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 27, 2026 (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. 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 acquisition of Gravity Water Intermediate Holdings LLC ("Gravity") (the "Gravity Acquisition"), 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; • the shift from hydrocarbon energy sources to alternative energy sources; 23 | Management's Discussion and Analysis of Financial Condition and Results of Operations • 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 renewable identification numbers ("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. 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. 24 | 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 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 the Tyler Refinery, El Dorado Refinery and Big Spring Refinery. Business and Economic Environment Overview During the six months ended June 30, 2026, we continued to focus on 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. Our strategic acquisitions over the past few years served to significantly enhance our competitive position in the Midland Basin and further our economic separation from our sponsor and contribute to an increase in third party revenue. The Partnership is well positioned to continue to add value through our gathering and processing services. In the Midland Basin, combined crude and water offering is appealing for our customers and brings additional growth opportunities to our system. Additionally, in the Delaware Basin, the Partnership expects continued cash flow growth in 2026 driven by the ramp up at the Libby gas processing plant and the ongoing completion of the sour gas gathering and acid gas injection ("AGI") capabilities. 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. The near-term economic outlook remains uncertain due to ongoing geopolitical instability, including the ongoing conflict involving Iran and resulting disruptions to maritime transit through the Strait of Hormuz, and heightened commodity market volatility. Uncertainty surrounding trade negotiations and geopolitical developments have contributed to increased market and commodity price volatility, heightened supply disruption risk, and broader macroeconomic uncertainty, which could negatively affect global economic conditions. Despite these challenges, we are well positioned to manage through an economic downturn because of built-in recessionary protections within our business, including fee-based arrangements supported by minimum volume commitments on throughput and dedicated acreage agreements. Changes in crude oil prices resulting from geopolitical events may indirectly influence upstream production activity and refinery utilization in our core operating areas, which could have a favorable impact on volumes over time. In addition, periods of increased market volatility may modestly increase demand for logistics, transportation, and storage services. The Partnership continues to pursue opportunities to enhance environmental stewardship consistent with applicable regulatory requirements and market conditions. While renewable energy sources are expected to continue growing as a percentage of total energy consumption, oil and gas are expected to remain an important component of the global energy mix in the near to medium term. As a result, liquid transportation fuels are expected to remain in demand, supporting throughput volumes and utilization of our assets. We believe our asset base and contractual protections position us to continue operating effectively amid evolving market and economic conditions. See further discussion below in 'Other 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 2026, in the ‘Market Trends’ section below. Other Developments Contractual Rate Adjustments to Keep Pace with Inflation On July 1, 2026, 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 1.4%. Under certain of our agreements with Delek Holdings and third parties, the fees that are subject to adjustments using the consumer price index increased 3.1% and the fees that are subject to adjustments using the producer price index increased approximately 3.6%. These adjustments allow us to maintain compliance with FERC regulations as well as to ensure that our results are reflective of current market conditions. 25 | Management's Discussion and Analysis of Financial Condition and Results of Operations 2034 Notes On May 14, 2026, the Partnership sold $800.0 million in aggregate principal amount of 6.875% senior notes due 2034 (the "2034 Notes"). Net proceeds were used to redeem the 2028 Notes including accrued interest and a portion of the 2029 Notes including accrued interest. 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. Libby Plant Equipment Construction and Lease Arrangement 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 at our Libby gas processing plant. The construction is expected to be completed in the second half 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 June 30, 2026. The total estimated project cost is approximately $60.0 million. 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”). Under the terms of the Intercompany Agreements, the consideration for these transactions may be received in a combination of cash and equity, with up to $20.0 million of the aggregate consideration payable through the return of Partnership common units. In addition, pursuant to the Intercompany Agreements, Delek Holdings will waive Omnibus fees for an aggregate of $4.0 million during the first two quarters of 2026. 