What changed in this filing

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Item 2. Management’s Discussion and Analysis

2024-11-07 compared with 2024-08-07 · 180 added, 152 removed, 436 unchanged (43% of the section changed)

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and any of its subsidiaries, other than the Partnership and its subsidiaries and its general partner.

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 Seller’s water disposal and recycling operations, in the Midland Basin in Texas (the “Purchase Agreement”).

For further information, see Note 10 to our condensed consolidated financial statements in Item 1.

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 “H2O Midstream Acquisition”), related to the Seller’s water disposal and recycling operations, in the Midland Basin in Texas (the “Purchase Agreement”).

See Note 2 to our condensed consolidated financial statements in Item 1.

Financial Statements, of this Quarterly Report on Form 10-Q.

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• inability to complete growth projects on time and on budget;

• our ability to successfully complete acquisitions and integrate acquired businesses, and to achieve the anticipated benefits therefrom, including the planned H2O Midstream acquisition;

• our ability to successfully complete acquisitions and integrate acquired businesses, and to achieve the anticipated benefits therefrom, including the H2O Midstream acquisition;

• disruptions due to acts of God, natural disasters, casualty losses, severe weather patterns, such as freezing conditions, cyber or other attacks on our electronic systems, and other matters beyond our control which might cause damage to our pipelines, terminal facilities and other assets and could impact our operating results through increased costs and/or loss of revenue;

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Business and Economic Environment Overview

During the six months ended June 30, 2024, domestic markets have experienced an elevated hydrocarbon pricing environment that has resulted in a strong demand for hydrocarbons and presented an opportunity for the Partnership to leverage its extensive network of logistics assets, resulting in increased throughputs and higher utilization as compared to the prior year.

Additionally, Delaware Gathering further diversifies our logistics customer base to include significantly more third-party customers, and it allows us to provide comprehensive logistics services in the Delaware Basin, while also serving as a funnel into our existing midstream Permian activities.

During the nine months ended September 30, 2024, domestic markets have experienced an elevated hydrocarbon pricing environment that has resulted in a strong demand for hydrocarbons and presented an opportunity for the Partnership to leverage its extensive network of logistics assets, resulting in increased throughputs and higher utilization as compared to the prior year.

Additionally, the H2O Acquisition as well as our Delaware Gathering operations further diversify our logistics customer base to include significantly more third-party customers, and it allows us to provide comprehensive logistics services in the Delaware and Midland Basins, while also serving as a funnel into our existing midstream Permian activities.

As producers continue to ramp up production within the Permian Basin, the Partnership is well positioned to continue to add value through our gathering and processing services as a result of our Delaware Gathering operations which complement our existing Midland Gathering System assets.

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Through our joint venture projects, we have increased our supply network to take advantage of growth opportunities in expanding markets and added additional flexibility which has delivered realized value through the Partnership system.

Net Income for the Partnership increased $4.4 million during the six months ended June 30, 2024, as compared to the prior year period.

Our EBITDA (as defined in "Non GAAP Measures" section below) increased $18.0 million in 2024 as compared to 2023.

This improvement can be attributed to the strong financial and operational performance achieved across all of our operating segments.

Our gathering and processing segment saw a $4.3 million increase in segment EBITDA.

Net Income for the Partnership increased $3.3 million during the nine months ended September 30, 2024, as compared to the prior year period.

Our EBITDA (as defined in "Non GAAP Measures" section below) decreased $11.1 million in 2024 as compared to 2023.

This decrease is largely attributable to a change in classification of certain of our commercial agreements with Delek, which meet the criteria to be classified as sales-type leases.

As such, certain throughput and storage fees that were previously recorded as revenue are now recorded as interest income under sales-type lease accounting.

Our gathering and processing segment saw a $6.2 million decrease in segment EBITDA.

Our wholesale marketing and terminalling segment saw a $2.3 million increase in segment EBITDA.

Our storage and transportation segment saw a $6.5 million increase in segment EBITDA.

Segment EBITDA for our investments in pipeline joint ventures increased by $2.8 million.

Our storage and transportation segment saw a $3.9 million decrease in segment EBITDA.

Segment EBITDA for our investments in pipeline joint ventures increased by $9.1 million with the acquisition of the W2W Investment from Delek Holdings.

See the “Results of Operations” section below for further discussion.

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Other 2024 Developments

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").

H2O Midstream Acquisition

On September 11, 2024, the Partnership closed the H2O Midstream Acquisition, in which we acquired water disposal and recycling operations, in the Midland Basin in Texas (the "Midland Water Gathering System") for total consideration of $229.5 million, subject to customary adjustments under the Purchase Agreement for net working capital and indebtedness.

The purchase price is comprised of approximately $159.5 million in cash and $70.0 million of preferred equity.

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.

On August 5, 2024, the Partnership acquired Permian Pipeline Holdings, LLC, which holds 50% equity interests in Wink to Webster Holdings, LLC ("W2W Holdings"), (the "W2W Investment") from a wholly owned subsidiary of Delek Holdings.

W2W Holdings includes a 15.6% indirect interest in the Wink to Webster Pipeline, LLC joint venture ("Wink to Webster"), and related joint venture indebtedness.

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.

Total consideration was comprised of $83.9 million in cash (including $2.7 million post-closing adjustment), forgiveness of a $60.0 million receivable from Delek Holdings and 2,300,000 of common units representing limited partnership interest in us.

Commercial Agreements with Delek Holdings

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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.

In addition, certain of these contracts had rate adjustments to be phased in over 2025 and 2026.

In addition, certain of these contracts have rate adjustments to be phased in over 2025 and 2026.

The amendments required the embedded leases within these agreements to be reassessed under Accounting Standards Codification 842, Leases .

As a result of these lease assessments, certain leases were reclassified from operating leases to sales-type leases.

