What changed in this filing

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Item 1. Financial Statements

2024-08-07 compared with 2024-05-08 · 182 added, 69 removed, 386 unchanged (39% of the section changed)

3 unchanged sentences

(in thousands, except unit and per unit data)

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

Current assets:

34 unchanged sentences

Common unitholders - public;

12,898,253 units issued and outstanding at March 31, 2024 ( 9,299,763 at December 31, 2023)

12,918,673 units issued and outstanding at June 30, 2024 ( 9,299,763 at December 31, 2023)

287,195 160,402

Common unitholders - Delek Holdings;

34,311,278 units issued and outstanding at March 31, 2024 ( 34,311,278 at December 31, 2023)

34,311,278 units issued and outstanding at June 30, 2024 ( 34,311,278 at December 31, 2023)

( 338,502 ) ( 322,271 )

4 unchanged sentences

Delek Logistics Partners, LP

Condensed Consolidated Statements of Comprehensive Income (Unaudited)

Condensed Consolidated Statements of Income and Comprehensive Income (Unaudited)

(In thousands, except unit and per unit data)

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2024 2023 2024 2023

Affiliate (1)

12 unchanged sentences

Depreciation and amortization 1,461 1,258 2,789 2,599

Loss on disposal of assets 567 142

Other operating income, net ( 1,744 ) ( 455 ) ( 1,177 ) ( 313 )

Total operating costs and expenses 196,167 186,964 383,700 366,557

22 unchanged sentences

Common - Public Common - Delek Holdings Total

Balance as of December 31, 2023 $ 160,402 $ ( 322,271 ) $ ( 161,869 )

Balance as of March 31, 2024 $ 290,051 $ ( 332,518 ) $ ( 42,467 )

Cash distributions ( 13,893 ) ( 36,713 ) ( 50,606 )

1 unchanged sentence

11,100 29,958 41,058

Issuance of units 132,327 — 132,327

( 63 ) 771 708

Balance as of March 31, 2024 $ 290,051 $ ( 332,518 ) $ ( 42,467 )

Balance as of June 30, 2024 $ 287,195 $ ( 338,502 ) $ ( 51,307 )

Common - Public Common - Delek Holdings Total

Balance as of December 31, 2022 $ 172,119 $ ( 282,819 ) $ ( 110,700 )

Balance as of March 31, 2023 $ 170,522 $ ( 287,944 ) $ ( 117,422 )

Cash distributions ( 9,496 ) ( 35,168 ) ( 44,664 )

2 unchanged sentences

( 49 ) 737 688

Balance as of March 31, 2023 $ 170,522 $ ( 287,944 ) $ ( 117,422 )

Balance as of June 30, 2023 $ 167,760 $ ( 297,262 ) $ ( 129,502 )

Common - Public Common - Delek Holdings Total

Balance as of December 31, 2023 $ 160,402 $ ( 322,271 ) $ ( 161,869 )

Cash distributions ( 23,905 ) ( 72,911 ) ( 96,816 )

Net income attributable to partners 18,504 55,202 73,706

Issuance of units 132,202 — 132,202

Other ( 8 ) 1,478 1,470

Balance as of June 30, 2024 $ 287,195 $ ( 338,502 ) $ ( 51,307 )

Common - Public Common - Delek Holdings Total

Balance as of December 31, 2022 $ 172,119 $ ( 282,819 ) $ ( 110,700 )

Cash distributions ( 18,938 ) ( 70,166 ) ( 89,104 )

Net income attributable to partners 14,723 54,540 69,263

Other ( 144 ) 1,183 1,039

Balance as of June 30, 2023 $ 167,760 $ ( 297,262 ) $ ( 129,502 )

See accompanying notes to the condensed consolidated financial statements

3 unchanged sentences

(in thousands)

Three Months Ended March 31,

Six Months Ended June 30,

Cash flows from operating activities:

34 unchanged sentences

Other financing activities ( 678 ) ( 1,457 )

