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) March 31, 2026 December 31, 2025 ASSETS Current assets: Cash and cash equivalents $ 9,907 $ 10,892 Accounts receivable 146,588 114,544 Accounts receivable from related parties 306,286 216,641 Lease receivable - affiliate 47,681 36,362 Inventory 20,967 17,913 Other current assets 4,900 4,416 Total current assets 536,329 400,768 Property, plant and equipment: Property, plant and equipment 1,876,022 1,827,530 Less: accumulated depreciation ( 431,556 ) ( 403,523 ) Property, plant and equipment, net 1,444,466 1,424,007 Equity method investments 333,795 340,070 Customer relationship intangibles, net 227,377 233,022 Other intangibles, net 142,833 137,439 Goodwill 12,203 12,203 Operating lease right-of-use assets 10,704 11,683 Finance lease right-of-use assets 28,179 27,802 Net investment in leases - affiliate 158,666 185,656 Other non-current assets 14,148 6,618 Total assets $ 2,908,700 $ 2,779,268 LIABILITIES AND (DEFICIT) EQUITY Current liabilities: Accounts payable $ 508,501 $ 292,908 Interest payable 26,930 30,557 Excise and other taxes payable 7,771 16,569 Current portion of operating lease liabilities 2,478 3,027 Current portion of finance lease liabilities 9,031 8,310 Accrued expenses and other current liabilities 6,256 5,122 Total current liabilities 560,967 356,493 Non-current liabilities: Long-term debt, net of current portion 2,294,624 2,344,420 Operating lease liabilities, net of current portion 3,054 3,551 Finance lease liabilities, net of current portion 20,010 20,289 Asset retirement obligations 25,169 24,278 Other non-current liabilities 25,029 24,123 Total non-current liabilities 2,367,886 2,416,661 (Deficit) Equity: Common unitholders - public; 19,653,345 units issued and outstanding at March 31, 2026 ( 19,643,923 at December 31, 2025) 500,506 510,376 Common unitholders - Delek Holdings; 33,868,203 units issued and outstanding at March 31, 2026 ( 33,868,203 at December 31, 2025) ( 520,659 ) ( 504,262 ) Total (deficit) equity ( 20,153 ) 6,114 Total liabilities and (deficit) equity $ 2,908,700 $ 2,779,268 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 March 31, 2026 2025 Net revenues Affiliate (1) $ 166,690 $ 126,321 Third party 130,776 123,609 Net revenues 297,466 249,930 Cost of sales: Cost of materials and other - affiliate (1) 108,185 89,966 Cost of materials and other - third party 60,426 39,086 Operating expenses (excluding depreciation and amortization presented below) 46,596 40,630 Depreciation and amortization 35,353 26,498 Total cost of sales 250,560 196,180 Operating expenses related to wholesale business (excluding depreciation and amortization presented below) 449 355 General and administrative expenses 4,274 8,864 Depreciation and amortization 1,148 1,218 Other operating expense (income), net 1,026 ( 4,286 ) Total operating costs and expenses 257,457 202,331 Operating income 40,009 47,599 Interest income ( 32,285 ) ( 22,547 ) Interest expense 51,592 41,101 Income from equity method investments ( 11,623 ) ( 10,150 ) Other income, net ( 27 ) ( 21 ) Total non-operating expenses, net 7,657 8,383 Income before income tax expense 32,352 39,216 Income tax expense — 182 Net income 32,352 39,034 Comprehensive income $ 32,352 $ 39,034 Net income per unit: Basic $ 0.60 $ 0.73 Diluted $ 0.60 $ 0.73 Weighted average common units outstanding: Basic 53,514,387 53,604,659 Diluted 53,602,510 53,633,836 (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 Balance as of December 31, 2025 $ 510,376 $ ( 504,262 ) $ 6,114 Cash distributions ( 22,100 ) ( 38,102 ) ( 60,202 ) Net income 11,877 20,475 32,352 Other 353 1,230 1,583 Balance as of March 31, 2026 $ 500,506 $ ( 520,659 ) $ ( 20,153 ) Common - Public Common - Delek Holdings Total Balance as of December 31, 2024 $ 440,957 $ ( 405,429 ) $ 35,528 Cash distributions ( 21,609 ) ( 37,693 ) ( 59,302 ) Net income 14,224 24,810 39,034 Issuance of units 91,511 — 91,511 Unit repurchase — ( 10,000 ) ( 10,000 ) Other 58 606 664 Balance as of March 31, 2025 $ 525,141 $ ( 427,706 ) $ 97,435 See accompanying notes to the condensed consolidated financial statements 5 | Financial Statements Delek Logistics Partners, LP Condensed Consolidated Statements of Cash Flows (Unaudited) (in thousands) Three Months Ended March 31, 2026 2025 Cash flows