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

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Net proceeds were used to redeem the 2025 Notes including accrued interest, pay off the DKL Term Loan Facility including accrued interest and to repay a portion of the outstanding borrowings under the DKL Revolving Facility.

On April 17, 2024, the Issuers sold $200.0 million in aggregate principal amount of additional 8.625% senior notes due 2029 (the “Additional 2029 Notes”), at 101.25%.

On April 17, 2024, the Partnership sold $200.0 million in aggregate principal amount of additional 8.625% senior notes due 2029 at 101.25% and on August 16, 2024, the Partnership sold $200.0 million in aggregate principal amount of additional 8.625% senior notes due 2029, at 103.25% (collectively, the "Additional 2029 Notes").

The Additional 2029 Notes were issued under the same indenture as the 2029 Notes and formed a part of the same series of notes as the 2029 Notes.

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

Equity Offering

Equity Offerings

On October 10, 2024, we completed a public offering of its common units in which it sold 4,423,075 common units (including an overallotment option of 576,922 common units) to the underwriters of the offering at a price to the public of $39.00 per unit.

The net proceeds received from this offering (net of underwriting discounts, commissions and expenses) were $165.3 million and were used to repay a portion of the outstanding borrowings under the DKL Revolving Facility.

Underwriting discounts totaled $6.6 million.

On March 12, 2024, we completed a public offering of its common units in which it sold 3,584,416 common units (including an overallotment option of 467,532 common units) to the underwriters of the offering at a price to the public of $38.50 per unit.

The proceeds received from this offering (net of underwriting discounts, commissions and expenses) were $132.2 million and were used to repay a portion of the outstanding borrowings under the DKL Revolving Facility.

The proceeds received from this offering (net of underwriting discounts, commissions and expenses) were $132.2 million and were used to redeem the Preferred Units and repay a portion of the outstanding borrowings under the DKL Revolving Facility.

Underwriting discounts totaled $5.5 million.

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Gathering and Processing

The operational assets in our gathering and processing segment consist of Midland Gathering Assets and Delaware Gathering Assets.

The operational assets in our gathering and processing segment consist of Midland Gathering Assets, Midland Water Gathering Assets and Delaware Gathering Assets.

The Midland Gathering Assets support our crude oil gathering activities which primarily serves Delek Holdings refining needs throughout the Permian Basin.

The Midland Water Gathering Assets support our water disposal and recycling operations, in the Midland Basin in Texas.

The Delaware Gathering Assets support our crude oil and natural gas gathering, processing and transportation businesses, as well as water disposal and recycling operations, located in the Delaware Basin of New Mexico, and serving primarily third-party producers and customers.

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Additionally, the demand for hydrocarbon-based refined products and related crack spreads significantly impact production decisions of our refining customers and likewise throughputs on our pipelines and other logistics assets.

Finally, fluctuations in demand and commodity prices for refined products, as well as the value attributable to RINs, directly impacts our wholesale marketing operations, where we are subject to short-term commodity price fluctuations at the rack.

Finally, fluctuations in demand and commodity prices for refined products,

as well as the value attributable to RINs, directly impacts our wholesale marketing operations, where we are subject to short-term commodity price fluctuations at the rack.

Most of the logistics services we provide (including transportation, gathering and processing services) are subject to long-term fee-based contracts with minimum volume commitments or long-term dedicated acreage agreements which mitigate most of our short-term financial risk to price and demand volatility.

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to this Quarterly Report on Form 10-Q.

• Distributable cash flow - calculated as net cash flow from operating activities plus or minus changes in assets and liabilities, less maintenance capital expenditures net of reimbursements and other adjustments not expected to settle in cash.

• Distributable cash flow - calculated as net cash flow from operating activities adjusted for changes in assets and liabilities, maintenance capital expenditures net of reimbursements, sales-type lease receipts, net of income recognized and other adjustments not expected to settle in cash.

The Partnership believes this is an appropriate reflection of a liquidity measure by which users of its financial statements can assess its ability to generate cash.

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Reconciliation of net income to EBITDA (in thousands)

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

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

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Reconciliation of net cash from operating activities to distributable cash flow (in thousands)

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

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

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(3,396) (2,069) (7,682) (5,924)

Reimbursement from Delek Holdings for capital expenditures (2)

Reimbursement from (refund to) Delek Holdings for capital expenditures (2)

— (69) 282 942

Accretion of asset retirement obligations (186) (176) (373) (352)

Sales-type lease receipts, net of income recognized 5,474 — 5,474 —

Accretion 446 (177) 73 (529)

Deferred income taxes (247) (124) (451) (753)

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Summary Statement of Operations Data (1)

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

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

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Operating income $ 31,808 $ 62,554 $ 164,811 $ 186,433

Interest expense, net 35,268 35,099 75,497 67,680

Interest income (23,470) — (23,498) —

Interest expense 37,022 36,901 112,547 104,581

Income from equity method investments (15,602) (9,296) (31,974) (22,897)

Other income, net (40) (19) (211) (21)

Total non-operating expenses, net 27,346 27,795 58,914 54,058

Other expense (income), net 34 (3) (177) (24)

Total non-operating (income) expenses, net (2,016) 27,602 56,898 81,660

Income before income tax expense 33,824 34,952 107,913 104,773

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Results of Operations

Consolidated Results of Operations — Comparison of the three and six months ended June 30, 2024 compared to the three and six months ended June 30, 2023

Net revenues increased by $17.7 million, or 7.2%, in the second quarter of 2024 compared to the second quarter of 2023, primarily driven by the following:

• increased revenue of $11.4 million in our West Texas marketing operations primarily driven by increases in volumes sold, partially offset by a decrease in average sales prices per gallon and decrease in RINs revenue:

◦ the volumes of gasoline and diesel sold increased by 3.6 million and 3.4 million gallons, respectively;

Consolidated Results of Operations — Comparison of the three and nine months ended September 30, 2024 compared to the three and nine months ended September 30, 2023

Net revenues decreased by $61.8 million, or 22.4%, in the third quarter of 2024 compared to the third quarter of 2023, primarily driven by the following:

• decreased revenue of $36.2 million in our West Texas marketing operations primarily driven by decreases in volumes sold, a decrease in average sales prices per gallon and decrease in RINs revenue:

◦ the volumes of gasoline and diesel sold decreased by 4.7 million and 0.5 million gallons, respectively;

◦ the average sales prices per gallon of gasoline and diesel sold decreased by $0.42 and $0.71 per gallon, respectively;

◦ RINs revenue decreased from $3.2 million in the second quarter of 2023 to $1.3 million in the second quarter of 2024, due to decrease in RINs prices.

• increase in terminalling and marketing revenue primarily due to rate increases and increased volumes.

Net revenues increased by $26.3 million, or 5.4%, in the six months ended June 30, 2024 compared to the six months ended June 30, 2023.

The increase was primarily driven by the following:

• increased revenue of $10.8 million in our West Texas marketing operations primarily driven by increases in volumes sold, partially offset by a decrease in average sales prices per gallon and decrease in RINs revenue:

◦ the volumes of gasoline and diesel sold increased by 7.6 million and 3.9 million gallons, respectively;

◦ RINs revenue decreased from $3.5 million in the third quarter of 2023 to $1.3 million in the third quarter of 2024, due to decrease in RINs prices;

• decreased revenue of $13.3 million and $8.3 million in our gathering and processing and storage and transportation segments, respectively due to recording certain throughput and storage fees as interest income under sales-type lease accounting that were previously recorded as revenue in the prior year period.

Net revenues decreased by $35.5 million, or 4.6%, in the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023.

The decrease was primarily driven by the following:

• decreased revenue of $28.7 million in our West Texas marketing operations primarily driven by a decrease in average sales prices per gallon and decrease in RINs revenue, partially offset by increases in volumes sold:

◦ the average sales prices per gallon of gasoline and diesel sold decreased by $0.33 and $0.36 per gallon, respectively;

◦ RINs revenue decreased from $5.6 million in the six months ended June 30, 2023 to $2.4 million in the six months ended June 30, 2024, due to decrease in RINs prices.

• increase in terminalling and marketing revenue primarily due to rate increases and increased volumes.

Cost of Materials and Other

Cost of materials and other increased by $9.9 million, or 7.8%, in the second quarter of 2024 compared to the second quarter of 2023, primarily driven by the following:

• increased costs of materials and other of $14.4 million in our West Texas marketing operations primarily driven by increases in the volumes of gasoline and diesel sold, partially offset by decreases in the average cost per gallon:

◦ the volumes of gasoline and diesel sold increased by 3.6 million and 3.4 million gallons, respectively;

◦ the average cost per gallon of gasoline sold decreased by $0.14 per gallon, partially offset by an increase in average cost per gallon of diesel sold of $0.03 per gallon.

Such increase was partially offset by the following:

• decrease of $2.2 million in our gathering and processing segment driven primarily by lower natural gas costs.

Cost of materials and other increased by $7.5 million, or 3.0%, in the six months ended June 30, 2024 compared to the six months ended June 30, 2023, primarily driven by

• increased costs of materials and other of $16.2 million in our West Texas marketing operations primarily driven by increases in the average volumes of gasoline and diesel sold, partially offset by decreased costs per gallon:

◦ RINs revenue decreased from $9.1 million in the nine months ended September 30, 2023 to $3.7 million in the nine months ended September 30, 2024, due to decrease in RINs prices;

◦ the volumes of gasoline and diesel sold increased by 2.9 million and 3.4 million gallons, respectively.

• decreased revenue of $10.4 million and $8.6 million in our gathering and processing and storage and transportation segments, respectively due to recording certain throughput and storage fees as interest income under sales-type lease accounting that were previously recorded as revenue in the prior year period;

• partially offset by increase in terminalling and marketing revenue primarily due to increased volumes and rate increases.

Cost of Materials and Other

Cost of materials and other decreased by $33.1 million, or 22.0%, in the third quarter of 2024 compared to the third quarter of 2023, primarily driven by the following:

• decreased costs of materials and other of $29.4 million in our West Texas marketing operations primarily driven by decreases in the volumes and average cost per gallon of gasoline and diesel sold:

◦ the volumes of gasoline and diesel sold decreased by 4.7 million and 0.5 million gallons, respectively;

◦ the average cost per gallon of gasoline and diesel sold decreased by $0.23 per gallon and $0.73 per gallon, respectively.

Such increase was partially offset by the following:

Cost of materials and other decreased by $25.6 million, or 6.3%, in the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023, primarily driven by

• decreased costs of materials and other of $13.2 million in our West Texas marketing operations primarily driven by decreased costs per gallon, partially offset by increases in the average volumes of gasoline and diesel sold:

◦ the average cost per gallon of gasoline and diesel sold decreased by $0.20 per gallon and $0.31 per gallon, respectively;

◦ the volumes of gasoline and diesel sold increased by 2.9 million and 3.4 million gallons, respectively;

• decrease of $8.0 million in our gathering and processing segment driven primarily by lower natural gas costs.

Operating Expenses

Operating expenses increased by $0.7 million, or 2.3%, in the second quarter of 2024 compared to the second quarter of 2023.

Operating expenses increased by $7.8 million, or 14.6%, in the six months ended June 30, 2024 compared to the six months ended June 30, 2023, primarily driven by an increase in contract services.

Operating expenses decreased by $5.1 million, or 15.4%, in the third quarter of 2024 compared to the third quarter of 2023, primarily driven by a decrease in outside services.

Operating expenses increased by $2.8 million, or 3.2%, in the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023, primarily driven by an increase in contract services.

General and Administrative Expenses

General and administrative expenses decreased by $0.6 million, or 9.0%, in the second quarter of 2024 compared to the second quarter of 2023.

General and administrative expenses decreased by $3.2 million, or 23.0%, in the six months ended June 30, 2024 compared to the six months ended June 30, 2023, primarily driven by the following:

• decrease in lease expense;

• decrease in contract services.

General and administrative expenses increased by $10.2 million, or 183.9%, in the third quarter of 2024 compared to the third quarter of 2023, primarily driven by the following:

• transaction costs associated with the H2O Acquisition, W2W Investment acquisition, and amendments of certain agreements with Delek Holdings of $8.7 million;

• increase in insurance expense primarily related to H2O.

General and administrative expenses increased by $7.0 million, or 35.4%, in the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023, primarily driven by the following:

• transaction costs associated with the H2O Acquisition, W2W Investment acquisition, and amendments of certain agreements with Delek Holdings of $8.7 million;

• increase in insurance expense primarily due to H2O Acquisition;

• partially offset by decreases in lease expense and contract services.

Depreciation and Amortization

Depreciation and amortization increased by $0.5 million, or 2.0%, in the second quarter of 2024 compared to the second quarter of 2023.

Depreciation and amortization increased by $5.9 million, or 13.1%, in the six months ended June 30, 2024 compared to the six months ended June 30, 2023, primarily driven by the following:

Depreciation and amortization decreased by $3.4 million, or 13.8%, in the third quarter of 2024 compared to the third quarter of 2023, primarily due to the derecognition of fixed assets in connection with the recognition of sales-type leases in the third quarter of 2024.

Depreciation and amortization increased by $2.5 million, or 3.6%, in the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023, primarily driven by the following:

• the derecognition of fixed assets in connection with the recognition of sales-type leases in the third quarter of 2024;

• depreciation associated with new projects in-serviced during the period.

Other operating income, net

Other operating income, net increased by $1.3 million, or 283.3%, in the second quarter of 2024 compared to the second quarter of 2023, primarily driven by the following:

• increase in gain on disposal of assets predominantly due to $8.3 million in condemnation proceeds received in the second quarter of 2024;

• partially offset by $5.4 million related to settlement of payment dispute.

Gain on disposal of assets increased by $0.9 million, or 276.0%, in the six months ended June 30, 2024 compared to the six months ended June 30, 2023, primarily driven by the following:

• increase in gain on disposal of assets predominantly due to $8.3 million in condemnation proceeds received in the second quarter of 2024;

Other operating income, net decreased by $0.4 million, or 76.2%, in the third quarter of 2024 compared to the third quarter of 2023.

Other operating income, net increased by $0.5 million, or 60.9%, in the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023, primarily driven by the following:

• increase in gain on disposal of assets of $6.0 million, predominantly due to $8.3 million in condemnation proceeds received in the second quarter of 2024;

• partially offset by $5.4 million related to settlement of payment dispute.

Interest Income

Interest income increased by $23.5 million, or 100.0%, in the third quarter of 2024 compared to the third quarter of 2023, primarily driven by income from certain of our commercial agreements with Delek Holdings that met the criteria to be accounted for as sales-type leases during the third quarter of 2024.

Interest income increased by $23.5 million, or 100.0%, in the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023, primarily driven by income from certain of our commercial agreements with Delek Holdings that met the criteria to be accounted for as sales-type leases during the third quarter of 2024.

Interest Expense

Interest expense increased by $0.2 million, or 0.5%, in the second quarter of 2024 compared to the second quarter of 2023.

Interest expense increased by $7.8 million, or 11.5%, in the six months ended June 30, 2024 compared to the six months ended June 30, 2023, primarily driven by the following:

Interest expense decreased by $0.1 million, or 0.3%, in the third quarter of 2024 compared to the third quarter of 2023.

Interest expense decreased by $8.0 million, or 7.6%, in the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023, primarily driven by the following:

• debt extinguishment costs of $3.6 million associated with the payoff of the DKL Term Loan Facility and the 2025 Notes with proceeds from the 2029 Notes issued in March 2024;

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Results from Equity Method Investments

Income from equity method investments increased by $0.6 million, or 8.2%, in the second quarter of 2024 compared to the second quarter of 2023.

Income from equity method investments increased by $2.8 million, or 20.4%, in the six months ended June 30, 2024 compared to the six months ended June 30, 2023 primarily due to increases in throughput at two of our joint ventures that were negatively impacted by the turnaround at the Tyler Refinery in prior year.

Income from equity method investments increased by $6.3 million, or 67.8%, in the third quarter of 2024 compared to the third quarter of 2023, primarily due to the W2W Investment, which was acquired on August 5, 2024, and contributed income of $6.4 million during the period.

Income from equity method investments increased by $9.1 million, or 39.6%, in the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023, primarily due to the W2W Investment, which was acquired on August 5, 2024, and contributed income of $6.4 million during the period and increases in throughput at two of our joint ventures that were negatively impacted by the turnaround at the Tyler Refinery in prior year.

Operating Segments

Gathering and Processing Segment

The following tables and discussion present the results of operations and certain operating statistics of the gathering and processing segment for the three and six months ended June 30, 2024 and 2023:

The following tables and discussion present the results of operations and certain operating statistics of the gathering and processing segment for the three and nine months ended September 30, 2024 and 2023:

Gathering and Processing

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

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

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Segment EBITDA $ 42,380 $ 52,906 $ 154,819 $ 161,014

Throughputs (average bpd)

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

Throughputs (bpd (1) )

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

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Delaware Gathering Assets Volumes

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

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

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123,856 99,158 120,360 104,920

(1) Mcfd - average thousand cubic feet per day.

Midland Water Gathering System Volumes

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

Water Disposal and Recycling (bpd (1) ) (3)

100,335 — 100,335 —

(1) bpd - average barrels per day.

Operational comparison of the three and six months ended June 30, 2024 compared to the three and six months ended June 30, 2023:

Net revenues for the gathering and processing segment decreased by $0.6 million, or 0.6%, in the second quarter of 2024 compared to the second quarter of 2023.

Net revenues for the gathering and processing segment increased by $2.9 million, or 1.5%, in the six months ended June 30, 2024 compared to the six months ended June 30, 2023.

(2) Mcfd - average thousand cubic feet per day.

(3) 2024 volumes include volumes from September 11, 2024 through September 30, 2024.

Operational comparison of the three and nine months ended September 30, 2024 compared to the three and nine months ended September 30, 2023:

Net revenues for the gathering and processing segment decreased by $13.3 million, or 14.0%, in the third quarter of 2024 compared to the third quarter of 2023, primarily due to recording certain throughput fees as interest income under sales-type lease accounting that were previously recorded as revenue in the prior year period.

Net revenues for the gathering and processing segment decreased by $10.4 million, or 3.7%, in the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023, primarily due to recording certain throughput fees as interest income under sales-type lease accounting that were previously recorded as revenue in the prior year period.

Cost of Materials and Other

Cost of materials and other for the gathering and processing segment decreased by $2.2 million, or 10.1%, in the second quarter of 2024 compared to the second quarter of 2023, driven primarily by driven primarily by lower natural gas costs.

Cost of materials and other for the gathering and processing segment decreased by $7.4 million, or 16.4%, in the six months ended June 30, 2024 compared to the six months ended June 30, 2023, driven primarily by lower natural gas costs.

Cost of materials and other for the gathering and processing segment decreased by $0.6 million, or 3.0%, in the third quarter of 2024 compared to the third quarter of 2023.

Cost of materials and other for the gathering and processing segment decreased by $8.0 million, or 12.2%, in the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023, driven primarily by lower natural gas costs.

Operating Expenses

Operating expenses for the gathering and processing segment decreased by $1.1 million, or 5.3%, in the second quarter of 2024 compared to the second quarter of 2023.

Operating expenses for the gathering and processing segment increased by $4.4 million, or 12.6%, in the six months ended June 30, 2024 compared to the six months ended June 30, 2023, primarily driven by increase in contract services.

EBITDA increased by $2.0 million, or 3.8%, in the second quarter of 2024 compared to the second quarter of 2023.

EBITDA increased by $4.3 million, or 4.0%, in the six months ended June 30, 2024 compared to the six months ended June 30, 2023.

Operating expenses for the gathering and processing segment decreased by $2.4 million, or 11.4%, in the third quarter of 2024 compared to the third quarter of 2023.

Operating expenses for the gathering and processing segment increased by $2.0 million, or 3.7%, in the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023, primarily driven by an increase in contract services.

EBITDA decreased by $10.5 million, or 19.9%, in the third quarter of 2024 compared to the third quarter of 2023, primarily driven by lower revenue related to sales-type lease accounting.

EBITDA decreased by $6.2 million, or 3.8%, in the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023 primarily driven by lower revenue related to sales-type lease accounting, partially offset by lower natural gas costs.

Wholesale Marketing and Terminalling Segment

The following tables and discussion present the results of operations and certain operating statistics of the wholesale marketing and terminalling segment for the three and six months ended June 30, 2024 and 2023:

The following tables and discussion present the results of operations and certain operating statistics of the wholesale marketing and terminalling segment for the three and nine months ended September 30, 2024 and 2023:

Wholesale Marketing and Terminalling

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

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

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Cost of materials and other $ 83,834 $ 115,702 $ 279,639 $ 292,094

Operating expenses (excluding depreciation and amortization presented below) $ 3,273 $ 3,848 $ 7,101 $ 8,456

Operating expenses (excluding depreciation and amortization) $ 3,438 $ 4,990 $ 10,539 $ 13,447

Segment EBITDA $ 20,245 $ 28,135 $ 75,724 $ 78,071

Operating Information

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

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

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(2) Consists of terminalling throughputs at our Tyler, Big Spring, Big Sandy and Mount Pleasant, Texas terminals, our El Dorado and North Little Rock, Arkansas terminals and our Memphis and Nashville, Tennessee terminals.

Operational comparison of the three and six months ended June 30, 2024 compared to the three and six months ended June 30, 2023:

Net revenues for the wholesale marketing and terminalling segment increased by $16.8 million, or 14.1%, in the second quarter of 2024 compared to the second quarter of 2023, driven primarily by the following:

◦ the volumes of gasoline and diesel sold increased by 3.6 million and 3.4 million gallons, respectively;

Operational comparison of the three and nine months ended September 30, 2024 compared to the three and nine months ended September 30, 2023:

Net revenues for the wholesale marketing and terminalling segment decreased by $40.2 million, or 27.3%, in the third quarter of 2024 compared to the third quarter of 2023, driven primarily by the following:

◦ the volumes of gasoline and diesel sold decreased by 4.7 million and 0.5 million gallons, respectively;

◦ the average sales prices per gallon of gasoline and diesel sold decreased by $0.42 and $0.71 per gallon, respectively;

◦ RINs revenue decreased from $3.2 million in the second quarter of 2023 to $1.3 million in the second quarter of 2024, due to decrease in RINs prices.

• increase in terminalling and marketing revenue primarily due to rate increases and increased volumes.

Net revenues for the wholesale marketing and terminalling segment increased by $23.7 million, or 10.3%, in the six months ended June 30, 2024 compared to the six months ended June 30, 2023, primarily driven by the following:

◦ the volumes of gasoline and diesel sold increased by 7.6 million and 3.9 million gallons, respectively;

◦ RINs revenue decreased from $3.5 million in the third quarter of 2023 to $1.3 million in the third quarter of 2024, due to decrease in RINs prices;

◦ decrease due to recording certain throughput fees as interest income under sales-type lease accounting that were previously recorded as revenue in the prior year period.

Net revenues for the wholesale marketing and terminalling segment decreased by $16.4 million, or 4.3%, in the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023, primarily driven by the following:

◦ the average sales prices per gallon of gasoline and diesel sold decreased by $0.33 and $0.36 per gallon, respectively;

◦ RINs revenue decreased from $5.6 million in the six months ended June 30, 2023 to $2.4 million in the six months ended June 30, 2024, due to decrease in RINs prices.

• increase in terminalling and marketing revenue primarily due to rate increases and increased volumes.

The following charts show summaries of the average sales prices per gallon of gasoline and diesel and refined products volume impacting our West Texas operations for the three and six months ended June 30, 2024 and 2023.

Cost of Materials and Other

Cost of materials and other for the wholesale marketing and terminalling segment increased by $15.0 million, or 16.9%, in the second quarter of 2024 compared to the second quarter of 2023, driven primarily by the following:

◦ the volumes of gasoline and diesel sold increased by 3.6 million and 3.4 million gallons, respectively;

◦ the average cost per gallon of gasoline sold decreased by $0.14 per gallon, partially offset by an increase in average cost per gallon of diesel sold of $0.03 per gallon.

Cost of materials and other for the wholesale marketing and terminalling segment increased by $19.4 million, or 11.0% , in the six months ended June 30, 2024 compared to the six months ended June 30, 2023, primarily driven by the following:

◦ RINs revenue decreased from $9.1 million in the nine months ended September 30, 2023 to $3.7 million in the nine months ended September 30, 2024, due to decrease in RINs prices;

◦ the volumes of gasoline and diesel sold increased by 2.9 million and 3.4 million gallons, respectively.

• decrease due to recording certain throughput fees as interest income under sales-type lease accounting that were previously recorded as revenue in the prior year period;

• partially offset by increase in terminalling and marketing revenue primarily due to increased volumes and rate increases.

Cost of Materials and Other

Cost of materials and other for the wholesale marketing and terminalling segment decreased by $31.9 million, or 27.5%, in the third quarter of 2024 compared to the third quarter of 2023, driven primarily by the following:

• decreased costs of materials and other of $29.4 million in our West Texas marketing operations primarily driven by decreases in volumes and average cost per gallon of gasoline and diesel sold:

◦ the volumes of gasoline and diesel sold decreased by 4.7 million and 0.5 million gallons, respectively;

◦ the average cost per gallon of gasoline and diesel sold decreased by $0.23 per gallon and $0.73 per gallon, respectively.

The following chart shows a summary of the average prices per gallon of gasoline and diesel purchased in our West Texas operations for the three and six months ended June 30, 2024 and 2023.

Cost of materials and other for the wholesale marketing and terminalling segment decreased by $12.5 million, or 4.3% , in the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023, primarily driven by the following:

◦ the average cost per gallon of gasoline and diesel sold decreased by $0.20 per gallon and $0.31 per gallon, respectively;

◦ the volumes of gasoline and diesel sold increased by 2.9 million and 3.4 million gallons, respectively.

The following chart shows a summary of the average prices per gallon of gasoline and diesel purchased in our West Texas operations for the three and nine months ended September 30, 2024 and 2023.

Refer to the Refined Products Volume - Gallons chart above for a summary of volumes impacting our West Texas operations.

Operating Expenses

Operating expenses for the wholesale marketing and terminalling segment decreased by $0.6 million, or 14.9%, in the second quarter of 2024 compared to the second quarter of 2023, driven primarily by a decrease in outside service costs.

Operating expenses for the wholesale marketing and terminalling segment decreased by $1.4 million, or 16.0%, in the six months ended June 30, 2024 compared to the six months ended June 30, 2023.

EBITDA increased by $2.2 million, or 7.9%, in the second quarter of 2024 compared to the second quarter of 2023, driven primarily by the following increase in terminalling utilization, partially offset by a decline in wholesale margins due to lower RINs prices.

EBITDA increased by $5.5 million, or 11.1%, in the six months ended June 30, 2024 compared to the six months ended June 30, 2023, primarily driven by increase in terminalling utilization, partially offset by a decline in wholesale margins due to lower RINs prices.

Operating expenses for the wholesale marketing and terminalling segment decreased by $1.6 million, or 31.1%, in the third quarter of 2024 compared to the third quarter of 2023, driven primarily by a decrease in outside service costs.

Operating expenses for the wholesale marketing and terminalling segment decreased by $2.9 million, or 21.6%, in the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023, driven primarily by a decrease in outside service costs.

EBITDA decreased by $7.9 million, or 28.0%, in the third quarter of 2024 compared to the third quarter of 2023, driven primarily by the following:

• a decline in wholesale margins partially due to lower RINs prices;

• lower revenue related to sales-type lease accounting.

EBITDA decreased by $2.3 million, or 3.0%, in the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023, primarily driven by the following:

• a decline in wholesale margins partially due to lower RINs prices;

• lower revenue related to sales-type lease accounting;

• partially offset by an increase in terminalling utilization.

Storage and Transportation Segment

The following tables and discussion present the results of operations and certain operating statistics of the storage and transportation segment for the three and six months ended June 30, 2024 and 2023:

The following tables and discussion present the results of operations and certain operating statistics of the storage and transportation segment for the three and nine months ended September 30, 2024 and 2023:

Storage and Transportation

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

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

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Cost of materials and other $ 13,588 $ 14,245 $ 41,951 $ 50,182

Operating expenses (excluding depreciation and amortization presented below) $ 4,534 $ 4,105 $ 9,555 $ 9,665

Operating expenses (excluding depreciation and amortization) $ 4,731 $ 3,098 $ 14,286 $ 12,763

Segment EBITDA $ 7,526 $ 17,914 $ 42,405 $ 46,316

Operation comparison of the three and six months ended June 30, 2024 compared to the three and six months ended June 30, 2023

Net revenues for the storage and transportation segment increased by $1.5 million, or 4.4%, in the second quarter of 2024 compared to the second quarter of 2023.

Net revenues for the storage and transportation segment decreased by $0.3 million, or 0.4%, in the six months ended June 30, 2024 compared to the six months ended June 30, 2023.

Operation comparison of the three and nine months ended September 30, 2024 compared to the three and nine months ended September 30, 2023

Net revenues for the storage and transportation segment decreased by $8.3 million, or 24.4%, in the third quarter of 2024 compared to the third quarter of 2023, primarily due to recording certain storage fees as interest income under sales-type lease accounting that were previously recorded as revenue in the prior year period.

Net revenues for the storage and transportation segment decreased by $8.6 million, or 8.0%, in the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023, primarily due to recording certain storage fees as interest income under sales-type lease accounting that were previously recorded as revenue in the prior year period.

Cost of Materials and Other

Cost of materials and other for the storage and transportation segment decreased by $2.9 million, or 16.5%, in the second quarter of 2024 compared to the second quarter of 2023 primarily due to decrease in trucking activity.

Cost of materials and other for the storage and transportation segment decreased by $7.6 million, or 21.1%, in the six months ended June 30, 2024 compared to the six months ended June 30, 2023 primarily due to decrease in trucking activity.

Cost of materials and other for the storage and transportation segment decreased by $0.7 million, or 4.6%, in the third quarter of 2024 compared to the third quarter of 2023 primarily due to decrease in trucking activity.

Cost of materials and other for the storage and transportation segment decreased by $8.2 million, or 16.4%, in the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023 primarily due to decrease in trucking activity.

Operating Expenses

Operating expenses for the storage and transportation segment increased by $0.4 million, or 10.5%, in the second quarter of 2024 compared to the second quarter of 2023.

Operating expenses for the storage and transportation segment decreased by $0.1 million, or 1.1%, in the six months ended June 30, 2024 compared to the six months ended June 30, 2023.

EBITDA increased by $1.8 million, or 11.8%, in the second quarter of 2024 compared to the second quarter of 2023.

EBITDA increased by $6.5 million, or 22.8%, in the six months ended June 30, 2024 compared to the six months ended June 30, 2023 primarily due to favorable rate escalations associated with pipeline and rail movement and lower cost associated with decrease in trucking activity.

Operating expenses for the storage and transportation segment increased by $1.6 million, or 52.7%, in the third quarter of 2024 compared to the third quarter of 2023, primarily due to an increase in contract services.

Operating expenses for the storage and transportation segment increased by $1.5 million, or 11.9%, in the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023, primarily due to an increase in contract services.

EBITDA decreased by $10.4 million, or 58.0%, in the third quarter of 2024 compared to the third quarter of 2023, primarily due to decrease in revenue related to sales-type lease accounting and an increase in outside services.

EBITDA decreased by $3.9 million, or 8.4%, in the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023, primarily due to decrease in revenue associated with sales-type lease accounting and lower cost associated with decrease in trucking activity.

Investments in Pipeline Joint Ventures Segment

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Financial Statements, of this Quarterly Report on Form 10-Q.

Refer to Consolidated Results of Operations above for details and discussion of the investments in pipeline joint ventures segment for the three and six months ended June 30, 2024.

Refer to Consolidated Results of Operations above for details and discussion of the investments in pipeline joint ventures segment for the three and nine months ended September 30, 2024.

Liquidity and Capital Resources

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(iii) potential issuance of additional equity;

At June 30, 2024, our total liquidity amounted to $824.9 million comprised of $819.8 million in unused credit commitments under our third-party revolving credit facility (as discussed in Note 5 of our condensed consolidated financial statements in Item 1.

At September 30, 2024, our total liquidity amounted to $702.4 million comprised of $695.1 million in unused credit commitments under our third-party revolving credit facility (as discussed in Note 6 of our condensed consolidated financial statements in Item 1.

Financial Statements, of this Quarterly Report on Form 10-Q), and $7.3 million in cash and cash equivalents.

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Cash Distributions

On July 30, 2024, the board of directors of our general partner declared a distribution of $1.090 per common unit (the "Distribution"), which equates to an estimated amount of approximately $51.5 million per quarter, or approximately $205.9 million per year, based on the number of common units outstanding as of June 30, 2024.

The Distribution will be paid on August 14, 2024 to common unitholders of record on August 9, 2024 and represents a 5.3% increase over the second quarter 2023 distribution.

On October 29, 2024, the board of directors of our general partner declared a distribution of 1.100 per common unit (the "Distribution"), which equates to an estimated amount of approximately $51.5 million per quarter, or approximately $206.1 million per year, based on the number of common units outstanding as of September 30, 2024.

The Distribution will be paid on November 14, 2024 to common unitholders of record on November 8, 2024 and represents a 5.3% increase over the third quarter 2023 distribution.

This increase in the distribution is consistent with our intent to maintain an attractive distribution growth profile over the long term.

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June 30, 2023 $1.035 $45,112

September 30, 2023 $1.045 $45,558

March 31, 2024 $1.070 $50,521

June 30, 2024 $1.090 $51,263

September 30, 2024 (1)

$1.100 $51,513

(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 was estimated based on the number of common units outstanding as of June 30, 2024.

Equity Offering

(1) On October 29, 2024, the board of directors of our general partner declared this quarterly cash distribution, payable on November 14, 2024, to unitholders of record on November 8, 2024.

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

Equity Offerings

Underwriting discounts totaled $6.6 million.

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Underwriting discounts totaled $5.5 million.

The following table sets forth a summary of our condensed consolidated cash flows for the six months ended June 30, 2024 and 2023 (in thousands):

Six Months Ended June 30,

The following table sets forth a summary of our condensed consolidated cash flows for the nine months ended September 30, 2024 and 2023 (in thousands):

Nine Months Ended September 30,

Net cash provided by operating activities $ 156,441 $ 110,630

Net cash used in investing activities (314,528) (55,634)

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

Net cash provided by (used in) financing activities 161,649 (58,784)

Net increase (decrease) in cash and cash equivalents $ 3,562 $ (3,788)

Operating Activities

Net cash provided by operating activities increased by $67.7 million for the six months ended June 30, 2024 compared to the six months ended June 30, 2023.

The cash receipts from customer activities increased by $21.2 million and cash payments to suppliers and for allocations to Delek Holdings for salaries decreased by $28.6 million.

In addition, cash dividends received from equity method investments increased by $2.1 million and cash paid for debt interest decreased by $15.8 million.

Net cash provided by operating activities increased by $45.8 million for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023.

The cash receipts from customer activities decreased by $28.4 million and cash payments to suppliers and for allocations to Delek Holdings for salaries decreased by $75.7 million.

In addition, cash dividends received from equity method investments increased by $4.2 million and cash paid for debt interest increased by $5.7 million.

Investing Activities

Net cash used in investing activities decreased by $39.5 million during the six months ended June 30, 2024 compared to the six months ended June 30, 2023, primarily due to decrease of $29.0 million in purchases of property, plant and equipment primarily associated with growth projects in our gathering and processing segment, a nd a $9.1 million increase in proceeds from sale of property, plant and equipment predominantly due to $8.3 million of condemnation proceeds received from eminent domain proceedings in Texas in the current period.

Additionally, distributions from equity method investments increased $1.2 million.

Net cash used in investing activities increased by $258.9 million during the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023, primarily due to acquisition of W2W investment for $83.9 million, H2O Acquisition for $159.5 million, increase of $24.4 million in purchases of property, plant and equipment primarily associated with growth projects in our gathering and processing segment, a nd a $9.2 million increase in proceeds from sale of property, plant and equipment predominantly due to $8.3 million of condemnation proceeds received from eminent domain proceedings in Texas in the current period.

Financing Activities

Net cash provided by financing activities decreased by $105.6 million for the six months ended June 30, 2024 compared to the six months ended June 30, 2023.

This decrease was primarily driven by net payments under our revolving credit facility which increased by $540.8 million due to paydown in conjunction with the issuance of the 2029 Notes.

Additionally contributing to this decrease was an increase in deferred financing costs paid of $12.6 million associated with the 2029 Note issuance, an increase in distributions paid of $7.7 million and a $6.2 million increase in payments on other financing arrangements.

Partially offsetting these decreases was an increase of $132.2 million due to proceeds from the equity issuance in March 2024, and an increase of $328.8 million in net proceeds from term debt primarily due to the issuance of the 2029 Notes.

Net cash provided by financing activities increased by $220.4 million for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023.

This increase was primarily driven by increase in net proceeds from term loans of $539.0 million due to issuance of 2029 Notes net of the extinguishment of 2025 Notes and term facility, partially offset by net payments under our revolving credit facility which increased by $416.3 million due to paydown in conjunction with the issuance of the 2029 Notes.

Additionally contributing to this increase was an increase of $132.2 million due to proceeds from the equity issuance in March 2024.

Partially offsetting these increases was an increase in deferred financing costs paid of $16.5 million associated with the 2029 Note issuances, an increase in distributions paid of $13.7 million and a $6.2 million increase in payments on other financing arrangements.

Debt Overview

As of June 30, 2024, we had total indebtedness of $1,580.2 million.

The decrease of $131.6 million in our long-term debt balance compared to the balance at December 31, 2023 resulted from the payments under the DKL Credit Facility and the 2025 Notes, which was partially offset by the issuance of the 2029 Notes during the six months ended June 30, 2024.

As of June 30, 2024, our total indebtedness consisted of:

As of September 30, 2024, we had total indebtedness of $1,904.9 million.

The increase of $193.2 million in our long-term debt balance compared to the balance at December 31, 2023 resulted from the issuance of the 2029 Notes during the nine months ended September 30, 2024, which was partially offset by the payments under the DKL Credit Facility and the 2025 Notes.

As of September 30, 2024, our total indebtedness consisted of:

• An aggregate principal amount of $454.9 million under the DKL Revolving Facility, due on October 13, 2027, with an average borrowing rate of 7.70%.

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• An aggregate principal amount of $1,050.0 million, under the 2029 Notes (8.625% senior notes), due in 2029, with an effective interest rate of 8.90%.

We believe we were in compliance with the covenants in all debt facilities as of June 30, 2024.

We believe we were in compliance with the covenants in all debt facilities as of September 30, 2024.

See Note 6 of our condensed consolidated financial statements in Item 1.

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Depending on the magnitude, funding for such projects may include cash generated from operations, borrowings under existing credit facilities, or issuances of additional debt or equity securities.

The following table summarizes our actual capital expenditures, including any material capital expenditure payments made or forecasted to be made in advance of receipt of goods and materials, for the six months ended June 30, 2024:

(in thousands) Full Year 2024 Forecast (1)

Six Months Ended June 30, 2024

Nine Months Ended September 30, 2024 (1)

Gathering and Processing

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Total Capital Spending $ 69,829 $ 37,150

(1) Excludes estimated 2024 costs of $90 million to $100 million related to our new natural gas processing plant.

(1) Excludes an estimated $90 million to $100 million and actual 2024 capital spending of $53.4 million related to the new gas processing plan.

Refer to 'Other 2024 Developments' section of Item 2.

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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-Q

Item 2. Management’s Discussion and Analysis