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. As a result of this transaction, Delek Holdings’ ownership interest in the Partnership was further diluted, decreasing to 63.0%. The El Dorado Terminal Sale is expected to close on October 1, 2027, subject to the satisfaction of customary closing conditions. Cybersecurity Incident In July 2026, we identified a cybersecurity incident in which an unauthorized third party accessed a single employee's account and copied certain files from our email and SharePoint environment. Upon discovery, we promptly contained the incident, disabled the affected credentials, and engaged a third-party forensic firm and outside legal counsel. The incident did not affect our refining or logistics operations, or financial reporting systems, and did not result in any loss of availability of our data. Management has determined, based on information known to date, that the incident is not material and is not reasonably likely to have a material impact on our business, financial condition, or results of operations. Our assessment of applicable notification and other legal obligations remains ongoing. 26 | 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. Segment reporting is discussed in more detail in Note 9 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, treatment, acid gas injection, processing and transportation businesses, including the operations at Libby 1 and Libby 2 gas processing plants, 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. 27 | 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 range 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. 2026 Strategic Focus Areas In service to these overarching Long-Term Strategic Objectives, as we began 2026, we prioritized 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. Enhance our Commitment to Sustainability and Minimize our Carbon Emissions We are a full-suite provider offering integrated crude, gas and water services to the Partnership's customers in the Permian Basin. We operate in the most prolific part of the Permian Basin, and we continue to be focused on growth opportunities 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. We continue to focus on expanding our natural gas processing capabilities, adding AGI and sour gas processing capabilities at our Libby complex, positioning us to be one of the few midstream companies to have a comprehensive sour gas solution to enable incremental crude and natural gas production in Delaware Basin. 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. 2026 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 Third-Party Customer Base Executed agreements with Delek Holdings to further our economic separation and increase third-party revenue ü ü ü Completion of debt offering, extending our debt maturity profile and enhancing long-term financial flexibility to support growth initiatives. ü ü ü Completion of revolver refinancing, further increasing our liquidity to over $1.1 billion ü ü ü Expansion of our gas treating capabilities, adding AGI and sour gas processing capabilities at our Libby complex ü ü ü 28 | Management's Discussion and Analysis of Financial Condition and Results of Operations 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 impact 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. While significant uncertainties remain in 2026 regarding global crude oil and refined products markets—particularly due to the ongoing conflict in Iran, which may impact supply stability and pricing—we believe our company is well-positioned to navigate these challenges. Our recent expansion of gas processing capabilities has not only broadened our service offerings but also enhanced both customer and geographic diversification, thereby reducing concentration risk. Additionally, our dedicated acreage agreements offer substantial growth potential in favorable economic conditions, such as periods of high demand or elevated commodity prices, without incurring additional customer acquisition costs. These strategic initiatives support our ability to sustain positive operating results and cash flows, even in volatile market environments, and enable us to pursue profitable growth projects that underpin future distribution growth. The charts on the following page provide historical commodity pricing statistics for crude oil, refined product and natural gas. 29 | Management's Discussion and Analysis of Financial Condition and Results of Operations 30 | 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, amortization and proportional interest, taxes, depreciation and amortization of equity method investments. • 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. 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 June 30, Six Months Ended June 30, 2026 2025 2026 2025 Net income $ 28,871 $ 44,574 $ 61,223 $ 83,608 Add: Income tax expense — 245 — 427 Depreciation and amortization 37,405 27,097 73,906 54,813 Proportional interest, taxes, depreciation and amortization from equity-method investments 6,219 6,505 12,915 13,170 Interest expense, net 47,545 18,173 66,852 36,727 EBITDA $ 120,040 $ 96,594 $ 214,896 $ 188,745 Reconciliation of net cash from operating activities to distributable cash flow (in thousands) Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Net cash provided by operating activities $ 71,198 $ 107,423 $ 241,574 $ 138,973 Changes in assets and liabilities 14,744 (37,602) (79,488) (5,522) Net distributions from equity method investments in investing activities 3,064 3,443 8,089 5,570 Non-cash lease expense (1,747) (1,352) (2,848) (3,619) Regulatory and sustaining capital expenditures not distributable (1) (9,552) (4,598) (13,628) (5,243) Reimbursement from Delek Holdings for capital expenditures (2) 10 10 22 19 Sales-type lease receipts, net of income recognized 1,488 3,868 4,584 9,027 Other non-cash adjustments 1,164 (1,154) 297 2,538 Distributable cash flow $ 80,369 $ 70,038 $ 158,602 $ 141,743 (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). 