Net cash (used in) provided by financing activities ( 28,080 ) 783

Net increase in cash and cash equivalents 5,917 2,994

Net cash used in financing activities ( 114,720 ) ( 9,164 )

Net increase (decrease) in cash and cash equivalents 1,356 ( 255 )

Cash and cash equivalents at the beginning of the period 3,755 7,970

3 unchanged sentences

Interest $ 49,553 $ 65,367

Income taxes $ — $ 20

Non-cash investing activities:

Increase in accrued capital expenditures $ 3,910 $ 8,258

(Decrease) increase in accrued capital expenditures $ ( 1,055 ) $ 53

Non-cash financing activities:

10 unchanged sentences

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").

On August 2, 2024, Delek Logistics Partners, LP (the “Purchaser”), entered into a Purchase and Sale Agreement with H2O Midstream Holdings, LLC (the “Seller”) to purchase 100 % of the limited liability company interests in H2O Midstream Intermediate, LLC, H2O Midstream Permian LLC, and H2O Midstream LLC (the “Purchased Interests”), related to the Seller’s water disposal and recycling operations, in the Midland Basin in Texas (the “Purchase Agreement”).

See Note 10 for further information.

Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with United States Generally Accepted Accounting Principles ("GAAP") have been condensed or omitted, although management believes that the disclosures herein are adequate to make the financial information presented not misleading.

8 unchanged sentences

Accounting Pronouncements Not Yet Adopted

ASU 2024-02, Codification Improvements - Amendments to Remove References to the Concepts Statements

In March 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2024-02 Codification Improvements - Amendments to Remove References to the Concepts Statements ("ASU 2024-02"), which amends the Accounting Standards Codification ("Codification") to remove references to various concepts statements and impacts a variety of topics in the Codification.

The ASU is intended to simplify the Codification and draw a distinction between authoritative and non-authoritative literature.

ASU 2024-02 is effective for annual reporting periods beginning after December 15, 2024, with early adoption permitted and can be applied on either a prospective or retroactive basis.

The Partnership does not expect this update to have a material impact on our condensed consolidated financial statements and related disclosures.

ASU 2023-07, Segment Reporti ng (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 or the group 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 condensed consolidated financial statements and related disclosures.

See Note 8 for further information.

Notes to the Condensed Consolidated Financial Statements (Unaudited)

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

10 unchanged sentences

See our Annual Report on Form 10-K for a more complete description of our material commercial agreements and other agreements with Delek Holdings.

Notes to the Condensed Consolidated Financial Statements (Unaudited)

Other Agreements with Delek Holdings

2 unchanged sentences

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

See Note 10 for a description of recent amendments to the Omnibus Agreement.

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

1 unchanged sentence

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

There was no reimbursement by Delek Holdings during the three months ended March 31, 2024 and 2023.

There were no reimbursements by Delek Holdings during the three and six months ended June 30, 2024.

There were no reimbursements by Delek Holdings during the three and six months ended June 30, 2023.

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 March 31, 2024 and December 31, 2023, 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 in each of the three month periods ended March 31, 2024 and 2023.

As of June 30, 2024 and December 31, 2023, there was no receivable from related parties for these matters.

These reimbursements are recorded as reductions to operating expense.

There were no reimbursements for these matters in each of the three and six month periods ended June 30, 2024 or the three and six month periods ended June 30, 2023.

Other Transactions

4 unchanged sentences

The agreement extends through December 2024.

Total fees paid to the Partnership were $ 0.4 million for both the three months ended March 31, 2024 and 2023, which are recorded in affiliate revenue in our condensed consolidated statements of income.

Total fees paid to the Partnership were $ 0.4 million for both the three months ended June 30, 2024 and 2023 and $ 0.8 million for both the six months ended June 30, 2024 and 2023, which are recorded in affiliate revenue in our accompanying condensed consolidated statements of income and comprehensive 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.

