. Transaction prices for these products are typically at market rates for the product at the time of delivery. Service revenues are recognized as crude oil, intermediate and refined products are shipped through, delivered by or stored in our pipelines, trucks, terminals and storage facility assets, as applicable. We do not recognize product revenues for these services, as the product does not represent a promised good in the context of ASC 606, Revenue from Contracts with Customers ("ASC 606"). All service revenues are based on regulated tariff rates or contractual rates. Payment terms require customers to pay shortly after delivery and do not contain significant financing components. Certain agreements for gathering, transportation, storage, terminalling, and offloading with Delek Holdings were considered operating leases under ASC 840, Leases ("ASC 840"). As part of the adoption of ASC 842, we applied the permitted practical expedient to not separate lease and non-lease components under the predominance principle to designated asset classes associated with the provision of logistics services. We have determined that the predominant component of the related agreements currently in effect is the lease component. Therefore, the combined component is accounted for under the applicable lease accounting guidance. Refer to Note 5 for further information. Up-Front payments to Customers. We record up-front payments to customers in accordance with ASC 606. We evaluate the nature of each payment, the rights and obligations under the related contract, and whether the payment meets the definition of an asset. When an asset is recognized for an up-front payment to a customer, the asset is amortized, as a reduction of revenue, in a manner that reflects the pattern and period over which the asset is expected to provide benefit. Revenues Related to Reimbursements. In addition to the agreements noted above, we have cost reimbursement provisions in certain of our agreements with Delek Holdings that provide for reimbursement to the Partnership for certain costs, including certain capital expenditures. Such reimbursements are recorded in other long-term liabilities and are amortized to revenue over the life of the underlying revenue agreement corresponding to the asset. Cost of Materials and Other and Operating Expenses Cost of materials and other includes (i) all costs of purchased refined products, additives and related transportation of such products, (ii) costs associated with the operation of our trucking assets, which primarily include allocated employee costs and other costs related to fuel, truck leases and repairs and maintenance, (iii) the cost of pipeline capacity leased from a third-party, and (iv) gains and losses related to our commodity hedging activities. Operating expenses include the costs associated with the operation of owned terminals and pipelines and terminalling expense at third-party locations, excluding depreciation and amortization. These costs primarily include outside services, allocated employee costs, repairs and maintenance costs and energy and utility costs. Operating expenses related to the wholesale business are excluded from cost of sales because they primarily relate to costs associated with selling the products through our wholesale business. Depreciation and amortization is separately presented in our consolidated statement of income and disclosed by reportable segment in Note 15. Deferred Financing Costs 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 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. Leases In accordance with ASC 842-20, Leases - Lessee ("ASC 842-20"), we classify leases with contractual terms longer than twelve months as either operating or finance. Finance leases are generally those leases that are highly specialized or allow us to substantially utilize or pay for the entire asset over its useful life. All other leases are classified as operating leases. We lease primarily transportation equipment. Our leases do not have any outstanding renewal options. Certain leases also include options to purchase the leased equipment. Certain of our lease agreements include rates based on equipment usage. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. 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, which are expensed as incurred. F-13 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. Accordingly, a lease liability is recognized for these leases and is calculated to be the present value of the fixed lease payments, as defined by ASC 842-20, using a discount rate based on our incremental borrowing rate. A corresponding right-of-use asset is recognized based on the lease liability and adjusted for certain costs and prepayments. Income Taxes We are not a taxable entity for federal income tax purposes or the income taxes of those states that follow the federal income tax treatment of partnerships. Instead, for purposes of these income taxes, each partner of the Partnership is required to take into account its share of items 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. The taxable income reportable to each partner takes into account differences between the tax basis and fair market value of our assets and financial reporting bases of assets and liabilities, the acquisition price of such partner's units and the taxable income allocation requirements under the Partnership's Second Amended and Restated Agreement of Limited Partnership, as amended (the "Partnership Agreement"). We are subject to income taxes in certain states that do not follow the federal tax treatment of partnerships. These taxes are accounted for under the provisions of ASC 740, Income Taxes ("ASC 740"). This statement generally requires the Partnership to record deferred income taxes for the differences between the book and tax bases of its assets and liabilities, which are measured using enacted tax rates and laws that will be in effect when the differences are expected to reverse. 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. U.S. GAAP requires management to evaluate uncertain tax positions taken by the Partnership. The financial statement effects of a tax position are recognized when the position is more likely than not, based on the technical merits, to be sustained upon examination by the Internal Revenue Service. Management has analyzed the tax positions taken by the Partnership, and has concluded that there are no uncertain positions taken or expected to be taken. The Partnership is subject to routine audits by taxing jurisdictions . Equity Based Compensation Our general partner provides equity-based compensation to officers, directors and employees of our general partner or its affiliates, and certain consultants, affiliates of our general partner or other individuals who perform services for us, which may include unit options, restricted units, phantom units, unit appreciation rights, distribution equivalent rights, other unit-based awards and unit awards. The fair value of our phantom units is determined based on the closing market price of our common units on the grant date. The estimated fair value of our phantom units is amortized over the vesting period using the straight line method. Awards vest over one - to five-year service periods, unless such awards are amended in accordance with the 2012 Long-Term Incentive Plan (the "LTIP") (see Note 13). It is our practice to issue new units when phantom units vest. Net Income per Limited Partner Unit Basic net income per unit applicable to limited partners is computed by dividing