from operating activities: Net income $ 32,352 $ 39,034 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 36,501 27,716 Non-cash lease expense 1,101 2,267 Amortization of deferred revenue ( 1,878 ) ( 830 ) Amortization of deferred financing costs and debt discount 1,593 1,283 Income from equity method investments ( 11,623 ) ( 10,150 ) Dividends from equity method investments 12,873 7,338 Loss on extinguishment of debt 1,589 — Other non-cash adjustments 3,636 ( 3,028 ) Changes in assets and liabilities: Accounts receivable ( 32,044 ) 2,508 Inventories and other current assets ( 3,538 ) 232 Accounts payable and other current liabilities 200,945 ( 17,579 ) Accounts receivable/payable to related parties ( 89,645 ) ( 21,158 ) Net investment in leases - affiliate 15,671 5,161 Non-current assets and liabilities, net 2,843 ( 1,244 ) Net cash provided by operating activities 170,376 31,550 Cash flows from investing activities: Purchases of property, plant and equipment ( 48,522 ) ( 55,474 ) Proceeds from sales of property, plant and equipment 76 4,318 Purchases of intangible assets ( 5,877 ) ( 4,558 ) Business combination, net of cash acquired — ( 181,180 ) Distributions from equity method investments 5,025 2,127 Net cash used in investing activities ( 49,298 ) ( 234,767 ) Cash flows from financing activities: Distributions to common unitholders - public ( 22,100 ) ( 21,609 ) Distributions to common unitholders - Delek Holdings ( 38,102 ) ( 37,693 ) Proceeds from revolving facility 882,500 598,500 Payments on revolving facility ( 933,250 ) ( 328,800 ) Unit repurchase — ( 10,000 ) Payments on finance leases ( 2,155 ) — Deferred financing costs paid ( 8,956 ) — Other financing activities — ( 458 ) Net cash (used in) provided by financing activities ( 122,063 ) 199,940 Net decrease in cash and cash equivalents ( 985 ) ( 3,277 ) Cash and cash equivalents at the beginning of the period 10,892 5,384 Cash and cash equivalents at the end of the period $ 9,907 $ 2,107 Three Months Ended March 31, 2026 2025 Supplemental disclosures of cash flow information: Cash paid during the period for: Interest, net of capitalized interest of $ 1.0 million and $ 2.7 million in the 2026 and 2025 periods, respectively $ 52,037 $ 54,623 Non-cash investing activities: Common units issued in connection with Gravity Acquisition $ — $ 91,511 Increase in accrued capital expenditures $ 1,303 $ 16,469 Non-cash financing activities: Lease liability arising from obtaining operating right-of-use assets during the period $ — $ 9,447 Lease liability arising from obtaining finance right-of-use assets during the period $ 2,600 $ — Decrease in right-of-use assets due to lease terminations during the period $ 41 $ — 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 significant portion 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"). 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, 2025 (our "Annual Report on Form 10-K"), filed with the U.S. Securities and Exchange Commission (the "SEC") on February 27, 2026, 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, 2025, 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 2025-12, Codification Improvements In December 2025,the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2025-12 Codification Improvements ("ASU 2025-12"). This update addresses suggestions received from stakeholders regarding the Accounting Standards Codification and makes other incremental improvements to U.S. GAAP. The update represents changes to the Codification that clarify, correct errors in or make other improvements to a variety of topics that are intended to make it easier to understand and apply. ASU 2025-12 is effective for fiscal years beginning after December 15, 2026 and interim periods within those fiscal years. Entities are required to apply the amendments to ASC 260 retrospectively. All other amendments may be applied prospectively or retrospectively. Early adoption is permitted. The adoption of ASU 2025-12 will not affect our financial position or our results of operations, but could impact disclosures. ASU 2025-11, Interim Reporting (Topic 270) Narrow-Scope Improvements In December 2025, the FASB issued ASU 2025-11 Interim Reporting (Topic 270) Narrow-Scope Improvements ("ASU 2025-11"), which is intended to improve the navigability of the guidance in ASC 270, Interim Reporting, and clarify when it applies. Under the amendments, an entity is subject to Topic 270 if it provides interim financial statements and notes in accordance with GAAP. ASU 2025-11 also addresses the form and content of such financial statements, interim disclosures requirements, and establishes a principle under which an entity must disclose events since the end of the last annual reporting period that have a material impact on the entity. ASU 2025-11 is effective for interim reporting periods within annual reporting periods beginning after December 15, 2027, and early adoption is permitted. The adoption of ASU 2025-11 will not affect our financial position or our results of operations, but could impact disclosures. 7 | Notes to the Condensed Consolidated Financial Statements (Unaudited) 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 FASB issued ASU 2025-03, Business Combinations (Topic 805) and Consolidation (Topic 810): Determining the Accounting Acquirer in a VIE ("ASU 2025-03"). 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. 2. Acquisitions Gravity Acquisition On January 2, 2025, we purchased 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”) for total consideration 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, and 2,175,209 of common units. 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 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 91,511 Purchase price $ 300,808 8 | Notes to the Condensed Consolidated Financial Statements (Unaudited) Purchase Price Allocation The following table summarizes the 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 fair value of $ 66.3 million, amortized over approximately 32 years. • Rights-of-way intangibles are valued at $ 31.9 million, the majority of which have an indefinite life. 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. 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. See our Annual Report on Form 10-K for a more complete description of our material commercial agreements and other agreements with Delek Holdings. 9 | Notes to the Condensed Consolidated Financial Statements (Unaudited) 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 transactions with 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 $ 13.0 million to Delek Holdings for its provision of centralized corporate services to the Partnership. Effective July 1, 2026, the annual fee will increase by $ 8.0 million. Pursuant to Intercompany Agreements (as defined below), Delek Holdings will waive Omnibus fees for an aggregate of $ 4.0 million during the first two quarters of 2026. Pursuant to the terms of the Omnibus Agreement, we are reimbursed by Delek Holdings for certain capital expenditures. These amounts are record ed in other long-term liabilities and are amortized to revenue over the life of the underlying revenue agreement corresponding to the ass et. There were no reimbursements by Delek Holdings during the three months ended March 31, 2026, and 2025. Additionally, we are reimbursed or indemnified, as the case may be, for costs incurred in excess of certain amounts related to certain asset failures, pursuant to the terms of the Omnibus Agreement. As of March 31, 2026, and December 31, 2025, 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 month periods ended March 31, 2026, and 2025. Asset Purchase Agreements with Delek Holdings On January 30, 2026, the Partnership entered into asset purchase agreements with Delek Holdings (collectively, the “Intercompany Agreements”). Pursuant to these agreements, the Partnership agreed to sell a Tyler refinery tank to Delek Holdings for total consideration of $ 19.0 million (the “Tyler Tank Sale”) and to sell El Dorado tank and terminal assets to Delek Holdings for total consideration of $ 66.0 million (the “El Dorado Terminal Sale”). The Tyler Tank Sale closed on April 1, 2026. At closing, Delek Holdings returned 359,372 Partnership common units to us, representing the full consideration of $ 19.0 million. The El Dorado Terminal Sale is expected to close on October 1, 2027, subject to the satisfaction of customary closing conditions. On May 1, 2025, the Partnership and Delek Holdings, entered into an asset purchase agreement (the “El Dorado Purchase Agreement”), whereby Delek Holdings committed to 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 closed on January 2, 2026, subject to certain closing conditions as set forth in the El Dorado Purchase Agreement. On May 1, 2025, the Partnership entered into an agreement to terminate, in its entirety, the marketing agreement with Delek Holdings, under which we marketed 100 % of the refined products output of the Tyler Refinery, effective as of January 1, 2026. 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, 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 March 31, 2026 2025 Revenues $ 166,690 $ 126,321 Interest income from sales-type leases $ 32,262 $ 22,547 Purchases from Affiliates $ 108,185 $ 89,966 Operating and maintenance expenses $ 28,678 $ 21,940 General and administrative expenses $ 1,816 $ 2,220 10 | Notes to the Condensed Consolidated Financial Statements (Unaudited) Quarterly Cash Distributions Date of Distribution Distributions paid to Delek Holdings (in thousands) February 12, 2026 $ 38,102 May 11, 2026 (1) 38,271 Total $ 76,373 February 11, 2025 $ 37,693 May 15, 2025 37,594 Total $ 75,287 (1) On April 23, 2026, 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 March 31, 2026. 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 March 31, 2026 Gathering and Processing Wholesale Marketing and Terminalling Storage and Transportation Consolidated Service Revenue - Third Party $ 22,997 $ — $ 1,476 $ 24,473 Service Revenue - Affiliate 3,067 644 15,337 19,048 Product Revenue - Third Party 82,433 23,870 — 106,303 Product Revenue - Affiliate 384 86,168 — 86,552 Lease Revenue - Affiliate 45,795 7,114 8,181 61,090 Total Revenue $ 154,676 $ 117,796 $ 24,994 $ 297,466 Three Months Ended March 31, 2025 Gathering and Processing Wholesale Marketing and Terminalling Storage and Transportation Consolidated Service Revenue - Third Party $ 18,454 $ — $ 1,582 $ 20,036 Service Revenue - Affiliate 1,506 6,657 13,974 22,137 Product Revenue - Third Party 61,582 41,991 — 103,573 Product Revenue - Affiliate 3,219 49,326 — 52,545 Lease Revenue - Affiliate 33,842 8,725 9,072 51,639 Total Revenue $ 118,603 $ 106,699 $ 24,628 $ 249,930 As of March 31, 2026, we expect to recognize approximately $ 507.3 million 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. Our unfulfilled performance obligations as of March 31, 2026, were as follows (in thousands): Remainder of 2026 $ 101,520 2027 134,716 2028 89,217 2029 80,117 2030 and thereafter 101,724 Total expected revenue on remaining performance obligations $ 507,294 11 | Notes to the Condensed Consolidated Financial Statements (Unaudited) 5. Net Income per Unit Basic net income per unit is computed by dividing net income by the weighted-average number of outstanding common units. Diluted net income per unit includes the effects of potentially dilutive units on our common units. As of March 31, 2026 and 2025, the only potentially dilutive units outstanding consist of unvested phantom units. The calculation of net income per unit is as follows (in thousands, except unit and per unit amounts): Three Months Ended March 31, 2026 2025 Net income $ 32,352 $ 39,034 Weighted average common units outstanding, basic 53,514,387 53,604,659 Dilutive effect of unvested phantom units 88,123 29,177 Weighted average common units outstanding, diluted 53,602,510 53,633,836 Net income per unit: Basic $ 0.60 $ 0.73 Diluted (1) $ 0.60 $ 0.73 (1) There were 22,566 and 28,692 anti-dilutive common unit equivalents excluded from the diluted earnings per unit calculation during the three months ended March 31, 2026 and 2025, respectively. 6. Long-Term Obligations Outstanding borrowings under the Partnership’s debt instruments are as follows (in thousands): March 31, 2026 December 31, 2025 DKL Revolving Facility $ 161,100 $ 211,850 2033 Notes 700,000 700,000 2029 Notes 1,050,000 1,050,000 2028 Notes 400,000 400,000 Principal amount of long-term debt 2,311,100 2,361,850 Less: Unamortized discount and premium and deferred financing costs 16,476 17,430 Total debt, net of unamortized discount and premium and deferred financing costs $ 2,294,624 $ 2,344,420 DKL Credit Facility On March 26, 2026, the Partnership entered into a credit agreement (the “New Credit Agreement”) that provides for revolving commitments up to $ 1,300.0 million in the aggregate with a sublimit up to $ 150.0 million for letters of credit and up to $ 50.0 million for swing line loans (the “DKL Revolving Facility”). The DKL Revolving Facility replaced the Partnership's previous revolving credit facility and term loan facility under the Fourth Amended and Restated Credit Agreement (the "Prior Credit Agreement") and proceeds were used to pay all outstanding balances of the Prior Credit Agreement. The maturity date for the DKL Revolving Facility is the earliest of (i) March 26, 2031, (ii) the date that is 180 days prior to the earliest maturity date of the Partnership’s 8.625 % Senior Notes due 2029 to the extent that on such date, no less than $ 500.0 million of aggregate principal amount of the 2029 Notes remains outstanding, and (iii) such date on which the Revolving Credit Commitments (as defined in the New Credit Agreement) are terminated in whole due to voluntary termination or certain events of default. Borrowings under the DKL Revolving Facility bear interest at either (i) a base rate (equal to the highest of the Prime Rate, the Federal Funds Rate plus 0.50 %, Term SOFR for a one-month interest period plus 1.00 %, and 1.00 %) plus an applicable margin ranging from 0.50 % to 1.50 % per annum, or (ii) a term SOFR-based tranche rate (subject to a 0.00 % floor) plus an applicable margin ranging from 1.50 % to 2.50 % per annum, in each case depending on the Partnership's Total Leverage Ratio (as defined in the New Credit Agreement). Swing loans bear interest at the base rate plus the applicable margin for base rate loans. As of March 31, 2026, the weighted average interest rate was 5.99 %. There were no letters of credit outstanding as of March 31, 2026. The New Credit Agreement contains affirmative and negative covenants and events of default which the Partnership considers customary and are similar to, but allow additional flexibility to the Partnership and its restricted subsidiaries as compared with, those in our Prior Credit Agreement. 12 | Notes to the Condensed Consolidated Financial Statements (Unaudited) The DKL Revolving Facility contains affirmative and negative covenants and events of default, which the Partnership considers customary and are similar to those in our predecessor DKL Revolving Facility. We believe we were in compliance with all covenant requirements as of March 31, 2026. Under the financial covenants in the DKL Revolving Facility, the Partnership cannot: • permit, as of the last day of each fiscal quarter, the Total Leverage Ratio (as defined in the New Credit Agreement) to be greater than 5.25 to 1.00; • permit, as of the last day of each fiscal quarter, the Senior Leverage Ratio (as defined in the New Credit Agreement) to be greater than 3.75 to 1.00; and • permit, as of the last day of each fiscal quarter, the interest coverage ratio to be equal to or less than 2.00 to 1.00. The obligations under the DKL Revolving Facility are secured by first priority liens on substantially all of the Partnership’s and its subsidiaries’ tangible and intangible assets. The carrying value of outstanding borrowings under the DKL Revolving Facility as of March 31, 2026 approximates their fair values. Our debt facilities contain affirmative and negative covenants and events of default the Partnership considers usual and customary. As of March 31, 2026, we were in compliance with covenants on all of our debt instruments. 2033 Notes Our 2033 Notes are general unsecured senior obligations comprised of $ 700.0 million in aggregate principal 7.375 % senior notes maturing on June 30, 2033. The 2033 Notes are unconditionally guaranteed jointly and severally on a senior unsecured basis by the existing Partnership's subsidiaries (other than Delek Logistics Finance Corp.) and will be unconditionally guaranteed on the same basis by certain of the Partnership’s future subsidiaries. As of March 31, 2026, the effective interest rate was 7.63 %. The estimated fair value of the 2033 Notes was $ 707.2 million and $ 716.4 million as of March 31, 2026 and December 31, 2025, respectively, measured based upon quoted market prices in an active market, defined as Level 2 in the fair value hierarchy. 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 March 31, 2026, the effective interest rate was 8.80 %. The estimated fair value of the 2029 Notes was $ 1,088.4 million and $ 1,100.4 million as of March 31, 2026 and December 31, 2025, respectively, measured based upon quoted market prices in an active market, defined as Level 2 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 March 31, 2026, the effective interest rate was 7.37 %. The estimated fair value of the 2028 Notes was $ 401.3 million and $ 402.7 million as of March 31, 2026 and December 31, 2025, respectively, measured based upon quoted market prices in an active market, defined as Level 2 in the fair value hierarchy. 7. Equity Equity Activity The table below summarizes the changes in the number of units outstanding from December 31, 2025 through March 31, 2026. Common - Public Common - Delek Holdings (1) Total Balance at December 31, 2025 19,643,923 33,868,203 53,512,126 Unit-based compensation awards (2) 9,422 — 9,422 Balance at March 31, 2026 19,653,345 33,868,203 53,521,548 (1) As of March 31, 2026, Delek Holdings owned a 63.3 % interest in the Partnership. (2) Unit-based compensation awards are presented net of 6,829 units withheld for taxes for three months ended March 31, 2026. 13 | Notes to the Condensed Consolidated Financial Statements (Unaudited) 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 three months ended March 31, 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 three months ended March 31, 2026. As of March 31, 2026, 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, 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 December 31, 2025 $ 1.125 $ 60,202 March 31, 2026 (1) $ 1.130 $ 60,479 (1) On April 23, 2026, the board of directors of our general partner declared this quarterly cash distribution, payable on May 11, 2026, to unitholders of record on May 4, 2026. Total cash distribution is estimated based on the number of common units outstanding as of March 31, 2026. 8. 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 interest in Wink to Webster Holdings, LLC ("W2W Holdings"). Our interest in W2W Holdings includes a 15.6 % indirect interest in the Wink to Webster Pipeline, LLC joint venture ("Wink to Webster") and related joint venture indebtedness. 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 March 31, 2026, 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 did not provide any financial support to equity method investments that it was not contractually obligated to provide during the three months ended March 31, 2026 and 2025. 14 | Notes to the Condensed Consolidated Financial Statements (Unaudited) The Partnership's investment balances in these joint ventures were as follows (in thousands): As of March 31, 2026 As of December 31, 2025 Red River $ 130,109 $ 132,139 W2W Holdings 113,765 116,404 CP LLC 58,001 59,088 Andeavor Logistics 31,920 32,439 Total Equity Method Investments $ 333,795 $ 340,070 9. 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 before net interest expense, income taxes, depreciation, amortization, and proportional interest, taxes, depreciation and amortization of equity method investments. Segment data for prior periods has been restated and is consistent with the current year presentation. A reconciliation of segment EBITDA to net income is included in the tables below. Assets by segment is not a measure used to assess the performance of the Partnership by the CODM and thus is not disclosed. 15 | Notes to the Condensed Consolidated Financial Statements (Unaudited) The following table summarizes segment operating results, as measured by segment EBITDA, for the periods presented: Three Months Ended March 31, 2026 Gathering and Processing Wholesale Marketing and Terminalling Storage and Transportation Investments in Pipeline Joint Ventures Total Net revenues: Affiliate $ 49,246 $ 93,926 $ 23,518 $ — $ 166,690 Third party 105,430 23,870 1,476 — 130,776 Total revenue 154,676 117,796 24,994 — 297,466 Cost of materials and other 50,301 105,132 13,138 — 168,571 Operating expenses 32,439 2,872 6,126 — 41,437 Proportional EBITDA from equity method investments — — — ( 18,319 ) ( 18,319 ) Other segment items (1) 1,316 30 ( 25 ) — 1,321 Segment EBITDA $ 70,620 $ 9,762 $ 5,755 $ 18,319 104,456 Reconciling items to consolidated net income before income taxes: Corporate expenses and other 9,600 Proportional interest, taxes, depreciation