Delek Logistics Partners, LP 10-Q

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Management’s Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") is management’s analysis of our financial performance and of significant trends that may affect our future performance. The MD&A should be read in conjunction with our condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q and in the Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission (''SEC'') on February 26, 2025 (the ''Annual Report on Form 10-K''). Those statements in the MD&A that are not historical in nature should be deemed forward-looking statements that are inherently uncertain. See "Forward-Looking Statements" below for a discussion of the factors that could cause actual results to differ materially from those projected in these statements. Unless otherwise noted or the context requires otherwise, references in this report to "Delek Logistics Partners, LP," the "Partnership," “we,” “us,” or “our” or like terms, may refer to Delek Logistics Partners, LP, one or more of its consolidated subsidiaries or all of them taken as a whole. Unless otherwise noted or the context requires otherwise, references in this report to "Delek Holdings" refer collectively to Delek US Holdings, Inc. and any of its subsidiaries, other than the Partnership and its subsidiaries and its general partner. On January 2, 2025, we acquired 100% of the limited liability company interests in Gravity Water Intermediate Holdings LLC ("Gravity") from Gravity Water Holdings LLC related to water disposal and recycling operations in the Permian Basin and the Bakken (the “Gravity Acquisition”). See Note 2 to our condensed consolidated financial statements in Item 1, Financial Statements, of this Quarterly Report on Form 10-Q. The Partnership announces material information to the public about the Partnership, its products and services and other matters through a variety of means, including filings with the Securities and Exchange Commission, press releases, public conference calls, the Partnership's website (www.deleklogistics.com), the investor relations section of the website (www.deleklogistics.com/overview), the news section of its website (www.deleklogistics.com/news-releases), and/or social media, including its X (formerly known as Twitter) account (@DelekLogistics). The Partnership encourages investors and others to review the information it makes public in these locations, as such information could be deemed to be material information. Please note that this list may be updated from time to time. Forward-Looking Statements This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Exchange Act. These forward-looking statements reflect our current estimates, expectations and projections about our future results, performance, prospects and opportunities. Forward-looking statements include, among other things, statements regarding the effect, impact, potential duration or other implications of, or expectations expressed with respect to, the actions of members of the Organization of Petroleum Exporting Countries ("OPEC") and other leading oil producing countries (together with OPEC, "OPEC+") with respect to oil production and pricing, and statements regarding our efforts and plans in response to such events, the information concerning our possible future results of operations, business and growth strategies, financing plans, expectations that regulatory developments or other matters will not have a material adverse effect on our business or financial condition, our competitive position and the effects of competition, the projected growth of the industry in which we operate, the benefits and synergies to be obtained from our completed and any future acquisitions, including the H2O Midstream and Gravity acquisitions, statements of management’s goals and objectives, and other similar expressions concerning matters that are not historical facts. Words such as “may,” “will,” “should,” “could,” “would,” "forecasts", “predicts,” "strategy", “potential,” “continue,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates,” “appears,” “projects” and similar expressions, as well as statements in future tense, identify forward-looking statements. Forward-looking statements should not be read as a guarantee of future performance or results, and will not necessarily be accurate indications of the times at, or by, which such performance or results will be achieved. Forward-looking information is based on information available at the time and/or management’s good faith belief with respect to future events, and is subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in the statements. Important factors that, individually or in the aggregate, could cause such differences include, but are not limited to: • our substantial dependence on Delek Holdings or its assignees and their support of and respective ability to pay us under our commercial agreements; • our future coverage, leverage, financial flexibility and growth, and our ability to improve performance and achieve distribution growth at any level or at all; • Delek Holdings' future growth, strategic priorities, financial performance, share repurchases, crude oil supply pricing and flexibility and product distribution; • industry dynamics, including Permian Basin growth, ownership concentration, efficiencies and takeaway capacity; • the age and condition of our assets and operating hazards and other risks incidental to transporting, storing and gathering crude oil, intermediate and refined products, including, but not limited to, costs, penalties, regulatory or legal actions and other effects related to spills, releases and tank failures; • changes in insurance markets impacting costs and the level and types of coverage available; • the timing and extent of changes in commodity prices and demand for refined products, and the impact of events such as the conflicts in Ukraine and the Middle East, and the global response to such conflicts, and any future public health crisis on such demand; • the wholesale marketing margins we are able to obtain and the number of barrels of product we are able to purchase and sell in our West Texas wholesale business; 25 | Management's Discussion and Analysis of Financial Condition and Results of Operations • the shift from hydrocarbon energy sources to alternative energy sources; • the suspension, reduction or termination of Delek Holdings' or its assignees' or third-party's obligations under our commercial agreements including the duration, fees or terms thereof; • the ability to attract and retain key personnel; • the results of our investments in joint ventures; • the ability to secure commercial agreements with Delek Holdings or third parties upon expiration of existing agreements; • the possibility of inefficiencies, curtailments, or shutdowns in refinery operations or pipelines, whether due to infection in the workforce or in response to reductions in demand as a result of a public health crisis; • disruptions due to equipment interruption or failure, or other events, including terrorism, sabotage or cyber-attacks, at our facilities, Delek Holdings’ facilities or third-party facilities on which our business is dependent; • changes in the availability and cost of capital of debt and equity financing; • our reliance on information technology systems in our