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Item 9A. Controls and Procedures

2024-02-28 compared with 2023-03-01 · 475 added, 807 removed, 1504 unchanged (46% of the section changed)

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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.

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

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

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;

Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP and that receipts and expenditures recorded by us are being made only in accordance with authorizations of our management and the board of directors of our general partner;

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

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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, 2023, based on the framework in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

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Changes in Internal Control over Financial Reporting

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.

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, 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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, 2023, as stated in their report, which is included in the section beginning on page F-1.

Controls and Procedures, and Other Information

OTHER INFORMATION

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

1 (“Amendment No.

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

Amendment No.

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

A copy of Amendment No.

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

Rule 10b5-1 Trading Plans

During the quarter ended December 31, 2023, none of our directors or officers (as defined in Rule 16a-1 under the Exchange Act) adopted , modified or terminated a "Rule 10b5-1 trading arrangement" or "non-Rule 105b-1 trading arrangement" (as those terms are defined in Item 408 of Regulation S-K).

DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

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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

Directors, Executive Officers, Corporate Governance, and Security Ownership

Directors' Experiences and Skills

YEMIN SOREQ BRILLON BROWN GADD GREEN HADDOCK KELLY SPIEGEL

PUBLIC COMPANY LEADERSHIP EXPERIENCE ● ● ● ● ● ● ●

PUBLIC COMPANY BOARD EXPERIENCE ● ● ● ● ● ● ● ● ●

FINANCE ● ● ● ● ● ● ● ● ●

ACCOUNTING AND AUDITING ● ● ● ● ● ● ● ● ●

ENERGY INDUSTRY EXPERIENCE ● ● ● ● ● ● ● ● ●

OPERATIONS EXPERIENCE ● ● ● ● ● ● ●

INTERNATIONAL BUSINESS EXPERIENCE ● ● ● ● ● ● ●

RISK MANAGEMENT ● ● ● ● ● ● ● ●

COMPENSATION ● ● ● ● ● ● ●

ENVIRONMENTAL/SUSTAINABILITY ● ● ● ● ● ● ●

ESG/SOCIAL RESPONSIBILITY ● ● ● ● ● ● ●

CYBERSECURITY/INFORMATION TECHNOLOGY ● ● ● ●

M&A/CAPITAL MARKETS ● ● ● ● ● ● ●

STRATEGY ● ● ● ● ● ● ●

GOVERNMENT/REGULATORY/PUBLIC POLICY ● ● ● ● ● ● ● ●

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.

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

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

Directors, Executive Officers, Corporate Governance, and Security Ownership

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, Executive Officers, Corporate Governance, and Security Ownership

Directors and Executive Officers of Our General Partner

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Ezra Uzi Yemin 54 Executive Chairman of the Board of Directors

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

Brillon 63 Chair of Audit Committee and Member of Technology and Governance, Compensation and Conflicts Committees

Brown, III 75 Director, Chair of Conflicts Committee and Member of Audit and Governance and Compensation Committees

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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.

She has also served as a member of the Governance and Compensation Committee and the Technology Committee since July 2021 and has been a member of the Conflicts Committee since May 2023.

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

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

Directors, Executive Officers, Corporate Governance, and Security Ownership

Brown, III has served as a member of the Board since November 2012, as a member of the Audit Committee and Conflicts Committee (of which he is Chairperson) since November 2012, as a member of the Governance and Compensation Committee since July 2021, and as a member of the EHS Committee from its inception in October 2016 to July 2021.

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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.

Brown served as the executive vice president of Apex Clean Energy, Inc., an independent renewable energy company, where he managed legal and business development

Directors, Executive Officers, Corporate Governance, and Security Ownership

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.

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

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.

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

Directors, Executive Officers, Corporate Governance, and Security Ownership

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

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

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

Prior to joining the Partnership in 2021, Mr.

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

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

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

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

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

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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.

The Board met 19 times in 2023, 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.

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

Directors, Executive Officers, Corporate Governance, and Security Ownership

Committees of the Board of Directors of Our General Partner

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Brillon 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 Audit Committee met seven times in 2023, 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.

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Brillon (Chair)

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

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The Conflicts Committee consists of Messrs.

Brown (chair) and Gadd and Ms.

Brown (chair) and Gadd and Mses.

Brillon and 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.

Brown and Gadd and Mses.

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

Brown joined the committee at its inception in November 2012.

Gadd joined the committee in October 2013.

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.

Brillon joined the committee in March 2023.

Kelly joined the committee in July 2020.

The Conflicts Committee met two times in 2023 either in person or telephonically, with each member attending all meetings of the Conflicts Committee.

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

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

The Governance and Compensation

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Committee consists of Messrs.

The Governance and Compensation Committee consists of Messrs.

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

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

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Technology Committee

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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.

Additionally, our Board believes it is important to promote the interests of the Partnership by providing 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").

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

Directors, Executive Officers, Corporate Governance, and Security Ownership

EXECUTIVE COMPENSATION

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

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Overview - Compensation Decisions and Allocation of Compensation Expenses

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In 2023 our executive officers received time-vesting phantom units under the LTIP.

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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.

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

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.”

Directors, Executive Officers, Corporate Governance, and Security Ownership

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.

The Governance and Compensation Committee of the Board retained a compensation consultant with respect to compensation paid to our NEOs or to its non-employee directors in 2023.

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

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

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

The members of the Governance and Compensation Committee have submitted this Governance and Compensation Committee Report to the Board of Directors as of February 28, 2024:

Haddock (Chair)

Directors, Executive Officers, Corporate Governance, and Security Ownership

2023 Summary Compensation Table

The Summary Compensation Table below summarizes the compensation for the fiscal year ended December 31, 2023 (and the two prior fiscal years) for our general partner's president (Mr.

Soreq), former principal executive officer (Mr.

Soreq), Executive Chairman (Mr.

Yemin), principal financial officer (Mr.

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McWatters) and Senior Vice President (Mr.

Directors, Executive Officers, Corporate Governance, and Security Ownership

Name and Principal Position (1)

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

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

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

Unit Awards ($) (3)

Option Awards ($) Non-Equity Incentive ($) (4)

Other Compensation ($) (5)

Avigal Soreq,

President 2023 — — 874,992 — — — 874,992

2022 — — 499,955 — — — 499,955

2021 — — — — — — —

Ezra Uzi Yemin,

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

Executive Chairman 2023 — — 749,971 — — — 749,971

2022 — — 1,233,943 — — — 1,233,943

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2022 — — 166,705 — — — 166,705

2021 — — 116,648 — — — 116,648

Odely Sakazi,

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Sakazi received compensation from us or our general partner in 2023.

(2) The $180,000 was a discretionary award given as a result of the Delaware Gathering (formerly 3 Bear) Acquisition that was paid out in March 2023.

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

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The fair value of DK PSUs is calculated using a Monte-Carlo simulation model, which assumes a risk-free rate of interest of 4.32%, an expected term of 2.81 years and expected volatility of 64.46%.