31 | 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 June 30, Six Months Ended June 30, 2026 2025 2026 2025 Net revenues: Gathering and Processing $ 195,139 $ 117,767 $ 349,815 $ 236,370 Wholesale marketing and terminalling 162,728 104,615 280,524 211,314 Storage and transportation 26,893 23,968 51,887 48,596 Total 384,760 246,350 682,226 496,280 Cost of materials and other 238,962 119,361 407,573 248,413 Operating expenses (excluding depreciation and amortization presented below) 43,337 38,074 90,382 79,059 General and administrative expenses 3,280 8,944 7,554 17,808 Depreciation and amortization 37,405 27,097 73,906 54,813 Other operating expense (income), net (120) 438 906 (3,848) Operating income $ 61,896 $ 52,436 101,905 100,035 Interest income (22,545) (23,538) (54,830) (46,085) Interest expense 70,090 41,711 121,682 82,812 Income from equity method investments (14,491) (10,536) (26,114) (20,686) Other income, net (29) (20) (56) (41) Total non-operating expenses, net 33,025 7,617 40,682 16,000 Income before income tax expense 28,871 44,819 61,223 84,035 Income tax expense — 245 — 427 Net income $ 28,871 $ 44,574 61,223 83,608 Comprehensive income 28,871 44,574 $ 61,223 $ 83,608 EBITDA (2) $ 120,040 $ 96,594 $ 214,896 $ 188,745 Net income per limited partner unit: Basic $ 0.54 $ 0.83 $ 1.15 $ 1.56 Diluted $ 0.54 $ 0.83 $ 1.15 $ 1.56 Weighted average limited partner units outstanding: Basic 53,175,413 53,445,803 53,343,964 53,524,792 Diluted 53,240,181 53,473,271 53,430,114 53,553,227 (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. 32 | Management's Discussion and Analysis of Financial Condition and Results of Operations Results of Operations Consolidated Results of Operations — Comparison of the three and six months ended June 30, 2026, compared to the three and six months ended June 30, 2025 Net Revenues Q2 2026 vs. Q2 2025 Net revenues increased by $138.4 million, or 56.2%, in the second quarter of 2026 compared to the second quarter of 2025, primarily driven by the following: • increased revenue of $65.9 million in our West Texas marketing operations primarily driven by an increase in average sales prices of gasoline and diesel, a net increase in volumes sold and an increase in RINs revenue: ◦ the average sales prices of gasoline sold increased by $1.06 per gallon and the average prices of diesel sold increased by $1.52 per gallon; ◦ the average volumes of gasoline sold increased by 4.9 million gallons, while the average volumes of diesel sold decreased by 1.3 million gallons; and ◦ RINs revenue increased by $3.3 million primarily due to increased RINs prices; • increased revenue of $77.4 million in our gathering and processing segment primarily associated with the Delek Permian Gathering purchasing and blending activities which was transferred from Delek Holdings on May 1, 2025 (the "DPG Dropdown") and increased sales in our Delaware Gathering operations; and • partially offsetting these increases was a decrease of $6.7 million associated with the termination of a marketing agreement with Delek Holdings, under which we marketed 100% of the refined products output of the Tyler Refinery (the "East Texas Marketing Agreement") . YTD 2026 vs. YTD 2025 Net revenues increased by $185.9 million, or 37.5%, in the six months ended June 30, 2026, compared to the six months ended June 30, 2025. The increase was primarily driven by the following: • increased revenue of $84.7 million in our West Texas marketing operations primarily driven by increase in average sales prices, a net increase in volumes sold and an increase in RINs revenue: ◦ the average sales prices per gallon of gasoline and diesel sold increased by $0.57 and $0.95 per gallon, respectively; ◦ the average volumes of gasoline sold increased by 9.6 million gallons, while the average volumes of diesel sold decreased by 2.1 million gallons; and ◦ RINs revenue increased by $5.7 million primarily due to increased RINs prices; • increased revenue of $113.4 million in our gathe ring and processing segment primarily associated with the DPG Dropdown and increased sales in our Delaware Gathering operations; and • partially offsetting these increases was a decrease of $13.4 million a ssociated with the termination of the East Texas Marketing Agreement. Cost of Materials and Other Q2 2026 vs. Q2 2025 Cost of materials and other increased by $119.6 million, or 100.2%, in the second quarter of 2026 compared to the second quarter of 2025, primarily driven by the following: • increase of $66.9 million in our West Texas marketing operations primarily driven by an increase in average cost per gallon and volumes sold; and • increase of $50.2 million in our gathering and processing segment primarily associated with increased costs associated with our Delaware Gathering operations. 