limited partners’ interest in net income by the weighted-average number of outstanding common units. Prior to August 13, 2020, we had more than one class of participating securities and used the two class method to calculate the net income per unit applicable to the limited partners. The classes of participating units prior to August 13, 2020 consisted of limited partner units, general partner units and IDRs. Pursuant to the IDR Restructuring Transaction, the IDRs were eliminated and the 2.0 % general partner economic interest was converted to a non-economic general partner interest. Effective August 13, 2020, the common limited partner units are the only participating security for cash distributions. Refer to Notes 6 and 12 for further discussion. Diluted net income per unit applicable to common limited partners includes the effects of potentially dilutive units on our common units. As of December 31, 2022, the only potentially dilutive units outstanding consist of unvested phantom units. Comprehensive Income Comprehensive income for the years ended December 31, 2022, 2021 and 2020 was equivalent to net income. Sales, Use and Excise Taxes 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. F-14 Notes to Consolidated Financial Statements New Accounting Pronouncements Adopted During 2022 ASU 2020-04, Facilitation of the Effects of Reference Rate Reform on Financial Reporting (Topic 848) In March 2020, the FASB issued an amendment which is intended to provide temporary optional expedients and exceptions to GAAP guidance on contracts, hedge accounting and other transactions affected by the expected market transition from the London Interbank Offered Rate ("LIBOR") and other interbank rates. 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. Acquisitions 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: $ 624,700 Add: closing net working capital (as defined in the 3 Bear Purchase Agreement) 3,600 Less: closing indebtedness (as defined in the 3 Bear Purchase Agreement) ( 80,618 ) 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 F-15 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) 210,000 Rights-of-way (1) 13,490 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. F-16 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 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 from Delek Holdings. The total consideration was approximately $ 48.0 million in cash. We financed this acquisition with a combination of cash on hand and borrowings under the DKL Credit Facility (as defined in Note 7). 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”). Under the Trucking Assets TSA Agreement, the Partnership will gather, coordinate pickup of, transport and deliver petroleum products for Delek Holdings, as well as provide ancillary services as requested. 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 Trucking Assets Acquisition was considered a transaction between entities under common control. Accordingly, the Trucking Assets were recorded at amounts based on Delek Holdings' historical carrying value as of the acquisition date. The carrying value of the Trucking Assets as of the acquisition date was $ 13.3 million, consisting of $ 0.5 million of owned assets and $ 12.8 million Right of Use asset for leased assets. The Right of Use asset offsets with an equivalent operating lease liability. Prior periods have not been recast as these assets do not constitute a business in accordance with Accounting Standard Update 2017-01, Clarifying the Definition of a Business ("ASU 2017-01"). We capitalized approximately $ 0.3 million of acquisition costs related to the Trucking Assets Acquisition. 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 Midland Gathering Assets are recorded in our gathering and processing segment and include: • Crude oil pipelines; • Approximately 200 miles of gathering systems; • Approximately 65 Tank battery connections; • Terminals (total storage of approximately 650,000 bbls); and • Applicable rights-of-way. 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 Midland Gathering Assets connecting Delek Holdings' interests in and to certain crude oil with the Partnership's Big Spring, F-17 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 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 Midland Gathering Assets Acquisition. 4. Related Party Transactions Commercial Agreements The Partnership has a number of long-term, fee-based commercial agreements with Delek Holdings under which we provide various services, including crude oil gathering and crude oil, intermediate and refined products transportation and storage services, and marketing, terminalling and offloading services to Delek Holdings. 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. 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. Material commercial agreements with Delek Holdings: Asset/Operation Initiation Date Initial/Maximum Term (years) (1) Service Minimum Throughput Commitment (bpd) Fee (/bbl) El Dorado Assets and El Dorado Gathering System: Crude Oil Pipelines (non-gathered) November 2012 5 / 15 Crude oil and refined products transportation 46,000 (2) $ 1.12 (3) Refined Products Pipelines November 2012 5 / 15 40,000 $ 0.13 El Dorado Gathering System November 2012 5 / 15 Crude oil gathering 14,000 $ 3.01 (3) East Texas Crude Logistics System: Crude Oil Pipelines November 2012 5 / 15 Crude oil transportation and storage 35,000 $ 0.53 (4) Storage November 2012 5 / 15 N/A $ 329,665 /month East Texas Marketing November 2012 10 (5) Marketing products for Tyler Refinery 50,000 $ 0.90 (5) Big Sandy Terminal: Refined Products Transportation November 2012 5 / 15 Refined products transportation, dedicated terminalling services and storage for the Tyler Refinery 5,000 $ 0.66 Terminalling November 2012 5 / 15 5,000 $ 0.66 Storage November 2012 5 / 15 N/A $ 65,874 /month Tyler Throughput and Tankage: Refined Products Throughput July 2013 8 / 16 Dedicated Terminalling and storage 50,000 $ 0.44 Storage July 2013 8 / 16 N/A $ 1,034,886 /month F-18 Notes to Consolidated Financial Statements Memphis Pipeline June 1, 2018 5 Refined Products Transportation 11,000 $ 1.36 El Dorado Throughput and Tankage: Refined Products Throughput February 2014 8 / 16 Dedicated terminalling and storage 11,000 $ 0.62 Storage February 2014 8 / 16 N/A $ 1,620,006 /month El Dorado Assets Throughput: Light Crude Throughput March 2015 9 / 15 Dedicated Offloading Services N/A (6) $ 1.25 Heavy Crude Throughput March 2015 9 / 15 Dedicated Offloading Services N/A (6) $ 2.81 Pipelines, Storage and Throughput Facilities Agreement (Big Spring Logistics Assets): Crude Oil and Refined Products Throughput March 1, 2018 10 / 15 Pipeline throughput 104,300 $ 0.06 Rail Offloading March 1, 2018 10 / 15 Offloading services 4,500 $ 0.48 Terminalling March 1, 2018 10 / 15 Dedicated Terminalling 29,250 $ 0.78 Storage March 1, 2018 10 / 15 Storage N/A $ 1,632,647 /month Asphalt Services Agreement (Big Spring Logistics Assets): Terminalling March 1, 2018 10 / 15 Dedicated Asphalt Terminalling and Storage 1,020 to 2,380 based on seasonality $ 9.86 Storage March 1, 2018 10 / 15 N/A $ 542,173 /month Marketing Agreement (Big Spring Logistics Assets): Marketing Services March 1, 2018 10 / 15 Dedicated Marketing and Selling 65,000 $ 0.59 - $ 0.84 Throughput and Deficiency Agreement (Midland Gathering Assets) Gathering System March 31, 2020 10 / 20 Gathering and Transportation Services 120,000 (7) $ 0.76 15,000 (8) $ 0.70 Re-delivery System March 30, 2020 10 / 20 50,000 $ 0.27 Pipelines, Throughput and Offloading Facilities Agreement (Big Spring Logistics Assets) Fintex / Magellen Pipeline April 1, 2020 2 / 10 Refined Products 20,000 $ 0.68 Crude Oil Offloading January 1, 2020 2 / 10 Crude Oil Offloading 15,120 $ 1.04 Storage April 1, 2020 2 / 10 Storage N/A $ 277,620 /month LPG Rack January 1, 2020 2 / 10 Truck Unloading Facility 4,500 $ 5.78 Transportation Services Agreement Trucking Services May 1, 2020 10 / 14 Transportation Services N/A $ 39,000,000 /Minimum Annual Revenue Commitment (1) Maximum term gives effect to the extension of the commercial agreement pursuant to the terms thereof. (2) Excludes volumes gathered on the El Dorado Gathering System (the "El Dorado Gathering System"). (3) Volumes gathered on the El Dorado Gathering System will not be subject to an additional fee for transportation on our El Dorado Assets (the "El Dorado Assets") to the El Dorado Refinery. (4) For any volumes in excess of 50,000 bpd, the throughput fee will be $ 0.79 /bbl. (5) For any volumes in excess of 50,000 bpd, the throughput fee will be $ 0.88 /bbl. Following the primary term, the marketing agreement automatically renews for a successive one-year term, unless either party provides notice of non-renewal 10 months prior to the expiration of the then-current term. The initial primary term for the marketing agreement has been extended through 2027. (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. F-19 Notes to Consolidated Financial Statements 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 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. 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, 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. 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 Our general partner operates our business on our behalf and is entitled under our Partnership Agreement to be reimbursed for the cost of providing those services, which include certain labor related costs. We and our subsidiaries paid Delek Holdings approximately $ 34.6 million, $ 21.8 million and $ 29.4 million pursuant to the Partnership Agreement during the years ended December 31, 2022, 2021 and 2020, respectively. These amounts are included in operating expenses in the accompanying consolidated statements of income and comprehensive income. Other Transactions 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 majority of the gathering systems have been constructed, however, additional costs pertaining to a pipeline connection that was not acquired by the Partnership continue to be incurred and are still subject to the terms of the DPG Management Agreement. The Partnership is also considered the operator for the project and is responsible for oversight of the project design, procurement and construction of project segments and provides other related services. Pursuant to the terms of the DPG Management Agreement, the Partnership receives a monthly operating services fee and a construction services fee, which includes the Partnership's direct costs of managing the project plus an additional percentage fee of the construction costs of each project segment. The agreement extends through December 2023. Total fees paid to the Partnership were $ 1.5 million and $ 1.6 million for the years ended December 31, 2022 and 2021, respectively, which are recorded in affiliate revenue in our consolidated statements of income. Additionally, the Partnership incurs the costs in connection with the construction of the assets and is subsequently reimbursed by Delek Holdings. Amounts reimbursable by Delek Holdings are recorded in accounts receivable from related parties. Unregistered Sale of Equity Securities 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. F-20 Notes to Consolidated Financial Statements 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. The purchase price of the units amounted to approximately $ 5.0 million. 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 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. On December 22, 2021, Delek Holdings issued a press release regarding a program to sell up to 434,590 common limited partner units representing limited partner interests in the Partnership. We will not sell any securities under this program and we will not receive any proceeds from the sale of the securities by Delek Holdings. 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 Midland Gathering Assets Acquisition, the Board of the general partner adopted Amendment No. 2 (“Amendment No. 2”) to the Previous Partnership Agreement, effective upon adoption. Amendment No. 2 amended the Previous Partnership Agreement to provide for a waiver of distributions in respect of the Incentive Distribution Rights ("IDRs") for General Partner Additional Units ("GP Additional Units") associated with the 5.0 million Additional Units for at least two years, through at least the distribution for the quarter ending March 31, 2022 ( the “IDR Waiver”). The IDR Waiver essentially reduced the distribution made to the holders of the IDRs during this period, as the holders would not receive a share of the distribution made on the GP Additional Units. Subsequently, the IDRs were eliminated in the IDR Restructuring Transaction on August 13, 2020. Conversion of GP Economic Interest and Elimination of IDRs On August 13, 2020, we closed the transaction contemplated by a definitive exchange agreement with Delek Holdings to eliminate all of the IDRs held by the general partner and convert the 2 % general partner economic interest into a non-economic general partner interest, all in exchange for 14.0 million of the Partnership's newly issued common limited partner units and $ 45.0 million cash. Contemporaneously, Delek Holdings purchased a 5.2 % ownership interest in our general partner from certain affiliates who were also members of our general partner's management and board of directors. As a result of the transaction, Delek Holdings owned 100 % interest in the general partner and approximately 34.7 million common limited partner units, representing approximately 80 % of the Partnership's outstanding common limited partner units. To implement the transaction, our Partnership Agreement was amended and restated. Summary of Transactions Revenues from affiliates consist primarily of revenues from gathering, transportation, storage, offloading, Renewable Identification Numbers, wholesale marketing and products terminalling services provided primarily to Delek Holdings based on regulated tariff rates or contractually based fees and product sales. Affiliate operating expenses are primarily comprised of amounts we reimburse Delek Holdings, or our general partner, as the case may be, for the services provided to us under the Partnership Agreement. These expenses could also include reimbursement and indemnification amounts from Delek Holdings, as provided under the Omnibus Agreement. Additionally, the Partnership is required to reimburse Delek Holdings for direct or allocated costs and expenses incurred by Delek Holdings on behalf of the Partnership and for charges Delek Holdings incurred for the management and operation of our logistics assets, including an annual fee for various centralized corporate services, which are included in general and administrative expenses. In addition to these transactions, we purchase refined products and bulk biofuels from Delek Holdings, the costs of which are included in cost of materials and other. A summary of revenue, purchases from affiliates and expense transactions with Delek Holdings and its affiliates are as follows (in thousands): Year Ended December 31, 2022 2021 2020 Revenues $ 479,411 $ 418,826 $ 382,666 Purchases from Affiliates $ 496,184 $ 321,939 $ 205,581 Operating and maintenance expenses $ 53,803 $ 40,854 $ 43,985 General and administrative expenses $ 13,565 $ 9,330 $ 12,557 Quarterly Cash Distribution Prior to August 13, 2020, our common and general partner unitholders and the holders of IDRs were entitled to receive quarterly distributions of available cash as it was determined by the board of directors of our general partner in accordance with the terms and provisions of our Partnership Agreement. Pursuant to the IDR Restructuring Transaction on August 13, 2020, the general partner will no longer receive any cash distributions. 