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.

Assumptions used in the calculation of these amounts for the 2023 fiscal year are included in footnote 20 to the audited financial statements of Delek Holdings for the 2023 fiscal year included in Delek Holdings’ Annual Report on Form 10-K filed with the SEC on or about February 28, 2024.

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.

(4) Bonus paid under the 2023 AIP Plan for 2023 plan year.

(5) For fiscal year 2023, this amount includes matching contributions to the Partnership’s 401(k) Plan in the amount of $15,028 for Mr.

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

Sakazi, this amount also includes reimbursement in the amount of $910 for phone expenses and $1,000 for HSA employer in 2022.

Sakazi, this amount also includes reimbursement in the amount of $1,000 for HSA employer in 2023.

Grants of Plan Based Awards in 2023

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Name Grant Date Threshold Target Maximum

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

Avigal Soreq 3/10/2023 16,895 (3)

Ezra Uzi Yemin 3/10/2023 14,481 (3)

Reuven Spiegel 3/10/2023 5,309 (3)

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3/10/2023 536 1,072 2,144 18,063

3/10/2023 536 1,072 2,144 31,024

3/10/2023 537 1,073 2,146 30,902

3/10/2023 1,073 2,145 4,290 53,797

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

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(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.

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

The RSUs vest quarterly for three years, pro rata.

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Ezra Uzi Yemin

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

Executive Chairman — — n/a n/a 22,091 $953,668

Reuven Spiegel

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Avigal Soreq, President — $— 7,331 $338,136

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

Ezra Uzi Yemin, Executive Chairman — $— 26,857 $1,272,902

Reuven Spiegel, Chief Financial Officer — $— 5,655 $263,686

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Avigal Soreq, President — $—

Ezra Uzi Yemin, Former Chief Executive Officer — $—

Ezra Uzi Yemin, Executive Chairman — $—

Reuven Spiegel, Chief Financial Officer — $—

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

The LTIP and applicable awards provide that the Board may, in its discretion, (i) accelerate the vesting

of the phantom units, (ii) make other adjustments to the terms of the phantom units, or (iii) in the event the Exchange Transaction involves the receipt of equity of another entity in exchange for units, convert the phantom units into comparable awards relating to such entity's equity.

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

Compensation of Directors in 2023

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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:

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

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

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

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

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

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

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

Lead Director Fee (Per Year) $15,000

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

Committee Retainers (Per Year):

Audit Committee $10,000

Conflicts Committee $7,500

EHS Committee $5,000

Technology Committee $5,000

Governance and Compensation Committee $7,500

Directors, Executive Officers, Corporate Governance, and Security Ownership

The following table sets forth a summary of the compensation we paid to the Compensated Directors for service during 2023.

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Gadd 90,000 119,995 — — 209,995

Green 76,400 99,980 — — 176,380

Haddock 129,000 (4)

85,000 119,995 — — 204,995

Haddock 107,500 119,995 — — 227,495

Gennifer Kelly

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(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 $53.26 per unit is equal to the NYSE closing price of our common units as of June 10, 2023.

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Kelly and Brillon held 2,253 outstanding phantom units at December 31, 2023.

(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.

(4) During 2023, Mr.

Green also received $171,999 in fees from Delek Holdings for consulting work.

Directors, Executive Officers, Corporate Governance, and Security Ownership

Compensation Committee Interlocks and Insider Participation

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

Directors, Executive Officers, Corporate Governance, and Security Ownership

Name of Beneficial Owner (1)

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4,514 * 14,965 *

Todd O'Malley (9)

Joseph Israel (9)

1,069 * 2,250 *

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370,672 * 1,199,870 1.9

Directors, Executive Officers, Corporate Governance, and Security Ownership

* 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.

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Common Stock includes 701 RSUs that will vest within 60 days of the Measurement Date.

Directors, Executive Officers, Corporate Governance, and Security Ownership

EQUITY COMPENSATION PLAN INFORMATION

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(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.

The LTIP did not require approval by our limited partners.

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.

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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.

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 our material commercial agreements and other non-contractual arrangements with Delek Holdings during 2023.

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

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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.

In addition to the agreements described above, we purchased refined products from Delek Holdings, totaling $396.3 million during the year ended December 31, 2023.

We sold RINs in the amount of approximately $12.8 million to Delek Holdings during the year ended December 31, 2023.

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").

Related Party Revolving Credit Facility

On November 6, 2023, the Partnership and certain of its subsidiaries, as guarantors, entered into a certain Promissory Note (the “Related Party Revolving Credit Facility”) with Delek Holdings.

The Related Party Revolving Credit Facility provides for revolving borrowings with aggregate commitments of $70.0 million comprised of a (i) $55.0 million senior tranche and a (ii) $15.0 million subordinated tranche (the “Subordinated Tranche”), with the initial borrowings under the Subordinated Tranche conditioned upon the Partnership and Delek Holdings reaching an agreement with Fifth Third Bank, National Association, as administrative agent under the DKL Credit Facility, on subordination provisions and other material terms related to the Subordinated Tranche.

The Related Party Revolving Credit Facility will bear interest at Term SOFR (as defined in the Related Party Revolving Credit Facility) plus 3.00% and matures on June 30, 2028.

The Related Party Revolving Credit Facility contains certain affirmative covenants, mandatory prepayments and events of default that the Partnership considers to be customary for an arrangement of this sort.

The obligations under the Related Party Revolving Credit Facility are unsecured.

DPG Management Agreement

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.

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

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

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.

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

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

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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.

The accompanying Index to Financial Statements on page F-1 of this Annual Report on Form 10-K is provided in response to this item.

List of Financial Statement Schedules.

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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).

2.4 Exchange Agreement, dated August 13, 2020, between the Partnership 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).

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3.3 Amendment No.

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

1 to the Second Amended and Restated Agreement of Limited Partnership of Delek Logistics Partners, LP, dated February 26, 2023 (incorporated by reference to Exhibit 3.3 of the Pa rtnership 's Form 10 -K filed on March 1, 2023 ).

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

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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.

Bank Trust Company, National Association (incorporated by reference to Exhibit 4.9 of the Partnership's Form 10-K filed on March 1, 2023).

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.

Bank Trust Company, National Association (incorporated by reference to Exhibit 4.10 of the Partnership's Form 10-K filed on March 1, 2023).

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.

Bank Trust Company, National Association (incorporated by reference to Exhibit 4.11 of the Partnership's Form 10-K filed on March 1, 2023).

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.

Bank Trust Company, National Association (incorporated by reference to Exhibit 4.12 of the Partnership's Form 10-K filed on March 1, 2023).

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

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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.

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).

10.13 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).

10.15 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.

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

10.46 First Amendment to the Fourth Amended and Restated Senior Secured Revolving Credit Facility, dated November 6, 2023, 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 to the Partnership’s Form 10-Q filed on November 8, 2023).