Notes to the Condensed Consolidated Financial Statements (Unaudited)

Related Party Revolving Credit Facility

On November 6, 2023, the Partnership and certain of its subsidiaries, as guarantors, entered into the Related Party Revolving Credit Facility (as defined below) with Delek Holdings.

On May 2, 2024, the Boards of Directors of Delek Holdings and our general partner authorized the termination of the intercompany loan agreement between Delek Holdings and the Partnership, which was effective on May 31, 2024.

See Note 5 - Long-Term Obligations for further information.

5 unchanged sentences

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-affiliate.

Notes to the Condensed Consolidated Financial Statements (Unaudited)

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

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2024 2023 2024 2023

Revenues $ 156,828 $ 132,993 $ 296,453 $ 257,992

8 unchanged sentences

May 15, 2024 $ 36,713

August 14, 2024 (1)

Total $ 110,310

1 unchanged sentence

May 15, 2023 $ 35,169

August 14, 2023

Total $ 105,679

(1) On April 25, 2024, the board of directors of our general partner declared this quarterly cash distribution based on the available cash as of the date of determination.

(1) On July 30, 2024, the board of directors of our general partner declared this quarterly cash distribution based on the available cash as of the date of determination.

Distributions paid are estimated based on common units held by Delek Holdings as of June 30, 2024.

Notes to the Condensed Consolidated Financial Statements (Unaudited)

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):

Three Months Ended March 31, 2024

Three Months Ended June 30, 2024

Gathering and Processing Wholesale Marketing and Terminalling Storage and Transportation Consolidated

5 unchanged sentences

Lease Revenue - Affiliate

47,074 14,096 20,690 81,860

Total Revenue $ 92,643 $ 135,600 $ 36,385 $ 264,628

Three Months Ended March 31, 2023

Three Months Ended June 30, 2023

Gathering and Processing Wholesale Marketing and Terminalling Storage and Transportation Consolidated

5 unchanged sentences

Lease Revenue - Affiliate

43,388 12,298 17,400 73,086

Total Revenue $ 93,237 $ 118,827 $ 34,847 $ 246,911

(1) Net of $1,803 of amortization expense for both the three months ended March 31, 2024 and 2023, related to marketing contract intangible recorded in the wholesale marketing and terminalling segment.

As of March 31, 2024, 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.

Six Months Ended June 30, 2024

Gathering and Processing Wholesale Marketing and Terminalling Storage and Transportation Consolidated

Service Revenue - Third Party $ 36,820 $ — $ 4,717 $ 41,537

Service Revenue - Affiliate (1)

5 27,468 27,255 54,728

Product Revenue - Third Party 47,624 131,089 — 178,713

Product Revenue - Affiliate 8,402 70,297 — 78,699

Lease Revenue - Affiliate 95,675 26,016 41,335 163,026

Total Revenue $ 188,526 $ 254,870 $ 73,307 $ 516,703

Six Months Ended June 30, 2023

Gathering and Processing Wholesale Marketing and Terminalling Storage and Transportation Consolidated

Service Revenue - Third Party $ 30,449 $ — $ 3,409 $ 33,858

Service Revenue - Affiliate (1)

6,422 20,157 34,944 61,523

Product Revenue - Third Party 53,277 145,309 — 198,586

Product Revenue - Affiliate 8,343 43,150 — 51,493

Lease Revenue - Affiliate 87,178 22,520 35,278 144,976

Total Revenue $ 185,669 $ 231,136 $ 73,631 $ 490,436

(1) Net of $ 1.8 million of amortization expense for both the three months ended June 30, 2024 and 2023 and $ 3.6 million for the six months ended June 30, 2024 and 2023, related to marketing contract intangible recorded in the wholesale marketing and terminalling segment.

As of June 30, 2024, we expect to recognize approximately $ 1.0 billion in lease revenues related to our unfulfilled performance obligations pertaining to the minimum volume commitments and capacity utilization under the non-cancelable terms of our commercial agreements with Delek Holdings.

