Delek Logistics Partners, LP 10-Q

Item 1. Financial Statements Delek Logistics Partners, LP Condensed Consolidated Balance Sheets (Unaudited) (thousands, except unit and per unit data) September 30, 2025 December 31, 2024 ASSETS Current assets: Cash and cash equivalents $ 6,912 $ 5,384 Accounts receivable 91,816 54,725 Accounts receivable from related parties 242,366 33,313 Lease receivable - affiliate 21,632 22,783 Inventory 18,635 5,427 Other current assets 1,432 24,260 Total current assets 382,793 145,892 Property, plant and equipment: Property, plant and equipment 1,794,458 1,375,391 Less: accumulated depreciation ( 375,615 ) ( 311,070 ) Property, plant and equipment, net 1,418,843 1,064,321 Equity method investments 325,753 317,152 Customer relationship intangibles, net 238,571 186,911 Other intangibles, net 134,237 94,547 Goodwill 12,203 12,203 Operating lease right-of-use assets 12,844 16,654 Net lease investment - affiliate 186,560 193,126 Other non-current assets 35,437 10,753 Total assets $ 2,747,241 $ 2,041,559 LIABILITIES AND EQUITY Current liabilities: Accounts payable $ 308,405 $ 41,380 Interest payable 27,860 30,665 Excise and other taxes payable 17,922 6,764 Current portion of operating lease liabilities 3,490 5,340 Accrued expenses and other current liabilities 12,556 4,629 Total current liabilities 370,233 88,778 Non-current liabilities: Long-term debt, net of current portion 2,288,318 1,875,397 Operating lease liabilities, net of current portion 4,134 6,004 Asset retirement obligations 23,445 15,639 Other non-current liabilities 43,639 20,213 Total non-current liabilities 2,359,536 1,917,253 Equity: Common unitholders - public; 19,611,965 units issued and outstanding at September 30, 2025 ( 17,374,618 at December 31, 2024) 514,884 440,957 Common unitholders - Delek Holdings; 33,868,203 units issued and outstanding at September 30, 2025 ( 34,111,278 at December 31, 2024) ( 497,412 ) ( 405,429 ) Total equity 17,472 35,528 Total liabilities and equity $ 2,747,241 $ 2,041,559 See accompanying notes to the condensed consolidated financial statements 3 | Financial Statements Delek Logistics Partners, LP Condensed Consolidated Statements of Income and Comprehensive Income (Unaudited) (In thousands, except unit and per unit data) Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Net revenues Affiliate (1) $ 131,016 $ 114,899 $ 371,420 $ 411,352 Third party 130,261 99,171 386,137 319,421 Net revenues 261,277 214,070 757,557 730,773 Cost of sales: Cost of materials and other - affiliate (1) 85,486 84,015 259,863 279,962 Cost of materials and other - third party 44,238 33,495 118,274 99,300 Operating expenses (excluding depreciation and amortization presented below) 43,472 27,746 121,627 88,895 Depreciation and amortization 34,128 19,969 86,505 67,882 Total cost of sales 207,324 165,225 586,269 536,039 Operating expenses related to wholesale business (excluding depreciation and amortization presented below) 381 174 1,285 569 General and administrative expenses 4,520 15,745 22,328 26,624 Depreciation and amortization 671 1,235 3,107 4,024 Other operating expense (income), net 3,013 ( 117 ) ( 835 ) ( 1,294 ) Total operating costs and expenses 215,909 182,262 612,154 565,962 Operating income 45,368 31,808 145,403 164,811 Interest income ( 26,716 ) ( 23,470 ) ( 72,801 ) ( 23,498 ) Interest expense 47,991 37,022 130,803 112,547 Income from equity method investments ( 21,878 ) ( 15,602 ) ( 42,564 ) ( 31,974 ) Other expense (income), net 67 34 26 ( 177 ) Total non-operating expenses, net ( 536 ) ( 2,016 ) 15,464 56,898 Income before income tax expense 45,904 33,824 129,939 107,913 Income tax expense 344 150 771 533 Net income 45,560 33,674 129,168 107,380 Comprehensive income $ 45,560 $ 33,674 $ 129,168 $ 107,380 Net income per unit: Basic $ 0.85 $ 0.71 $ 2.41 $ 2.32 Diluted $ 0.85 $ 0.71 $ 2.41 $ 2.32 Weighted average common units outstanding: Basic 53,467,306 47,109,008 53,505,419 46,248,003 Diluted 53,519,572 47,135,101 53,540,795 46,269,423 (1) See Note 3 for a description of our material affiliate revenue and purchases transactions. See accompanying notes to the condensed consolidated financial statements 4 | Financial Statements Delek Logistics Partners, LP Condensed Consolidated Statements of Partners' Equity (Deficit) (Unaudited) (in thousands) Common - Public Common - Delek Holdings Total Preferred Balance as of June 30, 2025 $ 519,930 $ ( 487,939 ) $ 31,991 $ — Cash distributions (1) ( 21,849 ) ( 37,763 ) ( 59,612 ) — Net income attributable to partners 16,698 28,862 45,560 — Distributions — ( 1,484 ) ( 1,484 ) — Other 105 912 1,017 — Balance as of September 30, 2025 $ 514,884 $ ( 497,412 ) $ 17,472 $ — Common - Public Common - Delek Holdings Total Preferred Balance as of June 30, 2024 $ 287,195 $ ( 338,502 ) $ ( 51,307 ) $ — Cash distributions (1) ( 14,082 ) ( 37,181 ) ( 51,263 ) — Net income attributable to partners 9,308 24,366 33,674 — Issuance of units — — — 70,000 Redemption of units — ( 97,949 ) ( 97,949 ) — Contributions — 50,873 50,873 — Other 37 827 864 — Balance as of September 30, 2024 $ 282,458 $ ( 397,566 ) $ ( 115,108 ) $ 70,000 Common - Public Common - Delek Holdings Total Preferred Balance as of December 31, 2024 $ 440,957 $ ( 405,429 ) $ 35,528 $ — Cash distributions (1) ( 65,184 ) ( 113,050 ) ( 178,234 ) — Net income attributable to partners 47,245 81,923 129,168 — Issuance of units 91,511 — 91,511 — Unit repurchase — ( 10,000 ) ( 10,000 ) — Distributions — ( 53,424 ) ( 53,424 ) — Other 355 2,568 2,923 — Balance as of September 30, 2025 $ 514,884 $ ( 497,412 ) $ 17,472 $ — Common - Public Common - Delek Holdings Total Preferred Balance as of December 31, 2023 $ 160,402 $ ( 322,271 ) $ ( 161,869 ) $ — Cash distributions (1) ( 37,987 ) ( 110,092 ) ( 148,079 ) — Net income attributable to partners 27,812 79,568 107,380 — Issuance of units 132,202 — 132,202 70,000 Redemption of units — ( 97,949 ) ( 97,949 ) — Contributions — 50,873 50,873 — Other 29 2,305 2,334 — Balance as of September 30, 2024 $ 282,458 $ ( 397,566 ) $ ( 115,108 ) $ 70,000 (1) Cash distributions include $ 0.3 million related to distribution equivalents on vested phantom units for the nine months ended September 30, 2024, with no distribution equivalents on vested phantom units for the three months ended September 30, 2024. There were no distribution equivalents on vested phantom units for the three and nine months ended September 30, 2025 . 5 | Financial Statements Delek Logistics Partners, LP Condensed Consolidated Statements of Cash Flows (Unaudited) (in thousands) Nine Months Ended September 30, 2025 2024 Cash flows from operating activities: Net income $ 129,168 $ 107,380 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 89,612 71,906 Non-cash lease expense 5,045 5,689 Amortization of marketing contract intangible — 4,206 Amortization of deferred revenue ( 2,102 ) ( 2,055 ) Amortization of deferred financing costs and debt discount 4,274 3,955 Income from equity method investments ( 42,564 ) ( 31,974 ) Dividends from equity method investments 21,424 28,309 Loss on extinguishment of debt — 3,571 Other non-cash adjustments 4,094 ( 3,378 ) Changes in assets and liabilities: Accounts receivable ( 20,658 ) ( 399 ) Inventories and other current assets ( 2,788 ) ( 332 ) Accounts payable and other current liabilities 269,392 ( 5,982 ) Accounts receivable/payable to related parties ( 263,622 ) ( 30,625 ) Net investment in leases - affiliate 7,717 5,531 Non-current assets and liabilities, net ( 5,082 ) 639 Net cash provided by operating activities 193,910 156,441 Cash flows from investing activities: Asset acquisitions from Delek Holdings — ( 83,903 ) Purchases of property, plant and equipment ( 237,143 ) ( 83,008 ) Proceeds from sales of property, plant and equipment 3,408 10,191 Purchases of intangible assets ( 8,914 ) ( 1,690 ) Business combination, net of cash acquired ( 181,180 ) ( 159,495 ) Distributions from equity method investments 12,168 3,377 Net cash used in investing activities ( 411,661 ) ( 314,528 ) Cash flows from financing activities: Distributions to common unitholders - public ( 65,184 ) ( 37,987 ) Distributions to common unitholders - Delek Holdings ( 113,050 ) ( 110,092 ) Proceeds from term debt 700,000 1,059,000 Payments on term debt — ( 531,250 ) Proceeds from revolving facility 1,106,900 1,021,600 Payments on revolving facility ( 1,385,450 ) ( 1,347,200 ) Unit repurchase ( 10,000 ) — Proceeds from issuance of common units, net of underwriters' discount — 132,202 Payments on other financing agreements — ( 6,214 ) Deferred financing costs paid ( 10,854 ) ( 18,154 ) Other financing activities ( 3,083 ) ( 256 ) Net cash provided by financing activities 219,279 161,649 Net increase in cash and cash equivalents 1,528 3,562 Cash and cash equivalents at the beginning of the period 5,384 3,755 Cash and cash equivalents at the end of the period $ 6,912 $ 7,317 Nine Months Ended September 30, 2025 2024 Supplemental disclosures of cash flow information: Cash paid during the period for: Interest $ 129,334 $ 95,267 Non-cash investing activities: Inventory received in connection with DPG Dropdown $ 6,860 $ — Equity attributable to W2W Holdings Acquisition $ — $ ( 62,783 ) Forgiveness of related