10.47 Second Amendment to the Fourth Amended and Restated Senior Secured Revolving Credit Facility, dated November 6, 2023, 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 10.2 to the Partnership’s Form 10-Q filed on November 8, 2023).

10.48 Third Amendment to the Fourth Amended and Restated Senior Secured Revolving Credit Facility, dated November 6, 2023, 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 10.3 to the Partnership’s Form 10-Q filed on November 8, 2023).

10.49 Promissory Note dated November 6, 2023 by and among the Partnership and Delek US Holdings, Inc.

(incorporated by reference to Exhibit 10.4 to the Partnership’s Form 10-Q filed on November 8, 2023).

21.1 # Subsidiaries of Registrant.

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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.

31.1 # Certification of Delek Logistics GP, LLC's Principal 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.

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

97 # Delek Logistics Partners, LP Clawback Policy.

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

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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”).

We have audited the accompanying consolidated balance sheets of Delek Logistics Partners, LP (the Partnership) as of December 31, 2023 and 2022, the related consolidated statements of income, comprehensive income, partners' equity (deficit) and cash flows for each of the three years in the period ended December 31, 2023, 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, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023, in conformity with U.S.

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

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Partnership’s internal control over financial reporting as of December 31, 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.

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, 2023, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated February 28, 2024 expressed an unqualified opinion thereon.

Basis for Opinion

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

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.

Evaluation of goodwill for impairment

Description of the Matter At December 31, 2023, the Partnership’s goodwill was $12.2 million.

As discussed in Notes 2 and 8 of the consolidated financial statements, goodwill is reviewed at the reporting unit level for impairment at least annually or more frequently if events or changes in circumstances indicate the goodwill might be impaired.

The Partnership performs its annual goodwill impairment assessment in the fourth quarter of each year.

The Partnership evaluates the recoverability of goodwill by comparing the carrying amount of each reporting unit to its estimated fair value.

For the Delaware Gathering reporting unit, management performed a quantitative assessment which estimated fair value using primarily a discounted cash flow analysis based upon projected financial information.

Auditing management’s annual goodwill impairment analysis for the Delaware Gathering reporting unit required significant judgment, as the valuation includes subjective estimates and assumptions in determining the estimated fair value.

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

How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design, and tested the operating effectiveness of controls relating to the valuation of the Delaware Gathering reporting unit in the goodwill impairment analysis process.

For example, we tested controls over management’s review of the significant inputs and assumptions, discussed above, used in determining the reporting unit fair value.

To test the estimated fair value of the Company’s Delaware Gathering reporting unit, our audit procedures included, among others, assessing valuation methodologies, performing recalculations, and testing the significant assumptions discussed above.

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

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

We also involved our valuation specialists to assist in evaluating the fair value methodologies used and testing certain assumptions used, including the determination of the weighted average cost of capital.

/s/ Ernst & Young LLP

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Nashville, Tennessee

March 1, 2023

February 28, 2024

Report of Independent Registered Public Accounting Firm

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In our opinion, Delek Logistics Partners, LP (the Partnership) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2023, 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.

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, 2023 and 2022, 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, 2023, and the related notes, and our report dated February 28, 2024 expressed an unqualified opinion thereon.

Basis for Opinion

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Nashville, Tennessee

March 1, 2023

Exhibits and Financial Statement Schedules

February 28, 2024

Financial Statements

Delek Logistics Partners, LP

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Accounts receivable 41,131 53,314

Accounts receivable from related parties 28,443 —

Inventory 2,264 1,483

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See accompanying notes to the consolidated financial statements

Exhibits and Financial Statement Schedules

Financial Statements

Delek Logistics Partners, LP

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Depreciation and amortization 5,248 2,778 1,825

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

Impairment of goodwill 14,848 — —

Gain on disposal of assets ( 1,266 ) ( 114 ) ( 59 )

Total operating costs and expenses 781,460 826,725 510,400

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Income from equity method investments ( 31,433 ) ( 31,683 ) ( 24,575 )

Other (income) expense, net ( 373 ) ( 119 ) 133

Other income, net ( 303 ) ( 373 ) ( 119 )

Total non-operating expenses, net 111,508 50,248 25,527

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Comprehensive income attributable to partners $ 126,236 $ 159,052 $ 164,822

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

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

Net income per limited partner unit:

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(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

Exhibits and Financial Statement Schedules

Financial Statements

Delek Logistics Partners, LP

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(in thousands)

Common - Public Common - Delek Holdings General Partner - Delek Holdings Total

Common - Public Common - Delek Holdings Total

Balance at December 31, 2020

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Cash distributions ( 32,462 ) ( 129,255 ) ( 161,717 )

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

GP units issued to maintain 2 % interest

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

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

Delek Holdings unit sale to public 650 ( 650 ) —

Other 179 1,025 1,204

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Cash distributions ( 35,868 ) ( 135,219 ) ( 171,087 )

( 32,462 ) ( 129,255 ) — ( 161,717 )

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

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Cash distributions ( 38,491 ) ( 141,534 ) ( 180,025 )

( 35,868 ) ( 135,219 ) — ( 171,087 )

Net income attributable to partners 26,857 99,379 126,236

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

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

Other ( 83 ) 2,703 2,620

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$ 160,402 $ ( 322,271 ) $ ( 161,869 )

(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

Exhibits and Financial Statement Schedules

Financial Statements

Delek Logistics Partners, LP

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Non-cash lease expense 9,549 16,254 9,652

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

Amortization of marketing contract intangible 7,211 7,211 7,211

Amortization of deferred revenue ( 1,755 ) ( 1,775 ) ( 1,953 )

Amortization of deferred financing costs and debt discount 6,327 3,872 3,016

Impairment of Goodwill 14,848 — —

Income from equity method investments ( 31,433 ) ( 31,683 ) ( 24,575 )

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Cash flows from investing activities:

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

Purchases of property, plant and equipment ( 96,101 ) ( 141,098 ) ( 23,052 )

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

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

Distributions to general partner — — ( 27,635 )

Distributions to common unitholders - public ( 38,491 ) ( 35,868 ) ( 32,462 )

Distributions to common unitholders - Delek Holdings ( 141,534 ) ( 135,219 ) ( 129,255 )

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 term facility — 298,511 —

Proceeds from revolving facility 431,800 1,752,300 341,000

Payments on revolving facility ( 371,800 ) ( 1,289,800 ) ( 829,601 )

Payments on term loan debt ( 18,750 ) — —

Proceeds from issuance of senior notes — — 400,000

Proceeds from other financing agreements 6,214 — —

Deferred financing costs paid ( 4,468 ) ( 8,206 ) ( 6,216 )

Payments on financing lease liabilities ( 2,876 ) ( 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 )

Net cash (used in) provided by financing activities ( 139,905 ) 581,947 ( 258,753 )

Net (decrease) increase in cash and cash equivalents ( 4,215 ) 3,678 49

Cash and cash equivalents at the beginning of the period 7,970 4,292 4,243

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(Decrease) increase in accrued capital expenditures and other $ ( 14,765 ) $ ( 10,428 ) $ 3,850

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 $ 4,966 $ 12,717 $ 9,457

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

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

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

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

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

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").