day-to-day operations; • changes in general economic conditions, including uncertainty regarding the timing, pace and extent of economic recovery in the United States due to governmental fiscal policy or a public health crisis; • the effects of existing and future laws and governmental regulations, including, but not limited to, the rules and regulations promulgated by the Federal Energy Regulatory Commission ("FERC") and state commissions and those relating to environmental protection, pipeline integrity and safety as well as current and future restrictions on commercial and economic activities in response to a public health crisis; • the timely receipt of required government approvals and permits; • significant operational, investment or other changes required by existing or future environmental statutes and regulations, including international agreements and national or regional societal, legislation; and regulatory measures to limit or reduce greenhouse gas emissions; • competitive conditions in our industry including capacity overbuild in areas where we operate; • actions taken by our customers and competitors; • the demand for crude oil, refined products and transportation and storage services; • our ability to successfully implement our business plan; • inability to complete growth projects on time and on budget; • our ability to successfully complete acquisitions and integrate acquired businesses, and to achieve the anticipated benefits therefrom; • disruptions due to acts of God, natural disasters, casualty losses, severe weather patterns, such as freezing conditions, cyber or other attacks on our electronic systems, and other matters beyond our control which might cause damage to our pipelines, terminal facilities and other assets and could impact our operating results through increased costs and/or loss of revenue; • changes in the price of RINs could affect our results of operations; • future decisions by OPEC+ regarding production and pricing and disputes between OPEC+ regarding such; • changes or volatility in interest and inflation rates; • labor relations; • large customer defaults; • changes in tax status and regulations; • the effects of future litigation or environmental liabilities that are not covered by insurance; and • other factors discussed elsewhere in this Quarterly Report on Form 10-Q and in our Annual Report on Form 10-K. Many of the foregoing risks and uncertainties are, and will be, exacerbated by any worsening of the global business and economic environment. In light of these risks, uncertainties and assumptions, our actual results of operations and execution of our business strategy could differ materially from those expressed in, or implied by, the forward-looking statements, and you should not place undue reliance upon them. In addition, past financial and/or operating performance is not necessarily a reliable indicator of future performance, and you should not use our historical performance to anticipate results or future period trends. We can give no assurances that any of the events anticipated by the forward-looking statements will occur or, if any of them do, what impact they will have on our results of operations and financial condition. In light of these risks, uncertainties and assumptions, our actual results of operations and execution of our business strategy could differ materially from those expressed in, or implied by, the forward-looking statements, and you should not place undue reliance upon them. In addition, past financial and/or operating performance is not necessarily a reliable indicator of future performance, and you should not use our historical performance to anticipate results or future period trends. We can give no assurances that any of the events anticipated by the forward-looking statements will occur or, if any of them do, what impact they will have on our results of operations and financial condition. All forward-looking statements included in this report are based on information available to us on the date of this report. We undertake no obligation to revise or update any forward-looking statements as a result of new information, future events or otherwise. 26 | Management's Discussion and Analysis of Financial Condition and Results of Operations Executive Summary: Management's View of Our Business and Strategic Overview Management's View of Our Business The Partnership provides gathering, pipeline and other transportation services primarily for crude oil and natural gas customers, storage, wholesale marketing and terminalling services primarily for intermediate and refined product customers, and water disposal and recycling services through its owned assets and joint ventures located primarily in the Permian Basin (including the Delaware sub-basin) and other select areas in the Gulf Coast region. A 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 refineries in Tyler, Texas (the "Tyler Refinery"), El Dorado, Arkansas (the "El Dorado Refinery") and Big Spring, Texas (the "Big Spring Refinery"). Business and Economic Environment Overview 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. These transactions significantly enhance our competitive position in the Midland basin and serve to further our economic separation from our sponsor and contribute to an increase in third party revenue. As producers continue to ramp up production within the Permian Basin, the Partnership is well positioned to continue to add value through our gathering and processing services as we have expanded our dedicated crude acreage in our Midland Gathering system. 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 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. Our disciplined approach to cost control, coupled with a focus on margin enhancements, supported earnings before interest, taxes, depreciation and amortization ("EBITDA") growth and improved cash flow, while our capital deployment remained aligned with our strategic priorities. This strengthened financial position empowers us to advance our strategy of organic growth while also exploring attractive opportunities for bolt-on acquisitions. 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 $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. Our gathering and processing segment saw a $46.6 million increase in segment EBITDA, largely due to the H2O Midstream and Gravity acquisitions. Our wholesale marketing and terminalling segment saw a $29.3 million decrease in segment EBITDA largely due to aforementioned sales-type lease accounting. Our storage and transportation segment saw a $24.7 million decrease in segment EBITDA, also attributable to sales-type lease accounting. Segment EBITDA for our investments in pipeline joint ventures increased by $10.6 million with the acquisition of the investment in Wink to Webster Holdings, LLC (the "W2W Investment") from Delek Holdings. See the “Results of Operations” section below for further discussion. The near-term economic outlook still has some uncertainty with the introduction of widespread tariffs by the U.S., geopolitical instability and commodity market volatility. The uncertainty surrounding trade negotiations and the potential for further expansion of tariffs have contributed to increased market and commodity volatility and potential economic downturns. That said, we are well positioned to manage through