DKL 10-K & 10-Q changes, risk factors and insider trading
Delek Logistics Partners, LP · NYSE · Pipe Lines (No Natural Gas) · CIK 1552797 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Risk Factors
Largest changes
“In the United States, no comprehensive climate change legislation has been implemented at the federal level. However, following the U.S. …”see in full comparison
The EPA finalized new regulations under the New Source Performance Standards (NSPS) OOOOa, OOOOb and OOOOc in March 2024 to expand and strengthen emissions reduction requirements for new, modified and reconstructed oil and natural gas sources, and require states to reduce methane emissions from existing sources nationwide. On July 31, 2025 EPA issued an Interim Final Rule to extend several deadlines for these regulations. Compliance costs are not expected to be material.see in full comparisonThe BLM has also asserted regulatory authority over aspects of the hydraulic fracturing process and issued a final rule in March 2015 that established more stringent standards for performing hydraulic fracturing on federal and Indian lands, including requirements relating to well construction and integrity, handling of wastewater and chemical disclosure. However, in December 2017, the BLM published a final rule rescinding the 2015 rule and the U.S. District Court for the Northern District of California upheld the December 2017 rescission rule in a March 2020 decision.
“In the United States, no comprehensive climate change legislation has been implemented at the federal level.”see in full comparison
In 2010, the EPA and the National Highway Transportation Safety Administration ("NHTSA") finalized new standards, raising the required Corporate Average Fuel Economy, or CAFE, standard of the nation’s passenger fleet by 40% to approximately 35 miles per gallon by 2016 and imposing the first ever federal GHG emissions standards on cars and light trucks. In September 2011, the EPA and the DOT finalized first-time standards for fuel economy of medium and heavy duty trucks. On August 28, 2012, the EPA and NHTSA announced final regulations that mandated further decreases in passenger vehicle GHG emissions and increases in fuel economy beginning with 2017 model year vehicles and increasing to the equivalent of 54.5 miles per gallon by 2025. During 2016, the EPA conducted a mid-term evaluation of progress in meeting vehicle GHG standards and in January 2017 the EPA issued a determination to maintain the current GHG emissions standards for model year (MY) 2022-2025 vehicles, but that action was subsequently withdrawn on April 13, 2018. In March 2017, EPA announced its decision to reopen the mid-term evaluation process and reconsider the January 2017 determination. As a result, GHG emissions standards for MY 2022-2025 vehicles remain uncertain. In August 2016, the EPA and the NHTSA jointly finalized standards for medium- and heavy-duty vehicles regulating fuel efficiency and carbon pollution. Onsee in full comparisonAugustMay10,2,2021,2022, the NHTSAproposedpublishedtoaamendfinal rule amending the CAFE standardspreviously published in 2020 (for model years2024-2026)2024–2026 to increasethestringencyatbya rate ofapproximately 8%aannuallyyear,forrathermodelthanyears 2024 and 2025 and 10% for model year 2026, superseding the 1.5%setannualpreviously.increases previously set. Such increases in fuel economy standards and potential electrification of the vehicle fleet, along with mandated increases in use of renewable fuels discussed above, could result in decreasing demand for petroleum fuels. Decreasing demand for petroleum fuels could materially affect profitability at Delek Holdings’ refineries, which could adversely impact our business, results of operations and cash flows.
Additionally, various states and groups of states have adopted or are considering adopting legislation, regulations or other regulatory initiatives that are focused on such areas as GHG cap and trade programs, carbon taxes, reporting and tracking programs, and restriction of GHG emissions. At the international level, in April 2016, the U.S. became a signatory to the 2015 United Nations Conference on Climate Change, which led to the creation of the Paris Agreement. After beginning the process to withdraw from participation in the Paris Agreement in 2017, in 2021 the U.S. rejoined the Paris Agreement. On Januarysee in full comparison20,27,2025,2026, the U.S.again begancompleted the processtoofwithdrawwithdrawing fromparticipating inthe Paris Agreement. The adoption and implementation of new or more stringent legislation or regulations could result in increased costs of compliance or costs of consuming, and thereby reduce demand for, oil and natural gas, which could reduce demand for our services and products.
The provisions of our revolving credit facility and of the respective indentures governing the 2028 Notes, 2029 Notes andsee in full comparison20292033 Notes may affect our ability to obtain future financing and pursue attractive business opportunities and our flexibility in planning for, and reacting to, changes in business conditions. In addition, a failure to comply with the provisions of our revolving credit facility or the indentures governing the 2028 Notes, 2029 Notes and20292033 Notes could result in a default or an event of default that could enable our lenders to declare the outstanding principal of that debt, together with accrued and unpaid interest and certain other indebtedness and other outstanding amounts, to be immediately due and payable. Such event of default would also permit our lenders to foreclose on our assets serving as collateral for our obligations under the revolving credit facility. If the payment of our debt is accelerated, our assets may be insufficient to repay such debt in full, and our unitholders could experience a partial or total loss of their investment. The revolving credit facility and the respective indentures governing the 2028 Notes, 2029 Notes and20292033 Notes also have cross-default provisions that would apply to certain other indebtedness we may have.
Full comparison: every changed paragraph (12)
Delek Holdings is the only ora primary customer for a majoritymany of our assets, including but not limited to our assets used to support the Tyler Refinery and the majority of our terminalling assets. In addition, Delek Holdings, through inventory intermediation agreements with its assignee, is effectively the principal customer for our Big Spring Logistics Assets used to support the Big Spring Refinery and our Lion Pipeline System, the Gathering Assets, and our El Dorado, Memphis and North Little Rock terminals. Please see Items 1 and 2. "Business and Properties—Delek Holdings' Crude Oil and Refined Products Intermediation Agreement." As we expect to continue to derive the substantial majority of our margins from Delek Holdings, either directly or indirectly, for the foreseeable future, we are subject to the risk of nonpayment, nonperformance or underperformance by Delek Holdings under our commercial agreements or its assignees. If Delek Holdings were to significantly decrease, or cause the significant decrease of, the materials transported on our pipelines or the volumes of refined products handled at our terminals, whether because of business or operational difficulties or strategic decisions by Delek Holdings’ management, it is unlikely that we would be able to utilize any additional capacity on our pipelines or terminal facilities to service third-party customers without substantial capital outlays and delays, if at all, which could materially and adversely affect our results of operations, financial condition and cash flows. Likewise, the terms of Delek Holdings' obligations under its agreements with us are for initial terms ranging from five years to ten years, with options to extend at the election of Delek Holdings. If Delek Holdings fails to renew these contracts as they come up for renewal, or if Delek Holdings fails to use our assets and services after the expiration of the agreements, or should our agreements be invalidated as a result of our performance failure or for any other reason, and we are unable to generate revenue from third parties with respect to such assets, our business and results of operations could be materially and adversely affected. See Note 4 to the consolidated financial statements in Item 8, Financial Statements and Supplementary Data, of this Annual Report on Form 10-K, for a complete discussion of our material commercial agreements with Delek Holdings. Additionally, any event, whether in our areas of operation or otherwise, that materially and adversely affects Delek Holdings’ or its assignees' operations, financial condition, results of operations or cash flows may adversely affect us and our business and, therefore, our ability to sustain or increase cash distributions to our unitholders. Accordingly, we are indirectly subject to the operational and business risks of Delek Holdings and its assignees, including, but not limited to, the following:
•potential unknown liabilities and unforeseen expenses, delays or regulatory conditions associated with the DelawareGravity GatheringAcquisition and H2O Midstream Acquisition;
Restrictions in our revolving credit facility and in the respective indentures governing the 2028 Notes, 2029 Notes and 20292033 Notes could adversely affect our business, financial condition, results of operations and ability to make quarterly cash distributions to our unitholders.
Our revolving credit facility and the respective indentures governing the 2028 Notes, 2029 Notes and 20292033 Notes (as defined in Note 10 to our consolidated financial statements in Item 8, Financial Statements and Supplementary Data, of this Annual Report on Form 10-K) contain, and any future financing agreements may contain, operating and financial restrictions and covenants that could limit our ability to finance future operations or capital needs, or to expand or pursue our business activities, which may, in turn, limit our ability to make cash distributions to our unitholders.
Similarly, the respective indentures governing the 2028 Notes, 2029 Notes and 20292033 Notes contain covenants that, among other things, limit our ability and the ability of our restricted subsidiaries to (i) incur, assume or guarantee additional indebtedness or issue certain convertible or redeemable equity securities; (ii) create liens to secure indebtedness; (iii) pay distributions on equity interests, repurchase equity securities or redeem subordinated securities; (iv) make investments; (v) make distributions, loans or other asset transfers from our restricted subsidiaries; (vi) consolidate with or merge with or into, or sell substantially all of our properties to, another person; (vii) sell or otherwise dispose or assets, including equity interests in subsidiaries; and (viii) enter into transactions with affiliates.
The provisions of our revolving credit facility and of the respective indentures governing the 2028 Notes, 2029 Notes and 20292033 Notes may affect our ability to obtain future financing and pursue attractive business opportunities and our flexibility in planning for, and reacting to, changes in business conditions. In addition, a failure to comply with the provisions of our revolving credit facility or the indentures governing the 2028 Notes, 2029 Notes and 20292033 Notes could result in a default or an event of default that could enable our lenders to declare the outstanding principal of that debt, together with accrued and unpaid interest and certain other indebtedness and other outstanding amounts, to be immediately due and payable. Such event of default would also permit our lenders to foreclose on our assets serving as collateral for our obligations under the revolving credit facility. If the payment of our debt is accelerated, our assets may be insufficient to repay such debt in full, and our unitholders could experience a partial or total loss of their investment. The revolving credit facility and the respective indentures governing the 2028 Notes, 2029 Notes and 20292033 Notes also have cross-default provisions that would apply to certain other indebtedness we may have.