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

Accounting Policies

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Any material subsequent events that occurred during this time have been properly recognized or disclosed in our financial statements.

Use of Estimates

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

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Actual results could differ from those estimates.

Notes to Consolidated Financial Statements

Reclassifications

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• The investments in pipeline joint ventures segment include the Partnership's joint ventures investments discussed in Note 12.

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 13.

Notes to Consolidated Financial Statements

Cash and Cash Equivalents

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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.

Allowance for doubtful accounts is based on a combination of historical experience and specific identification methods.

Delek Holdings accounted for more than 10 % of our consolidated accounts receivable balance as of December 31, 2023 and 2022.

One third-party customer accounted for more than 10 % of our consolidated account receivable balance as of December 31, 2022.

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.

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

We also capitalize interest on capital projects.

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

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

Notes to Consolidated Financial Statements

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

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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 amortization expense, with the exception of the marketing contract intangible, is included in depreciation and amortization in 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.

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If the carrying amount is more than the recoverable amount, an impairment charge must be recognized based on the fair value of the asset.

Notes to Consolidated Financial Statements

Goodwill and Potential Impairment

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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 accordance with Accounting Standards Updates ("ASU") 2017-04, Goodwill and Other (Topic 350);

Simplifying the Test for Goodwill Impairment, g oodwill 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.

We may consider inputs such as a market participant weighted average cost of capital, gross margin, capital expenditures and long-term growth rates based on historical information and our best estimate of future forecasts, all of which are subject to significant judgment and estimates.

We may also consider a market approach in determining or corroborating the fair values of the reporting units using a multiple of expected future cash flows, such as those used by third-party analysts, which is also subject to significant judgment and estimates.

If these estimates and assumptions change in the future, due to factors such as a decline in general economic conditions, competitive pressures on sales and margins and other economic and industry factors beyond management's control, an impairment charge may be required.

A significant risk to our future results and the potential future impairment of goodwill is the volatility of the crude oil and the refined product markets which is often unpredictable and may negatively impact our results of operations in ways that cannot be anticipated and that are beyond management's control.

We may also elect to perform a qualitative impairment assessment of goodwill balances.

The qualitative assessment permits companies to assess whether it is more likely than not (i.e., a likelihood of greater than 50%) that the fair value of a reporting unit is less than its carrying amount.

If a company concludes that, based on the qualitative assessment, it is more likely than not that the fair value of a reporting unit is less than its carrying amount, the company is required to perform the quantitative impairment test.

Alternatively, if a company concludes based on the qualitative assessment that it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, it has completed its goodwill impairment test and does not need to perform the quantitative impairment test.

Our annual assessment of goodwill resulted in an impairment of $ 14.8 million during the year ended December 31, 2023.

There was no impairment during the years ended December 31, 2022 and 2021.

Details of remaining goodwill balances by segment are included in Note 8.

Business Combinations

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

Equity investments for which we determine we have significant influence

Notes to Consolidated Financial Statements

are accounted for as equity method investments.

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

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

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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.

There were no impairment losses recorded on equity method investments for the years ended December 31, 2023, 2022 or 2021.

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

See Note 12 for further information on our equity method investments.

Notes to Consolidated Financial Statements

Fair Value of Financial Instruments

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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

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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.

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

Notes to Consolidated Financial Statements

Revenue Recognition

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Payment terms require customers to pay shortly after delivery and do not contain significant financing components.

We 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.

Certain agreements for gathering, transportation, storage, terminalling, and offloading with Delek Holdings were considered operating leases under ASC 840, Leases ("ASC 840").

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Refer to Note 5 for further information.

Notes to Consolidated Financial Statements

Up-Front payments to Customers.

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Revenues Related to Reimbursements.

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

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

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

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

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

Deferred financing costs associated with our term loan facilities 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.

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.

In accordance with ASC 842-20, Leases - Lessee ("ASC 842-20"), we evaluate if a contract is or contains a lease at the inception of the contract.

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.

We have noncancellable operating leases primarily associated with certain pipeline and transportation equipment.

Our leases do not have any outstanding renewal options.

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

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.

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.

Notes to Consolidated Financial Statements

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

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A corresponding right-of-use asset is recognized based on the lease liability and adjusted for certain costs and prepayments.

For substantially all classes of underlying assets, we have elected the practical expedient not to separate lease and non-lease components, which allows us to combine the components if certain criteria are met.

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").

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 basis 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").

Notes to Consolidated Financial Statements

We are subject to income taxes in certain states that do not follow the federal tax treatment of partnerships.

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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.

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.

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 11 for further discussion.

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Comprehensive income for the years ended December 31, 2023, 2022 and 2021 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.

Notes to Consolidated Financial Statements

New Accounting Pronouncements Adopted During 2023

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 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.

ASU 2023-03 , Presentation of Financial Statements (Topic 205), Income Statement - Reporting Comprehensive Income (Topic 220), Distinguishing Liabilities from Equity (Topic 480), Equity (Topic 505), and Compensation - Stock Compensation (Topic 718)

In July 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-03, Presentation of Financial Statements (Topic 205), Income Statement-Reporting Comprehensive Income (Topic 220), Distinguishing Liabilities from Equity (Topic 480), Equity (Topic 505), and Compensation-Stock Compensation (Topic 718) (“ASU 2023-03”).

This ASU amends or supersedes various SEC paragraphs within the FASB Accounting Standards Codification to conform to past SEC announcements and guidance issued by the SEC.

ASU 2023-03 does not provide any new guidance, so there is no transition or effective date.

We adopted ASU 2023-03 in July 2023.

There was no material impact on our consolidated financial statements.

Accounting Pronouncements Not Yet Adopted

ASU 2023-06, Codification Amendments in Response to the SEC's Disclosure Update and Simplification Initiative

In October 2023, the FASB issued ASU 2023-06 Codification Amendments in Response to the SEC's Disclosure Update and Simplification Initiative ("ASU 2023-06").

The main provision of ASU 2023-06 is to clarify or improve disclosure and presentation requirements of a variety of topics, which will allow users to more easily compare entities subject to the SEC's existing disclosures with those entities that were not previously subject to the requirements, and align the requirements in the FASB accounting standard codification with the SEC's regulations.

The effective date for each amendment will be the date on which the SEC’s removal of that related disclosure from Regulation S-X or Regulation S-K becomes effective, with early adoption prohibited.

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

Notes to Consolidated Financial Statements

ASU 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures

In November 2023, the FASB issued ASU 2023-07 Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures ("ASU 2023-07").

ASU 2023-07 expands reportable segment disclosure requirements by requiring disclosures of significant reportable segment expenses that are regularly provided to the chief decision maker ("CODM") and included within each reported measure of a segment's profit or loss, an amount and description of its composition for other segment items, and interim disclosures of a reportable segment's profit or loss and assets.