an economic downturn because of built-in recessionary protections which include minimum volume commitments on throughput and dedicated acreage agreements. Additionally, the Partnership has embraced opportunities to enhance our environmental stewardship. It is expected that renewables, other than hydrocarbons, will continue to grow as a percentage of total energy consumption; however, a material reduction in the reliance on oil and gas for energy consumption is unlikely in the near term. Therefore, we expect that liquid transportation fuels will continue to be in high demand, and we expect to continue to leverage the strength of our cash flows and balance sheet in order to continue maximizing unitholder returns and the long-term prospects for return on investment. See further discussion below in 'Other 2025 Developments' detailing the strategic initiatives the Partnership has implemented in order to position ourselves as a premier, full-service midstream provider in the Permian Basin. These actions not only enhance our standing in the market but also move to align us as an independent, largely third-party cash flow company with a robust growth profile. See further discussion on macroeconomic factors and market trends, including the impact on 2025, in the ‘Market Trends’ section below. 27 | Management's Discussion and Analysis of Financial Condition and Results of Operations Other 2025 Developments Contractual Rate Adjustments to Keep Pace with Inflation On July 1, 2025, the tariffs on certain of our FERC regulated pipelines and the throughput fees and storage fees under certain of our agreements with Delek Holdings and third parties that are subject to adjustments using FERC indexing increased 2.0%. Under certain of our agreements with Delek Holdings and third parties, the fees that are subject to adjustments using the consumer price index increased 2.6% and the fees that are subject to adjustments using the producer price index increased approximately 1.4%. These adjustments allow us to maintain compliance with FERC regulations as well as to ensure that our results are reflective of current market conditions. 2033 Notes On June 30, 2025, the Partnership sold $700.0 million in aggregate principal amount of 7.375% senior notes due 2033 (the "2033 Notes") at par. Net proceeds were used to repay a portion of the outstanding borrowing under the DKL Revolving Facility. 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 will assume all of Delek Holdings’ rights and obligations to purchase crude oil under certain contracts associated with the Partnership’s existing Midland Gathering System. Total consideration included the cancellation of $58.8 million in existing receivables owed by Delek Holdings. 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. Omnibus Agreement On May 1, 2025, we entered into an amended and restated Omnibus Agreement with Delek Holdings that provides for an increase in the Administrative Fee (as defined therein), which will be 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. 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”). 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 On January 2, 2025, we acquired Gravity and related to water disposal and recycling operations in the Permian Basin and the Bakken for total consideration of $300.8 million. The purchase price was comprised of $209.3 million in cash and 2,175,209 of common units. This transaction further enhances our position as full service (crude, natural gas and water) provider in the Permian basin. The acquisition is synergistic to our recent acquisition of H2O Midstream and supplements our integrated crude and produced water gathering and disposal offering in the Midland Basin. 28 | Management's Discussion and Analysis of Financial Condition and Results of Operations Segment Overview We review operating results in four reportable segments: (i) gathering and processing; (ii) wholesale marketing and terminalling; (iii) storage and transportation; and (iv) investments in pipeline joint ventures. Decisions concerning the allocation of resources and assessment of operating performance are made based on this segmentation. Management measures the operating performance of each reportable segment based on the segment EBITDA, except for the investments in pipeline joint ventures segment, which is measured based on net income. Segment reporting is discussed in more detail in Note 10 to our condensed consolidated financial statements in Item 1, Financial Statements, of this Quarterly Report on Form 10-Q. Gathering and Processing The operational assets in our gathering and processing segment consist of our pipeline assets, Midland Gathering Assets, Midland Water Gathering Assets and Delaware Gathering Assets. The Midland Gathering Assets support our crude oil gathering activities which primarily serve Delek Holdings refining needs throughout the Permian Basin. The Midland Water Gathering Assets support our water disposal and recycling operations primarily in the Midland Basin in Texas. The Delaware Gathering Assets support our crude oil and natural gas gathering, processing and transportation businesses, as well as water disposal and recycling operations, located in the Delaware Basin of New Mexico. While we do not take ownership of gas that is gathered, we sell the processed gas at a market price which we remit to the producer, net of our fees. Therefore, we are not directly exposed to changes in commodity prices with respect to these operations. Finally, our gathering and processing assets are integrated with our pipeline assets, which we use to transport gathered crude oil as well as provide other crude oil, intermediate and refined products transportation mainly in support of Delek Holdings' refining operations in Tyler, Texas, El Dorado, Arkansas and Big Spring, Texas, as well as to certain third parties. In providing these services, we do not take ownership of the refined products or crude oil that we transport. The combination of these operational assets provides a comprehensive, integrated midstream service offering to producers and customers. Wholesale Marketing and Terminalling Our wholesale marketing and terminalling segment provides wholesale marketing and terminalling services to Delek Holdings’ refining operations and to independent third parties from whom we receive fees for marketing, transporting, storing and terminalling refined products and to whom we wholesale market refined products. In providing certain of these services, we take ownership of the products and are therefore exposed to market risks related to the volatility of commodity and refined product prices in our West Texas operations, which depend on many factors, including demand and supply of refined products in the West Texas market, the timing of refined product deliveries and downtime at refineries in the surrounding area. Storage and Transportation The operational assets in our storage and transportation segment consist of tanks, offloading facilities, trucks and ancillary assets, which provide crude oil, intermediate and refined products transportation and storage services primarily in support of Delek Holdings' refining operations in Tyler, Texas, El Dorado, Arkansas and Big Spring, Texas. Additionally, the assets in this segment provide crude oil transportation services to certain third parties. In providing these services, we do not take ownership of the products or crude oil that we transport or store. Therefore, we are not directly exposed to changes in commodity prices with respect to this operating segment. Investments in Pipeline Joint Ventures The Partnership owns a portion of four joint ventures (accounted for as equity method investments) that have constructed separate crude oil pipeline systems and related ancillary assets primarily in the Permian Basin and Gulf Coast regions and with strategic connections to Cushing, Midland and connections from Wink, Texas to Webster, Texas and other key exchange points, which provide crude oil and refined product pipeline transportation to third parties and subsidiaries of Delek Holdings. 