party receivable in connection with W2W Holdings Acquisition $ — $ 60,000 Preferred units issued in connection with H2O Acquisition $ — $ 70,000 Forgiveness of related party receivable in connection with DPG Dropdown $ 58,800 $ — Common units issued in connection with Gravity Acquisition $ 91,511 $ — Increase in accrued capital expenditures $ 3,619 $ 7,542 Non-cash financing activities: Lease liability arising from obtaining right-of-use assets during the period $ 33,110 $ 1,398 Decrease in right-of-use assets due to lease terminations during the period $ 1,176 $ — See accompanying notes to the condensed consolidated financial statements 6 | Notes to the Condensed Consolidated Financial Statements (Unaudited) Delek Logistics Partners, LP Notes to the Condensed Consolidated Financial Statements (Unaudited) 1. Organization and Basis of Presentation As used in this report, the terms "Delek Logistics Partners, LP," the "Partnership," "we," "us," or "our" may refer to Delek Logistics Partners, LP, one or more of its consolidated subsidiaries or all of them taken as a whole. The Partnership is a Delaware limited partnership formed in April 2012 by Delek US Holdings, Inc. ("Delek Holdings") and its subsidiary Delek Logistics GP, LLC, our general partner (our "general partner"). The Partnership provides gathering, pipeline and other transportation services primarily for crude oil and natural gas customers, storage, wholesale marketing and terminalling services primarily for intermediate and refined product customers, and water disposal and recycling services through its owned assets and joint ventures located primarily in the Permian Basin and other select areas in the Gulf Coast region. A majority of our existing assets are both integral to and dependent upon the success of Delek Holdings' refining operations, as many of our assets are contracted exclusively to Delek Holdings in support of its Tyler, Texas (the "Tyler Refinery"), El Dorado, Arkansas (the "El Dorado Refinery") and Big Spring, Texas (the "Big Spring Refinery"). On September 11, 2024, Delek Logistics completed the acquisition of 100 % of the limited liability company interests in H2O Midstream Intermediate, LLC, H2O Midstream Permian LLC, and H2O Midstream LLC from H2O Midstream Holdings, LLC ("H2O Purchase Agreement"), which included water disposal and recycling operations in the Midland Basin in Texas. See Note 2 for further information. On January 2, 2025, we acquired 100 % of the limited liability company interests in Gravity Water Intermediate Holdings LLC from Gravity Water Holdings LLC (the "Seller") related to the Seller's water disposal and recycling operations in the Permian Basin and the Bakken (the “Gravity Acquisition”). See Note 2 for further information. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with United States Generally Accepted Accounting Principles ("GAAP") have been condensed or omitted, although management believes that the disclosures herein are adequate to make the financial information presented not misleading. Our unaudited condensed consolidated financial statements have been prepared in conformity with GAAP applied on a consistent basis with those of the annual audited financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2024 (our "Annual Report on Form 10-K"), filed with the U.S. Securities and Exchange Commission (the "SEC") on February 26, 2025, and in accordance with the rules and regulations of the SEC. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto for the year ended December 31, 2024, included in our Annual Report on Form 10-K. All adjustments necessary for a fair presentation of the financial position and the results of operations for the interim periods presented have been included. All intercompany accounts and transactions have been eliminated. Such intercompany transactions do not include those with Delek Holdings or our general partner, which are presented as related parties in these accompanying condensed consolidated financial statements. All adjustments are of a normal, recurring nature. Operating results for the interim period should not be viewed as representative of results that may be expected for any future interim period or for the full year. Accounting Pronouncements Not Yet Adopted ASU 2025-03, "Business Combinations (Topic 805) and Consolidation (Topic 810): Determining the Accounting Acquirer in the Acquisition of a VIE In May 2025, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2025-03, Business Combinations (Topic 805) and Consolidation (Topic 810): Determining the Accounting Acquirer in a VIE. This standard clarifies the guidance in determining the accounting acquirer in a business combination effected primarily by exchanging equity interests when the acquiree is a VIE that meets the definition of a business. The standard is effective for fiscal years beginning after December 15, 2026, including interim periods within those fiscal years. Early adoption is permitted, and the standard is to be applied prospectively to acquisitions after the adoption date. The adoption of ASU 2025-03 will not affect our financial position or our results of operations, but could impact future business combinations. ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40) In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40) ("ASU 2024-03"). ASU 2024-03 requires disaggregation of expenses into specific categories such as purchase of inventory, employee compensation, depreciation, and intangible asset amortization, by relevant expense caption on the statement of operations. This update is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted on either a prospective or retrospective basis. The adoption will not affect our financial position or our results of operations. The adoption of ASU 2024-03 will not affect our financial position or our results of operations, but will result in additional disclosures. 7 | Notes to the Condensed Consolidated Financial Statements (Unaudited) 2. Acquisitions Gravity Acquisition On January 2, 2025, we completed the Gravity Acquisition for a preliminary purchase price of $ 300.8 million, subject to customary adjustments for net working capital. The purchase price was comprised of $ 209.3 million in cash consisting of a cash deposit of $ 22.8 million paid in December 2024 upon execution of the purchase agreement and $ 186.5 million paid at closing on January 2, 2025, and 2,175,209 of common units. For the three and nine months ended September 30, 2025, we incurred $ 0.7 million and $ 4.8 million, respectively, in incremental direct acquisition and integration costs that principally consist of legal, advisory and other professional fees. Such costs are included in general and administrative expenses in the accompanying condensed consolidated statements of income and comprehensive income. Our consolidated financial and operating results reflect the Gravity Acquisition operations beginning January 2, 2025. Our results of operations included revenue and net income of $ 20.7 million and $ 6.1 million, respectively for the three months ended September 30, 2025, and $ 67.5 million and $ 24.0 million, respectively, for the period from January 2, 2025, through September 30, 2025, related to these operations. This acquisition was accounted for using the acquisition method of accounting, whereby the purchase price is measured at acquisition date fair value of assets acquired and liabilities assumed. Determination of Purchase Price The table below presents the estimated purchase price (in thousands): Base purchase price: $ 291,561 Less: Adjusted Net Working Capital (as defined in the Gravity Acquisition Agreement) 3,814 Plus: V arious closing adjustments 5,433 Adjusted purchase price $ 300,808 Cash paid $ 209,297 Fair value of common units issued (1) 91,511 Preliminary purchase price $ 300,808 (1) The increase from the $ 85.0 million base purchase price outlined in the purchase agreement for the common unit consideration was driven by an appreciation in the common unit price. 8 | Notes to the Condensed Consolidated Financial Statements (Unaudited) Purchase Price Allocation The following table summarizes the preliminary fair values of assets acquired and liabilities assumed in the Gravity Acquisition as of January 2, 2025 (in thousands): Assets acquired: Cash and cash equivalents $ 5,317 Accounts receivables 16,433 Inventories 1,851 Other current assets 1,681 Property, plant and equipment 191,485 Operating lease right-of-use assets 107 Customer relationship intangible (1) 66,271 Other intangibles (1) 31,921 Other non-current assets 59 Total assets acquired 315,125 Liabilities assumed: Accounts payable 2,459 Accrued expenses and other current liabilities 5,733 Current portion of operating lease liabilities 54 Asset retirement obligations 6,022 Operating lease liabilities, net of current portion 49 Total liabilities assumed 14,317 Fair value of net assets acquired $ 300,808 (1) The acquired intangible assets amount includes the following identified intangibles: • Customer relationship intangible that is subject to amortization with a preliminary fair value of $ 66.3 million, which we estimate to be amortized over approximately 32 years. • Rights-of-way intangibles are valued at $ 31.9 million, the majority of which have an indefinite life. These fair value estimates are preliminary and therefore, the final fair value of assets acquired and liabilities assumed and the resulting effect on our financial position may change once all necessary information has become available and we finalize our valuations. To the extent possible, estimates have been considered and recorded, as appropriate, for the items above based on the information available as of September 30, 2025. We will continue to evaluate these items until they are satisfactorily resolved and adjust our purchase price allocation accordingly, within the allowable measurement period (not to exceed one year from the date of acquisition), as defined by ASC 805. The fair value of property, plant and equipment was based on the combination of the cost and market approaches. Key assumptions in the cost approach include determining the replacement cost by evaluating recently published data and adjusting replacement cost for physical deterioration, functional and economic obsolescence. We used the market approach to measure the value of certain assets through an analysis of recent sales or offerings of comparable properties. Customer relationships were valued using the income approach, with essential assumptions including projected revenues from these relationships, attrition rates, operating margins, and discount rates. The fair values discussed above were based on significant inputs that are not observable in the market and, therefore, represent Level 3 measurements. For all other current assets and payables, their fair values were considered equivalent to their carrying amounts due to their short-term nature. Fair Value Adjustments During the three months ended September 30, 2025, the Partnership recorded immaterial fair value adjustments to the purchase price allocation. During the nine months ended September 30, 2025, the Partnership recorded the following fair value adjustments to the preliminary purchase price allocation, based on new information about facts and circumstances that existed as of the acquisition date: Balance Sheet Description Preliminary Value Adjusted Value Change Property, plant and equipment 208,313 191,485 ( 16,828 ) Customer relationship intangible 50,674 66,271 15,597 Asset retirement obligations 7,202 6,022 ( 1,180 ) 9 | Notes to the Condensed Consolidated Financial Statements (Unaudited) Unaudited Pro Forma Financial Information The following table summarizes the unaudited pro forma financial information of the Partnership assuming the Gravity Acquisition had occurred on January 1, 2024. The unaudited pro forma financial information has been adjusted to give effect to certain pro forma adjustments that are directly related to this acquisition based on available information and certain assumptions that management believes are factually supportable. The most significant pro forma adjustments relate to (i) incremental interest expense associated with revolving credit facility borrowings incurred in connection with this acquisition, (ii) incremental depreciation resulting from the estimated fair values of acquired property, plant and equipment, (iii) incremental amortization resulting from the estimated fair value of the acquired customer relationship intangible and, (iv) transaction costs. The unaudited pro forma financial information excludes any expected cost savings or other synergies as a result of this acquisition. The unaudited pro forma financial information is not necessarily indicative of the results of operations that would have been achieved had this acquisition been effective as of the date presented, nor is it indicative of future operating results of the combined company. Actual results may differ significantly from the unaudited pro forma financial information. Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 (in thousands) Net sales $ 261,277 $ 242,070 $ 757,557 $ 822,573 Net income attributable to partners $ 46,260 $ 33,674 $ 133,968 $ 111,180 H2O Midstream Acquisition On September 11, 2024, we completed an acquisition in which we acquired 100 % of the limited liability company interests in H2O Midstream Intermediate, LLC, H2O Midstream Permian LLC, and H2O Midstream LLC ("H2O Midstream Acquisition") from H2O Midstream Holdings, LLC. The H2O Midstream Acquisition included water disposal and recycling operations in the Midland Basin in Texas, for total consideration of $ 229.7 million, subject to customary adjustments for net working capital. The purchase price was comprised of $ 159.7 million in cash and $ 70.0 million of preferred units (“Preferred Units”). The cash portion was financed through a combination of cash on hand and borrowings under the DKL Credit Facility (as defined in Note 6 ). This acquisition was accounted for using the acquisition method of accounting, whereby the purchase price is measured at acquisition date fair value of assets acquired and liabilities assumed. Determination of Purchase Price The table below presents the estimated purchase price (in thousands): Base purchase price: $ 230,000 Less: Adjusted Net Working Capital (as defined in the H2O Midstream Acquisition Agreement) ( 2,596 ) Plus: various closing adjustments 2,331 Adjusted purchase price $ 229,735 Cash paid $ 159,735 Fair value of Preferred Units issued 70,000 Preliminary purchase price $ 229,735 10 | Notes to the Condensed Consolidated Financial Statements (Unaudited) Purchase Price Allocation The following table summarizes the preliminary fair values of assets acquired and liabilities assumed in the H2O Midstream Acquisition as of September 11, 2024 (in thousands): Assets acquired: Accounts receivables $ 6,644 Inventories 2,448 Other current assets 879 Property, plant and equipment 172,374 Operating lease right-of-use assets 2,058 Customer relationship intangible (1) 26,270 Other intangibles (1) 33,268 Other non-current assets 21 Total assets acquired 243,962 Liabilities assumed: Accounts payable 1,833 Accrued expenses and other current liabilities 7,045 Current portion of operating lease liabilities 278 Asset retirement obligations 4,852 Operating lease liabilities, net of current portion 219 Total liabilities assumed 14,227 Fair value of net assets acquired $ 229,735 (1) The acquired intangible assets amount includes the following identified intangibles: • Customer relationship intangible that is subject to amortization with a preliminary fair value of $ 26.3 million, which will be amortized over a 13.4 years useful life. • Rights-of-way intangibles are valued at $ 28.5 million, which have an indefinite life. • Favorable supply contract intangible that is subject to amortization with a preliminary fair value of $ 4.8 million which will be amortized over a 4.8 years useful life. There have been no significant adjustments to the preliminary purchase price allocation during the three and nine months ended September 30, 2025. The fair value of property, plant and equipment was based on the combination of the cost and market approaches. Key assumptions in the cost approach include determining the replacement cost by evaluating recently published data and adjusting replacement cost for physical deterioration, functional and economic obsolescence. We used the market approach to measure the value of certain assets through an analysis of recent sales or offerings of comparable properties. Customer relationships were valued using the income approach, with essential assumptions including projected revenues from these relationships, attrition rates, operating margins, and discount rates. The fair values discussed above were based on significant inputs that are not observable in the market and, therefore, represent Level 3 measurements. For all other current assets and payables, their fair values were considered equivalent to their carrying amounts due to their short-term nature. 11 | Notes to the Condensed Consolidated Financial Statements (Unaudited) Unaudited Pro Forma Financial Information The following table summarizes the unaudited pro forma financial information of the Partnership assuming the H2O Midstream Acquisition had occurred on January 1, 2023. The unaudited pro forma financial information has been adjusted to give effect to certain pro forma adjustments that are directly related to this acquisition based on available information and certain assumptions that management believes are factually supportable. The most significant pro forma adjustments relate to (i) incremental interest expense associated with revolving credit facility borrowings incurred in connection with this acquisition, (ii) incremental depreciation resulting from the estimated fair values of acquired property, plant and equipment, (iii) incremental amortization resulting from the estimated fair value of the acquired customer relationship intangible and, (iv) transaction costs. The unaudited pro forma financial information excludes any expected cost savings or other synergies as a result of this acquisition. The unaudited pro forma financial information is not necessarily indicative of the results of operations that would have been achieved had this acquisition been effective as of the date presented, nor is it indicative of future operating results of the combined company. Actual results may differ significantly from the unaudited pro forma financial information. Three Months Ended September 30, Nine Months Ended September 30, 2024 2024 (in thousands) Net sales $ 226,303 $ 775,369 Net income attributable to partners $ 40,045 $ 119,183 By acquiring Gravity and H20 Midstream, we intend to increase third-party revenue streams, diversify our customer and product mix, and expand our footprint in the Midland and Bakken basins, aligning with our strategic growth objectives. 3. Related Party Transactions Commercial Agreements The Partnership has a number of long-term, fee-based commercial agreements with Delek Holdings under which we provide various services, including crude oil gathering and crude oil, intermediate and refined products transportation and storage services, and marketing, terminalling and offloading services to Delek Holdings. Most of these agreements have an initial term ranging from five to ten years , which may be extended for various renewal terms at the option of Delek Holdings. The fees under each agreement are payable to us monthly by Delek Holdings or certain third parties to whom Delek Holdings has assigned certain of its rights and are generally subject to increase or decrease on July 1 of each year, by the amount of any change in various inflation-based indices, however, in no event will the fees be adjusted below the amount initially set forth in the applicable agreement. Under each of these agreements, we are required to maintain the capabilities of our pipelines and terminals, such that Delek Holdings may throughput and/or store, as the case may be, specified volumes of crude oil, intermediate and refined products. In addition, on August 5, 2024, the Partnership entered into an assignment agreement with Delek Holdings to assign its rights and obligations under the Big Spring Refinery Marketing Agreement to Delek Holdings. As consideration for this agreement, the Partnership redeemed 2,500,000 common units representing limited partnership interest in us held by Delek Holdings. Associated with such marketing agreement was a contract intangible with a carrying value of $ 97.9 million at the closing date of the assignment. This intangible was transferred to Delek Holdings in conjunction with the assignment. See our Annual Report on Form 10-K for a more complete description of our material commercial agreements and other agreements with Delek Holdings. Other Agreements with Delek Holdings In addition to the commercial agreements described above, the Partnership has entered into the following agreements with Delek Holdings: Omnibus Agreement On November 7, 2012, the Partnership entered into an omnibus agreement with Delek Holdings, our general partner, Delek Logistics Operating, LLC, Lion Oil Company, LLC and certain of the Partnership’s and Delek Holdings' other subsidiaries, which has been amended and restated from time to time in connection with acquisitions from Delek Holdings (collectively, as amended and restated, the "Omnibus Agreement"). The Omnibus Agreement governs the provision of certain operational services and reimbursement obligations, among other matters, between the Partnership and Delek Holdings, and obligates us to pay an annual fee of $ 4.4 million to Delek Holdings for its provision of centralized corporate services to the Partnership. On August 5, 2024, the Partnership entered into an amended and restated Omnibus Agreement with Delek Holdings that provides Delek Holdings an option to purchase certain critical assets from us at market value during the period beginning upon any change in control or sale of 12 | Notes to the Condensed Consolidated Financial Statements (Unaudited) substantially all assets involving us and extending (i) in the case of a transaction involving a third party, for six months following closing, and (ii) for any other transaction, for four years following closing. On May 1, 2025, the Partnership entered into an amended and restated Omnibus Agreement with Delek Holdings that provides for an increase in the Administrative Fee (as defined therein), which is being phased in over the two years beginning July 1, 2025, and a binding obligation for both parties to enter into transition services agreements in the event of a change in control. Pursuant to the terms of the Omnibus Agreement, we are reimbursed by Delek Holdings for certain capital expenditures. These amounts are recorded in other long-term liabilities and are amortized to revenue over the life of the underlying revenue agreement corresponding to the asset. There were no reimbursements by Delek Holdings during the three and nine months ended September 30, 2025, and 2024. Additionally, we are reimbursed or indemnified, as the case may be, for costs incurred in excess of certain amounts related to certain asset failures, pursuant to the terms of the Omnibus Agreeme nt. As of September 30, 2025, and December 31, 2024, there was no receivable from related parties for these matters. These reimbursements are recorded as reductions to operating expense. There were no reimbursements for these matters in each of the three and nine month periods ended September 30, 2025, and 2024. Other Transactions The Partnership manages long-term capital projects on behalf of Delek Holdings pursuant to a construction management and operating agreement (the "DPG Management Agreement") for the construction of gathering systems in the Permian Basin. The majority of the gathering systems have been constructed, however, additional costs pertaining to a pipeline connection that was not acquired by the Partnership continue to be incurred and are still subject to the terms of the DPG Management Agreement. The Partnership is also considered the operator for the project and is responsible for oversight of the project design, procurement and construction of project segments and provides other related services. Pursuant to the terms of the DPG Management Agreement, the Partnership receives a monthly operating services fee and a construction services fee, which includes the Partnership's direct costs of managing the project plus an additional percentage fee of the construction costs of each project segment. The agreement extends through December 2025. Total fees paid to the Partnership were $ 0.5 million for the nine months ended September 30, 2025, and $ 0.4 million and $ 1.2 million for the three and nine months ended September 30, 2024, respectively, which are recorded in affiliate revenue in our accompanying condensed consolidated statements of income and comprehensive income. There were no fees to the Partnership for the three months ended September 30, 2025. Additionally, the Partnership incurs the costs in connection with the construction of the assets and is subsequently reimbursed by Delek Holdings. Amounts reimbursable by Delek Holdings are recorded in accounts receivable from related parties. Delek Permian Gathering Dropdown On May 1, 2025, Delek Holdings transferred the Delek Permian Gathering purchasing and blending activities to the Partnership (the "DPG Dropdown”). In connection with the DPG Dropdown, the Partnership assumed all of Delek Holdings’ rights and obligations to purchase crude oil under certain contracts associated with the Partnership’s existing Midland Gathering System. In addition, line fill inventory amounting to $ 6.9 million was transferred to the Partnership. Total consideration included the cancellation of $ 58.8 million in existing receivables owed to the Partnership by Delek Holdings. Since this transaction was between entities under common control, the impact was recorded as a distribution in the accompanying condensed consolidated statements of partners' equity. Commercial Agreements On May 1, 2025, the Partnership entered into an agreement to terminate, in its entirety, the East Texas Marketing Agreement effective as of January 1, 2026. On May 1, 2025, in connection with the DPG Dropdown, the Partnership amended and restated a throughput agreement with Delek Holdings for the El Dorado rail facility (the “Throughput Agreement”), which includes a minimum volume commitment for refined products until the termination of the Throughput Agreement, which will occur at the closing of the El Dorado Purchase (as defined below). Additionally, on May 1, 2025, in connection with the DPG Dropdown, the Partnership and Delek Holdings, entered into an asset purchase agreement (the “El Dorado Purchase Agreement”), whereby Delek Holdings will purchase the related El Dorado rail facility assets from the Partnership for cash consideration of $ 25.0 million (the “El Dorado Purchase”). The El Dorado Purchase is currently set to close January 2, 2026, subject to certain closing conditions as set forth in the El Dorado Purchase Agreement. Summary of Transactions Income from affiliates consist primarily of revenues from gathering, transportation, storage, offloading, Renewable Identification Numbers, wholesale marketing and products terminalling services provided primarily to Delek Holdings under commercial agreements based on regulated tariff rates or contractually based fees and product sales, and