The ASU also requires disclosure of the title and position of the individual identified as the CODM and an explanation of how the CODM uses the reported measures of a segment's profit or loss in assessing segment performance and deciding how to allocate resources.

ASU 2023-07 is effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024, and should be applied retrospectively to all prior periods presented in the financial statements.

The adoption of ASU 2023-07 should not have a material impact on our consolidated financial statements.

See Note 13 for further information.

Delaware Gathering (formerly 3 Bear)

On April 8, 2022, DKL Delaware Gathering, LLC, a subsidiary of the Partnership ("Delaware Gathering"), 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”) (subsequently renamed to DKL Delaware Holding - NM, LLC), 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 “Delaware Gathering Acquisition”).

We completed the Delaware Gathering Acquisition on June 1, 2022.

The purchase price for the Delaware Gathering Acquisition was $ 628.3 million.

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

The Delaware Gathering 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.

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Purchase price $ 628,300

Notes to Consolidated Financial Statements

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):

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

Assets acquired:

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Goodwill 14,848

Customer relationships intangible, net (1)

Customer relationship intangible, net 210,000

Rights-of-way 13,490

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Fair value of net assets acquired $ 628,300

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

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

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

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

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

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

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

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

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

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

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

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

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

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

This goodwill is deductible for income tax purposes.

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

Unaudited Pro Forma Financial Information

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

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

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

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

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

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

Year Ended December 31,

(in thousands, except per unit data) 2022 2021

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

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

Net income per limited partner unit:

Basic income per unit $ 3.61 $ 2.65

Diluted income per unit $ 3.60 $ 2.65

Trucking Assets Acquisition

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);

• 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,

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.

Related Party Transactions

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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)

Refined Products Pipelines November 2012 5 / 15

El Dorado Gathering System November 2012 5 / 15

Crude oil gathering 14,000

East Texas Crude Logistics System:

Crude Oil Pipelines November 2012 5 / 15

Crude oil transportation and storage 35,000

Storage November 2012 5 / 15

N/A $ 329,665 /month

East Texas Marketing November 2012 10 (5)

Marketing products for Tyler Refinery 50,000

Big Sandy Terminal:

Refined Products Transportation November 2012 5 / 15

Refined products transportation, dedicated terminalling services and storage for the Tyler Refinery 5,000

Terminalling November 2012 5 / 15

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

Storage July 2013 8 / 16

N/A $ 1,034,886 /month

Notes to Consolidated Financial Statements

Memphis Pipeline June 1, 2018 5

Refined Products Transportation 11,000

El Dorado Throughput and Tankage:

Refined Products Throughput February 2014 8 / 16

Dedicated terminalling and storage 11,000

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)

Heavy Crude Throughput March 2015 9 / 15

Dedicated Offloading Services N/A (6)

Material commercial agreements with Delek Holdings:

Asset/Operation Contract End Date (1)

Pipelines and Storage Facilities Agreement (El Dorado Assets and El Dorado Gathering System):

Crude Oil Pipelines (non-gathered) March 31, 2024 Crude oil and refined products transportation

Refined Products Pipelines

El Dorado Gathering System Crude oil gathering

Pipeline and Tankage Agreement (East Texas Crude Logistics System):

Crude Oil Pipelines March 31, 2024 Crude oil transportation and storage

Marketing Agreement (East Texas Marketing):

East Texas Marketing October 1, 2026 Marketing products for Tyler Refinery

Throughput and Tankage Agreement (Tyler Throughput and Tankage):

Refined Products Throughput March 31, 2024 Dedicated Terminalling and storage

Throughput and Tankage Agreement (El Dorado Throughput and Tankage):

Refined Products Throughput March 31, 2024 Dedicated terminalling and storage

Throughput and Tankage Agreement - El Dorado Rail Offloading Facility (El Dorado Assets Throughput):

Light Crude and Heavy Crude Throughput March 31, 2024 Dedicated Offloading Services

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

Rail Offloading March 1, 2018 10 / 15

Offloading services 4,500

Terminalling March 1, 2018 10 / 15

Dedicated Terminalling 29,250

Storage March 1, 2018 10 / 15

Storage N/A $ 1,632,647 /month

Crude Oil and Refined Products Throughput February 28, 2028 Pipeline throughput

Rail Offloading Offloading services

Terminalling Dedicated Terminalling

Storage Storage

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

Storage March 1, 2018 10 / 15

N/A $ 542,173 /month

Terminalling February 28, 2028 Dedicated Asphalt Terminalling and Storage

Marketing Agreement (Big Spring Logistics Assets):

Marketing Services March 1, 2018 10 / 15

Dedicated Marketing and Selling 65,000

$ 0.59 - $ 0.84

Marketing Services February 28, 2028 Dedicated Marketing and Selling

Throughput and Deficiency Agreement (Midland Gathering Assets)

Gathering System March 31, 2020 10 / 20

Gathering and Transportation Services 120,000 (7)

Re-delivery System March 30, 2020 10 / 20

Gathering System March 31, 2030 Gathering and Transportation Services

Re-delivery System

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

Fintex / Magellen Pipeline April 1, 2020 2 / 10

Refined Products 20,000

Crude Oil Offloading January 1, 2020 2 / 10

Crude Oil Offloading 15,120

Storage April 1, 2020 2 / 10

Storage N/A $ 277,620 /month

LPG Rack January 1, 2020 2 / 10

Truck Unloading Facility 4,500

Fintex / Magellen Pipeline April 1, 2030 Refined Products

Crude Oil Offloading January 1, 2030 Crude Oil Offloading

Storage April 1, 2030 Storage

LPG Rack January 1, 2030 Truck Unloading Facility

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.

Notes to Consolidated Financial Statements

Trucking Services December 31, 2030 Transportation Services

(1) Expired contracts and contracts that will expire in the next 12 months will continue to operate on a month-to-month basis until new contracts are negotiated.

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

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The Omnibus Agreement governs the provision of certain operational services and reimbursement obligations, among other matters, between the Partnership and Delek Holdings, and obligates us to pay an annual fee of $ 4.4 million to Delek Holdings for its provision of centralized corporate services to the Partnership.

Notes to Consolidated Financial Statements

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.

We were reimbursed a nominal amount during the years ended December 31, 2023 and 2021.

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.

As of December 31, 2023 and 2022, there was no receivable from related parties for these matters.

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.

There were no reimbursements for these matters during the years ended December 31, 2023 and 2022.

We were reimbursed a nominal amount for these matters during the year ended December 31, 2021.

Other Agreements

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The agreement extends through December 2024.

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.

Total fees paid to the Partnership were $ 1.6 million, $ 1.5 million and $ 1.6 million for the years ended December 31, 2023, 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.

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.

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.

Delek Holdings Unit Sale to Public

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.

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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

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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.