33 | Management's Discussion and Analysis of Financial Condition and Results of Operations YTD 2026 vs. YTD 2025 Cost of materials and other increased by $159.2 million, or 64.1%, in the six months ended June 30, 2026, compared to the six months ended June 30, 2025, primarily driven by the following: • increase of $82.5 million in our West Texas marketing operations primarily driven by an increase in average cost per gallon and volumes sold; and • increase of $76.1 million in our gathering and processing segment primarily associated with increased costs associated with our Delaware Gathering operations. Operating Expenses Q2 2026 vs. Q2 2025 Operating expenses increased by $5.3 million, or 13.8%, in the second quarter of 2026 compared to the second quarter of 2025, primarily driven by the following: • increase of $8.4 million in outside services, primarily related to professional consulting and contract services; • increase in employee expenses of $2.4 million, primarily associated with our Midland Water Gathering operations; • increase in insurance expense of $0.7 million and $0.9 million increase in supplies expense; and • partially offsetting these increases was a decrease in variable expenses of $4.6 million and a $3.1 million decrease in maintenance and repairs costs. YTD 2026 vs. YTD 2025 Operating expenses increased by $11.3 million, or 14.3%, in the six months ended June 30, 2026, compared to the six months ended June 30, 2025, primarily driven by the following: • increase of $13.8 million in outside services, primarily related to professional consulting and contract services; • increase in employee expenses of $3.2 million, primarily associated with our Midland Water Gathering operations; • increase in insurance expense of $1.7 million and an increase in supplies expense of $1.6 million; and • partially offsetting these increases was a $5.3 million decrease in maintenance and repairs costs and a $3.1 million decrease in variable expenses. General and Administrative Expenses Q2 2026 vs. Q2 2025 General and administrative expenses decreased by $5.7 million, or 63.3%, in the second quarter of 2026 compared to the second quarter of 2025, primarily driven by the following: • decrease in employee expenses of $2.0 million; and • decrease in outside services of $2.4 million. YTD 2026 vs. YTD 2025 General and administrative expenses decreased by $10.3 million, or 57.6%, in the six months ended June 30, 2026, compared to the six months ended June 30, 2025, primarily driven by the following: • decrease in employee expenses of $2.7 million; • decrease in outside services of $3.4 million; and • decrease in insurance expense of $2.9 million. 34 | Management's Discussion and Analysis of Financial Condition and Results of Operations Depreciation and Amortization Q2 2026 vs. Q2 2025 Depreciation and amortization increased by $10.3 million, or 38.0%, in the second quarter of 2026 compared to the second quarter of 2025, primarily driven by the following: • additional assets associated with the gas plant expansion; and • additional equipment under finance leases. YTD 2026 vs. YTD 2025 Depreciation and amortization increased by $19.1 million, or 34.8%, in the six months ended June 30, 2026, compared to the six months ended June 30, 2025, primarily driven by the following: • additional assets associated with the gas plant expansion; and • additional equipment under finance leases. Other operating expense (income), net Q2 2026 vs. Q2 2025 Other operating income, net increased by $0.6 million or 127.4%, in the second quarter of 2026 compared to the second quarter of 2025. YTD 2026 vs. YTD 2025 Other operating income, net decreased by $4.8 million, or 123.5%, in the six months ended June 30, 2026, compared to the six months ended June 30, 2025, primarily driven by $4.3 million in condemnation proceeds received in the first quarter of 2025. Interest Income Q2 2026 vs. Q2 2025 Interest income decreased by $1.0 million, or 4.2% in the second quarter of 2026 compared to the second quarter of 2025. YTD 2026 vs. YTD 2025 Interest income increased by $8.7 million, or 19.0%, in the six months ended June 30, 2026, compared to the six months ended June 30, 2025, primarily driven by the following: • the modification of certain sales type leases associated with the Tyler refinery tank and El Dorado tank and terminal assets being sold to Delek Holdings under the Intercompany Agreements; and • partially offset by the termination of income from sales type lease associated the El Dorado rail facility assets sold to Delek Holdings on January 2, 2026. Interest Expense Q2 2026 vs. Q2 2025 Interest expense increased by $28.4 million, or 68.0%, in the second quarter of 2026 compared to the second quarter of 2025, primarily driven by: • increase of $21.4 million due to loss on extinguishment of debt related to the redemption of our 7.125% senior notes and the partial redemption of our 8.625% senior notes; • increase of $12.2 million primarily due to the issuances of the $700 million senior note during the second quarter of 2025 and the 2034 Notes during the second quarter of 2026; and • partially offsetting these increases was a decrease associated with our revolver primarily due to decreased average balance. 35 | Management's Discussion and Analysis of Financial Condition and Results of Operations YTD 2026 vs. YTD 2025 Interest expense increased by $38.9 million, or 46.9%, in the six months ended June 30, 2026, compared to the six months ended June 30, 2025, primarily driven by the following: • increase of $23.0 million due to loss on extinguishment of debt related to the amendment of our revolving credit facility, the redemption of our 7.125% senior notes and the partial redemption of our 8.625% senior notes. • increase of $25.2 million primarily due to the issuances of the $700 million senior note during the second quarter 2025 and the 2034 Notes during the second quarter of 2026; and • partially offsetting these increases was a decrease associated with our revolver primarily due to decreased average balance. Results from Equity Method Investments Q2 2026 vs. Q2 2025 Income from equity method investments increased by $4.0 million, or 37.5%, in the second quarter of 2026 compared to the second quarter of 2025, primarily due to the following: • increase of $3.0 million from our investment in in Wink to Webster Holdings, LLC ("W2W"); and • increase of $1.0 million from our investment in Red River Pipeline Company LLC ("Red River"). YTD 2026 vs. YTD 2025 Income from equity method investments increased by $5.4 million, or 26.2%, in the six months ended June 30, 2026, compared to the six months ended June 30, 2025, primarily due to the following: • increase of $6.8 million and $0.6 million from our investments in W2W and Red River, respectively; and • partially offsetting this increase was a $2.0 million decrease in income from our investments in other joint ventures. 36 | 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 six months ended June 30, 2026 and 2025: Gathering and Processing Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Net revenues $ 195,139 $ 117,767 $ 349,815 $ 236,370 Cost of materials and other $ 71,939 $ 21,748 $ 122,240 $ 46,092 Operating expenses (excluding depreciation and amortization) $ 29,739 $ 31,516 $ 62,178 $ 62,097 Segment EBITDA $ 93,386 $ 63,947 $ 164,006 $ 131,886 Throughputs (bpd (1) ) Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 El Dorado Assets: Crude pipelines (non-gathered) 74,197 71,220 68,068 66,580 Refined products pipelines to Enterprise Systems 52,059 53,597 48,379 54,797 El Dorado Gathering System 9,737 9,983 9,485 10,151 East Texas Crude Logistics System 34,259 33,101 30,791 30,027 Midland Gathering System 209,957 207,183 214,057 209,059 Plains Connection System 176,680 158,881 194,421 169,004 Delaware Gathering Assets Volumes Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Natural Gas Gathering and Processing (Mcfd (2) ) 80,715 60,940 72,355 60,378 Crude Oil Gathering (bpd (1) ) 157,156 137,167 143,380 129,737 Water Disposal and Recycling (bpd (1) ) 105,396 116,504 108,269 122,468 Midland Water Gathering System Volumes Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Water Disposal and Recycling (bpd (1) ) (3) 701,435 600,891 679,223 613,817 (1) bpd - average barrels per day. (2) Mcfd - average thousand cubic feet per day. (3) Includes freshwater sales of 119,653 bpd and 119,383 bpd for the three and six months ended June 30, 2026, respectively, and 14,765 bpd and 13,697 bpd for the three and six months ended June 30, 2025, respectively. Comparison of the three and six months ended June 30, 2026, compared to the three and six months ended June 30, 2025 Net Revenues Q2 2026 vs. Q2 2025 Net revenues for the gathering and processing segment increased by $77.4 million, or 65.7%, in the second quarter of 2026 compared to the second quarter of 2025, primarily driven by the DPG Dropdown and increased sales in our Delaware Gathering operations. YTD 2026 vs. YTD 2025 Net revenues for the gathering and processing segment increased by $113.4 million, or 48.0%, in the six months ended June 30, 2026, compared to the six months ended June 30, 2025, primarily driven by the DPG Dropdown and increased sales in our Delaware Gathering operations. 37 | Management's Discussion and Analysis of Financial Condition and Results of Operations Cost of Materials and Other Q2 2026 vs. Q2 2025 Cost of materials and other for the gathering and processing segment increased by $50.2 million, or 230.8%, in the second quarter of 2026 compared to the second quarter of 2025, driven primarily by increased costs associated with our Delaware Gathering operations. YTD 2026 vs. YTD 2025 Cost of materials and other for the gathering and processing segment increased by $76.1 million, or 165.2%, in the six months ended June 30, 2026, compared to the six months ended June 30, 2025, driven primarily by increased costs associated with our Delaware Gathering operations. Operating Expenses Q2 2026 vs. Q2 2025 Operating expenses for the gathering and processing segment decreased by $1.8 million, or 5.6%, in the second quarter of 2026 compared to the second quarter of 2025, primarily driven by the following: • decrease in variable expenses of $3.9 million and maintenance and repair costs of $3.2 million; and • partially offset by increase in outside services costs of $3.0 million primarily related to professional consulting and contract services, and $2.0 million increase in employee costs. YTD 2026 vs. YTD 2025 Operating expenses for the gathering and processing segment increased by $0.1 million, or 0.1%, in the six months ended June 30, 2026, compared to the six months ended June 30, 2025, primarily driven by the following: • increase in outside services costs of $6.6 million and employee costs of $2.8 million; and • partially offset by decrease in variable expenses of $2.8 million and maintenance and repairs costs of $5.6 million. EBITDA Q2 2026 vs. Q2 2025 EBITDA increased by $29.4 million, or 46.0%, in the second quarter of 2026 compared to the second quarter of 2025, primarily driven by the DPG Dropdown. YTD 2026 vs. YTD 2025 EBITDA increased by $32.1 million, or 24.4%, in the six months ended June 30, 2026, compared to the six months ended June 30, 2025, primarily driven by the DPG Dropdown. 