and amortization from equity-method investments 6,696 Depreciation and amortization 36,501 Interest income ( 32,285 ) Interest expense 51,592 Income tax expense — Net income $ 32,352 Three Months Ended March 31, 2025 Gathering and Processing Wholesale Marketing and Terminalling Storage and Transportation Investments in Pipeline Joint Ventures Total Net revenues: Affiliate $ 38,567 $ 64,708 $ 23,046 $ — $ 126,321 Third party 80,036 41,991 1,582 — 123,609 Total revenue 118,603 106,699 24,628 — 249,930 Cost of materials and other 24,344 89,653 15,027 — 129,024 Operating expenses 30,581 3,799 5,161 — 39,541 Proportional EBITDA from equity method investments — — — ( 16,815 ) ( 16,815 ) Other segment items (1) ( 4,261 ) 10 26 — ( 4,225 ) Segment EBITDA $ 67,939 $ 13,237 $ 4,414 $ 16,815 102,405 Reconciling items to consolidated net income before income taxes: Corporate expenses and other 10,254 Proportional interest, taxes, depreciation and amortization from equity-method investments 6,665 Depreciation and amortization 27,716 Interest income ( 22,547 ) Interest expense 41,101 Income tax expense 182 Net income $ 39,034 (1) Other segment items include general and administrative expense, other operating (income) loss and other income. 16 | Notes to the Condensed Consolidated Financial Statements (Unaudited) The following is a summary of other segment information for the periods presented: Three Months Ended March 31, 2026 Gathering and Processing Wholesale Marketing and Terminalling Storage and Transportation Investments in Pipeline Joint Ventures Corporate and Other Consolidated Depreciation and amortization $ 33,241 $ 768 $ 1,725 $ — $ 767 $ 36,501 Interest income $ 10,158 $ 4,017 $ 18,110 $ — $ — $ 32,285 Capital spending (1) $ 49,519 $ 111 $ 195 $ — $ — $ 49,825 Three Months Ended March 31, 2025 Gathering and Processing Wholesale Marketing and Terminalling Storage and Transportation Investments in Pipeline Joint Ventures Corporate and Other Consolidated Depreciation and amortization $ 24,723 $ 952 $ 1,281 $ — $ 760 $ 27,716 Interest income $ 11,365 $ 4,161 $ 7,021 $ — $ — $ 22,547 Capital spending (1) $ 71,311 $ 90 $ 542 $ — $ — $ 71,943 (1) Capital spending includes additions on an accrual basis. 10. 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. 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. 17 | Notes to the Condensed Consolidated Financial Statements (Unaudited) 11. Leases Lessee In March 2026, we entered into an arrangement with a third party to construct, own, and subsequently lease to us certain sour gas gathering equipment near our Libby gas processing plant. The construction is expected to be completed in the second quarter of 2026, at which time we have committed to enter into a finance lease for the equipment. During construction, we are not deemed to control the assets and are not obligated to fund construction costs; therefore, we have not recognized the assets or related obligations on our balance sheet as of March 31, 2026. The total estimated project cost is approximately $ 60.0 million. Upon lease commencement, we will recognize a right-of-use asset and lease liability in accordance with ASC 842, Leases ("ASC 842"). 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 March 31, (in thousands) 2026 2025 Operating leases: Lease revenue $ 57,199 $ 48,599 Sales-type leases: Interest income (Sales-type rental revenue-fixed minimum) $ 32,262 $ 22,547 Lease revenue (Revenue from variable lease payments) 3,891 3,040 Sales-type lease income $ 36,153 $ 25,587 12. Subsequent Events Distribution Declaration On April 23, 2026, our general partner's board of directors declared a quarterly cash distribution of $ 1.130 per unit, payable on May 11, 2026, to unitholders of record on May 4, 2026. Asset Purchase Agreements with Delek Holdings On April 1, 2026, the Partnership completed the Tyler Tank Sale pursuant to the terms of the Intercompany Agreements as further described in Note 3. At closing, Delek Holdings returned 359,372 Partnership common units to us, representing the full consideration of $ 19.0 million. As a result of this transaction, Delek Holdings’ ownership interest in the Partnership was further diluted, decreasing to 63.0 %. 18 | Management's Discussion and Analysis of Financial Condition and Results of Operations