Notes to Consolidated Financial Statements

A summary of revenue, purchases from affiliates and expense transactions with Delek Holdings and its affiliates are as follows (in thousands):

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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

Date of Distribution Distributions paid to Delek Holdings (in thousands)

February 9, 2023 $ 34,998

May 15, 2023 $ 35,169

August 14, 2023

November 13, 2023 $ 35,855

Total $ 141,534

February 8, 2022 $ 33,829

May 12, 2022 $ 33,625

August 11, 2022 $ 33,797

November 10, 2022 $ 33,968

Total $ 135,219

February 9, 2021 $ 31,619

May 14, 2021 $ 31,966

August 11, 2021 $ 32,661

November 10, 2021 $ 33,009

Total $ 129,255

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 .

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.

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

for storing intermediate products and feed stocks;

for recycling and disposal of wastewater;

for distributing, transporting and storing refined products;

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

for wholesale marketing in the West Texas area.

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

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(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):

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Service Revenue - Affiliate (1)

9,730 48,618 55,691 114,039

Product Revenue - Third Party 98,102 286,704 — 384,806

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Lease Revenue - Affiliate 187,108 47,410 76,578 311,096

116,695 50,193 120,482 287,370

Total Revenue $ 371,110 $ 505,701 $ 143,598 $ 1,020,409

(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, 2022

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Service Revenue - Affiliate (1)

16,458 32,593 — 49,051

Product Revenue - Third Party 90,383 415,800 — 506,183

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Lease Revenue - Affiliate 116,695 50,193 120,482 287,370

143,459 37,686 113,851 294,996

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, 2021, related to a customer contract intangible asset recorded in the wholesale marketing and terminalling segment.

Notes to Consolidated Financial Statements

Year ended December 31, 2021

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Service Revenue - Affiliate (1)

13,723 34,033 — 47,756

Product Revenue - Third Party — 264,974 — 264,974

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Lease Revenue - Affiliate 143,459 37,686 113,851 294,996

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

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, 2020, related to a customer contract intangible asset recorded in the wholesale marketing and terminalling segment.

(1) Net of $ 7.2 million of amortization expense for each of the years ended December 31, 2023, 2022 and 2021, related to the marketing contract intangible recorded in the wholesale marketing and terminalling segment.

As of December 31, 2023, we expect to recognize approximately $ 1.1 billion in lease revenues related to our unfulfilled performance obligations pertaining to the minimum volume commitments and capacity utilization under the non-cancelable terms of our commercial agreements with Delek Holdings.

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We disclose information about remaining performance obligations that have original expected durations of greater than one year.

Notes to Consolidated Financial Statements

Our unfulfilled performance obligations as of December 31, 2023 were as follows (in thousands):

2024 $ 238,152

2028 and thereafter 315,253

Total expected revenue on remaining performance obligations $ 1,145,905

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):

Notes to Consolidated Financial Statements

Basic net income per unit attributable to limited partners is computed by dividing limited partners' interest in net income by the weighted-average number of outstanding common units.

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

For the years ended December 31, 2023, 2022 and 2021, potentially dilutive units outstanding consist of unvested phantom units.

The calculation of net income per unit is as follows (in thousands, except unit and per unit amounts):

Year Ended December 31,

2023 2022 2021

Net income attributable to partners $ 159,052 $ 164,822 $ 159,256

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

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 attributable to limited partners $ 126,236 $ 159,052 164,822

Weighted average limited partner units outstanding, basic 43,583,938 43,487,910 43,447,739

Dilutive effect of unvested phantom units 27,376 23,740 12,731

Weighted average limited partner units outstanding, diluted 43,611,314 43,511,650 43,460,470

Net income per limited partner unit:

Common - basic $ 3.66 $ 3.79 $ 4.18

Common - diluted (2)

Basic $ 2.90 $ 3.66 $ 3.79

$ 2.89 $ 3.66 $ 3.79

(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.

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.

(1) There were 41,790 , 7,511 and 4,458 anti-dilutive common unit equivalents excluded from the diluted earnings per unit calculation during the years ended December 31, 2023, 2022 and 2021, respectively.

Property, Plant and Equipment

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Property, plant and equipment, net $ 936,151 $ 924,004

Notes to Consolidated Financial Statements

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

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We performed our annual goodwill impairment review in the fourth quarter of 2023, 2022, and 2021.

We performed a qualitative assessment for the years ended December 31, 2022, December 31, 2021, and December 31, 2020.

For the year ended December 31, 2023, we performed a quantitative assessment for our Delaware Gathering reporting unit and a qualitative assessment for our other reporting units.

Our 2023 testing of goodwill did not identify any impairments other than our Delaware Gathering reporting unit, which reported a goodwill impairment charge of $ 14.8 million.

The impairment was primarily driven by the significant increases in interest rates and timing of system connections with our producer customers.

For the quantitative assessment, the discounted cash flow fair value estimate is based on known or knowable information at the measurement date.

The significant assumptions that were used to develop the estimates of the fair values under the discounted cash flow method included management’s best estimates of the discount rate of 16 % as well as estimates of future cash flows, which are impacted primarily by future volumes and EBITDA projections.

Fair value determinations require considerable judgment and are sensitive to changes in underlying assumptions and factors.

As a result, there can be no assurance that the estimates and assumptions made for purposes of the interim goodwill impairment test will prove to be an accurate prediction of the future.

The fair value measurements for the individual reporting units represent Level 3 measurements.

We performed a qualitative assessment for the years ended December 31, 2022, and December 31, 2021.

In 2022 and 2021, 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):

Accumulated goodwill impairment was $ 14.8 million as of December 31, 2023.

There was no accumulated goodwill impairment at December 31, 2022.

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

Gathering and Processing Wholesale Marketing and Terminalling Storage and Transportation Total

Balance, December 31, 2021 $ 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

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

Goodwill Impairment ( 14,848 ) — — ( 14,848 )

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Our identifiable intangible assets are as follows (in thousands):

Useful Accumulated

As of December 31, 2022 Life Gross Amortization Net

As of December 31, 2023 As of December 31, 2022

Useful Life Gross Accumulated Amortization Net Gross Accumulated Amortization Net

Intangible assets subject to amortization:

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Total $ 414,833 $ ( 71,806 ) $ 343,027 $ 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 $ 18.7 million for the year ended December 31, 2023, and is included in depreciation and amortization on the accompanying consolidated statements of income and comprehensive income.

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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, 2024 through 2028.

Notes to Consolidated Financial Statements

Long-Term Obligations

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

Outstanding borrowings under the Partnership’s debt instruments are as follows (in thousands):

December 31, 2023 December 31, 2022

Delek Logistics 2028 Notes (1)

$ 395,190 $ 394,302

DKL Revolving Facility $ 780,500 $ 720,500

720,129 258,000

DKL Term Facility 281,250 300,000

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.