38 | Management's Discussion and Analysis of Financial Condition and Results of Operations Wholesale Marketing and Terminalling Segment The following tables and discussion present the results of operations and certain operating statistics of the wholesale marketing and terminalling segment for the three and six months ended June 30, 2026 and 2025: Wholesale Marketing and Terminalling Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Net revenues $ 162,728 $ 104,615 $ 280,524 $ 211,314 Cost of materials and other $ 151,562 $ 84,496 $ 256,694 $ 174,149 Operating expenses (excluding depreciation and amortization) $ 2,551 $ 1,171 $ 5,423 $ 4,970 Segment EBITDA $ 8,610 $ 18,939 $ 18,372 $ 32,176 Operating Information Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 East Texas - Tyler Refinery sales volumes (average bpd) (1) — 67,516 — 67,695 West Texas marketing throughputs (average bpd) 4,191 10,757 7,960 10,791 West Texas marketing gross margin per barrel $ 2.88 $ 4.12 $ 3.65 $ 2.88 Terminalling throughputs (average bpd) (2) 159,363 150,971 147,619 144,030 (1) East Texas Marketing agreement was terminated on January 1, 2026. (2) Consists of terminalling throughputs at our Tyler, Big Spring, Big Sandy and Mount Pleasant, Texas terminals, our El Dorado and North Little Rock, Arkansas terminals and our Memphis and Nashville, Tennessee terminals. Operational comparison of the three and six months ended June 30, 2026, compared to the three and six months ended June 30, 2025 Net Revenues Q2 2026 vs. Q2 2025 Net revenues for the wholesale marketing and terminalling segment increased by $58.1 million, or 55.5%, in the second quarter of 2026 compared to the second quarter of 2025, driven primarily by the following: • Increased revenue of $65.9 million in our West Texas marketing operations primarily driven by an increase in average sales prices of gasoline and diesel, a net increase in volumes sold and an increase in RINs revenue: ◦ the average sales prices of gasoline sold increased by $1.06 per gallon and the average prices of diesel sold increased by $1.52 per gallon; ◦ the average volumes of gasoline sold increased by 4.9 million, while the average volumes of diesel sold decreased by 1.3 million gallons; ◦ RINs revenue increased $3.3 million primarily due to increased RINs prices. • Partially offsetting this increase was a decrease of $6.7 million associated with the termination of the East Texas Marketing Agreement. YTD 2026 vs. YTD 2025 Net revenues for the wholesale marketing and terminalling segment increased by $69.2 million, or 32.8%, in the six months ended June 30, 2026, compared to the six months ended June 30, 2025, primarily driven by the following: • increased revenue of $84.7 million in our West Texas marketing operations primarily driven by increase in average sales prices, a net increase in volumes sold and an increase in RINs revenue: ◦ the average sales prices per gallon of gasoline and diesel sold increased by $0.57 and $0.95 per gallon, respectively; ◦ the average volumes of gasoline sold increased by 9.6 million gallons, while the average volumes of diesel sold decreased by 2.1 million gallons; and ◦ RINs revenue increased by $5.7 million primarily due to increased RINs prices. • Partially offsetting this increase was a decrease of $13.4 million associated with the termination of the East Texas Marketing Agreement. 39 | Management's Discussion and Analysis of Financial Condition and Results of Operations The following charts show summaries of the average sales prices per gallon of gasoline and diesel and refined products volume impacting our West Texas operations for the three and six months ended June 30, 2026 and 2025. Cost of Materials and Other Q2 2026 vs. Q2 2025 Cost of materials and other for the wholesale marketing and terminalling segment increased by $67.1 million, or 79.4%, in the second quarter of 2026 compared to the second quarter of 2025, driven primarily by the following: • increased costs of materials and other of $66.9 million in our West Texas marketing operations primarily driven by an increase in average cost per gallon of gasoline and diesel sold and a net increase in volumes sold: ◦ the average cost per gallon of gasoline and diesel sold increased by $1.11 per gallon and $1.68 per gallon, respectively; and ◦ the volumes of gasoline sold increased by 4.9 million, while diesel sold decreased by 1.3 million gallons, respectively. YTD 2026 vs. YTD 2025 Cost of materials and other for the wholesale marketing and terminalling segment increased by $82.5 million, or 47.4% , in the six months ended June 30, 2026, compared to the six months ended June 30, 2025, primarily driven by the following: • increased costs of materials and other of $82.5 million in our West Texas marketing operations primarily driven by an increase in average cost per gallon and a net increase in volumes sold: ◦ the average cost per gallon of gasoline and diesel sold increased by $0.57 per gallon and $1.06 per gallon, respectively; and ◦ the volumes of gasoline sold increased by 9.6 million gallons, while diesel sold decreased by 2.1 million gallons. 