29 | Management's Discussion and Analysis of Financial Condition and Results of Operations Strategic Overview Long-Term Strategic Objectives The Partnership’s Long-Term Strategic Objectives have been focused on providing a competitive yield and growing our distribution while maintaining healthy coverage and leverage ratios. To that end, we are focused on growing our asset base through a slew of accretive growth opportunities we are seeing in our areas of operation. We are supplementing our organic growth opportunities by accretive bolt-on acquisitions which enhance our full suite services offering to our customers. A secondary benefit of growing our contribution of third-party cash flows is to continue to increase our economic separation from our sponsor Delek Holdings and to progress deconsolidation. 2025 Strategic Focus Areas In service to these overarching Long-Term Strategic Objectives, as we begin 2025, we focus on the following Strategic Focus Areas : I. Achieve Strong Cash Flow Growth II. Pursue Attractive Expansion Opportunities III. Engage in Mutually Beneficial Transactions with Delek Holdings IV. Optimize Our Existing Assets and Expand Our Customer Base V. Expand our ESG Consciousness and Lower our Carbon Footprint • Achieve Strong Cash Flow Growth. 2025 is likely to be a transformational year for Delek Logistics as it completes the expansion of the Libby gas processing plant and integrates two free cash flow accretive acquisitions in H2O Midstream and Gravity. The plant expansion and combined crude and water offerings in the Midland Basin are going to increase the Partnership's overall cash flow and improve our distribution coverage ratio. • Pursue Attractive Expansion Opportunities. Continue to evaluate and pursue opportunities to grow our business through several organic growth opportunities and bolt-on acquisitions ◦ Organic growth opportunities. The partnership is in the middle of pursuing several attractive organic growth opportunities enabled by its advantageous position in the prolific Permian Basin. The gas plant expansion and addition of AGI and sour gas processing capabilities are enabling several additional growth options for the Partnership in the Delaware Basin. In the Midland Basin combined crude and water offering is appealing for our customers and bringing additional growth opportunities to our system. ◦ Pursue Acquisitions. Delek logistics will also continue to look for attractive bolt-on acquisitions which are accretive to its free cash flow, EBITDA and leverage profiles. • Engage in Mutually Beneficial Transactions with Delek Holdings. A key tenet of the Partnership's strategy is to continue to increase its economic separation from Delek Holdings and increase the contribution of third-party cash flows in its overall profile. We will continue to evaluate our commercial agreements with Delek Holdings to engage in mutually beneficial negotiations to create incremental value for both ourselves and our sponsor. • Optimize Our Existing Assets and Expand Our Customer Base. We will continue to enhance the profitability of our existing assets by adding incremental throughput volumes, improving operating efficiencies and increasing system-wide utilization. Additionally, we are seeking opportunities to further diversify our customer base by increasing third-party throughput volumes utilizing certain of our existing systems and expanding our existing asset portfolio to service more third-party customers. • Expand our ESG Consciousness and Lower Our Carbon Footprint. Continue to look for ways to grow our business whilst staying conscious of and minimizing the negative environmental impact, while also seeking opportunities to invest in innovative technologies that will reduce our carbon emissions as we achieve our growth objectives and sustainably improve unitholder returns. We expect to achieve this objective through ESG-Conscious Investments with Clear Value Propositions and Sustainable Returns. We continue to be focused on growth opportunities in the Permian Basin given our advantageous location in the Midland and the Delaware Basins. We believe that opportunities exist in crude, natural gas and water which will continue to enhance our gathering and processing segment. The Partnership prioritizes safe and reliable operation of its assets to maintain financial stability and growth. We have successfully avoided lost time injuries for four years, demonstrating our strong safety protocols and adherence to regulations. This commitment protects employees, assets, and operations, minimizing financial losses and maintaining stakeholder trust. Additionally, we have prioritized reducing our leverage ratio, providing us with more financial flexibility to pursue opportunities and expand operations. By reducing our leverage and maintaining a strong financial position, we are better equipped to navigate challenges that may arise. This financial stability also allows us to seize emerging opportunities that align with our strategic goals, ensuring that we can continue to deliver value to our unitholders. 30 | Management's Discussion and Analysis of Financial Condition and Results of Operations 2025 Strategic Scorecard Description of Strategic Success Achieve Strong Cash Flow Growth Pursue Attractive Expansion Opportunities Engage in Mutually Beneficial Transactions with Delek Holdings Optimize Our Existing Assets and Expand Our Customer Base Expand our ESG Consciousness and Lower our Carbon Footprint Completion of debt offering, increasing our liquidity to over $1.0 billion ü ü ü DPG Dropdown ü ü ü ü Acquisition of Gravity ü ü ü Repurchase of common units from Delek Holdings ü ü Began initial phase of operations of the natural gas processing plant expansion ü ü ü Executed agreements with Delek Holdings to further our economic separation and increase third-party revenue ü ü Market Trends Fluctuations in crude oil, natural gas and NGL prices and the prices of related refined and other hydrocarbon products impact operations in the midstream energy sector. For example, the prices of each of these products have the ability to influence drilling activity in many basins and the amounts of capital spending that crude oil exploration and production companies incur to support future growth. Exploration and production activities have a direct impact on volumes transported through our gathering assets in the geologic basins in which we operate. Additionally, the demand for hydrocarbon-based refined products and related crack spreads significantly impact production decisions of our refining customers and likewise throughputs on our pipelines and other logistics assets. Finally, fluctuations in demand and commodity prices for refined products, as well as the value attributable to RINs, directly impacts our wholesale marketing operations, where we are subject to short-term commodity price fluctuations at the rack. Most of the logistics services we provide (including transportation, gathering and processing services) are subject to long-term fee-based contracts with minimum volume commitments or long-term dedicated acreage agreements which mitigate most of our short-term financial risk to price and demand volatility. However, sustained depressed demand/prices over the longer term could not only curb exploration and production expansion opportunities under our agreements, but it could also impact our customers' willingness or ability to renew commercial agreements or result in liquidity or credit constraints that could impact our longer-term relationship with them. That said, despite the recent crude price softness, we are seeing higher volumes in our crude gathering business. Also, our recent expansion of our gas processing capabilities has improved both our customer and geographic diversification, which lowers concentration risk in those areas, in addition to adding service offerings to our portfolio. Furthermore, our dedicated acreage agreements provide significant growth opportunities in strong economic conditions (e.g., high demand/high commodity prices) without incremental customer acquisition cost. Given all of these factors, we believe that we continue to be strategically positioned, even in tougher market conditions, to sustain positive operating results and cash flows and to continue developing profitable growth projects that are needed to support future distribution growth. The charts on the following page provide historical commodity pricing statistics for crude oil, refined product and natural gas. 31 | Management's Discussion and Analysis of Financial Condition and Results of Operations 32 | Management's Discussion and Analysis of Financial Condition and Results of Operations Non-GAAP Measures Our management uses certain "non-GAAP" operational measures to evaluate our operating segment performance and non-GAAP financial measures to evaluate past performance and prospects for the future to supplement our financial information presented in accordance with United States Generally Accepted Accounting Principles ("GAAP"). These financial and operational non-GAAP measures include: • EBITDA - calculated as net income 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 condensed consolidated statements of income and comprehensive income in Item 1. to this Quarterly Report on Form 10-Q. • Distributable cash flow - calculated as net cash flow from operating activities adjusted for changes in assets and liabilities, maintenance capital expenditures net of reimbursements, sales-type lease receipts, net of income recognized and other adjustments not expected to settle in cash. The Partnership believes this is an appropriate reflection of a liquidity measure by which users of its financial statements can assess its ability to generate cash. EBITDA and distributable cash flow are non-GAAP supplemental financial measures that management and external users of our condensed consolidated financial statements, such as industry analysts, investors, lenders and rating agencies, may use to assess: • our operating performance as compared to other publicly traded partnerships in the midstream energy industry, without regard to historical cost basis or, in the case of EBITDA, financing methods; • the ability of our assets to generate sufficient cash flow to make distributions to our unitholders; • our ability to incur and service debt and fund capital expenditures; and • the viability of acquisitions and other capital expenditure projects and the returns on investment of various investment opportunities. We believe that the presentation of EBITDA and distributable cash flow provide information useful to investors in assessing our financial condition and results of operations. EBITDA and distributable cash flow should not be considered alternatives to net income, operating income, cash flow from operating activities or any other measure of financial performance or liquidity presented in accordance with GAAP. EBITDA and distributable cash flow have important limitations as analytical tools, because they exclude some, but not all, items that affect net income and net cash provided by operating activities. Additionally, because EBITDA and distributable cash flow may be defined differently by other partnerships in our industry, our definitions of EBITDA and distributable cash flow may not be comparable to similarly titled measures of other partnerships, thereby diminishing their utility. See below for a reconciliation of EBITDA and distributable cash flow to their most directly comparable GAAP financial measures. Non-GAAP Reconciliations The following table provides a reconciliation of EBITDA and distributable cash flow (which are defined above) to the most directly comparable GAAP measure, or net income and net cash from operating activities, respectively. Reconciliation of net income to EBITDA (in thousands) Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Net income $ 45,560 $ 33,674 $ 129,168 $ 107,380 Add: Income tax expense 344 150 771 533 Depreciation and amortization 34,799 21,204 89,612 71,906 Amortization of marketing contract intangible — 601 — 4,206 Interest expense, net 21,275 13,552 58,002 89,049 EBITDA $ 101,978 $ 69,181 $ 277,553 $ 273,074 33 | Management's Discussion and Analysis of Financial Condition and Results of Operations Reconciliation of net cash from operating activities to distributable cash flow (in thousands) Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Net cash provided by operating activities $ 54,937 $ 24,944 $ 193,910 $ 156,441 Changes in assets and liabilities 20,563 29,049 15,041 31,168 Distributions from equity method investments in investing activities 6,598 704 12,168 3,377 Non-cash lease expense (1,426) (3,788) (5,045) (5,689) Regulatory and sustaining capital expenditures not distributable (1) (5,600) (3,396) (10,843) (7,682) Reimbursement from Delek Holdings for capital expenditures (2) 9 — 28 282 Sales-type lease receipts, net of income recognized (590) 5,474 8,437 5,474 Accretion (737) 446 (1,784) (564) Deferred income taxes (183) (247) (446) (451) Gain on disposal of assets 13 97 3,861 6,727 Distributable cash flow $ 73,584 $ 53,283 $ 215,327 $ 189,083 (1) Regulatory and sustaining capital expenditures represent cash expenditures (including for the addition or improvement to, or the replacement of, our capital assets, and for the acquisition of existing, or the construction or development of new, capital assets) made to maintain our long-term operating income or operating capacity. Examples include expenditures for the repair, refurbishment and replacement of pipelines and terminals, to maintain equipment reliability, integrity and safety and to address environmental laws and regulations. (2) Reimbursement from Delek Holdings for capital expenditures represents amounts for certain capital expenditures reimbursable to us from Delek Holdings pursuant to the terms of the Omnibus Agreement (as defined in Note 3 to our condensed consolidated financial statements in Item 1, Financial Statements, of this Quarterly Report on Form 10-Q). 