2028 Notes 400,000 400,000

2025 Notes 250,000 250,000

Principal amount of long-term debt 1,711,750 1,670,500

Unamortized discount and deferred financing costs 7,961 8,933

Total debt, net of unamortized discount and deferred financing costs 1,703,789 1,661,567

Current portion of long-term debt and notes payable 30,000 15,000

Long-term debt, net of current portion $ 1,673,789 $ 1,646,567

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

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.

The 2022 DKL Credit Facility, among other things, (i) increased total aggregate commitments to $ 1.20 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, which will accelerate to 180 days prior to the stated maturity date of the 2025 Notes if any of the 2025 Notes remain outstanding on that date, 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 (iii) provided for the DKL Term Facility be drawn in full on October 13, 2022, with a maturity date of April 15, 2025 and with a prepayment requirement for the proceeds obtained from certain senior unsecured notes issuances.

As of December 31, 2023, the DKL Revolving Facility was classified as long-term in the accompanying consolidated balance sheets as the Partnership currently has the ability and intent to refinance the 2025 Notes on a long-term basis through available capacity under the DKL Revolving Facility and Related Party Revolving Credit Facility (as defined below).

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

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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.

As of December 31, 2023 and December 31, 2022, the weighted average interest rate was 8.46 % and 7.55 %, respectively.

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.

At December 31, 2023 and December 31, 2022, the weighted average borrowing rate was approximately 9.46 % and 7.92 %, respectively.

The effective interest rate was 9.93 % as of December 31, 2023.

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.

We believe we were in compliance with all covenant requirements as of December 31, 2023.

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

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

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

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

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

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

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

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

Notes to Consolidated Financial Statements

6.750 % Senior Notes Due 2025

On November 6, 2023, the Partnership entered into a First Amendment, a Second Amendment and a Third Amendment to the 2022 DKL Credit Facility (together, the “Amendments” ) to extend the maturity of the DKL Term Facility to April 15, 2025.

In addition, the Amendments added a maturity acceleration clause which will accelerate the maturity of the DKL Term Facility to 180 days prior to the stated maturity date of the 2025 Notes if any of the 2025 Notes remain outstanding on that date.

As of December 31, 2023, the DKL Term Facility was classified as long-term in the accompanying consolidated balance sheets as the Partnership currently has the ability and intent to refinance the 2025 Notes on a long-term basis through available capacity under the DKL Revolving Facility and Related Party Revolving Credit Facility.

The DKL Term Facility requires four quarterly amortization payments of $ 3.8 million in 2023, four quarterly amortization payments of $ 7.5 million in 2024 and one quarterly amortization payment of $ 7.5 million in 2025 with final maturity and principal due on April 15, 2025.

The DKL Revolving Facility has a total capacity of $ 1.05 billion, including up to $ 115.0 million for letters of credit and $ 25.0 million in swing line loans.

This facility has a maturity date of October 13, 2027 which will accelerate to 180 days prior to the stated maturity date of the Delek Logistics 2025 Notes if any of the Delek Logistics 2025 Notes remain outstanding on that date.

On November 6, 2023, the Partnership entered into the Amendments which among other things:

(i) increased the U.S.

Revolving Credit Commitments (as defined in the DKL Credit Facility) by an amount equal to $ 150.0 million, resulting in aggregate lender commitments under the DKL Revolving Credit Facility in an amount of $ 1.05 billion and (ii) increased the limit allowed for general unsecured debt (as defined in the DKL Credit Facility) by an amount equal to $ 95.0 million, resulting in an unsecured general debt limit of $ 150.0 million.

There were no letters of credit outstanding as of December 31, 2023 or December 31, 2022.

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

The carrying values of outstanding borrowings under the 2022 DKL Credit Facility as of December 31, 2023 and December 31, 2022 approximate their fair values.

Related Party Revolving Credit Facility

On November 6, 2023, the Partnership and certain of its subsidiaries, as guarantors, entered into a certain Promissory Note (the “Related Party Revolving Credit Facility”) with Delek Holdings.

The Related Party Revolving Credit Facility provides for revolving borrowings with aggregate commitments of $ 70.0 million comprised of a (i) $ 55.0 million senior tranche and a (ii) $ 15.0 million subordinated tranche (the “Subordinated Tranche”), with the initial borrowings under the Subordinated Tranche conditioned upon the Partnership and Delek Holdings reaching an agreement with Fifth Third Bank, National Association, as administrative agent under the DKL Credit Facility, on subordination provisions and other material terms related to the Subordinated Tranche.

The Related Party Revolving Credit Facility will bear interest at Term SOFR (as defined in the Related Party Revolving Credit Facility) plus 3.00 %.

The Related Party Revolving Credit Facility proceeds will be used for the Partnership’s working capital purposes and other general corporate purposes.

The Related Party Revolving Credit Facility will mature on June 30, 2028.

The obligations under the Related Party Revolving Credit Facility are unsecured.

There were no borrowings outstanding under the Related Party Revolving Credit Facility as of December 31, 2023.

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

Bank, National Association as trustee.

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 107.13 % of the redeemed principal amount, plus accrued and unpaid interest, if any, 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 103.56 % of the redeemed principal for the twelve-month period beginning on June 1, 2024, 101.78 % 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.

As of December 31, 2023, the effective interest rate was 7.39 %.

The estimated fair value of the 2028 Notes was $ 380.4 million and $ 359.7 million as of December 31, 2023 and December 31, 2022, respectively, measured based upon quoted market prices in an active market, defined as Level 1 in the fair value hierarchy.

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.

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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.

The Issuers may, subject to certain conditions and limitations, redeem all of the 2025 Notes at a redemption price of 100.00 % of the redeemed principal during the twelve-month period 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 101.00 % 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 %.

As of December 31, 2023, the effective interest rate was 7.19 %.

The estimated fair value of the 2025 Notes was $ 248.7 million and $ 243.4 million as of December 31, 2023 and December 31, 2022, respectively, measured based upon quoted market prices in an active market, defined as Level 1 in the fair value hierarchy.

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2024 $ 30,000

Thereafter 400,000

Total $ 1,711,750

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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

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, 2021 through December 31, 2023.

Common - Public Common - Delek Holdings General Partner Total

Common - Public Common - Delek Holdings Total

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

General partner units issued to maintain 2 % interest

— — 102,196 102,196

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

Unit-based compensation awards (1)

27,517 — 27,517

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, 2021 8,774,053 34,696,800 43,470,853

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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

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

Unit-based compensation awards (1)

42,458 — 42,458

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

Balance at December 31, 2023 9,299,763 34,311,278 43,611,041

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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.

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

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

General partner's IDRs

Total general partner's interest in net income

$ — $ — $ 18,724

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

Notes to Consolidated Financial Statements

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.