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

1 unchanged sentence

Notes to the Condensed Consolidated Financial Statements (Unaudited)

Our unfulfilled performance obligations as of March 31, 2024 were as follows (in thousands):

Our unfulfilled performance obligations as of June 30, 2024 were as follows (in thousands):

Remainder of 2024 $ 106,819

4 unchanged sentences

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

As of March 31, 2024, the only potentially dilutive units outstanding consist of unvested phantom units.

As of June 30, 2024, the only 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):

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2024 2023 2024 2023

Net income attributable to partners $ 41,058 $ 31,896 $ 73,706 $ 69,263

5 unchanged sentences

$ 0.87 $ 0.73 $ 1.61 $ 1.59

(1) There were 42,315 and $ 22,632 anti-dilutive common unit equivalents excluded from the diluted earnings per unit calculation during the three months ended March 31, 2024 and 2023, respectively.

(1) There were 46,281 and 30,003 anti-dilutive common unit equivalents excluded from the diluted earnings per unit calculation during the three and six months ended June 30, 2024, respectively.

There were $ 11,180 and 35,383 anti-dilutive common unit equivalents excluded from the diluted earnings per unit calculation during the three and six months ended June 30, 2023, respectively.

Long-Term Obligations

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

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

DKL Revolving Facility $ 330,200 $ 780,500

4 unchanged sentences

Principal amount of long-term debt 1,580,200 1,711,750

Unamortized discount and deferred financing costs 13,974 7,961

Total debt, net of unamortized discount and deferred financing costs 1,601,226 1,703,789

Unamortized discount and premium and deferred financing costs 13,854 7,961

Total debt, net of unamortized discount and premium and deferred financing costs 1,566,346 1,703,789

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

11 unchanged sentences

At December 31, 2023, the weighted average borrowing rate was approximately 9.46 %.

Debt extinguishment costs were $ 2.1 million and are recorded in interest expense, net in the accompanying condensed consolidated statements of income.

On March 29, 2024, the Partnership entered into a Fourth Amendment to the fourth amended and restated senior secured revolving credit agreement (the "DKL Revolving Facility") which among other things increased the U.S.

Debt extinguishment costs were $ 2.1 million and are recorded in interest expense, net in the accompanying condensed consolidated statements of income and comprehensive income.

On March 29, 2024, the Partnership entered into a Fourth Amendment to the amended and restated senior secured revolving credit agreement (the "DKL Revolving Facility") which among other things increased the U.S.

Revolving Credit Commitments (as defined in the DKL Credit Facility) by an amount equal to $ 100.0 million resulting in aggregate lender commitments under the Delek Logistics Revolving Credit Facility in an amount of $ 1,150.0 million, including up to $ 146.9 million for letters of credit and $ 31.9 million in swing line loans.

3 unchanged sentences

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

As of March 31, 2024 and December 31, 2023, the weighted average interest rate was 8.18 % and 8.46 %, respectively.

There were no letters of credit outstanding as of March 31, 2024 or December 31, 2023.

As of June 30, 2024 and December 31, 2023, the weighted average interest rate was 8.00 % and 8.46 %, respectively.

There were no letters of credit outstanding as of June 30, 2024 or December 31, 2023.

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

The carrying value of outstanding borrowings under the DKL Revolving Facility as of March 31, 2024 and December 31, 2023 approximate their fair values.

The carrying value of outstanding borrowings under the DKL Revolving Facility as of June 30, 2024 and December 31, 2023 approximate their fair values.

Our debt facilities contain affirmative and negative covenants and events of default the Partnership considers usual and customary.

As of March 31, 2024, we were in compliance with covenants on all of our debt instruments.

As of June 30, 2024, we were in compliance with covenants on all of our debt instruments.

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 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.

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

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

On March 13, 2024, the Partnership and our wholly owned subsidiary Delek Logistics Finance Corp.

5 unchanged sentences

The net proceeds were used to repay a portion of the outstanding borrowings under the DKL Revolving Facility.