interest income associated with those commercial agreements classified as sales-type leases. Affiliate operating expenses are primarily comprised of amounts we reimburse Delek Holdings, or our general partner, as the case may be, for the services provided to us under the Partnership Agreement. These expenses could also include reimbursement and indemnification amounts from Delek Holdings, as provided under the Omnibus Agreement. Additionally, the Partnership is required to reimburse Delek Holdings for direct or allocated costs and expenses incurred by Delek Holdings on behalf of the Partnership and for charges Delek Holdings incurred for the management and operation of our logistics assets, including an annual fee for various centralized corporate services, 13 | Notes to the Condensed Consolidated Financial Statements (Unaudited) which are included in general and administrative expenses. In addition to these transactions, we purchase refined products and bulk biofuels from Delek Holdings, the costs of which are included in cost of materials and other-affiliate. A summary of income, purchases and expense transactions with Delek Holdings and its affiliates are as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Revenues $ 131,016 $ 114,899 $ 371,420 $ 411,352 Interest income from sales-type leases $ 26,688 $ 23,442 $ 72,768 $ 23,442 Purchases from Affiliates $ 85,486 $ 84,015 $ 259,863 $ 279,962 Operating and maintenance expenses $ 23,076 $ 15,275 $ 66,169 $ 48,432 General and administrative expenses $ 4,540 $ 2,777 $ 9,874 $ 9,280 Quarterly Cash Distributions Date of Distribution Distributions paid to Delek Holdings (in thousands) February 11, 2025 $ 37,693 May 15, 2025 37,594 August 14, 2025 37,763 November 13, 2025 (1) 37,932 Total $ 150,982 February 12, 2024 $ 36,198 May 15, 2024 36,713 August 14, 2024 37,181 November 14, 2024 37,352 Total $ 147,444 (1) On October 28, 2025, the board of directors of our general partner declared this quarterly cash distribution based on the available cash as of the date of determination. Distributions paid are estimated based on common units held by Delek Holdings as of September 30, 2025. 14 | Notes to the Condensed Consolidated Financial Statements (Unaudited) 4. Revenues The following table represents a disaggregation of revenue for the gathering and processing, wholesale marketing and terminalling, and storage and transportation segments for the periods indicated (in thousands): Three Months Ended September 30, 2025 Gathering and Processing Wholesale Marketing and Terminalling Storage and Transportation Consolidated Service Revenue - Third Party $ 18,770 $ — $ 1,292 $ 20,062 Service Revenue - Affiliate (1) 3,386 7,584 14,856 25,826 Product Revenue - Third Party 62,274 47,925 — 110,199 Product Revenue - Affiliate 976 41,671 — 42,647 Lease Revenue - Affiliate 46,803 7,561 8,179 62,543 Total Revenue $ 132,209 $ 104,741 $ 24,327 $ 261,277 Three Months Ended September 30, 2024 Gathering and Processing Wholesale Marketing and Terminalling Storage and Transportation Consolidated Service Revenue - Third Party $ 19,331 $ — $ 2,298 $ 21,629 Service Revenue - Affiliate (1) 8,481 2,216 13,669 24,366 Product Revenue - Third Party 22,286 55,256 — 77,542 Product Revenue - Affiliate 5,121 31,887 — 37,008 Lease Revenue - Affiliate 26,308 17,579 9,638 53,525 Total Revenue $ 81,527 $ 106,938 $ 25,605 $ 214,070 Nine Months Ended September 30, 2025 Gathering and Processing Wholesale Marketing and Terminalling Storage and Transportation Consolidated Service Revenue - Third Party $ 57,750 $ — $ 4,224 $ 61,974 Service Revenue - Affiliate (1) 9,844 22,242 44,585 76,671 Product Revenue - Third Party 181,999 142,164 — 324,163 Product Revenue - Affiliate 4,859 127,530 — 132,389 Lease Revenue - Affiliate 114,127 24,119 24,114 162,360 Total Revenue $ 368,579 $ 316,055 $ 72,923 $ 757,557 Nine Months Ended September 30, 2024 Gathering and Processing Wholesale Marketing and Terminalling Storage and Transportation Consolidated Service Revenue - Third Party $ 56,151 $ — $ 7,015 $ 63,166 Service Revenue - Affiliate (1) 8,486 29,684 40,924 79,094 Product Revenue - Third Party 69,910 186,345 — 256,255 Product Revenue - Affiliate 13,523 102,184 — 115,707 Lease Revenue - Affiliate 121,983 43,595 50,973 216,551 Total Revenue $ 270,053 $ 361,808 $ 98,912 $ 730,773 (1) Net of $ 0.6 million and $ 4.2 million for the three and nine months ended September 30, 2024, respectively, related to marketing contract intangible recorded in the wholesale marketing and terminalling segment. For the three and nine months ended September 30, 2025, no amortization was recorded related to this intangible, as the associated agreement was terminated on August 5, 2024. As of September 30, 2025, we expect to recognize approximately $ 0.6 billion in service revenues related to our unfulfilled performance obligations pertaining to the minimum volume commitments and capacity utilization under the non-cancelable terms of our commercial agreements with Delek Holdings. Most of these agreements have an initial term ranging from five to ten years , which may be extended for various renewal terms. We disclose information about remaining performance obligations that have original expected durations of greater than one year. 15 | Notes to the Condensed Consolidated Financial Statements (Unaudited) Our unfulfilled performance obligations as of September 30, 2025, were as follows (in thousands): Remainder of 2025 $ 39,307 2026 134,194 2027 134,194 2028 88,724 2029 and thereafter 186,126 Total expected revenue on remaining performance obligations $ 582,545 5. Net Income per Unit We use the two-class method when calculating the net income per unit applicable to limited partners, because we have more than one participating class of securities. Our participating securities consist of common units and preferred units. The two-class method is based on the weighted-average number of common units outstanding during the period. Basic net income per unit applicable to common limited partners is computed by dividing limited partners’ interest in net income allocated to participating securities by the weighted-average number of outstanding common units. Undistributed earnings are allocated to our preferred unitholders and limited partners based on their respective ownership interests. During a period of net loss or negative undistributed earnings, the two-class method is not applicable. Diluted net income per unit applicable to common limited partners includes the effects of potentially dilutive units on our common units. As of September 30, 2025 and 2024, the only potentially dilutive units outstanding consist of unvested phantom units. The calculation of net income per unit is as follows (in thousands, except unit and per unit amounts): Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Net income $ 45,560 $ 33,674 $ 129,168 $ 107,380 Less: Limited partners' distribution declared on common units 59,898 51,263 178,830 147,794 Undistributed net loss $ ( 14,338 ) $ ( 17,589 ) $ ( 49,662 ) $ ( 40,414 ) Limited partners' earnings on common units: Distributions $ 59,898 $ 51,263 $ 178,830 $ 147,794 Allocation of undistributed net loss ( 14,338 ) ( 17,589 ) ( 49,662 ) ( 40,414 ) Total limited partners' earnings on common units $ 45,560 $ 33,674 $ 129,168 $ 107,380 Weighted average limited partner units outstanding, basic 53,467,306 47,109,008 53,505,419 46,248,003 Dilutive effect of unvested phantom units 52,266 26,093 35,376 21,420 Weighted average limited partner units outstanding, diluted 53,519,572 47,135,101 53,540,795 46,269,423 Net income per limited partner unit: Basic $ 0.85 $ 0.71 $ 2.41 $ 2.32 Diluted (1) $ 0.85 $ 0.71 $ 2.41 $ 2.32 1) There were 6,863 and 23,824 anti-dilutive common unit equivalents excluded from the diluted earnings per unit calculation during the three and nine months ended September 30, 2025, respectively. There were 24,506 anti-dilutive common unit equivalents excluded from the diluted earnings per unit calculation during both three and nine months ended September 30, 2024. 16 | Notes to the Condensed Consolidated Financial Statements (Unaudited) 6. Long-Term Obligations Outstanding borrowings under the Partnership’s debt instruments are as follows (in thousands): September 30, 2025 December 31, 2024 DKL Revolving Facility $ 156,850 $ 435,400 2033 Notes 700,000 — 2029 Notes 1,050,000 1,050,000 2028 Notes 400,000 400,000 Principal amount of long-term debt 2,306,850 1,885,400 Less: Unamortized discount and premium and deferred financing costs 18,532 10,003 Total debt, net of unamortized discount and premium and deferred financing costs $ 2,288,318 $ 1,875,397 DKL Credit Facility On October 13, 2022, the Partnership entered into a senior secured term loan with Fifth Third, as administrative agent and a syndicate of lenders with an original principal of $ 300.0 million (the "DKL Term Loan Facility"). The outstanding principal balance of $ 281.3 million was paid on March 13, 2024, from a portion of the proceeds received with the issuance of the 2029 Notes as indicated below. Debt extinguishment costs were $ 2.1 million for the three and nine months ended September 30, 2024, and were recorded in interest expense in the accompanying condensed consolidated statements of income and comprehensive income. On March 29, 2024, the Partnership entered into a Fourth Amendment to the amended and restated senior secured revolving credit agreement (the "DKL Revolving Facility") which among other things increased the U.S. Revolving Credit Commitments (as defined in the DKL Credit Facility) by an amount equal to $ 100.0 million resulting in aggregate lender commitments under the Delek Logistics Revolving Credit Facility in an amount of $ 1,150.0 million, including up to $ 146.9 million for letters of credit and $ 31.9 million in swing line loans. This facility has a maturity date of October 13, 2027. As of September 30, 2025, and December 31, 2024, the weighted average interest rate was 7.39 % and 7.27 %, respectively. There were no letters of credit outstanding as of September 30, 2025, or December 31, 2024. The obligations under the DKL Revolving Facility are secured by first priority liens on substantially all of the Partnership’s and its subsidiaries’ tangible and intangible assets. The carrying value of outstanding borrowings under the DKL Revolving Facility as of September 30, 2025, and December 31, 2024, approximate their fair values. Our debt facilities contain affirmative and negative covenants and events of default the Partnership considers usual and customary. As of September 30, 2025, we were in compliance with covenants on all of our debt instruments. 2033 Notes On June 30, 2025, the Partnership and our wholly owned subsidiary Delek Logistics Finance Corp. ("Finance Corp." and together with the Partnership, the "Issuers") sold $ 700.0 million in aggregate principal amount of 7.375 % senior notes due 2033 (the "2033 Notes") at par, pursuant to an indenture with U.S. Bank Trust Company, National Association as trustee. Net proceeds were used to repay a portion of the outstanding borrowing under the DKL Revolving Facility. The 2033 Notes are general unsecured senior obligations of the Issuers and are unconditionally guaranteed jointly and severally on a senior unsecured basis by the Partnership's subsidiaries other than Finance Corp., and will be unconditionally guaranteed on the same basis by certain of the Partnership’s future subsidiaries. The 2033 Notes rank equal in right of payment with all existing and future senior indebtedness of the Issuers, and senior in right of payment to any future subordinated indebtedness of the Issuers. The 2033 Notes will mature on June 30, 2033, and interest on the 2033 Notes is payable semi-annually in arrears on each June 30 and December 30, commencing December 30, 2025. At any time prior to June 30, 2028, the Issuers may redeem up to 35 % of the aggregate principal amount of the 2033 Notes with the net cash proceeds of one or more equity offerings by the Partnership at a redemption price of 107.375 % of the redeemed principal amount, plus accrued and unpaid interest, if any, subject to certain conditions and limitations. Prior to June 30, 2028, the Issuers may also redeem all or part of the 2033 Notes at a redemption price of the principal amount plus accrued and unpaid interest, if any, plus a "make whole" premium, subject to certain conditions and limitations. In addition, beginning on June 30, 2028, the Issuers may, subject to certain conditions and limitations, redeem all or part of the 2033 Notes, at a redemption price of 103.688 % of the redeemed principal for the twelve-month period beginning on June 30, 2028, 101.844 % for the twelve-month period beginning on June 30, 2029, and 100.00 % beginning on June 30, 2030 and thereafter, plus accrued and unpaid interest, if any. In the event of a change of control, subject to certain conditions and limitations, the Issuers will be obligated to make an offer for the purchase of the 2033 Notes from holders at a price equal to 101.00 % of the principal amount thereof, plus accrued and unpaid interest. We recorded $ 11.1 million of debt issuance costs which will be amortized over the term of the 2033 Notes and included in interest expense in the accompanying condensed consolidated statements of income. As of September 30, 2025, the effective interest rate was 7.64 %. The estimated fair value of the 2033 Notes was $ 713.2 million as of September 30, 2025, measured based upon quoted market prices in an active market, defined as Level 1 in the fair value hierarchy. 17 | Notes to the Condensed Consolidated Financial Statements (Unaudited) 2029 Notes Our 2029 Notes are general unsecured senior obligations comprised of $ 1,050.0 million in aggregate principal 8.625 % senior notes maturing on March 15, 2029. The 2029 Notes are unconditionally guaranteed jointly and severally on a senior unsecured basis by the Partnership's existing subsidiaries (other than Delek Logistics Finance Corp.) and will be unconditionally guaranteed on the same basis by certain of the Partnership's future subsidiaries. As of September 30, 2025, the effective interest rate was 8.80 %. The estimated fair value of the 2029 Notes was $ 1,095.5 million and $ 1,086.9 million as of September 30, 2025, and December 31, 2024, respectively, measured based upon quoted market prices in an active market, defined as Level 1 in the fair value hierarchy. 2028 Notes Our 2028 Notes are general unsecured senior obligations comprised of $ 400.0 million in aggregate principal of 7.125 % senior notes maturing June 1, 2028. The 2028 Notes are unconditionally guaranteed jointly and severally on a senior unsecured basis by the Partnership's existing subsidiaries (other than Delek Logistics Finance Corp.) and will be unconditionally guaranteed on the same basis by certain of the Partnership's future subsidiaries. As of September 30, 2025, the effective interest rate was 7.38 %. The estimated fair value of the 2028 Notes was $ 402.5 million and $ 399.1 million as of September 30, 2025, and December 31, 2024, respectively, measured based upon quoted market prices in an active market, defined as Level 1 in the fair value hierarchy. 2025 Notes Our 2025 Notes were general unsecured senior obligations comprised of $ 250.0 million in aggregate principal of 6.75 % senior notes maturing on May 15, 2025. Concurrent with the issuance of the 2029 Notes, the Partnership made a cash tender offer (the "Offer") for all of the outstanding 2025 Notes with a conditional notice of full redemption for the remaining balance not received from the Offer. The Partnership received tenders from holders of approximately $ 156.2 million in aggregate principal amount. All the remaining 2025 Notes were redeemed by March 29, 2024, pursuant to the notice of conditional redemption. Debt extinguishment costs were $ 1.5 million and were recorded in interest expense in the accompanying condensed consolidated statements of income and comprehensive income for the three and nine months ended September 30, 2024. 18 | Notes to the Condensed Consolidated Financial Statements (Unaudited) 7. Equity Equity Activity The table below summarizes the changes in the number of limited partner units outstanding from December 31, 2024, through September 30, 2025. Common - Public Common - Delek Holdings (1) Total Balance at December 31, 2024 17,374,618 34,111,278 51,485,896 Unit-based compensation awards (2) 62,138 — 62,138 Issuance of units in connection with Gravity Acquisition 2,175,209 — 2,175,209 Unit repurchase — ( 243,075 ) ( 243,075 ) Balance at September 30, 2025 19,611,965 33,868,203 53,480,168 (1) As of September 30, 2025, Delek Holdings owned a 63.3 % interest in the Partnership. (2) Unit-based compensation awards are presented net of 26,260 units withheld for taxes for the nine months ended September 30, 2025. Unit Repurchase 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”). The purchase price per common unit in each Repurchase will be the 30-day volume weighted-average price of the common units at the close of trading on the day prior to the closing date subject to certain limitations set forth in the Common Unit Purchase Agreement. The Partnership may fund Repurchases using cash on hand or borrowings under its existing credit facility, subject to compliance with applicable covenants. 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. Cash Distributions Our Partnership Agreement sets forth the calculation to be used to determine the amount and priority of available cash distributions that our limited partner unitholders will receive. Our distributions earned with respect to a given period are declared subsequent to quarter end. The table below summarizes the quarterly distributions related to our quarterly financial results: Quarter Ended Total Quarterly Distribution Per Limited Partner Unit Total Cash Distribution (in thousands) December 31, 2023 $ 1.055 $ 46,010 March 31, 2024 $ 1.070 $ 50,521 June 30, 2024 $ 1.090 $ 51,263 September 30, 2024 $ 1.100 $ 56,613 December 31, 2024 $ 1.105 $ 59,302 March 31, 2025 $ 1.110 $ 59,320 June 30, 2025 $ 1.115 $ 59,612 September 30, 2025 (1) $ 1.120 $ 59,898 (1) On October 28, 2025, the board of directors of our general partner declared this quarterly cash distribution, payable on November 13, 2025, to unitholders of record on November 7, 2025. The total cash distribution is estimated based on the number of common units outstanding as of September 30, 2025. 