Quarter Ended Total Quarterly Distribution Per Limited Partner Unit Total Cash Distribution (in thousands)

March 31, 2021 $ 0.920 $ 39,968

June 30, 2021 $ 0.940 $ 40,846

September 30, 2021 $ 0.950 $ 41,286

December 31, 2021 $ 0.975 $ 42,384

March 31, 2022 $ 0.980 $ 42,604

June 30, 2022 $ 0.985 $ 42,832

September 30, 2022 $ 0.990 $ 43,057

December 31, 2022 $ 1.020 $ 44,440

March 31, 2023 $ 1.025 $ 44,664

June 30, 2023 $ 1.035 $ 45,112

September 30, 2023 $ 1.045 $ 45,558

December 31, 2023 $ 1.055 $ 46,010

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):

Red River owns a 16-inch crude oil pipeline running from Cushing, Oklahoma to Longview, Texas with capacity of 235,000 bpd.

During the years ended December 31, 2023 and 2022, we made no additional capital contributions.

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

We have two additional pipeline joint ventures, in which 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") to operate the other pipeline system.

Combined summarized financial information on a 100% basis is shown below (in thousands):

As of December 31, 2023 As of December 31, 2022

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Current liabilities $ 8,994 $ 7,117

Non-current liabilities $ 63 $ —

Years Ended December 31,

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Net income $ 85,636 $ 85,311 $ 64,979

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):

Notes to Consolidated Financial Statements

As of December 31, 2023 As of December 31, 2022

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Total Equity Method Investments $ 241,337 $ 257,022

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.

We aggregate our operating segments into four reportable segments:

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

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

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

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

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

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

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

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

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.

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

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

Notes to Consolidated Financial Statements

The CODM evaluates performance based on EBITDA for planning and forecasting purposes.

EBITDA is an important measure used by management to evaluate the financial performance of our core operations.

EBITDA is not a GAAP measure, but the components of EBITDA are computed using amounts that are determined in accordance with GAAP.

A reconciliation of EBITDA to Net Income is included in the tables below.

We define EBITDA as net income (loss) before net interest expense, income tax expense, depreciation and amortization expense, including amortization of marketing contract intangible, which is included as a component of net revenues in our accompanying consolidated statements of income.

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

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

Year Ended December 31, 2023

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

(In thousands) Gathering and Processing (1)

Wholesale Marketing and Terminalling Storage and Transportation Investments in Pipeline Joint Ventures Corporate and Other Consolidated

Net revenues:

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Depreciation and amortization 72,181 7,055 9,839 — 3,309 92,384

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

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

Interest expense, net — — — — 143,244 143,244

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

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

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

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

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

Notes to Consolidated Financial Statements

Year ended December 31, 2021

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

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

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

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

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

(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.

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.

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.

(1) EBITDA includes $ 14.8 million of goodwill impairment expense for the year ended December 31, 2023.

Refer to Note 8 - Goodwill for further information.

(2) Affiliate revenue for the wholesale marketing and terminalling segment is presented net of amortization expense pertaining to the marketing contract intangible.

(3) Capital spending includes additions on an accrual basis.

Capital spending for the year ended December 31, 2021 excludes contributions to equity method investments amounting to $ 1.4 million.

There were no contributions made during the years ended December 31, 2023 and 2022.

Commitments and Contingencies

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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

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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.

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.

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While it is often difficult to quantify future environmental or safety related expenditures, we anticipate that continuing capital investments and changes in operating procedures will be required to comply with existing and new requirements, as well as evolving interpretations and enforcement of existing laws and regulations.

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.

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.

Releases of hydrocarbons or hazardous substances into the environment could, to the extent the event is not insured, or is not a reimbursable event under the Omnibus Agreement, subject us to substantial expenses, including costs to respond to, contain and remediate a release, to comply with applicable laws and regulations and to resolve claims by governmental agencies or other persons for personal injury, property damage, response costs, or natural resources damages.

We have noncancellable operating leases primarily associated with certain pipeline and transportation equipment.

Our remaining lease terms range from less than one year to 41 years.

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.

Notes to Consolidated Financial Statements

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

The components of lease cost are as follows (in thousands) (1) :

Years Ended December 31,

(in thousands) 2022 2021

Lease Cost (1)

2023 2022 2021

Operating lease cost $ 11,533 $ 12,054 $ 12,586

Short-term lease cost 5,031 2,541 1,609

Variable lease costs 4,803 600

Variable lease cost 3,826 4,803 600

Total lease cost $ 20,390 $ 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

(1) Includes an immaterial amount of financing lease cost.

Supplemental balance sheet information related to leases is as follows:

Years Ended December 31,

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Weighted-average discount rate (1) finance lease

(1) Includes an immaterial amount of financing lease.

(1) 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:

Thereafter 1,235

Supplemental cash flow and other information related to leases are as follows (in thousands):

Years Ended December 31,

2023 2022 2021

Cash paid for amounts included in the measurement of lease liabilities:

Operating cash flows from operating leases $ ( 9,588 ) $ ( 12,054 ) $ ( 12,586 )

Leased assets obtained in exchange for new operating lease liabilities $ 3,804 $ 12,682 $ 6,386

Leased assets obtained in exchange for new financing lease liabilities $ 1,162 $ 35 $ 3,071

Maturities of lease liabilities as of December 31, 2023 are as follows (in thousands):

Year Ended December 31, Operating Finance

2024 $ 7,515 $ 583

2025 4,377 288

2026 1,972 263

2027 1,473 263

2029 and thereafter 1,111 —

Total lease payments 17,079 1,551

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:

Total lease payment $ 3,151

Present values of lease liabilities $ 3,067

present value discount 2,047 206

Lease payable $ 15,032 $ 1,345

We are the lessor under certain agreements for gathering, transportation, storage, terminalling, and offloading with Delek Holdings.

These agreements have remaining terms ranging from less than one year to 11 years with renewal options ranging from one year to 10 years, and some agreements have multiple renewal options.

Revenue from these leases are recorded in affiliate revenue on the consolidated statements of income.

For details on Lease Revenue, see Note 5.

The following is a schedule of annual undiscounted minimum future lease cash receipts on the non-cancellable operating leases as of December 31, 2023 (in thousands):

2024 $ 129,596

2029 and thereafter 76,455

Total minimum future lease revenue $ 582,517

The following table summarized our investment in assets held under operating lease by major classes (in thousands):

Land $ 14,946 $ 14,946

Building and building improvements 853 853

Pipelines, tanks and terminals 664,567 622,609

Other equipment 3,856 3,856

Property, plant and equipment 684,222 642,264

accumulated depreciation 253,955 221,375

Property, plant and equipment, net $ 430,267 $ 420,889

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.

On January 24, 2024, our general partner's board of directors declared a quarterly cash distribution of $ 1.055 per unit, payable on February 12, 2024, to unitholders of record on February 5, 2024.

FORM 10-K SUMMARY

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Director, Executive Vice President and Chief Financial Officer

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:

February 28, 2024

/s/ Avigal Soreq

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Robert Wright

Senior Vice President, Chief Accounting Officer

Senior Vice President, Deputy Chief Financial Officer

(Principal Accounting Officer)

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures