What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2025-11-07 compared with 2025-08-06 · 155 added, 157 removed, 506 unchanged (38% of the section changed)

75 unchanged sentences

Business and Economic Environment Overview

During the six months ended June 30, 2025, we made significant strides in our commitment to being a full-suite crude, gas and water midstream services provider in the Permian Basin, in addition to diversifying our customer base to include more third-party customers.

On May 1, 2025, we entered into a series of agreements with Delek Holdings which, among other things, will allow us to assume all of Delek Holdings’ rights and obligations to purchase crude oil under certain contracts associated with our existing Midland Gathering System.

During the nine months ended September 30, 2025, we made significant strides in our commitment to being a full-suite crude, gas and water midstream services provider in the Permian Basin, in addition to diversifying our customer base to include more third-party customers.

On May 1, 2025, we entered into a series of agreements with Delek Holdings which, among other things, allowed us to assume all of Delek Holdings’ rights and obligations to purchase crude oil under certain contracts associated with our existing Midland Gathering System.

In January 2025, the Partnership closed the Gravity Acquisition which includes integrated full-cycle water systems in the Midland Basin, in addition to water gathering, and transportation assets in the Bakken, and along with our H2O Midstream Acquisition, provides a strong opportunity for integrated crude and water services to its customers.

2 unchanged sentences

Additionally, in the Delaware Basin, we are expanding our natural gas processing capabilities by constructing a new natural gas processing plant and adding AGI and sour gas processing capabilities.

Currently, the gas plant is in its initial phase of operation, and we foresee it reaching full capacity by the latter half of 2025.

Currently, the gas plant is in its initial phase of operation, and we foresee it increasing throughput through the end of 2025.

In June 2025, we successfully completed a debt issuance raising $700 million, enhancing our liquidity to over $1.0 billion.

2 unchanged sentences

Our positioning allows our customers the ability to control quality and adds optionality to place barrels in a variety of markets.

As a result of these efforts, the Partnership saw a $9.9 million increase in net income during the six months ended June 30, 2025, as compared to the prior year period .

Our EBITDA decreased $28.3 million in 2025 as compared to 2024.

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 a result of these efforts, the Partnership saw a $21.8 million increase in net income during the nine months ended September 30, 2025, as compared to the prior year period.

Our EBITDA increased $4.5 million in 2025 as compared to 2024.

These increases are primarily attributable to earnings achieved by our H2O and Gravity acquisitions, partially offset by a decrease due to 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.

35 unchanged sentences

On February 24, 2025, the Partnership and Delek Holdings entered into a Common Unit Purchase Agreement (the “Common Unit Purchase Agreement”) whereby the Partnership may repurchase common units from time to time from Delek Holdings in one or more transactions for an aggregate purchase price of up to $150.0 million through December 31, 2026 (each such repurchase, a “Repurchase”).

During the six months ended June 30, 2025, 243,075 common units were repurchased from Delek Holdings and cancelled at the time of the transaction for a total of $10.0 million.

No common units were repurchased for the six months ended June 30, 2024.

As of June 30, 2025, there was $140.0 million of authorization remaining under the Common Unit Repurchase Agreement.

During the nine months ended September 30, 2025, 243,075 common units were repurchased from Delek Holdings and cancelled at the time of the transaction for a total of $10.0 million.

No common units were repurchased for the nine months ended September 30, 2024.

As of September 30, 2025, there was $140.0 million of authorization remaining under the Common Unit Repurchase Agreement.

Gravity Acquisition

119 unchanged sentences

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,

2025 2024 2025 2024

7 unchanged sentences

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,

2025 2024 2025 2024

6 unchanged sentences

Reimbursement from Delek Holdings for capital expenditures (2)

10 (4) 19 282

Sales-type lease receipts, net of income recognized (590) 5,474 8,437 5,474

1 unchanged sentence

Deferred income taxes (183) (247) (446) (451)

Gain (loss) on disposal of assets (438) 7,197 3,848 6,630

Gain on disposal of assets 13 97 3,861 6,727

Distributable cash flow $ 73,584 $ 53,283 $ 215,327 $ 189,083

8 unchanged sentences

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,

2025 2024 2025 2024

13 unchanged sentences

Income from equity method investments (21,878) (15,602) (42,564) (31,974)

Other income, net (20) (40) (41) (211)

Other expense (income), net 67 34 26 (177)

Total non-operating expenses, net (536) (2,016) 15,464 56,898

23 unchanged sentences

Results of Operations

Consolidated Results of Operations — Comparison of the three and six months ended June 30, 2025, compared to the three and six months ended June 30, 2024

Net revenues decreased by $18.3 million, or 6.9%, in the second quarter of 2025 compared to the second quarter of 2024, primarily driven by the following:

• decreased revenue of $18.4 million in our West Texas marketing operations primarily driven by decreases in average sales prices per gallon, a net decrease in volumes sold, partially offset by an increase in RINs revenue:

◦ the average sales prices per gallon of gasoline and diesel sold decreased by $0.34 and $0.33 per gallon, respectively;

◦ the average volumes of gasoline sold decreased by 2.7 million and the average volumes of diesel sold increased by 0.3 million gallons;

◦ RINs revenue increased from $1.3 million in the second quarter of 2024 to $2.2 million in the second quarter of 2025, due to increased RINs prices.

• decrease of $7.4 million due to the assignment of the Big Spring refinery marketing agreement to Delek Holdings in the third quarter of 2024;

• 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 incremental revenue associated with Gravity and H2O Midstream acquisitions of $15.3 million and $24.0 million, respectively.

Net revenues decreased by $20.4 million, or 4.0%, in the six months ended June 30, 2025, compared to the six months ended June 30, 2024.

The decrease was primarily driven by the following:

• decreased revenue of $21.1 million in our West Texas marketing operations primarily driven by decrease in average sales prices per gallon, partially offset by net increase in volumes sold and an increase in RINs revenue:

Consolidated Results of Operations — Comparison of the three and nine months ended September 30, 2025, compared to the three and nine months ended September 30, 2024

Net revenues increased by $47.2 million, or 22.1%, in the third quarter of 2025 compared to the third quarter of 2024, primarily driven by the following:

• increase in incremental revenue associated with the Gravity acquisition of $20.7 million and an increase in revenue associated with the H2O Midstream acquisition of $11.0 million.

• increased revenue of $15.5 million related to the DPG dropdown agreement that went into effect in the second quarter of 2025

• increased revenue of $2.4 million in our West Texas marketing operations primarily driven by increase in volumes sold, increase in average sales prices of diesel per gallon, and an increase in RINs revenue, partially offset by decrease in average prices of gasoline per gallon:

◦ the average sales prices of gasoline sold decreased by $0.13 per gallon and the average prices of diesel sold increased by $0.04 per gallon;

◦ the average volumes of gasoline and diesel sold increased by 0.4 million and 1.2 million gallons, respectively;

◦ RINs revenue increased $1.0 million due to increased RINs prices.

• partially offset by a decrease of $1.4 million due to the assignment of the Big Spring refinery marketing agreement to Delek Holdings in the third quarter of 2024;

• decrease in revenue related to the termination of the Centrifuge Slurry agreement in December 2024

Net revenues increased by $26.8 million, or 3.7%, in the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024.

The increase was primarily driven by the following:

• increase in incremental revenue associated with the Gravity acquisition of $67.5 million and an increase in revenue associated with the H2O Midstream acquisition of $42.8 million.

• partially offset by decreased revenue of $18.7 million in our West Texas marketing operations primarily driven by decrease in average sales prices per gallon, partially offset by increase in volumes sold and an increase in RINs revenue:

◦ the average sales prices per gallon of gasoline and diesel sold decreased by $0.22 and $0.21 per gallon, respectively;

◦ the average volumes of diesel sold increased by 3.2 million and the average volumes of gasoline sold decreased by 1.2 million gallons;

◦ RINs revenue increased from $2.4 million in the second quarter of 2024 to $3.9 million in the second quarter of 2025, due to increased 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;

◦ RINs revenue increased $2.4 million due to increased RINs prices.

• decreased revenue of $40.0 million due to recording certain throughput fees as interest income under sales-type lease accounting, whereas these fees were recognized as revenue during part of the prior year period;

• decrease of $12.1 million due to the assignment of the Big Spring Refinery marketing agreement to Delek Holdings in the third quarter of 2024.

• partially offset by incremental revenue associated with the Gravity and H2O Midstream Acquisitions of $46.8 million and $31.8 million, respectively.

Cost of Materials and Other

Cost of materials and other decreased by $18.7 million, or 13.5%, in the second quarter of 2025 compared to the second quarter of 2024, primarily driven by the following:

• decreased costs of materials and other of $19.3 million in our West Texas marketing operations primarily driven by decreases in average cost per gallon of gasoline and diesel sold and net decrease in volumes sold:

Cost of materials and other increased by $12.2 million, or 10.4%, in the third quarter of 2025 compared to the third quarter of 2024, primarily driven by the following:

• increased costs of materials and other of $1.2 million in our West Texas marketing operations primarily driven by decreases in average cost per gallon of gasoline and diesel sold, partially offset by an increase in volumes sold:

◦ the average cost per gallon of gasoline and diesel sold decreased by $0.08 per gallon and $0.04 per gallon, respectively;

◦ the volumes of gasoline sold decreased by 2.7 million and the average volumes of diesel sold increased by 0.3 million gallons.

• incremental costs associated with the H2O Midstream and Gravity Acquisitions of $0.9 million and $2.7 million, respectively.

◦ the volumes of gasoline and diesel sold increased by 0.4 million and 1.2 million gallons, respectively.

• incremental costs associated with the Gravity and H2O Midstream Acquisitions of $5.3 million and $1.2 million, respectively.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Cost of materials and other decreased by $13.3 million, or 5.1%, in the six months ended June 30, 2025, compared to the six months ended June 30, 2024, primarily driven by the following:

• decreased costs of materials and other of $21.7 million in our West Texas marketing operations primarily driven by decrease in average cost per gallon, partially offset by net increase in volumes sold:

Cost of materials and other decreased by $1.1 million, or 0.3%, in the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024, primarily driven by the following:

• decreased costs of materials and other of $20.5 million in our West Texas marketing operations primarily driven by decrease in average cost per gallon, partially offset by net increase in volumes of diesel sold:

◦ the average cost per gallon of gasoline and diesel sold decreased by $0.19 per gallon and $0.24 per gallon, respectively;

◦ the average volumes of diesel sold increased by 3.2 million gallons, and the average volumes of gasoline sold decreased by 1.2 million.

• incremental costs associated with the H2O Midstream and Gravity Acquisitions of $1.7 million and $4.7 million, respectively.

• partially offset by incremental costs associated with the Gravity and H2O Midstream Acquisitions of $10.1 million and $2.9 million, respectively.

Operating Expenses

Operating expenses increased by $8.4 million, or 28.5%, in the second quarter of 2025 compared to the second quarter of 2024, primarily driven by the following:

• incremental expenses associated with the H2O Midstream and Gravity Acquisitions of $4.8 million and $11.0 million, respectively;

• partially offset by a decrease in outside services.

Operating expenses increased by $17.5 million, or 28.5%, in the six months ended June 30, 2025, compared to the six months ended June 30, 2024, primarily driven by the following:

• incremental expenses associated with the H2O Midstream and Gravity Acquisitions of $10.2 million and $17.8 million, respectively;

• partially offset by a decrease in outside services.

Operating expenses increased by $15.9 million, or 57.1%, in the third quarter of 2025 compared to the third quarter of 2024, primarily driven by the following:

• incremental costs associated with the Gravity and H2O Midstream Acquisitions of $6.2 million and $1.9 million, respectively;

• increase in natural gas and electrical costs;

• increase in employee costs.

Operating expenses increased by $33.4 million, or 37.4%, in the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024, primarily driven by the following:

• incremental costs associated with the Gravity and H2O Midstream Acquisitions of $24.0 million and $12.1 million, respectively;

• partially offset by decreases in outside services.

General and Administrative Expenses

General and administrative expenses increased by $2.9 million, or 48.7%, in the second quarter of 2025 compared to the second quarter of 2024, primarily driven by transaction costs of $2.5 million associated with the Gravity and H2O Midstream Acquisitions, the DPG Dropdown transaction and associated agreements with Delek Holdings.

General and administrative expenses increased by $6.9 million, or 63.7%, in the six months ended June 30, 2025, compared to the six months ended June 30, 2024, primarily driven by following:

• transaction costs of $5.8 million associated with the Gravity and H2O Midstream Acquisitions, the DPG Dropdown transaction and associated agreements with Delek Holdings;

• increase in insurance expense.

General and administrative expenses decreased by $11.2 million, or 71.3%, in the third quarter of 2025 compared to the third quarter of 2024, primarily driven by the following:

• decreases in outside services.

General and administrative expenses decreased by $4.3 million, or 16.1%, in the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024, primarily driven by following:

• decreases in outside services.

Depreciation and Amortization

Depreciation and amortization increased by $2.9 million, or 11.9%, in the second quarter of 2025 compared to the second quarter of 2024, primarily driven by the additional fixed asset base from the H2O Midstream and Gravity Acquisitions.

Depreciation and amortization increased by $4.1 million, or 8.1%, in the six months ended June 30, 2025, compared to the six months ended June 30, 2024, primarily driven by the additional fixed asset base from the H2O Midstream and Gravity Acquisitions.

Depreciation and amortization increased by $13.6 million, or 64.1%, in the third quarter of 2025 compared to the third quarter of 2024, primarily driven by the additional fixed asset base from the Gravity and H2O Midstream Acquisitions.

Depreciation and amortization increased by $17.7 million, or 24.6%, in the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024, primarily driven by the additional fixed asset base from the Gravity and H2O Midstream Acquisitions.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Other operating income, net

Other operating income, net decreased by $2.2 million, or 125%, in the second quarter of 2025 compared to the second quarter of 2024, primarily driven by the following:

• decrease in gain on disposal of assets of $7.6 million primarily due to condemnation proceeds of $8.3 million received in the second quarter of 2024;

• offset by increase of $5.4 million due to settlement of payment dispute in prior year.

Other operating income, net increased by $2.7 million, or 226.9%, in the six months ended June 30, 2025, compared to the six months ended June 30, 2024, primarily driven by the following:

• increase of $5.4 million due to settlement of payment dispute in prior year;

• partially offset by decrease in gain on disposal of assets of $2.8 million.

Other operating expense (income), net

Other operating expense, net increased by $3.1 million in the third quarter of 2025 compared to the third quarter of 2024.

Other operating income, net decreased by $0.5 million in the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024.

Interest Income

Interest income increased by $23.5 million in the second quarter of 2025 compared to the second quarter of 2024, 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 $46.1 million in the six months ended June 30, 2025, compared to the six months ended June 30, 2024, 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 $3.2 million in the third quarter of 2025 compared to the third quarter of 2024, 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 $49.3 million in the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024, 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 $6.4 million, or 18.2%, in the second quarter of 2025 compared to the second quarter of 2024, primarily driven by an increase in weighted-average interest rates.

Interest expense increased by $7.3 million, or 9.6%, in the six months ended June 30, 2025, compared to the six months ended June 30, 2024, primarily driven by an increase in weighted-average interest rates.

Interest expense increased by $11.0 million, or 29.6%, in the third quarter of 2025 compared to the third quarter of 2024, primarily driven by

• increased interest due to the issuance of the $700 million senior note during the second quarter 2025;

• partially offset by a decrease in interest on our outstanding revolver due to a decreased average balance.

Interest expense increased by $18.3 million, or 16.2%, in the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024, primarily driven by

• increased interest due to the issuance of the $700 million senior note during the second quarter 2025;

• partially offset by a decrease in interest on our outstanding revolver due to a decreased average balance;

• decreased interest due to the pay off of a term loan during 2024.

Results from Equity Method Investments

Income from equity method investments increased by $2.7 million, or 33.7%, in the second quarter of 2025 compared to the second quarter of 2024, primarily due to the following:

• the acquisition of the W2W Investment on August 5, 2024, which contributed income of $5.9 million during the period;

• partially offset by a $2.7 million decrease in income from our investment in Red River Pipeline Company LLC.

Income from equity method investments increased by $4.3 million, or 26.3%, in the six months ended June 30, 2025, compared to the six months ended June 30, 2024, primarily due to the following:

• the acquisition of the W2W Investment on August 5, 2024, which contributed income of $11.6 million during the period;

• partially offset by a $7.3 million decrease primarily related to our investment in Red River Pipeline Company LLC.

Income from equity method investments increased by $6.3 million, or 40.2%, in the third quarter of 2025 compared to the third quarter of 2024, primarily due to the following:

• the acquisition of the W2W Investment on August 5, 2024, which contributed incremental income of $10.4 million during the period;

• partially offset by a $4.1 million decrease in income from our investments in our other joint ventures.

Income from equity method investments increased by $10.6 million, or 33.1%, in the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024, primarily due to the following:

• the acquisition of the W2W Investment on August 5, 2024, which contributed incremental income of $22.0 million during the period;

• partially offset by a $11.4 million decrease in income from our investments in our other joint ventures.

Management's Discussion and Analysis of Financial Condition and Results of Operations

1 unchanged sentence

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, 2025, and 2024:

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, 2025, and 2024:

Gathering and Processing

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

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

2025 2024 2025 2024

4 unchanged sentences

Throughputs (bpd (1) )

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

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

2025 2024 2025 2024

7 unchanged sentences

Delaware Gathering Assets Volumes

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

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

2025 2024 2025 2024

6 unchanged sentences

Midland Water Gathering System Volumes (3)

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

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

2025 2024 2025 2024

4 unchanged sentences

(3) Consists of volumes of H2O Midstream and Gravity.

Gravity volumes are from January 2, 2025, to June 30, 2025.

Operational comparison of the three and six months ended June 30, 2025, compared to the three and six months ended June 30, 2024

Net revenues for the gathering and processing segment increased by $25.1 million, or 27.1%, in the second quarter of 2025 compared to the second quarter of 2024, primarily due to the following:

• an increase in revenue associated with the H2O Midstream operations of $15.3 million which began in the third quarter of 2024;

Gravity volumes are from January 2, 2025, to September 30, 2025.

Operational comparison of the three and nine months ended September 30, 2025, compared to the three and nine months ended September 30, 2024

Net revenues for the gathering and processing segment increased by $50.7 million, or 62.2%, in the third quarter of 2025 compared to the third quarter of 2024, primarily due to the following:

• an increase in revenue associated with the Gravity operations of $20.7 million which began on January 2, 2025;

• partially offset by a 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.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Net revenues for the gathering and processing segment increased by $47.8 million, or 25.4%, in the six months ended June 30, 2025, compared to the six months ended June 30, 2024, primarily due to the following:

• an increase in revenue associated with the H2O Midstream operations of $31.8 million which began in the third quarter of 2024;

• an increase in revenue associated with the H2O Midstream operations of $11.0 million which began in September 2024.

Net revenues for the gathering and processing segment increased by $98.5 million, or 36.5%, in the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024, primarily due to the following:

• an increase in revenue associated with the Gravity operations of $67.5 million which began on January 2, 2025;

• partially offset by a 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.

Management's Discussion and Analysis of Financial Condition and Results of Operations

• an increase in revenue associated with the H2O Midstream operations of $42.8 million which began in September 2024;

• partially offset by a decrease due to recording certain throughput fees as interest income under sales-type lease accounting, whereas these fees were recognized as revenue during part of the prior year period.

Cost of Materials and Other

Cost of materials and other for the gathering and processing segment increased by $2.1 million, or 10.6%, in the second quarter of 2025 compared to the second quarter of 2024, driven primarily by the following:

• incremental costs associated with the H2O Midstream and Gravity Acquisitions of $0.9 million and $2.7 million, respectively.

Cost of materials and other for the gathering and processing segment increased by $8.6 million, or 22.8%, in the six months ended June 30, 2025, compared to the six months ended June 30, 2024, driven primarily by the following:

• incremental costs associated with the H2O Midstream and Gravity Acquisitions of $1.7 million and $4.7 million, respectively.

Cost of materials and other for the gathering and processing segment increased by $11.3 million, or 56.5%, in the third quarter of 2025 compared to the third quarter of 2024, driven primarily by the following:

• incremental costs associated with the Gravity and H2O Midstream Acquisitions of $5.3 million and $1.2 million, respectively.

Cost of materials and other for the gathering and processing segment increased by $19.9 million, or 34.5%, in the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024, driven primarily by the following:

• incremental costs associated with the Gravity and H2O Midstream Acquisitions of $10.1 million and $2.9 million, respectively.

Operating Expenses

Operating expenses for the gathering and processing segment increased by $12.0 million, or 61.2%, in the second quarter of 2025 compared to the second quarter of 2024, primarily driven by the following:

• incremental costs associated with the H2O Midstream and Gravity Acquisitions of $4.8 million and $11.0 million, respectively;

• partially offset by a decrease in outside services.

Operating expenses for the gathering and processing segment increased by $22.8 million, or 58.2%, in the six months ended June 30, 2025, compared to the six months ended June 30, 2024, primarily driven by the following:

• incremental costs associated with the H2O Midstream and Gravity Acquisitions of $10.2 million and 17.8 million, respectively;

• partially offset by a decrease in outside services.

EBITDA increased by $9.3 million, or 16.9%, in the second quarter of 2025 compared to the second quarter of 2024, primarily driven by the following:

• incremental EBITDA of $9.4 million and $10.3 million associated with H2O Midstream and Gravity Acquisitions, respectively;

• partially offset by lower revenue related to sales-type lease accounting.

EBITDA increased by $19.4 million, or 17.3%, in the six months ended June 30, 2025, compared to the six months ended June 30, 2024, primarily driven by the following:

• incremental EBITDA of $19.6 million and $24.2 million associated with H2O Midstream and Gravity Acquisitions, respectively;

• partially offset by lower revenue related to sales-type lease accounting.

Operating expenses for the gathering and processing segment increased by $12.5 million, or 68.2%, in the third quarter of 2025 compared to the third quarter of 2024, primarily driven by the following:

• incremental costs associated with the Gravity and H2O Midstream Acquisitions of $6.2 million and $1.9 million, respectively;

• increases in employee costs.

Operating expenses for the gathering and processing segment increased by $35.4 million, or 61.4%, in the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024, primarily driven by the following:

• incremental costs associated with the Gravity and H2O Midstream Acquisitions of $24.0 million and $12.1 million, respectively.

EBITDA increased by $27.2 million, or 64.1%, in the third quarter of 2025 compared to the third quarter of 2024, primarily driven by the following:

• incremental EBITDA of $9.1 million and $7.6 million associated with the Gravity and H2O Midstream Acquisitions, respectively.

EBITDA increased by $46.6 million, or 30.1%, in the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024, primarily driven by the following:

• incremental EBITDA of $33.3 million and $27.2 million associated with the Gravity and H2O Midstream Acquisitions, respectively.

Management's Discussion and Analysis of Financial Condition and Results of Operations

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, 2025, and 2024:

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, 2025, and 2024:

Wholesale Marketing and Terminalling

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

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

2025 2024 2025 2024

4 unchanged sentences

Operating Information

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

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

2025 2024 2025 2024

10 unchanged sentences

(3) 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, 2025, compared to the three and six months ended June 30, 2024

Net revenues for the wholesale marketing and terminalling segment decreased by $31.0 million, or 22.9%, in the second quarter of 2025 compared to the second quarter of 2024, driven primarily by the following:

◦ the average sales prices per gallon of gasoline and diesel sold decreased by $0.34 and $0.33 per gallon, respectively;

◦ the volumes of gasoline sold decreased by 2.7 million and the volumes of diesel sold increased by 0.3 million gallons;

◦ RINs revenue increased from $1.3 million in the second quarter of 2024 to $2.2 million in the second quarter of 2025, due to increased 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;

Operational comparison of the three and nine months ended September 30, 2025, compared to the three and nine months ended September 30, 2024

Net revenues for the wholesale marketing and terminalling segment decreased by $2.2 million, or 2.1%, in the third quarter of 2025 compared to the third quarter of 2024, driven primarily by the following:

• decrease due to recording certain throughput fees as interest income under sales-type lease accounting, whereas these fees were recognized as revenue during part of the prior year period;

• decrease of $1.4 million due to the assignment of the Big Spring refinery marketing agreement to Delek Holdings in the third quarter of 2024;

Management's Discussion and Analysis of Financial Condition and Results of Operations

Net revenues for the wholesale marketing and terminalling segment decreased by $43.6 million, or 17.1%, in the six months ended June 30, 2025, compared to the six months ended June 30, 2024, primarily driven by the following:

• partially offset by increased revenue of $2.4 million in our West Texas marketing operations primarily driven by a net increase in volumes sold, an increase in average sales prices of diesel per gallon, and an increase in RINs revenue, partially offset by a decrease in average prices of gasoline per gallon:

◦ the average sales prices of gasoline sold decreased by $0.13 per gallon and the average prices of diesel sold increased by $0.04 per gallon;

◦ the average volumes of gasoline and diesel sold increased by 0.4 million and 1.2 million gallons, respectively;

◦ RINs revenue increased $1.0 million due to increased RINs prices.

Net revenues for the wholesale marketing and terminalling segment decreased by $45.8 million, or 12.6%, in the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024, primarily driven by the following:

• decreased revenue of $18.7 million in our West Texas marketing operations primarily driven by decrease in average sales prices per gallon, partially offset by increase in volumes sold and an increase in RINs revenue:

◦ the average sales prices per gallon of gasoline and diesel sold decreased by $0.22 and $0.21 per gallon, respectively;

◦ the volumes of diesel sold increased by 2.0 million and the volumes of gasoline sold decreased by 1.6 million gallons;

◦ RINs revenue increased from $2.4 million in the second quarter of 2024 to $3.9 million in the second quarter of 2025, due to increased 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;

• decrease of $14.2 million due to the assignment of the Big Spring refinery marketing agreement to Delek Holdings in the third quarter of 2024.

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, 2025, and 2024.

◦ the average volumes of diesel sold increased by 3.2 million and the average volumes of gasoline sold decreased by 1.2 million gallons;

Management's Discussion and Analysis of Financial Condition and Results of Operations

◦ RINs revenue increased $2.4 million due to increased RINs prices.

• decrease due to recording certain throughput fees as interest income under sales-type lease accounting, whereas these fees were recognized as revenue during part of the prior year period;

• decrease of $12.1 million due to the assignment of the Big Spring refinery marketing agreement to Delek Holdings in the third quarter of 2024.

Cost of Materials and Other

Cost of materials and other for the wholesale marketing and terminalling segment decreased by $19.4 million, or 18.7%, in the second quarter of 2025 compared to the second quarter of 2024, driven primarily by the following:

Cost of materials and other for the wholesale marketing and terminalling segment increased by $1.5 million, or 1.8%, in the third quarter of 2025 compared to the third quarter of 2024, driven primarily by the following:

◦ the average cost per gallon of gasoline and diesel sold decreased by $0.08 per gallon and $0.04 per gallon, respectively;

◦ the volumes of gasoline sold decreased by 2.7 million and the volumes of diesel sold increased by 0.3 million gallons.

Cost of materials and other for the wholesale marketing and terminalling segment decreased by $21.7 million, or 11.1% , in the six months ended June 30, 2025, compared to the six months ended June 30, 2024, primarily driven by the following:

◦ the volumes of gasoline and diesel sold increased by 0.4 million and 1.2 million gallons, respectively.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Cost of materials and other for the wholesale marketing and terminalling segment decreased by $20.1 million, or 7.2% , in the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024, primarily driven by the following:

• decreased costs of materials and other of $20.5 million in our West Texas marketing operations primarily driven by decrease in average cost per gallon, partially offset by a net increase in volumes of diesel sold:

◦ the average cost per gallon of gasoline and diesel sold decreased by $0.19 per gallon and $0.24 per gallon, respectively;

◦ the volumes of diesel sold increased by 2.0 million gallons, and the volumes of gasoline sold decreased by 1.6 million.

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, 2025, and 2024.

◦ the average volumes of diesel sold increased by 3.2 million gallons, and the average volumes of gasoline sold decreased by 1.2 million.

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, 2025, and 2024.

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 $2.1 million, or 64.2%, in the second quarter of 2025 compared to the second quarter of 2024, driven primarily by a decrease in outside service costs.

Operating expenses for the wholesale marketing and terminalling segment decreased by $2.1 million or 30.0%, in the six months ended June 30, 2025, compared to the six months ended June 30, 2024, driven primarily by a decrease in outside service costs.

Management's Discussion and Analysis of Financial Condition and Results of Operations

EBITDA decreased by $11.3 million, or 37.3%, in the second quarter of 2025 compared to the second quarter of 2024, driven primarily by the following:

Operating expenses for the wholesale marketing and terminalling segment decreased by $1.1 million, or 31.9%, in the third quarter of 2025 compared to the third quarter of 2024, driven primarily by a decrease in outside service costs.

Operating expenses for the wholesale marketing and terminalling segment decreased by $3.2 million or 30.6%, in the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024, driven primarily by a decrease in outside service costs.

EBITDA decreased by $6.0 million, or 29.8%, in the third quarter of 2025 compared to the third quarter of 2024, driven primarily by the following:

• lower revenue related to sales-type lease accounting;

1 unchanged sentence

• partially offset by a $1.11 per barrel increase in wholesale margins.

EBITDA decreased by $23.3 million, or 42.0%, in the six months ended June 30, 2025, compared to the six months ended June 30, 2024, primarily driven by the following:

EBITDA decreased by $29.3 million, or 38.8%, in the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024, primarily driven by the following:

• lower revenue related to sales-type lease accounting;

3 unchanged sentences

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, 2025 and 2024:

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, 2025 and 2024:

Storage and Transportation

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

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

2025 2024 2025 2024

3 unchanged sentences

Segment EBITDA $ 6,250 $ 7,526 $ 17,691 $ 42,405

Operation comparison of the three and six months ended June 30, 2025, compared to the three and six months ended June 30, 2024

Net revenues for the storage and transportation segment decreased by $12.4 million, or 34.1%, in the second quarter of 2025 compared to the second quarter of 2024, primarily due to recording certain storage fees as interest income under sales-type lease accounting that were recorded as revenue in the prior year period.

Net revenues for the storage and transportation segment decreased by $24.7 million, or 33.7%, in the six months ended June 30, 2025, compared to the six months ended June 30, 2024, 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.

Operation comparison of the three and nine months ended September 30, 2025, compared to the three and nine months ended September 30, 2024

Net revenues for the storage and transportation segment decreased by $1.3 million, or 5.0%, in the third quarter of 2025 compared to the third quarter of 2024, primarily due to recording certain storage fees as interest income under sales-type lease accounting, whereas these fees were recognized as revenue during part of the prior year period.

Net revenues for the storage and transportation segment decreased by $26.0 million, or 26.3%, in the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024, primarily due to recording certain storage fees as interest income under sales-type lease accounting, whereas these fees were recognized as revenue during part of the prior year period.

Cost of Materials and Other

Cost of materials and other for the storage and transportation segment decreased by $1.4 million, or 9.5%, in the second quarter of 2025 compared to the second quarter of 2024.

Cost of materials and other for the storage and transportation segment decreased by $0.2 million, or 0.9%, in the six months ended June 30, 2025, compared to the six months ended June 30, 2024.

Cost of materials and other for the storage and transportation segment decreased by $0.7 million, or 4.9%, in the third quarter of 2025 compared to the third quarter of 2024.

Cost of materials and other for the storage and transportation segment decreased by $0.9 million, or 2.2%, in the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024.

Operating Expenses

Operating expenses for the storage and transportation segment decreased by $0.7 million, or 16.3%, in the second quarter of 2025 compared to the second quarter of 2024.

Operating expenses for the storage and transportation segment decreased by $0.6 million, or 6.3%, in the six months ended June 30, 2025, compared to the six months ended June 30, 2024.

EBITDA decreased by $9.7 million, or 58.1%, in the second quarter of 2025 compared to the second quarter of 2024, primarily due to decrease in revenue related to sales-type lease accounting.

Operating expenses for the storage and transportation segment increased by $0.5 million, or 9.9%, in the third quarter of 2025 compared to the third quarter of 2024.

Operating expenses for the storage and transportation segment decreased by $0.1 million, or 0.9%, in the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024.

EBITDA decreased by $1.3 million, or 17.0%, in the third quarter of 2025 compared to the third quarter of 2024, primarily due to decrease in revenue related to sales-type lease accounting.

Management's Discussion and Analysis of Financial Condition and Results of Operations

EBITDA decreased by $23.4 million, or 67.2%, in the six months ended June 30, 2025, compared to the six months ended June 30, 2024, primarily due to a decrease in revenue related to sales-type lease accounting.

EBITDA decreased by $24.7 million, or 58.3%, in the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024, primarily due to a decrease in revenue related to sales-type lease accounting.

Management's Discussion and Analysis of Financial Condition and Results of Operations

4 unchanged sentences

Investments in pipeline joint ventures segment include the Partnership's joint ventures investments described in Note 9 of our condensed consolidated financial statements in Item 1, 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, 2025.

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, 2025.

Liquidity and Capital Resources

6 unchanged sentences

(iii) potential issuance of additional equity;

At June 30, 2025, our total liquidity amounted to $1,070.6 million comprised of $1,069.2 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 $1.4 million in cash and cash equivalents.

At September 30, 2025, our total liquidity amounted to $1,000.1 million comprised of $993.2 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 $6.9 million in cash and cash equivalents.

Historically, we have generated adequate cash from operations to fund ongoing working capital requirements, pay quarterly cash distributions and operational capital expenditures, and we expect the same to continue in the foreseeable future.

10 unchanged sentences

Cash Distributions

On July 29, 2025, the board of directors of our general partner declared a distribution of $1.115 per common unit (the "Distribution"), which equates to an estimated amount of approximately $59.6 million per quarter, or approximately $238.4 million per year, based on the number of common units outstanding as of June 30, 2025.

The Distribution will be paid on August 14, 2025, to common unitholders of record on August 8, 2025, and represents a 2.3% increase over the second quarter 2024 distribution.

On October 28, 2025, the board of directors of our general partner declared a distribution of 1.120 per common unit (the "Distribution"), which equates to an estimated amount of approximately $59,898 per quarter, or approximately $239.6 million per year, based on the number of common units outstanding as of September 30, 2025.

The Distribution will be paid on November 13, 2025, to common unitholders of record on November 7, 2025, and represents a 1.8% increase over the third quarter 2024 distribution.

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

9 unchanged sentences

June 30, 2025 $1.115 $59,612

September 30, 2025 $1.120 $59,898

Unit Repurchase

On February 24, 2025, the Partnership and Delek Holdings entered into a Common Unit Purchase Agreement whereby the Partnership may repurchase common units from time to time from Delek Holdings in one or more transactions for an aggregate purchase price of up to $150.0 million through December 31, 2026 (each such repurchase, a “Repurchase”).The Partnership may fund Repurchases using cash on hand or borrowings under its existing credit facility, subject to compliance with applicable covenants.

During the six months ended June 30, 2025, 243,075 common units were repurchased from Delek Holdings and cancelled at the time of the transaction for a total of $10.0 million.

No common units were repurchased for the six months ended June 30, 2024.

As of June 30, 2025, there was $140.0 million of authorization remaining under the Common Unit Repurchase Agreement.

The following table sets forth a summary of our consolidated cash flows for the six months ended June 30, 2025, and 2024 (in thousands):

Six Months Ended June 30,

During the nine months ended September 30, 2025, 243,075 common units were repurchased from Delek Holdings and cancelled at the time of the transaction for a total of $10.0 million.

No common units were repurchased for the nine months ended September 30, 2024.

As of September 30, 2025, there was $140.0 million of authorization remaining under the Common Unit Repurchase Agreement.

The following table sets forth a summary of our consolidated cash flows for the nine months ended September 30, 2025, and 2024 (in thousands):

Nine Months Ended September 30,

Net cash provided by operating activities $ 193,910 $ 156,441

Net cash used in investing activities (411,661) (314,528)

Net cash provided by (used in) financing activities 204,762 (114,720)

Net (decrease) increase in cash and cash equivalents $ (3,948) $ 1,356

Net cash provided by financing activities 219,279 161,649

Net increase (decrease) in cash and cash equivalents $ 1,528 $ 3,562

Operating Activities

Net cash provided by operating activities increased by $7.5 million for the six months ended June 30, 2025, compared to the six months ended June 30, 2024.

Net cash provided by operating activities increased by $37.5 million for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024.

The cash receipts from customer activities increased by $57.3 million and cash payments to suppliers and for allocations to Delek Holdings for salaries decreased by $21.1 million.

1 unchanged sentence

Investing Activities

Net cash used in investing activities increased by $332.3 million during the six months ended June 30, 2025, compared to the six months ended June 30, 2024, primarily due to Gravity Acquisition for $181.2 million.

Net cash used in investing activities increased by $97.1 million during the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024, primarily due to Gravity Acquisition for $181.2 million.

Additionally, purchases of property, plant and equipment and intangibles increased $154.1 million and $7.2 million, respectively, primarily associated with growth projects in our gathering and processing segment.

2 unchanged sentences

Financing Activities

Net cash provided by financing activities increased by $319.5 million for the six months ended June 30, 2025, compared to the six months ended June 30, 2024.

Net cash provided by financing activities increased by $57.6 million for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024.

This increase was primarily driven by a decrease in net payments on term loans of $172.3 million and an increase in net proceeds from our revolving credit facility of $47.1 million.

3 unchanged sentences

Debt Overview

As of June 30, 2025, we had total indebtedness of $2,230.9 million.

The increase of $345.5 million in our long-term debt balance compared to the balance at December 31, 2024, resulted from additional borrowings under our 2033 Notes, partially offset by the paydown of the revolving facility during the six months ended June 30, 2025.

As of June 30, 2025, our total indebtedness consisted of:

As of September 30, 2025, we had total indebtedness of $2,306.9 million.

The increase of $421.5 million in our long-term debt balance compared to the balance at December 31, 2024, resulted from additional borrowings under our 2033 Notes, partially offset by the paydown of the revolving facility during the nine months ended September 30, 2025.

As of September 30, 2025, our total indebtedness consisted of:

• An aggregate principal amount of $156.9 million under the DKL Revolving Facility, due on October 13, 2027, with an average borrowing rate of 7.39%.

2 unchanged sentences

• An aggregate principal amount of $700.0 million, under the 2033 Notes (7.375% senior notes), due in 2033, with an effective interest rate of 7.64%.

We believe we were in compliance with the covenants in all debt facilities as of June 30, 2025.

We believe we were in compliance with the covenants in all debt facilities as of September 30, 2025.

See Note 6 to our condensed consolidated financial statements for a complete discussion of our third-party indebtedness.

15 unchanged sentences

Management's Discussion and Analysis of Financial Condition and Results of Operations

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, 2025:

(in thousands) Full Year 2025 Forecast Six Months Ended June 30, 2025

(in thousands) Full Year 2025 Forecast Nine Months Ended September 30, 2025

Gathering and Processing

20 unchanged sentences

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