34 | Management's Discussion and Analysis of Financial Condition and Results of Operations Summary of Financial and Other Information A discussion and analysis of the factors contributing to our results of operations is presented below. The financial statements, together with the following information, are intended to provide investors with a reasonable basis for assessing our historical operations, but should not serve as the only criteria for predicting our future performance. The following table provides summary financial data (in thousands, except unit and per unit amounts): Summary Statement of Operations Data (1) Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Net revenues: Gathering and Processing $ 132,209 $ 81,527 $ 368,579 $ 270,053 Wholesale marketing and terminalling 104,741 106,938 316,055 361,808 Storage and transportation 24,327 25,605 72,923 98,912 Total 261,277 214,070 757,557 730,773 Cost of materials and other 129,724 117,510 378,137 379,262 Operating expenses (excluding depreciation and amortization presented below) 43,853 27,920 122,912 89,464 General and administrative expenses 4,520 15,745 22,328 26,624 Depreciation and amortization 34,799 21,204 89,612 71,906 Other operating expense (income), net 3,013 (117) (835) (1,294) 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 EBITDA (2) $ 101,978 $ 69,181 $ 277,553 $ 273,074 Net income per limited partner unit: Basic $ 0.85 $ 0.71 $ 2.41 $ 2.32 Diluted $ 0.85 $ 0.71 $ 2.41 $ 2.32 Weighted average limited partner 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) This information is presented at a summary level for your reference. See the condensed consolidated statements of income and comprehensive income in Item 1. to this Quarterly Report on Form 10-Q for more details regarding our results of operations. (2) For a definition of EBITDA see "Non-GAAP Measures" above. We report operating results in four reportable segments: • Gathering and Processing • Wholesale Marketing and Terminalling • Storage and Transportation • Investments in Pipeline Joint Ventures Decisions concerning the allocation of resources and assessment of operating performance are made based on this segmentation. Management measures the operating performance of each of its reportable segments based on the segment EBITDA. 35 | Management's Discussion and Analysis of Financial Condition and Results of Operations Results of Operations 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 Q3 2025 vs. Q3 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; and • decrease in revenue related to the termination of the Centrifuge Slurry agreement in December 2024 YTD 2025 vs. YTD 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; and ◦ 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; and • 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 Q3 2025 vs. Q3 2024 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; and ◦ 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. 36 | Management's Discussion and Analysis of Financial Condition and Results of Operations YTD 2025 vs. YTD 2024 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; and ◦ the average volumes of diesel sold increased by 3.2 million gallons, and the average volumes of gasoline sold decreased by 1.2 million. • partially offset by incremental costs associated with the Gravity and H2O Midstream Acquisitions of $10.1 million and $2.9 million, respectively. Operating Expenses Q3 2025 vs. Q3 2024 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; and • increase in natural gas and electrical costs; and • increase in employee costs. YTD 2025 vs. YTD 2024 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 Q3 2025 vs. Q3 2024 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. YTD 2025 vs. YTD 2024 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 Q3 2025 vs. Q3 2024 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. YTD 2025 vs. YTD 2024 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. 37 | Management's Discussion and Analysis of Financial Condition and Results of Operations Other operating expense (income), net Q3 2025 vs. Q3 2024 Other operating expense, net increased by $3.1 million in the third quarter of 2025 compared to the third quarter of 2024. YTD 2025 vs. YTD 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 Q3 2025 vs. Q3 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. YTD 2025 vs. YTD 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 Q3 2025 vs. Q3 2024 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. YTD 2025 vs. YTD 2024 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; and • decreased interest due to the pay off of a term loan during 2024. Results from Equity Method Investments Q3 2025 vs. Q3 2024 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; and • partially offset by a $4.1 million decrease in income from our investments in our other joint ventures. YTD 2025 vs. YTD 2024 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; and • partially offset by a $11.4 million decrease in income from our investments in our other joint ventures. 38 | Management's Discussion and Analysis of Financial Condition and Results of Operations Operating Segments Gathering and Processing Segment The following tables and discussion present the results of operations and certain operating statistics of the gathering and processing segment for the three and nine months ended September 30, 2025, and 2024: Gathering and Processing Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Net revenues $ 132,209 $ 81,527 $ 368,579 $ 270,053 Cost of materials and other $ 31,394 $ 20,061 $ 77,486 $ 57,590 Operating expenses (excluding depreciation and amortization) $ 30,891 $ 18,371 $ 92,988 $ 57,622 Segment EBITDA $ 69,551 $ 42,380 $ 201,437 $ 154,819 Throughputs (bpd (1) ) Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 El Dorado Assets: Crude pipelines (non-gathered) 71,802 68,430 68,340 71,576 Refined products pipelines to Enterprise Systems 59,679 55,283 56,442 59,681 El Dorado Gathering System 9,053 13,886 9,781 12,113 East Texas Crude Logistics System 31,317 35,891 30,462 26,319 Midland Gathering System 222,980 185,179 213,750 201,796 Plains Connection System 185,151 188,421 174,446 218,323 Delaware Gathering Assets Volumes Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Natural Gas Gathering and Processing (Mcfd (2) ) 62,692 75,719 61,157 76,092 Crude Oil Gathering (bpd (1) ) 153,745 125,123 137,828 124,190 Water Disposal and Recycling (bpd (1) ) 87,176 123,856 110,575 123,360 Midland Water Gathering System Volumes (3) Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Water Disposal and Recycling (bpd (1) ) 616,484 311,290 674,532 311,290 (1) bpd - average barrels per day. (2) Mcfd - average thousand cubic feet per day. (3) Consists of volumes of H2O Midstream and Gravity. 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 Q3 2025 vs. Q3 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; and • an increase in revenue associated with the H2O Midstream operations of $11.0 million which began in September 2024. YTD 2025 vs. YTD 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; 39 | 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; and • 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 Q3 2025 vs. Q3 2024 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. YTD 2025 vs. YTD 2024 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 Q3 2025 vs. Q3 2024 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; and • increases in employee costs. YTD 2025 vs. YTD 2024 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 Q3 2025 vs. Q3 2024 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. YTD 2025 vs. YTD 2024 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. 40 | 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 nine months ended September 30, 2025, and 2024: Wholesale Marketing and Terminalling Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Net revenues $ 104,741 $ 106,938 $ 316,055 $ 361,808 Cost of materials and other $ 85,378 $ 83,834 $ 259,527 $ 279,639 Operating expenses (excluding depreciation and amortization) $ 2,341 $ 3,438 $ 7,311 $ 10,539 Segment EBITDA $ 14,203 $ 20,245 $ 46,379 $ 75,724 Operating Information Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 East Texas - Tyler Refinery sales volumes (average bpd) (1) 67,439 70,172 67,609 69,246 Big Spring marketing throughputs (average bpd) (2) — 22,700 — 60,109 West Texas marketing throughputs (average bpd) 2,680 6,552 8,058 5,276 West Texas marketing gross margin per barrel $ 4.50 $ 3.38 $ 3.41 $ 2.85 Terminalling throughputs (average bpd) (3) 145,808 160,849 144,629 152,272 (1) Excludes jet fuel and petroleum coke. (2) Marketing agreement terminated on August 5, 2024, upon assignment to Delek Holdings. (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 nine months ended September 30, 2025, compared to the three and nine months ended September 30, 2024 Net Revenues Q3 2025 vs. Q3 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; and • 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; • 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. YTD 2025 vs. YTD 2024 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 average volumes of diesel sold increased by 3.2 million and the average volumes of gasoline sold decreased by 1.2 million gallons; and 41 | 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; and • 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. 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 nine months ended September 30, 2025, and 2024. Cost of Materials and Other Q3 2025 vs. Q3 2024 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: • 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; and ◦ the volumes of gasoline and diesel sold increased by 0.4 million and 1.2 million gallons, respectively. 42 | Management's Discussion and Analysis of Financial Condition and Results of Operations YTD 2025 vs. YTD 2024 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; and ◦ 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 Q3 2025 vs. Q3 2024 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. YTD 2025 vs. YTD 2024 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 Q3 2025 vs. Q3 2024 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; • lower revenue due to the assignment of the Big Spring refinery marketing agreement to Delek Holdings; and • partially offset by a $1.11 per barrel increase in wholesale margins. YTD 2025 vs. YTD 2024 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; • lower revenue due to the assignment of the Big Spring refinery marketing agreement to Delek Holdings; and • partially offset by a $0.56 per barrel increase in wholesale margins. 43 | Management's Discussion and Analysis of Financial Condition and Results of Operations 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 nine months ended September 30, 2025 and 2024: Storage and Transportation Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Net revenues $ 24,327 $ 25,605 $ 72,923 $ 98,912 Cost of materials and other $ 12,924 $ 13,588 $ 41,041 $ 41,951 Operating expenses (excluding depreciation and amortization) $ 5,200 $ 4,731 $ 14,155 $ 14,286 Segment EBITDA $ 6,250 $ 7,526 $ 17,691 $ 42,405 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 Q3 2025 vs. Q3 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. YTD 2025 vs. YTD 2024 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 Q3 2025 vs. Q3 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. YTD 2025 vs. YTD 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 Q3 2025 vs. Q3 2024 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. YTD 2025 vs. YTD 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 Q3 2025 vs. Q3 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. 44 | Management's Discussion and Analysis of Financial Condition and Results of Operations YTD 2025 vs. YTD 2024 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. 45 | Management's Discussion and Analysis of Financial Condition and Results of Operations Investments in Pipeline Joint Ventures Segment The Investments in Pipeline Joint Ventures segment relates to strategic Joint Venture investments, accounted for as equity method investments, to support the Delek Holdings operations in terms of offering connection to takeaway pipelines, alternative crude supply sources and flow of high-quality crude oil to the Delek Holdings refining system. As a result, Delek Holdings is a major shipper and customer on certain of the Joint Venture pipelines, with minimum volume commitment ("MVC") agreements, which cushion the Joint Venture entities during periods of low activity. The other Joint Venture owners are usually major shippers on the pipelines resulting in a majority of the revenue of the Joint Venture entities coming from MVC agreements with related entities. 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 nine months ended September 30, 2025. Liquidity and Capital Resources Sources of Capital We consider the following when assessing our liquidity and capital resources: (i) cash generated from operations; (iv) potential issuance of additional debt securities; and (ii) borrowings under our revolving credit facility; (v) potential sale of assets. (iii) potential issuance of additional equity; 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. Other funding sources, including the issuance of additional debt securities, have been utilized to fund growth capital projects such as dropdowns and other acquisitions. In addition, we have historically been able to source funding at rates that reflect market conditions, our financial position and our credit ratings. We continue to monitor market conditions, our financial position and our credit ratings and expect future funding sources to be at rates that are sustainable and profitable for the Partnership. However, there can be no assurances regarding the availability of any future financings or additional credit facilities or whether such financings or additional credit facilities can be made available on terms that are acceptable to us. We believe we have sufficient financial resources from the above sources to meet our funding requirements in the next 12 months, including working capital requirements, quarterly cash distributions and capital expenditures. Nevertheless, our ability to satisfy working capital requirements, to service our debt obligations, to fund planned capital expenditures, or to pay distributions will depend upon future operating performance, which will be affected by prevailing economic conditions in the oil industry and other financial and