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 F-21 Notes to Consolidated Financial Statements 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 . 5. Revenues 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). In addition to the services we provide to Delek Holdings, we also generate substantial revenue from crude oil, intermediate and refined products transportation services for, and terminalling and marketing services to, third parties primarily in Texas, New Mexico, Tennessee and Arkansas. Certain of these services are provided pursuant to contractual agreements with third parties. Payment terms require customers to pay shortly after delivery and do not contain significant financing components. 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. The majority of our commercial agreements with Delek Holdings meet the definition of a lease because: (1) performance of the contracts is dependent on specified property, plant or equipment and (2) it is remote that one or more parties other than Delek Holdings will take more than a minor amount of the output associated with the specified property, plant or equipment. As part of our adoption of ASC 842, Leases ("ASC 842"), we applied the permitted practical expedient to not separate lease and non-lease components under the predominance principle to designated asset classes associated with the provision of logistics services. We have determined that the predominant component of the related agreements currently in effect is the lease component. Therefore, the combined component is accounted for under the applicable lease accounting guidance. Of our $ 924.0 million net property, plant, and equipment balance as of December 31, 2022, $ 348.9 million is subject to operating leases under our commercial agreements. These agreements do not include options for the lessee to purchase our leased assets, nor do they include any material residual value guarantees or material restrictive covenants. The following table represents a disaggregation of revenue for the gathering and processing, wholesale marketing and terminalling, and storage and transportation segments for the periods indicated (in thousands): Year Ended December 31, 2022 Gathering and Processing Wholesale Marketing and Terminalling Storage and Transportation Consolidated Service Revenue - Third Party $ 29,199 $ — $ 21,614 $ 50,813 Service Revenue - Affiliate 16,458 32,593 — 49,051 Product Revenue - Third Party 90,383 415,800 — 506,183 Product Revenue - Affiliate 52,692 90,298 — 142,990 Lease Revenue - Affiliate (1) 116,695 50,193 120,482 287,370 Total Revenue $ 305,427 $ 588,884 $ 142,096 $ 1,036,407 (1) Net of $ 7.2 million of amortization expense for the year ended December 31, 2022, related to a customer contract intangible asset recorded in the wholesale marketing and terminalling segment. Year Ended December 31, 2021 Gathering and Processing Wholesale Marketing and Terminalling Storage and Transportation Consolidated Service Revenue - Third Party $ 4,670 $ 490 $ 11,942 $ 17,102 Service Revenue - Affiliate 13,723 34,033 — 47,756 Product Revenue - Third Party — 264,974 — 264,974 Product Revenue - Affiliate — 76,074 — 76,074 Lease Revenue - Affiliate (1) 143,459 37,686 113,851 294,996 Total Revenue $ 161,852 $ 413,257 $ 125,793 $ 700,902 (1) Net of $ 7.2 million of amortization expense for the year ended December 31, 2021, related to a customer contract intangible asset recorded in the wholesale marketing and terminalling segment. F-22 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. Most of these agreements have an initial term ranging from five to ten years , which may be extended for various renewal terms. We disclose information about remaining performance obligations that have original expected durations of greater than one year. Our unfulfilled performance obligations as of December 31, 2022 were as follows (in thousands): 2023 $ 293,303 2024 210,897 2025 185,592 2026 177,917 2027 430,886 Total expected revenue on remaining performance obligations $ 1,298,595 6. Net Income per Unit Basic net income per unit applicable to limited partners is computed by dividing limited partners' interest in net income by the weighted-average number of outstanding common units. Prior to August 13, 2020, we had more than one class of participating securities and used the two class method to calculate the net income per unit applicable to the limited partners. The classes of participating units prior to August 13, 2020 consisted of limited partner units, general partner units and IDRs. Pursuant to the IDR Restructuring Transaction, the IDRs were eliminated and the 2 % general partner economic interest was converted to a non-economic general partner interest. Effective August 13, 2020, the common limited partner units are the only participating security for cash distributions. Refer to Note 12 - Equity for a discussion of the elimination of the IDRs and conversion of the 2 % general partner economic interest effective August 13, 2020. The two-class method was based on the weighted-average number of common units outstanding during the period. Basic net income per unit applicable to limited partners was computed by dividing limited partners’ interest in net income, after deducting our general partner’s 2 % interest and IDRs, by the weighted-average number of outstanding common units. Our net income was allocated to our general partner and limited partners in accordance with their respective partnership percentages after giving effect to priority income allocations for IDRs, which are held by our general partner pursuant to our Partnership Agreement. Earnings in excess of distributions were allocated to our general partner and limited partners based on their respective ownership interests. The IDRs were paid following the close of each quarter. 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 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. 