40 | Management's Discussion and Analysis of Financial Condition and Results of Operations The following chart shows a summary of the average prices per gallon of gasoline and diesel purchased in our West Texas operations for the three and six months ended June 30, 2026 and 2025. Refer to the Refined Products Volume - Gallons chart above for a summary of volumes impacting our West Texas operations. Operating Expenses Q2 2026 vs. Q2 2025 Operating expenses for the wholesale marketing and terminalling segment increased by $1.4 million, or 117.8%, in the second quarter of 2026 compared to the second quarter of 2025, driven primarily by an increase in outside service costs primarily related to professional services and contract labor. YTD 2026 vs. YTD 2025 Operating expenses for the wholesale marketing and terminalling segment increased by $0.5 million or 9.1%, in the six months ended June 30, 2026, compared to the six months ended June 30, 2025, driven primarily by an increase in outside service costs primarily related to professional services and contract labor. EBITDA Q2 2026 vs. Q2 2025 EBITDA decreased by $10.3 million, or 54.5%, in the second quarter of 2026 compared to the second quarter of 2025, driven primarily by the following: • the termination of the East Texas Marketing Agreement; and • a decrease in wholesale margins of $1.24 per barrel. YTD 2026 vs. YTD 2025 EBITDA decreased by $13.8 million, or 42.9%, in the six months ended June 30, 2026, compared to the six months ended June 30, 2025, primarily driven by the following: • the termination of the East Texas Marketing Agreement; and • partially offset by a $0.77 per barrel increase in wholesale margins. 41 | 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 six months ended June 30, 2026 and 2025: Storage and Transportation Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Net revenues $ 26,893 $ 23,968 $ 51,887 $ 48,596 Cost of materials and other $ 13,934 $ 13,090 $ 27,072 $ 28,117 Operating expenses (excluding depreciation and amortization) $ 5,377 $ 3,794 $ 11,503 $ 8,955 Segment EBITDA $ 7,611 $ 7,027 $ 13,366 $ 11,441 Operational comparison of the three and six months ended June 30, 2026, compared to the three and six months ended June 30, 2025 Net Revenues Q2 2026 vs. Q2 2025 Net revenues for the storage and transportation segment increased by $2.9 million, or 12.2%, in the second quarter of 2026 compared to the second quarter of 2025, primarily due to higher volume in our trucking operations. YTD 2026 vs. YTD 2025 Net revenues for the storage and transportation segment increased by $3.3 million, or 6.8%, in the six months ended June 30, 2026, compared to the six months ended June 30, 2025, primarily due to higher volume in our trucking operations. Cost of Materials and Other Q2 2026 vs. Q2 2025 Cost of materials and other for the storage and transportation segment increased by $0.8 million, or 6.4%, in the second quarter of 2026 compared to the second quarter of 2025, primarily driven by increased trucking activity. YTD 2026 vs. YTD 2025 Cost of materials and other for the storage and transportation segment decreased by $1.0 million, or 3.7%, in the six months ended June 30, 2026, compared to the six months ended June 30, 2025. Operating Expenses Q2 2026 vs. Q2 2025 Operating expenses for the storage and transportation segment increased by $1.6 million, or 41.7%, in the second quarter of 2026 compared to the second quarter of 2025, primarily driven by an increase in outside service costs. YTD 2026 vs. YTD 2025 Operating expenses for the storage and transportation segment increased by $2.5 million, or 28.5%, in the six months ended June 30, 2026, compared to the six months ended June 30, 2025, primarily driven by an increase in outside service costs. EBITDA Q2 2026 vs. Q2 2025 EBITDA increased by $0.6 million, or 8.3%, in the second quarter of 2026 compared to the second quarter of 2025. YTD 2026 vs. YTD 2025 EBITDA increased by $1.9 million, or 16.8%, in the six months ended June 30, 2026, compared to the six months ended June 30, 2025, primarily driven by an increase in volume in our trucking operations. 42 | 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 8 of our condensed consolidated financial statements in Item 1, Financial Statements, of this Quarterly Report on Form 10-Q. Refer to Consolidated Results of Operations above for details and discussion of the investments in pipeline joint ventures segment for the three and six months ended June 30, 2026. 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 June 30, 2026, our total liquidity amounted to $1,065.6 million comprised of $1,051.9 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 $13.7 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 July 22, 2026, the board of directors of our general partner declared a distribution of $1.135 per common unit (the "Distribution"), which equates to an estimated amount of approximately $60.4 million per quarter, or approximately $241.5 million per year, based on the number of common units outstanding as of June 30, 2026. The Distribution will be paid on August 10, 2026, to common unitholders of record on August 3, 2026, and represents a 1.8% increase over the second quarter 2025 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. 