8. Preferred Units On September 11, 2024 (the “Closing Date”), the Partnership issued 70,000 preferred units (“Preferred Units”) in connection with the H2O Midstream Acquisition for an amount equal to $ 70.0 million. Preferred Units ranked senior to all common units with respect to distributions and rights upon liquidation. The holders of the Preferred Units were entitled to receive, when and if declared by the board, a quarterly distribution equal to the amount of distributions they would have received on an as converted basis at a price of $ 41.04 , including any special distributions made to common unitholders. At any time, the Partnership may redeem, in whole or part, the Preferred Units at a redemption price of $ 1,000 per Preferred Unit plus the amount of accrued but unpaid distributions and a make whole amount, to be settled in cash. In addition, at any time prior to October 31, 2027, if the Partnership completed an offering of common units or Preferred Units, the Partnership shall redeem an amount of the Preferred Units not to 19 | Notes to the Condensed Consolidated Financial Statements (Unaudited) exceed the amount equal to the net cash proceeds to the Partnership from such offering, after deducting underwriting discounts and commissions and offering expenses payable by the Partnership at a redemption price of $ 1,000 per Preferred Unit plus the amount of accrued but unpaid distributions and a make whole amount. As a result of our public offering of common units completed on October 10, 2024, the Partnership redeemed all 70,000 of the Preferred Units for at a redemption price of $ 1,000 per unit. Total redemption payment was $ 70.8 million, including payment made for pro-rata distributions. For a summary of changes in the Preferred Units balance for 2024, see the condensed consolidated statements of partners' equity (deficit). 9. Equity Method Investments The Partnership owns a 33 % membership interest in Red River Pipeline Company LLC ("Red River"), a joint venture operated with Plains Pipeline, L.P, which owns and operates a crude oil pipeline running from Cushing, Oklahoma to Longview, Texas. Additionally, we have two pipeline joint ventures, in which we own a 50 % membership interest in the entity formed with an affiliate of Plains All American Pipeline, L.P. ("CP LLC") to operate one of these pipeline systems and a 33 % membership interest in the entity formed with Andeavor Logistics RIO Pipeline LLC ("Andeavor Logistics") to operate the other pipeline system. The Partnership owns a 50 % equity interests in W2W Holdings. Our interest in W2W Holdings includes a 15.6 % indirect interest in the Wink to Webster joint venture, and related joint venture indebtedness. W2W Holdings was originally formed by Delek Holdings and MPLX Operations LLC to obtain financing and fund capital calls associated with its collective and contributed interests in Wink to Webster. Wink to Webster owns and operates a long-haul crude oil pipeline system with origin points at Wink and Midland in the Permian Basin and delivery points at multiple Houston area locations. We determined that W2W Holdings is a VIE. While we have the ability to exert significant influence through participation in board and management committees, we are not the primary beneficiary since we do not have a controlling financial interest in W2W Holdings, and no single party has the power to direct the activities that most significantly impact W2W Holdings' economic performance. Distributions received from WWP are first applied to service the debt of W2W Holdings wholly owned finance LLC, with excess distributions made to the W2W Holdings members as provided for in the W2W Holdings LLC Agreement and as allowed for under its debt agreements. The obligations of the W2W Holdings members under the W2W Holdings LLC Agreement are guaranteed by the parents of the member entities. As of September 30, 2025, except for the guarantee of member obligations under the joint venture, we do not have other guarantees with or to W2W Holdings, nor any third-party associated with W2W Holdings contracted work. The Partnership's maximum exposure to any losses incurred by W2W Holdings is limited to its investment. The Partnership's investment balances in these joint ventures were as follows (in thousands): As of September 30, 2025 As of December 31, 2024 Red River $ 132,483 $ 136,455 W2W Holdings 102,834 86,117 CP LLC 57,324 59,252 Andeavor Logistics 33,112 35,328 Total Equity Method Investments $ 325,753 $ 317,152 10. Segment Data We review operating results in four reportable segments: (i) gathering and processing; (ii) wholesale marketing and terminalling; (iii) storage and transportation; and (iv) investment in pipeline joint ventures. Operations that are not specifically included in the reportable segments are included in Corporate and other. The Partnership defines its segments based on how internally reported financial information is regularly reviewed by its chief operating decision maker ("CODM") to analyze financial performance, make decisions and allocate resources. The CODM is the President of the Partnership. The CODM evaluates performance based on segment EBITDA for planning and forecasting purposes. The CODM considers budget to actual variances on a monthly basis when making decisions about allocation of operating and capital resources to each segment. Segment EBITDA is an important measure used by management to evaluate the financial performance of our core operations. We define segment EBITDA as net income (loss) before net interest expense, income tax expense, depreciation and amortization expense, including amortization of marketing contract intangible, which is included as a component of net revenues in our accompanying condensed consolidated statements of income and comprehensive income. A reconciliation of segment EBITDA to net Income is included in the tables below. Assets by segment are not a measure used to assess the performance of the Partnership by the CODM and thus is not disclosed. 20 | Notes to the Condensed Consolidated Financial Statements (Unaudited) The following is a summary of business segment operating performance as measured by segment EBITDA for the periods indicated: Three Months Ended September 30, 2025 Gathering and Processing Wholesale Marketing and Terminalling Storage and Transportation Investments in Pipeline Joint Ventures Total Net revenues: Affiliate (1) $ 51,165 $ 56,816 $ 23,035 $ — $ 131,016 Third party 81,044 47,925 1,292 — 130,261 Total revenue 132,209 104,741 24,327 — 261,277 Cost of materials and other 31,394 85,378 12,924 — 129,696 Operating expenses 30,891 2,341 5,200 — 38,432 Income from equity method investments — — — ( 21,878 ) ( 21,878 ) Other segment items (2) 373 2,819 ( 47 ) — 3,145 Segment EBITDA 69,551 14,203 6,250 21,878 111,882 Reconciling items to consolidated net income before income taxes: Corporate expenses and other 9,904 Depreciation and amortization 34,799 Interest income ( 26,716 ) Interest expense 47,991 Income tax expense 344 Net income $ 45,560 Three Months Ended September 30, 2024 Gathering and Processing Wholesale Marketing and Terminalling Storage and Transportation Investments in Pipeline Joint Ventures Total Net revenues: Affiliate (1) $ 39,910 $ 51,682 $ 23,307 $ — $ 114,899 Third party 41,617 55,256 2,298 — 99,171 Total revenue 81,527 106,938 25,605 — 214,070 Cost of materials and other 20,061 83,834 13,588 — 117,483 Operating expenses 18,371 3,438 4,731 — 26,540 Income from equity method investments — — — ( 15,602 ) ( 15,602 ) Other segment items (2) 715 ( 579 ) ( 240 ) — ( 104 ) Segment EBITDA 42,380 20,245 7,526 15,602 85,753 Reconciling items to consolidated net income before income taxes: Corporate expenses and other 16,572 Depreciation and amortization 21,204 Amortization of marketing contract intangible 601 Interest income ( 23,470 ) Interest expense 37,022 Income tax expense 150 Net income $ 33,674 21 | Notes to the Condensed Consolidated Financial Statements (Unaudited) Nine Months Ended September 30, 2025 Gathering and Processing Wholesale Marketing and Terminalling Storage and Transportation Investments in Pipeline Joint Ventures Total Net revenues: Affiliate (1) $ 128,830 $ 173,891 $ 68,699 $ — $ 371,420 Third party 239,749 142,164 4,224 — 386,137 Total revenue 368,579 316,055 72,923 — 757,557 Cost of materials and other 77,486 259,527 41,041 — 378,054 Operating expenses 92,988 7,311 14,155 — 114,454 Income from equity method investments — — — ( 42,564 ) ( 42,564 ) Other segment items (2) ( 3,332 ) 2,838 36 — ( 458 ) Segment EBITDA 201,437 46,379 17,691 42,564 308,071 Reconciling items to consolidated net income before income taxes: Corporate expenses and other 30,518 Depreciation and amortization 89,612 Interest income ( 72,801 ) Interest expense 130,803 Income tax expense 771 Net income $ 129,168 Nine Months Ended September 30, 2024 Gathering and Processing Wholesale Marketing and Terminalling Storage and Transportation Investments in Pipeline Joint Ventures Total Net revenues: Affiliate (1) $ 143,992 $ 175,463 $ 91,897 $ — $ 411,352 Third party 126,061 186,345 7,015 — 319,421 Total revenue 270,053 361,808 98,912 — 730,773 Cost of materials and other 57,590 279,639 41,951 — 379,180 Operating expenses 57,622 10,539 14,286 — 82,447 Income from equity method investments — — — ( 31,974 ) ( 31,974 ) Other segment items (2) 22 ( 4,094 ) 270 — ( 3,802 ) Segment EBITDA 154,819 75,724 42,405 31,974 304,922 Reconciling items to consolidated net income before income taxes: Corporate expenses and other 31,848 Depreciation and amortization 71,906 Amortization of marketing contract intangible 4,206 Interest income ( 23,498 ) Interest expense 112,547 Income tax expense 533 Net income $ 107,380 (1) Affiliate revenue for the wholesale marketing and terminalling segment is presented net of amortization expense pertaining to the marketing contract intangible of $ 0.6 million and $ 4.2 million for the three and nine months ended September 30, 2024. There was no amortization recorded during the three and nine months ended September 30, 2025, related to this intangible, as the associated agreement was terminated on August 5, 2024. (2) Other segment items include general and administrative expense, other operating (income) loss and other income. Additionally, the wholesale marketing and terminalling segment includes amortization of the marketing contract intangible for the three and nine months ended September 30, 2024. 