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. As of December 31, 2022, the only potentially dilutive units outstanding consist of unvested phantom units. Our distributions earned with respect to a given period are declared subsequent to quarter end. Therefore, the table below represents total cash distributions applicable to the period in which the distributions are earned. The date of distribution for the distributions earned during the quarterly period ended December 31, 2022 is February 9, 2023. The calculation of net income per unit is as follows (dollars in thousands, except units and per unit amounts): F-23 Notes to Consolidated Financial Statements Year Ended December 31, 2022 2021 2020 Net income attributable to partners $ 159,052 $ 164,822 $ 159,256 Less: General partner's distribution (including IDRs) (1) — — 18,618 Less: Limited partners' distribution 172,933 164,484 127,070 Earning in excess (deficit) of distributions $ ( 13,881 ) $ 338 $ 13,568 General partner's earnings: Distributions (including IDRs) (1) $ — $ — $ 18,618 Allocation of earnings in excess (deficit) of distributions — — 106 Total general partner's earnings $ — $ — $ 18,724 Limited partners' earnings on common units: Distributions $ 172,933 $ 164,484 $ 127,070 Allocation of earnings in excess (deficit) of distributions ( 13,881 ) 338 13,462 Total limited partners' earnings on common units $ 159,052 $ 164,822 $ 140,532 Weighted average limited partner units outstanding: Common units - basic 43,487,910 43,447,739 33,594,284 Common units - diluted 43,511,650 43,460,470 33,597,418 Net income per limited partner unit: Common - basic $ 3.66 $ 3.79 $ 4.18 Common - diluted (2) $ 3.66 $ 3.79 $ 4.18 (1) Prior to August 13, 2020, general partner distributions (including IDRs) consist of the 2 % general partner interest and IDRs, which represent the right of the general partner to receive increasing percentages of quarterly distributions of available cash from operating surplus in excess of 0.43125 per unit per quarter. In connection with the IDR Restructuring Transaction on August 13, 2020, the IDRs were eliminated and the general partner interest became a non-economic general partner interest. See Note 12 for further discussion related to IDRs. (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. 7. Inventory 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. Inventory is stated at the lower of cost or net realizable value, with cost determined on a first-in, first-out basis. We recognize lower of cost or net realizable value charges as a component of cost of materials and other in the consolidated statements of income and comprehensive income. 8. Property, Plant and Equipment Property, plant and equipment, at cost, consist of the following (in thousands): December 31, 2022 2021 Land $ 17,367 $ 14,533 Building and building improvements 5,072 2,742 Pipelines, tanks and terminals 1,103,857 654,154 Asset retirement obligation assets 2,073 2,073 Other equipment 30,849 30,774 Construction in process 81,466 11,594 Property, plant and equipment 1,240,684 715,870 Less: accumulated depreciation ( 316,680 ) ( 266,482 ) Property, plant and equipment, net $ 924,004 $ 449,388 F-24 9. Goodwill Goodwill represents the excess of the aggregate purchase price over the fair value of the identifiable net assets acquired and is not amortized. We perform an annual assessment of whether goodwill retains its value. This assessment is done more frequently if indicators of potential impairment exist. We performed our annual goodwill impairment review in the fourth quarter of 2022, 2021, and 2020. We performed a qualitative assessment for the years ended December 31, 2022, December 31, 2021, and December 31, 2020. In 2022, 2021 and 2020, the annual impairment review resulted in the determination that no indicators of impairment of goodwill were present. 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 10. Other Intangible Assets Our identifiable intangible assets are as follows (in thousands): Useful Accumulated As of December 31, 2022 Life Gross Amortization Net Intangible assets subject to amortization: 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: Rights-of-way assets Indefinite 42,877 42,877 Total $ 410,586 $ ( 45,790 ) $ 364,796 Useful Accumulated As of December 31, 2021 Life Gross Amortization Net Intangible assets subject to amortization: Marketing contract 20 years $ 144,219 $ ( 27,642 ) $ 116,577 Intangible assets not subject to amortization: Rights-of-way assets Indefinite 37,280 37,280 Total $ 181,499 $ ( 27,642 ) $ 153,857 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. F-25 Notes to Consolidated Financial Statements 11. 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) 298,605 — 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 On May 24, 2021, the Partnership and our wholly owned subsidiary Delek Logistics Finance Corp. ("Finance Corp." and together with the Partnership, the "Issuers") issued $ 400.0 million in aggregate principal amount of 7.125 % senior notes due 2028 (the "2028 Notes") at par, pursuant to an indenture with U.S. Bank, National Association as trustee. The 2028 Notes are general unsecured senior obligations of the Issuers and are unconditionally guaranteed jointly and severally on a senior unsecured basis by the Partnership's subsidiaries other than Finance Corp., and will be unconditionally guaranteed on the same basis by certain of the Partnership’s future subsidiaries. The 2028 Notes rank equal in right of payment with all existing and future senior indebtedness of the Issuers, and senior in right payment to any future subordinated indebtedness of the Issuers. The 2028 Notes will mature on June 1, 2028, and interest on the 2028 Notes is payable semi-annually in arrears on each June 1 and December 1, commencing December 1, 2021. At any time prior to June 1, 2024, the Issuers may redeem up to 35 % of the aggregate principal amount of the 2028 Notes with the net cash proceeds of one or more equity offerings by the Partnership at a redemption price of 107.125 % of the redeemed principal amount, plus accrued and unpaid interest, if any, subject to certain conditions and limitations. Prior to June 1, 2024, the Issuers may also redeem all or part of the 2028 Notes at a redemption price of the principal amount plus accrued and unpaid interest, if any, plus a "make whole" premium, subject to certain conditions and limitations. In addition, beginning on June 1, 2024, the Issuers may, subject to certain conditions and limitations, redeem all or part of the 2028 Notes, at a redemption price of 103.563 % of the redeemed principal for the twelve-month period beginning on June 1, 2024, 101.781 % for the twelve-month period beginning on June 1, 2025, and 100.00 % beginning on June 1, 2026 and thereafter, plus accrued and unpaid interest, if any. In the event of a change of control, accompanied or followed by a ratings downgrade within a certain period of time, subject to certain conditions and limitations, the Issuers will be obligated to make an offer for the purchase of the 2028 Notes from holders at a price equal to 101.00 % of the principal amount thereof, plus accrued and unpaid interest. As of December 31, 2022, we had $ 400.0 million in outstanding principal amount under the 2028 Notes, and the effective interest rate was 7.40 %. 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, 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. or Canadian dollars. The DKL Credit Facility also contains an accordion feature whereby the Partnership can increase the size of the credit facility to an aggregate of $ 1.0 billion, subject to receiving increased or new commitments from lenders and the satisfaction of certain other conditions precedent. 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. 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 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. 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 F-26 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. 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; and • 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 %. F-27 Notes to Consolidated Financial Statements 6.750 % Senior Notes Due 2025 On May 23, 2017, the Partnership and Delek Logistics Finance Corp., a Delaware corporation and a wholly owned subsidiary of the Partnership (“Finance Corp.” and together with the Partnership, the “Issuers”), issued $ 250.0 million in aggregate principal amount of 6.75 % senior notes due 2025 (the “2025 Notes”) at a discount. The 2025 Notes are general unsecured senior obligations of the Issuers. The 2025 Notes are unconditionally guaranteed jointly and severally on a senior unsecured basis by the Partnership's existing subsidiaries (other than Finance Corp., the "Guarantors") and will be unconditionally guaranteed on the same basis by certain of the Partnership’s future subsidiaries. 