Notes to the Condensed Consolidated Financial Statements (Unaudited)

The 2029 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.

1 unchanged sentence

The 2029 Notes will mature on March 15, 2029, and interest on the 2029 Notes is payable semi-annually in arrears on each March 15 and September 15, commencing September 15, 2024.

Notes to the Condensed Consolidated Financial Statements (Unaudited)

At any time prior to March 15, 2026, the Issuers may redeem up to 35 % of the aggregate principal amount of the 2029 Notes with the net cash proceeds of one or more equity offerings by the Partnership at a redemption price of 108.625 % of the redeemed principal amount, plus accrued and unpaid interest, if any, subject to certain conditions and limitations.

2 unchanged sentences

In the event of a change of control, subject to certain conditions and limitations, the Issuers will be obligated to make an offer for the purchase of the 2029 Notes from holders at a price equal to 101.00 % of the principal amount thereof, plus accrued and unpaid interest.

We recorded $ 10.4 million of debt issuance costs which will be amortized over the term of the 2029 Notes and included in interest expense in the accompanying condensed consolidated statements of income.

As of March 31, 2024, the effective interest rate was 8.81 %.

The estimated fair value of the 2029 Notes was $ 664.3 million as of March 31, 2024, measured based upon quoted market prices in an active market, defined as Level 1 in the fair value hierarchy.

We recorded $ 13.5 million of debt issuance costs which will be amortized over the term of the 2029 Notes and included in interest expense in the accompanying condensed consolidated statements of income and comprehensive income.

The premium recognized for the Additional 2029 Notes was $ 2.5 million which will be amortized over the term of the 2029 Notes and included in interest expense in the accompanying condensed consolidated statements of income and comprehensive income.

As of June 30, 2024, the effective interest rate was 8.95 %.

The estimated fair value of the 2029 Notes was $ 874.2 million as of June 30, 2024, measured based upon quoted market prices in an active market, defined as Level 1 in the fair value hierarchy.

Our 2028 Notes are general unsecured senior obligations comprised of $ 400.0 million in aggregate principal of 7.125 % senior notes maturing June 1, 2028.

The 2028 Notes are unconditionally guaranteed jointly and severally on a senior unsecured basis by the Partnership's existing subsidiaries (other than Delek Logistics Finance Corp.) and will be unconditionally guaranteed on the same basis by certain of the Partnership's future subsidiaries.

As of March 31, 2024, the effective interest rate was 7.39 %.

The estimated fair value of the 2028 Notes was $ 391.4 million and $ 380.4 million as of March 31, 2024 and December 31, 2023, respectively, measured based upon quoted market prices in an active market, defined as Level 1 in the fair value hierarchy.

As of June 30, 2024, the effective interest rate was 7.39 %.

The estimated fair value of the 2028 Notes was $ 394.9 million and $ 380.4 million as of June 30, 2024 and December 31, 2023, respectively, measured based upon quoted market prices in an active market, defined as Level 1 in the fair value hierarchy.

Our 2025 Notes are general unsecured senior obligations comprised of $ 250.0 million in aggregate principal of 6.75 % senior notes maturing on May 15, 2025.

2 unchanged sentences

All the remaining 2025 Notes were redeemed by March 29, 2024, pursuant to the notice of conditional redemption.

Debt extinguishment costs were $ 1.5 million and are recorded in interest expense, net in the accompanying condensed consolidated statements of income.

Debt extinguishment costs were $ 1.5 million and are recorded in interest expense, net in the accompanying condensed consolidated statements of income and comprehensive income.

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

3 unchanged sentences

Equity Activity

The table below summarizes the changes in the number of limited partner units outstanding from December 31, 2023 through March 31, 2024.

The table below summarizes the changes in the number of limited partner units outstanding from December 31, 2023 through June 30, 2024.