43 | 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, 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 $1.130 $60,080 June 30, 2026 $1.135 $60,379 Unit Repurchase On February 24, 2025, the Partnership and Delek Holdings entered into a Common Unit Purchase Agreement whereby the Partnership may repurchase common units from time to time from Delek Holdings in one or more transactions for an aggregate purchase price of up to $150.0 million through December 31, 2026 (each such repurchase, a “Repurchase”). The Partnership may fund Repurchases using cash on hand or borrowings under its existing credit facility, subject to compliance with applicable covenants. During the six months ended June 30, 2025, 243,075 common units were repurchased from Delek Holdings and cancelled at the time of the transaction for a total of $10.0 million. No common units were repurchased for the six months ended June 30, 2026. As of June 30, 2026, 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 six months ended June 30, 2026, and 2025 (in thousands): Six Months Ended June 30, 2026 2025 Net cash provided by operating activities $ 241,574 $ 138,973 Net cash used in investing activities (109,091) (347,683) Net cash (used in) provided by financing activities (129,670) 204,762 Net increase (decrease) in cash and cash equivalents $ 2,813 $ (3,948) Operating Activities Net cash provided by operating activities increased by $102.6 million for the six months ended June 30, 2026, compared to the six months ended June 30, 2025. The cash receipts from customer activities increased by $203.5 million. Additionally contributing to the increase was a $10.7 million increase in cash dividends received from equity method investments. Partially offsetting these increases was a $20.5 million increase in cash paid for debt interest, and an increase of $91.0 million in cash payments to suppliers and for allocations to Delek Holdings for salaries. Investing Activities Net cash used in investing activities decreased by $238.6 million during the six months ended June 30, 2026, compared to the six months ended June 30, 2025, primarily due to a decrease of $181.2 million associated with the Gravity Acquisition in the prior year with no corresponding activity in the current year. Purchases of property, plant and equipment decreased by $61.9 million primarily associated with higher growth projects in our gathering and processing segment in the prior year period. Also contributing to this decrease was an increase in distributions received from equity method investments of $2.5 million. Partially offsetting this decrease was a decrease in proceeds from sale of property, plant and equipment of $4.8 million compared to the prior year and a $2.2 million increase in purchase of intangible assets. Financing Activities Net cash used in financing activities increased by $334.4 million for the six months ended June 30, 2026, compared to the six months ended June 30, 2025. This increase was primarily driven by an increase in net payments on our term debt of $700 million, resulting from the redemption of certain of our senior notes and issuance of our 6.875% senior notes. Additionally contributing to this increase was an increase in deferred financing costs paid of $12.6 million, debt extinguishment costs paid of $17.8 million and a $3.2 million increase in cash used for other financing activities. Partially offsetting the increase was an increase in net proceeds from our revolving credit facility of $390.8 million and a decrease of $10.0 million due to unit repurchases from Delek Holdings in the prior period. 44 | Management's Discussion and Analysis of Financial Condition and Results of Operations Debt Overview As of June 30, 2026, we had total indebtedness of $2,398.1 million. The increase of $36.3 million in our long-term debt balance compared to the balance at December 31, 2025, resulted primarily from an increase in borrowings under our revolving facility during the six months ended June 30, 2026. As of June 30, 2026, our total indebtedness consisted of: • An aggregate principal amount of $248.1 million under the DKL Revolving Facility, due on March 26, 2031, with an average borrowing rate of 6.05%. • An aggregate principal amount of $650.0 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 7.63%. • An aggregate principal amount of $800.0 million, under the 2034 Notes (6.875% senior notes), due in 2034, with an effective interest rate of 7.15%. We believe we were in compliance with the covenants in all debt facilities as of June 30, 2026. 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. 45 | Management's Discussion and Analysis of Financial Condition and Results of Operations The following table summarizes our actual capital expenditures, including any material capital expenditure payments made or forecasted to be made in advance of receipt of goods and materials, for the six months ended June 30, 2026: (in thousands) Full Year 2026 Forecast Six Months Ended June 30, 2026 (1) Gathering and Processing Regulatory $ — $ 2,847 Sustaining 17,000 9,396 Growth 209,600 92,237 Gathering and Processing Segment Total $ 226,600 $ 104,480 Wholesale Marketing and Terminalling Regulatory $ 12,000 $ 54 Sustaining — 41 Growth 600 388 Wholesale Marketing and Terminalling Segment Total $ 12,600 $ 483 Storage and Transportation Regulatory $ — $ 13 Sustaining 16,000 880 Growth — — Storage and Transportation Segment Total $ 16,000 $ 893 Total Capital Spending $ 255,200 $ 105,856 (1) Amounts exclude capitalized interest and internal labor costs totaling $4.8 million, which are predominantly associated with our gathering and processing segment. 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. 46 | Quantitative and Qualitative Disclosures about Market Risk