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. 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. On April 25, 2018, we made an offer to exchange the 2025 Notes and the related guarantees that were validly tendered and not validly withdrawn for an equal principal amount of exchange notes that are freely tradeable, as required under the terms of the original indenture. The terms of the exchange notes that were issued in May 2018 as a result of the exchange (also referred to as the "2025 Notes") are substantially identical to the terms of the original 2025 Notes. As of December 31, 2022, we had $ 250.0 million in outstanding principal amount of the 2025 Notes. As of December 31, 2022, the effective interest rate related to the 2025 Notes was approximately 7.21 %. 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): Year Ended December 31, Total 2023 $ 15,000 2024 285,000 2025 250,000 2026 — 2027 720,500 Thereafter 400,000 Total $ 1,670,500 12. Equity 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 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. 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 F-28 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. In August 2020, we filed a shelf registration statement with the U.S. Securities and Exchange Commission, which subsequently became effective, for the proposed re-sale or other disposition from time to time by Delek Holdings of up to 14.0 million of our common limited partner units. As of December 31, 2022, we did not sell any securities under this shelf registration statement and we will not receive any proceeds from the sale of securities by Delek Holdings. Equity Activity The table below summarizes the changes in the number of units outstanding from December 31, 2020 through December 31, 2022. Common - Public Common - Delek Holdings General Partner Total 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 Midland Gathering Assets Acquisition equity issuance — 5,000,000 — 5,000,000 Delek Holdings unit purchases from public ( 451,822 ) 451,822 — — General Partner units converted to non-economic general partner interest — — ( 600,678 ) ( 600,678 ) Common limited partner units issued in IDR Restructuring Transaction — 14,000,000 — 14,000,000 Balance at December 31, 2020 8,697,468 34,745,868 — 43,443,336 Delek Holdings resale of units 49,068 ( 49,068 ) — — Unit-based compensation awards (1) 27,517 — — 27,517 Balance at December 31, 2021 8,774,053 34,696,800 — 43,470,853 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. Issuance of Additional Securities Our Partnership Agreement authorizes us to issue an unlimited number of additional partnership securities for the consideration and on the terms and conditions determined by our general partner without the approval of the unitholders. Costs associated with the issuance of securities are allocated to all unitholders' capital accounts based on their ownership interest at the time of issuance. Allocations of Net Income Our Partnership Agreement contains provisions for the allocation of net income and loss to the unitholders. For purposes of maintaining partner capital accounts, the Partnership Agreement specifies that items of income and loss shall be allocated among the partners in accordance with their respective percentage interest. Prior to August 13, 2020, normal allocations were made according to percentage interests after giving effect to priority income allocations in an amount equal to incentive cash distributions allocated 100 % to our general partner. Effective August 13, 2020, the IDRs were eliminated and the 2 % general partner economic interest was converted to a non-economic general partner interest that no longer receives cash distributions. The following table presents the allocation of the general partner's interest in net income (in thousands, except percentage of ownership interest): Year Ended December 31, 2022 2021 2020 Net income attributable to partners $ 159,052 $ 164,822 $ 159,256 Less: General partner's IDRs — — ( 17,632 ) Net income available to partners $ 159,052 $ 164,822 $ 141,624 General partner's ownership interest — % — % 2.0 % General partner's allocated interest in net income — — 1,092 General partner's IDRs — — 17,632 Total general partner's interest in net income $ — $ — $ 18,724 F-29 Notes to Consolidated Financial Statements Incentive Distribution Rights Effective August 13, 2020, the Partnership closed on the IDR Restructuring Transaction and the general partner no longer receives any cash distributions. Prior to August 13, 2020, our general partner was entitled to 2.0 % of all quarterly distributions that we make prior to our liquidation. Our general partner had the right, but not the obligation, to contribute up to a proportionate amount of capital to us to maintain its current general partner interest. Our general partner held IDRs that entitled it to receive increasing percentages, up to a maximum of 48.0 %, of the cash we distributed from operating surplus (as defined in our Partnership Agreement) in excess of $ 0.43125 per unit per quarter. The maximum distribution was 48.0 % and did not include any distributions that our general partner or its affiliates may have received on common or general partner units that it owns. As of August 12, 2020, the IDRs held by our general partner were entitled to receive the maximum distribution. Pursuant to Amendment No. 2 to the Prior Partnership Agreement, prior to the IDR Restructuring Transaction, an agreement was reached for a waiver of distributions in respect of the IDRs associated with the 5.0 million Additional Units for at least two years, through at least the distribution for the quarter ending March 31, 2022 (the "IDR Waiver"). 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. 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 (in thousands) Date of Distribution Unitholders Record Date December 31, 2020 $ 0.910 $ 39,533 February 9, 2021 February 2, 2021 March 31, 2021 $ 0.920 $ 39,968 May 14, 2021 May 10, 2021 June 30, 2021 $ 0.940 $ 40,846 August 11, 2021 August 5, 2021 September 30, 2021 $ 0.950 $ 41,286 November 10, 2021 November 5, 2021 December 31, 2021 $ 0.975 $ 42,384 February 8, 2022 February 1, 2022 March 31, 2022 $ 0.980 $ 42,604 May 12, 2022 May 5, 2022 June 30, 2022 $ 0.985 $ 42,832 August 11, 2022 August 4, 2022 September 30, 2022 $ 0.990 $ 43,057 November 10, 2022 November 4, 2022 December 31, 2022 $ 1.020 $ 44,440 February 9, 2023 February 2, 2023 The allocations of total quarterly cash distributions made to general and limited partners for the years ended December 31, 2022, 2021 and 2020 are set forth in the table below. Distributions earned with respect to a given period are declared subsequent to quarter end. Therefore, the table below presents total cash distributions applicable to the period in which the distributions are earned (in thousands, except per unit amounts): Year Ended December 31, 2022 2021 2020 General partner's distributions: General partner's distributions $ — $ — $ 986 General partner's IDRs — — 17,632 Total general partner's distributions — — 18,618 Limited partners' distributions: Common limited