Common - Public Common - Delek Holdings (1)

3 unchanged sentences

Units issued 3,584,416 — 3,584,416

Balance at March 31, 2024 12,898,253 34,311,278 47,209,531

(1) As of March 31, 2024, Delek Holdings owned a 72.7 % limited partner interest in the Partnership.

(2) Unit-based compensation awards are presented net of 6,711 units withheld for taxes as of March 31, 2024.

Balance at June 30, 2024 12,918,673 34,311,278 47,229,951

(1) As of June 30, 2024, Delek Holdings owned a 72.6 % limited partner interest in the Partnership.

(2) Unit-based compensation awards are presented net of 12,345 units withheld for taxes for six months ended June 30, 2024.

Notes to the Condensed Consolidated Financial Statements (Unaudited)

6 unchanged sentences

June 30, 2023 $ 1.035 $ 45,112

September 30, 2023 $ 1.045 $ 45,558

December 31, 2023 $ 1.055 $ 46,010

March 31, 2024 $ 1.070 $ 50,521

June 30, 2024 (1)

$ 1.090 $ 51,481

(1) On July 30, 2024, the board of directors of our general partner declared this quarterly cash distribution, payable on August 14, 2024, to unitholders of record on August 9, 2024.

The total cash distribution is estimated based on the number of common units outstanding as of June 30, 2024.

Equity Method Investments

4 unchanged sentences

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

As of March 31, 2024 As of December 31, 2023

As of June 30, 2024 As of December 31, 2023

Red River $ 139,101 $ 141,091

12 unchanged sentences

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 condensed 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.

Notes to the Condensed Consolidated Financial Statements (Unaudited)

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

Three Months Ended March 31, 2024

Notes to the Condensed Consolidated Financial Statements (Unaudited)

Three Months Ended June 30, 2024

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

12 unchanged sentences

$ 7,351 $ 105 $ 2,731 $ — $ — $ 10,187

Three Months Ended March 31, 2023

Three Months Ended June 30, 2023

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

12 unchanged sentences

$ 18,877 $ ( 2,712 ) $ 3,215 $ — $ — $ 19,380

Six Months Ended June 30, 2024

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

Net revenues:

Affiliate (1)

$ 104,082 $ 123,781 $ 68,590 $ — $ — $ 296,453

Third party 84,444 131,089 4,717 — — 220,250

Total revenue $ 188,526 $ 254,870 $ 73,307 $ — $ — $ 516,703

Segment EBITDA $ 112,439 $ 55,479 $ 34,879 $ 16,372 $ ( 15,276 ) $ 203,893

Depreciation and amortization 40,216 3,347 5,297 — 1,842 50,702

Amortization of marketing contract intangible — 3,605 — — — 3,605

Interest expense, net — — — — 75,497 75,497

Income tax expense 383

Net income $ 73,706

Capital spending (3)

$ 22,074 $ 21 $ 3,257 $ — $ — $ 25,352

Six Months Ended June 30, 2023

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

Net revenues:

Affiliate (1)

$ 101,943 $ 85,827 $ 70,222 $ — $ — $ 257,992

Third party 83,726 145,309 3,409 — — 232,444

Total revenue $ 185,669 $ 231,136 $ 73,631 $ — $ — $ 490,436

Segment EBITDA $ 108,108 $ 49,937 $ 28,400 $ 13,601 $ ( 14,108 ) $ 185,938

Depreciation and amortization 35,248 3,569 4,406 — 1,609 44,832

Amortization of marketing contract intangible — 3,605 — — — 3,605

Interest expense, net — — — — 67,680 67,680

Income tax expense 558

Net income $ 69,263

Capital spending (2)

$ 51,666 $ 404 $ 3,411 $ — $ — $ 55,481

Notes to the Condensed Consolidated Financial Statements (Unaudited)

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

3 unchanged sentences

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.

Texas Department of Transportation Settlement

Beginning in August 2023, the Partnership was involved in litigation with the State of Texas Department of Transportation.

The subject of the litigation was the expansion of the highway where the Partnership's Nettleton Station is situated.