business factors, including crude oil prices, some of which are beyond our control. We continuously review our liquidity and capital resources. If market conditions were to change, for instance due to a significant decline in crude oil prices, and our revenue was reduced significantly or operating costs were to increase significantly, our cash flows and liquidity could be reduced. Additionally, it could cause the rating agencies to lower our credit ratings. There are no ratings triggers that would accelerate the maturity of any borrowings under our debt agreements. Cash Distributions 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. Although our Partnership Agreement requires that we distribute all of our available cash each quarter, we do not otherwise have a legal obligation to distribute any particular amount per common unit. 46 | Management's Discussion and Analysis of Financial Condition and Results of Operations 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) 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 $1.120 $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 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 Flows 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, 2025 2024 Net cash provided by operating activities $ 193,910 $ 156,441 Net cash used in investing activities (411,661) (314,528) 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 $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. In addition, cash dividends received from equity method investments decreased by $6.9 million and cash paid for debt interest increased by $34.1 million. Investing Activities 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. Also contributing to this increase was a decrease in proceeds from sale of property, plant and equipment of $6.8 million. Partially offsetting the increase in cash used was an increase in distributions received from equity method investments of $8.8 million. Financing Activities 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. Additionally contributing to this increase was a $6.2 million decrease in payments on other financing arrangements, and a decrease in deferred financing costs paid of $7.3 million. Partially offsetting the increase were a decrease of $132.2 million due to proceeds received from the equity issuances in October and March 2024, an increase in distributions paid of $30.2 million and a decrease of $10.0 million due to unit repurchases from Delek Holdings in the current period. 47 | Management's Discussion and Analysis of Financial Condition and Results of Operations Debt Overview 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%. • An aggregate principal amount of $400.0 million, under the 2028 Notes (7.125% senior notes), due in 2028, with an effective interest rate of 7.38%. • An aggregate principal amount of $1,050.0 million, under the 2029 Notes (8.625% senior notes), due in 2029, with an effective interest rate of 8.80%. • 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 September 30, 2025. See Note 6 to our condensed consolidated financial statements for a complete discussion of our third-party indebtedness. Agreements Governing Certain Indebtedness of Delek Holdings Delek Holdings' level of indebtedness, the terms of its borrowings and any future credit ratings could adversely affect our ability to grow our business, our ability to make cash distributions to our unitholders and our credit profile. Our current and future credit ratings may also be affected by Delek Holdings' level of indebtedness, financial performance and credit ratings. Capital Spending A key component of our long-term strategy is our capital expenditure program, which includes strategic consideration and planning for the timing and extent of regulatory maintenance, sustaining maintenance, and growth capital projects. These categories are described below: • Regulatory maintenance projects in the gathering and processing segment are those expenditures expected to be spent on certain of our pipelines to maintain their operational integrity pursuant to applicable environmental and other regulatory requirements. Regulatory projects in the wholesale marketing and terminalling segment relate to scheduled maintenance and improvements on our terminalling tanks and racks at certain of our terminals in order to maintain environmental and other regulatory compliance. These expenditures have historically been and will continue to be financed through cash generated from operations. • Sustaining capital expenditures represent capitalizable expenditures for the addition or improvement to, or the replacement of, our capital assets, and for the acquisition of existing, or the construction or development of new, capital assets made to maintain our long-term operating income or operating capacity. Examples of sustaining capital expenditures are expenditures for the repair, refurbishment and replacement of pipelines, tanks and terminals, to maintain equipment reliability, integrity and safety and to maintain compliance with environmental laws and regulations. Delek Holdings has agreed to reimburse us with respect to certain assets it has transferred to us pursuant to the terms of the Omnibus Agreement (as defined in Note 3 to our accompanying condensed consolidated financial statements). When not provided for under reimbursement agreements, such activities are generally funded by cash generated from operations. • Growth projects include those projects that do not fall into one of the two categories above, and could include committed expansion projects under contracts with customers as well as other incremental growth projects, but are generally expected to produce incremental cash flows in accordance with our internal return on invested capital policy. Depending on the magnitude, funding for such projects may include cash generated from operations, borrowings under existing credit facilities, or issuances of additional debt or equity securities. 48 | 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 nine months ended September 30, 2025: (in thousands) Full Year 2025 Forecast Nine Months Ended September 30, 2025 Gathering and Processing Regulatory $ — $ 286 Sustaining 2,715 5,922 Growth 209,300 229,915 Gathering and Processing Segment Total $ 212,015 $ 236,123 Wholesale Marketing and Terminalling Regulatory $ 6,958 $ 185 Sustaining 3,022 617 Growth 6,800 — Wholesale Marketing and Terminalling Segment Total $ 16,780 $ 802 Storage and Transportation Regulatory $ 6,515 $ 1,345 Sustaining — 2,488 Growth — 4 Storage and Transportation Segment Total $ 6,515 $ 3,837 Total Capital Spending $ 235,310 $ 240,762 The amount of our capital expenditure forecast is subject to change due to unanticipated increases in the cost, scope and completion time for our capital projects. For example, we may experience increases in the cost of and/or timing to obtain necessary equipment required for our continued compliance with government regulations or to complete improvement projects. Additionally, the scope and cost of employee or contractor labor expense related to installation of that equipment could increase from our projections. Off-Balance Sheet Arrangements We have no off-balance sheet arrangements through the date of the filing of this Quarterly Report on Form 10-Q. 49 | Quantitative and Qualitative Disclosures about Market Risk