partners' distributions 172,933 164,484 127,070 Total cash distributions $ 172,933 $ 164,484 $ 145,688 Cash distributions per limited partner unit $ 3.975 $ 3.785 $ 3.605 F-30 Notes to Consolidated Financial Statements 13. Equity-Based Compensation The Delek Logistics GP, LLC 2012 Long-Term Incentive Plan (the "LTIP") was adopted by the Delek Logistics GP, LLC board of directors in connection with the completion of our initial public offering in November 2012. The LTIP is administered by the Conflicts Committee of the board of directors. Equity-based compensation expense is included in general and administrative expenses in the accompanying consolidated statements of income and comprehensive income and is immaterial for the years ended December 31, 2022, 2021 and 2020. See Note 2 for additional information on terms and measurement considerations. On June 9, 2021, the LTIP was amended to increase the number of units representing limited partner interest in the Partnership (the "Common Units") authorized for issuance by 300,000 Common Units to 912,207 Common Units. Additionally, the term of the LTIP was extended to June 9, 2031. 14. Equity Method Investments 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): As of December 31, 2022 As of December 31, 2021 Current Assets $ 33,365 $ 28,735 Non-current Assets $ 394,267 $ 403,692 Current liabilities $ 5,144 $ 10,040 Years Ended December 31, 2022 2021 2020 Revenues $ 95,525 $ 68,057 $ 51,001 Gross profit $ 62,726 $ 41,121 $ 31,103 Operating income $ 61,975 $ 40,436 $ 30,382 Net income $ 62,113 $ 40,390 $ 30,404 We have two additional joint ventures that have constructed separate crude oil pipeline systems and related ancillary assets, which are serving third parties and subsidiaries of Delek Holdings. We own a 50 % membership interest in the entity formed with an affiliate of Plains All American Pipeline, L.P. ("CP LLC") to operate one of these pipeline systems and a 33 % membership interest in the entity formed with Andeavor Logistics Rio Pipeline LLC ("Andeavor Logistics"), formerly known as Rangeland Energy II, LLC ("Rangeland Energy") to operate the other pipeline system. Combined summarized financial information for these two equity method investees on a 100% basis is shown below (in thousands): As of December 31, 2022 As of December 31, 2021 Current assets $ 18,888 $ 15,010 Non-current assets $ 231,898 $ 242,599 Current liabilities $ 1,973 $ 1,492 Years Ended December 31, 2022 2021 2020 Revenues $ 45,109 $ 46,335 $ 55,482 Gross profit $ 25,849 $ 26,688 $ 36,904 Operating income $ 23,121 $ 24,587 $ 34,951 Net Income $ 23,198 $ 24,589 $ 34,977 The Partnership's investments in these three entities were financed through a combination of cash from operations and borrowings under the DKL Credit Facility. The Partnership's investment balances in these joint ventures were as follows (in thousands): F-31 Notes to Consolidated Financial Statements As of December 31, 2022 As of December 31, 2021 Red River $ 149,635 $ 144,041 CP LLC 64,056 61,670 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. Our share of net income or loss of the investees will increase or decrease, as applicable, the carrying value of our investments in unconsolidated affiliates. With respect to our equity method investments, we determined that these entities do not represent variable interest entities and consolidation is not required. We have the ability to exercise significant influence over each of these joint ventures through our participation in the management committees, which make all significant decisions. However, since all significant decisions require the consent of the other investor(s) without regard to economic interest, we have determined that we have joint control and have applied the equity method of accounting. Our investment in these joint ventures is reflected in our investments in pipeline joint ventures segment. 15. Segment Data We aggregate our operating segments into four reportable segments: (i) gathering and processing; (ii) wholesale marketing and terminalling; (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. 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. Our operating segments adhere to the accounting policies used for our consolidated financial statements. Our operating segments are managed separately because each segment requires different industry knowledge, technology and marketing strategies. Decisions concerning the allocation of resources and assessment of operating performance are made based on this segmentation. 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. GAAP. 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. F-32 Notes to Consolidated Financial Statements 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 (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 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 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: Affiliate (1) $ 157,182 $ 147,793 $ 113,851 $ — $ — $ 418,826 Third party 4,670 265,464 11,942 — — 282,076 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 F-33 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 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 Amortization of customer contract intangible — 7,211 — — — 7,211 Interest expense, net — — — — 42,874 42,874 Income tax expense 223 Net income $ 159,256 Capital spending (2) (3) $ 5,384 $ 5,962 $ 4,087 $ — $ 16 $ 15,449 (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. (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. 16. Income Taxes 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. The taxable income reportable to each partner takes into account differences between the tax basis and fair market value of our assets, the acquisition price of such partner's units and the taxable income allocation requirements under our Partnership Agreement. The Partnership is not a taxable entity for federal income tax purposes. While most states do not impose an entity level tax on partnership income, the Partnership is subject to entity level tax in both Tennessee and Texas. The Partnership does not file a separate Texas tax return. Our results of operations are included in Delek Holdings’ consolidated return. However, the provisions of ASC 740 have been followed as if we were a stand-alone entity. As a result, the Partnership must record deferred income taxes for the differences between book and tax bases of its assets and liabilities based on those states' enacted tax rates and laws that will be in effect when the differences are expected to reverse. As of December 31, 2022 and 2021, the total non-current deferred tax liability was $ 1.0 million and $ 1.0 million, respectively. 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, 2022 and 2021 was depreciation and amortization. F-34 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): Year Ended December 31, 2022 2021 2020 State income taxes $ 382 $ 153 $ 223 Income tax expense $ 382 $ 153 $ 223 Income tax expense (benefit) is as follows (in thousands): Year Ended December 31, 2022 2021 2020 Current $ 377 $ ( 200 ) $ ( 178 ) Deferred 5 353 401 Total $ 382 $ 153 $ 223 Delek Holdings files a consolidated Texas gross margin tax return, and tax payments for the Partnership are paid by Delek Holdings. Therefore, a portion of the current tax payable is included in accounts receivable/payable from related parties. As of both December 31, 2022 and 2021, income taxes payable were immaterial and were included in accounts receivable/payable from related parties in the accompanying consolidated balance sheets. Taxes that are determined on a consolidated basis apply the “benefits for loss” allocation method; thus, tax attributes are realized when used in the combined tax return to the extent that they have been subject to a valuation allowance. We are no longer subject to audit through 2017. We recognize accrued interest and penalties related to unrecognized tax benefits as an adjustment to the current provision for income taxes. There were no uncertain tax positions recorded as of December 31, 2022 or 2021, and there were no interest or penalties recognized related to uncertain tax positions for the years ended December 31, 2022, 2021 or 2020. We have examined uncertain tax positions for any material changes in the next 12 months and none are expected. 17. Commitments and Contingencies Litigation In the ordinary conduct of our business, we are from time to time subject to lawsuits, investigations and claims, including environmental claims and employee-related matters. Although we cannot predict with certainty the ultimate resolution of lawsuits, investigations and claims asserted against us, including civil penalties or other enforcement actions, we do not believe that any currently pending legal proceeding or proceedings to which we are a party will have a material adverse effect on our financial statements. See "Crude Oil and Other Releases" below for discussion of an enforcement action. Environmental, Health and Safety We are subject to extensive federal, state and local environmental and safety laws and regulations enforced by various agencies, including the Environmental Protection Agency (the "EPA"), the United States Department of Transportation, the Occupational Safety and Health Administration, as well as numerous state, regional and local environmental, safety and pipeline agencies. These laws and regulations govern the discharge of materials into the environment, waste management practices and pollution prevention measures, as well as the safe operation of our pipelines and the safety of our workers and the public. Numerous permits or other authorizations are required under these laws and regulations for the operation of our terminals, pipelines, saltwells, trucks and related operations, and may be subject to revocation, modification and renewal. These laws and permits raise potential exposure to future claims and lawsuits involving environmental and safety matters, which could include soil, surface water and groundwater contamination, air pollution, personal injury and property damage allegedly caused by substances which we may have handled, used, released or disposed of, transported, or that relate to pre-existing conditions for which we may have assumed responsibility. We believe that our current operations are in substantial compliance with existing environmental and safety requirements. However, there have been and we expect that there will continue to be ongoing discussions about environmental and safety matters between us and federal and state authorities, including the receipt and response to notices of violations, citations and other enforcement actions, some of which have resulted or may result in changes to operating procedures and in capital expenditures. 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 F-35 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, 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, 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 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. We may incur additional expenses as a result of further scrutiny by regulatory authorities and continued compliance with laws and regulations to which our assets are subject. As of December 31, 2022, we have accrued $ 0.3 million for remediation and other such matters related to these releases. 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 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 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. 18. Leases We lease certain pipeline and transportation equipment. Leases with an initial term of 12 months or less are not recorded on the balance sheet; we recognize lease expense for these leases on a straight-line basis over the lease term. Our leases do not have any outstanding renewal options. Certain leases also include options to purchase the leased equipment. Certain of our lease agreements include rates based on equipment usage and others include rate inflationary indices based increases. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. F-36 Notes to Consolidated Financial Statements The following table presents additional information related to our operating leases in accordance ASC 842: Years Ended December 31, (in thousands) 2022 2021 Lease Cost (1) Operating lease cost $ 12,054 $ 12,586 Short-term lease cost 2,541 1,609 Variable lease costs 4,803 600 Total lease cost $ 19,398 $ 14,795 Other Information Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ ( 12,054 ) $ ( 12,586 ) Leased assets obtained in exchange for new operating lease liabilities $ 12,682 $ 6,386 Leased assets obtained in exchange for new financing lease liabilities $ 35 $ 3,071 Years Ended December 31, 2022 2021 Weighted-average remaining lease term (years) for operating leases 3.3 3.3 Weighted-average discount rate (2) operating leases 6.6 % 5.8 % Weighted-average remaining lease term (years) for finance lease 1.1 2.1 Weighted-average discount rate (2) finance lease 1.9 % 1.8 % (1) Includes an immaterial amount of financing lease. (2) Our discount rate is primarily based on our incremental borrowing rate in accordance with ASC 842. The following is an estimate of the maturity of our lease liabilities for operating leases having remaining noncancellable terms in excess of one year as of December 31, 2022 (in thousands) under ASC 842: 2023 $ 9,058 2024 6,673 2025 3,527 2026 1,357 2027 807 Thereafter 1,235 Total lease payments $ 22,657 Less: Interest 2,523 Present value of lease liabilities $ 20,134 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: 2023 $ 2,807 2024 320 2025 24 2026 — 2027 — Thereafter — Total lease payment $ 3,151 Less: Interest 84 Present values of lease liabilities $ 3,067 F-37 19. Subsequent Events Distribution Declaration On January 23, 2023, our general partner's board of directors declared a quarterly cash distribution of $ 1.02 per unit, paid on February 9, 2023, to unitholders of record on February 2, 2023. F-38 ITEM 16. FORM 10-K SUMMARY None. F-94 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Delek Logistics Partners, LP by and through its general partner, Delek Logistics GP, LLC By: /s/ Reuven Spiegel Reuven Spiegel Director, Executive Vice President and Chief Financial Officer Dated: March 1, 2023 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by or on behalf of the following persons on behalf of the registrant and in the capacities indicated on March 1, 2023: /s/ Avigal Soreq Avigal Soreq President (Principal Executive Officer) /s/ Reuven Spiegel Reuven Spiegel Director, Executive Vice President and Chief Financial Officer (Principal Financial Officer) /s/ Robert Wright Robert Wright Senior Vice President, Chief Accounting Officer (Principal Accounting Officer) /s/ Ezra Uzi Yemin Ezra Uzi Yemin Executive Chairman of the Board of Directors /s/ Sherri A. Brillon Sherri A. Brillon Director F-95 /s/ Charles J. Brown, III Charles J. Brown, III Director /s/ Eric D. Gadd Eric D. Gadd Director /s/ Frederec Charles Green Frederec Charles Green Director /s/ Ron W. Haddock Ron W. Haddock Director /s/ Gennifer F. Kelly Gennifer F. Kelly Director F-96