22 | Notes to the Condensed Consolidated Financial Statements (Unaudited) The following is a summary of other segment information for the periods indicated: Three Months Ended September 30, 2025 Gathering and Processing Wholesale Marketing and Terminalling Storage and Transportation Investments in Pipeline Joint Ventures Corporate and Other Consolidated Depreciation and amortization $ 31,801 $ 811 $ 1,411 $ — $ 776 $ 34,799 Capital spending (1) $ 47,594 $ 647 $ 1,389 $ — $ — $ 49,630 Three Months Ended September 30, 2024 Gathering and Processing Wholesale Marketing and Terminalling Storage and Transportation Investments in Pipeline Joint Ventures Corporate and Other Consolidated Depreciation and amortization $ 16,424 $ 2,796 $ 1,218 $ — $ 766 $ 21,204 Amortization of marketing contract intangible $ — $ 601 $ — $ — $ — $ 601 Capital spending (1) $ 62,086 $ 1,202 $ 1,910 $ — $ — $ 65,198 Nine Months Ended September 30, 2025 Gathering and Processing Wholesale Marketing and Terminalling Storage and Transportation Investments in Pipeline Joint Ventures Corporate and Other Consolidated Depreciation and amortization $ 80,609 $ 2,715 $ 3,993 $ — $ 2,295 $ 89,612 Capital spending (1) $ 236,123 $ 802 $ 3,837 $ — $ — $ 240,762 Nine Months Ended September 30, 2024 Gathering and Processing Wholesale Marketing and Terminalling Storage and Transportation Investments in Pipeline Joint Ventures Corporate and Other Consolidated Depreciation and amortization $ 56,640 $ 6,143 $ 6,515 $ — $ 2,608 $ 71,906 Amortization of marketing contract intangible $ — $ 4,206 $ — $ — $ — $ 4,206 Capital spending (1) $ 84,160 $ 1,223 $ 5,167 $ — $ — $ 90,550 (1) Capital spending includes additions on an accrual basis. 11. Commitments and Contingencies Litigation In the ordinary conduct of our business, we are from time to time subject to lawsuits, investigations and claims, including environmental claims and employee-related matters. Although we cannot predict with certainty the ultimate resolution of lawsuits, investigations and claims asserted against us, including civil penalties or other enforcement actions, we do not believe that any currently pending legal proceeding or proceedings to which we are a party will have a material adverse effect on our financial statements. Texas Department of Transportation Settlement Beginning in August 2023, the Partnership was involved in litigation with the State of Texas Department of Transportation. The subject of the litigation was the expansion of the highway where the Partnership's Nettleton Station is situated. As a result of this expansion, two tanks owned by the Partnership were impacted. This litigation was settled in the second quarter of 2024 and resulted in the Partnership recovering $ 8.3 million in condemnation proceeds, which was recorded in other operating expense (income), net in the condensed consolidated statements of income and comprehensive income. In 2025, we recovered an additional $ 4.3 million related to this settlement, which is recorded in other operating expense (income), net in the accompanying condensed consolidated statements of income and comprehensive income. 23 | Notes to the Condensed Consolidated Financial Statements (Unaudited) Environmental, Health and Safety We are subject to extensive federal, state and local environmental and safety laws and regulations enforced by various agencies, including the Environmental Protection Agency (the "EPA"), the United States Department of Transportation, the Occupational Safety and Health Administration, as well as numerous state, regional and local environmental, safety and pipeline agencies. These laws and regulations govern the discharge of materials into the environment, waste management practices and pollution prevention measures, as well as the safe operation of our pipelines and the safety of our workers and the public. The State of New Mexico promulgated new regulations to limit emissions from oil and gas operations in 2022. The cost to comply is not expected to be material. Numerous permits or other authorizations are required under these laws and regulations for the operation of our terminals, pipelines, salt wells, trucks and related operations, and may be subject to revocation, modification and renewal. These laws and permits raise potential exposure to future claims and lawsuits involving environmental and safety matters, which could include soil, surface water and groundwater contamination, air pollution, personal injury and property damage allegedly caused by substances which we may have handled, used, released or disposed of, transported, or that relate to pre-existing conditions for which we may have assumed responsibility. We believe that our current operations are in substantial compliance with existing environmental and safety requirements. However, there have been and we expect that there will continue to be ongoing discussions about environmental and safety matters between us and federal and state authorities, including the receipt and response to notices of violations, citations and other enforcement actions, some of which have resulted or may result in changes to operating procedures and in capital expenditures. While it is often difficult to quantify future environmental or safety related expenditures, we anticipate that continuing capital investments and changes in operating procedures will be required to comply with existing and new requirements, as well as evolving interpretations and enforcement of existing laws and regulations. Releases of hydrocarbons or hazardous substances into the environment could, to the extent the event is not insured, or is not a reimbursable event under the Omnibus Agreement, subject us to substantial expenses, including costs to respond to, contain and remediate a release, to comply with applicable laws and regulations and to resolve claims by governmental agencies or other persons for personal injury, property damage, response costs, or natural resources damages. 12. Leases Lessor We are the lessor under certain agreements for gathering, transportation, storage, terminalling, and offloading with Delek Holdings. Revenue from these leases are recorded in affiliate revenue in the accompanying condensed consolidated statements of income and comprehensive income. We elected the practical expedient to carry forward historical lease classification conclusions until a modification of an existing agreement occurs. Once a modification occurs, the amended agreement is required to be assessed under ASC 842, to determine whether a reclassification of the lease is required. The net investment in sales-type leases is recorded utilizing the estimated fair value of the underlying leased assets at contract modification date and are nonrecurring fair value measurements. The leased assets were valued using a cost method valuation approach which utilizes Level 3 inputs. We recognized any billings in excess of minimum volume requirements as variable lease payments, and these variable lease payments were recorded in lease revenues. Lease income included in the accompanying condensed consolidated statements of income and comprehensive income were as follows: Three Months Ended September 30, Nine Months Ended September 30, (in thousands) 2025 2024 2025 2024 Operating leases: Lease revenue $ 57,784 $ 49,176 $ 150,244 $ 212,202 Sales-type leases: Interest income (Sales-type rental revenue-fixed minimum) 26,688 23,442 72,768 23,442 Lease revenue (Revenue from variable lease payments) 4,759 4,349 12,116 4,349 Sales-type lease income $ 31,447 $ 27,791 $ 84,884 $ 27,791 13. Subsequent Events Distribution Declaration On October 28, 2025, our general partner's board of directors declared a quarterly cash distribution of 1.120 per unit, payable on November 13, 2025, to unitholders of record on November 7, 2025. 24 | Management's Discussion and Analysis of Financial Condition and Results of Operations