As a result of this expansion, four tanks owned by the Partnership were impacted.

This litigation was settled in the second quarter of 2024 and resulted in the Partnership recovering $ 8.3 million in condemnation proceeds, which are recorded in other operating income, net in the accompanying condensed consolidated statements of income and comprehensive income.

Environmental, Health and Safety

2 unchanged sentences

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.

Notes to the Condensed Consolidated Financial Statements (Unaudited)

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.

5 unchanged sentences

Distribution Declaration

On April 25, 2024, our general partner's board of directors declared a quarterly cash distribution of $ 1.070 per unit, payable on May 15, 2024, to unitholders of record on May 8, 2024 .

Management's Discussion and Analysis

On July 30, 2024, our general partner's board of directors declared a quarterly cash distribution of $ 1.090 per unit, payable on August 14, 2024, to unitholders of record on August 9, 2024.

Planned H2O Midstream Acquisition

On August 2, 2024, the Partnership entered into a Purchase and Sale Agreement with H2O Midstream Holdings, LLC (the “Seller”) to purchase 100 % of the limited liability company interests in H2O Midstream Intermediate, LLC, H2O Midstream Permian LLC, and H2O Midstream LLC (the “Purchased Interests” or "H2O Midstream"), related to the Seller’s water disposal and recycling operations, in the Midland Basin in Texas (the “Purchase Agreement”) for total consideration of $ 230.0 million, subject to customary adjustments under the Purchase Agreement for net working capital and indebtedness (the "H2O Transaction").

The purchase price is comprised of $ 160.0 million in cash and $ 70.0 million of preferred equity.

We paid a deposit under the Purchase Agreement of $ 23.0 million.

The deposit may be retained by the Seller upon certain termination events described in the Purchase Agreement.

At closing, the deposit will be applied to the purchase price to be paid under the Purchase Agreement.

The closing of the H2O Transaction is currently anticipated to occur by the end of 2024.

Wink to Webster Pipeline Investment Acquisition

On August 5, 2024, the Partnership acquired a 50 % investment in W2W Holdings LLC which includes a 15.6 % indirect interest in the Wink to Webster Pipeline, LLC joint venture ("Wink to Webster"), and related joint venture indebtedness, from a wholly owned subsidiary of Delek Holdings.

W2W Holdings LLC was originally formed by Delek Holdings and MPLX Operations LLC to obtain financing and fund capital calls associated with its collective and contributed interests in Wink to Webster.

Wink to Webster owns and operates a long-haul crude oil pipeline system with origin points at Wink and Midland in the Permian Basin and delivery points at multiple Houston area locations.

Total consideration was comprised of $ 86.6 million in cash, forgiveness of an approximately $ 60 million receivable from Delek Holdings and 2,300,000 of common units representing limited partnership interest in us.

Commercial Agreements

On August 5, 2024, the Partnership amended and extended expired, or soon to be expired, commercial agreements with subsidiaries of Delek Holdings under which we provide various services, including crude oil gathering and crude oil, intermediate and refined products transportation and storage services, and marketing, terminalling and offloading services to Delek Holdings.

These agreements have an initial term of five to seven years , with the ability to extend for an additional five years at Delek Holdings' option.

Certain of these contracts had rate adjustments to be phased in over 2025 and 2026.

In addition, the Partnership entered into an assignment agreement with Delek Holdings.

As a result of these agreements with Delek Holdings, the Partnership redeemed 2,500,000 common units representing limited partnership interest in us held by Delek Holdings to assign the Big Spring Refinery Marketing Agreement to Delek Holdings.

We also entered into an amended and restated Omnibus Agreement with Delek Holdings that provides Delek Holdings an option to purchase certain critical assets from us at market value during the period beginning upon any change in control or sale of substantially all assets involving us and extending (i) in the case of a transaction involving a third party, for six months following closing, and (ii) for any other transaction, for four years following closing.

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-Q

Item 1. Financial Statements