As of December 31, 2024,2025, we had approximately $1,885.4$2,361.9 million in debt outstanding. We have the ability to incur additional debt; however, such ability is subject to limitations under our revolving credit facility and the respective indentures governing the 2028 Notes, 2029 Notes and 20292033 Notes. Our level of debt could have important consequences to us, including the following:
In the United States, no comprehensive climate change legislation has been implemented at the federal level.
In the United States, no comprehensive climate change legislation has been implemented at the federal level. However, following the U.S. Supreme Court finding that GHG emissions constitute a pollutant under the Clean Air Act, the EPA has adopted regulations that, among other things, establish construction and operating permit reviews for GHG emissions from certain large stationary sources, require the monitoring and annual reporting of GHG emissions from certain petroleum and natural gas system sources in the United States, implement New Source Performance Standards directing the reduction of methane from certain new, modified, or reconstructed facilities in the oil and natural gas sector, and together with the DOT, implement GHG emissions limits on vehicles manufactured for operation in the United States.
Additionally, various states and groups of states have adopted or are considering adopting legislation, regulations or other regulatory initiatives that are focused on such areas as GHG cap and trade programs, carbon taxes, reporting and tracking programs, and restriction of GHG emissions. At the international level, in April 2016, the U.S. became a signatory to the 2015 United Nations Conference on Climate Change, which led to the creation of the Paris Agreement. After beginning the process to withdraw from participation in the Paris Agreement in 2017, in 2021 the U.S. rejoined the Paris Agreement. On January 20,27, 2025,2026, the U.S. again begancompleted the process toof withdrawwithdrawing from participating in the Paris Agreement. The adoption and implementation of new or more stringent legislation or regulations could result in increased costs of compliance or costs of consuming, and thereby reduce demand for, oil and natural gas, which could reduce demand for our services and products.
In 2010, the EPA and the National Highway Transportation Safety Administration ("NHTSA") finalized new standards, raising the required Corporate Average Fuel Economy, or CAFE, standard of the nation’s passenger fleet by 40% to approximately 35 miles per gallon by 2016 and imposing the first ever federal GHG emissions standards on cars and light trucks. In September 2011, the EPA and the DOT finalized first-time standards for fuel economy of medium and heavy duty trucks. On August 28, 2012, the EPA and NHTSA announced final regulations that mandated further decreases in passenger vehicle GHG emissions and increases in fuel economy beginning with 2017 model year vehicles and increasing to the equivalent of 54.5 miles per gallon by 2025. During 2016, the EPA conducted a mid-term evaluation of progress in meeting vehicle GHG standards and in January 2017 the EPA issued a determination to maintain the current GHG emissions standards for model year (MY) 2022-2025 vehicles, but that action was subsequently withdrawn on April 13, 2018. In March 2017, EPA announced its decision to reopen the mid-term evaluation process and reconsider the January 2017 determination. As a result, GHG emissions standards for MY 2022-2025 vehicles remain uncertain. In August 2016, the EPA and the NHTSA jointly finalized standards for medium- and heavy-duty vehicles regulating fuel efficiency and carbon pollution. On AugustMay 10,2, 2021,2022, the NHTSA proposedpublished toa amendfinal rule amending the CAFE standards previously published in 2020 (for model years 2024-2026)2024–2026 to increase the stringency atby a rate ofapproximately 8% aannually year,for rathermodel thanyears 2024 and 2025 and 10% for model year 2026, superseding the 1.5% setannual previously.increases previously set. Such increases in fuel economy standards and potential electrification of the vehicle fleet, along with mandated increases in use of renewable fuels discussed above, could result in decreasing demand for petroleum fuels. Decreasing demand for petroleum fuels could materially affect profitability at Delek Holdings’ refineries, which could adversely impact our business, results of operations and cash flows.
The EPA finalized new regulations under the New Source Performance Standards (NSPS) OOOOa, OOOOb and OOOOc in March 2024 to expand and strengthen emissions reduction requirements for new, modified and reconstructed oil and natural gas sources, and require states to reduce methane emissions from existing sources nationwide. On July 31, 2025 EPA issued an Interim Final Rule to extend several deadlines for these regulations. Compliance costs are not expected to be material. The BLM has also asserted regulatory authority over aspects of the hydraulic fracturing process and issued a final rule in March 2015 that established more stringent standards for performing hydraulic fracturing on federal and Indian lands, including requirements relating to well construction and integrity, handling of wastewater and chemical disclosure. However, in December 2017, the BLM published a final rule rescinding the 2015 rule and the U.S. District Court for the Northern District of California upheld the December 2017 rescission rule in a March 2020 decision.
Management's Discussion & Analysis (MD&A)
New heading “Delek Permian Gathering Dropdown”
New heading “Agreements with Delek Holdings”
New heading “Unit Repurchase”
New heading “II.Pursue Attractive Expansion Opportunities”
New heading “Unit Repurchase”
Removed heading “H2O Midstream Acquisition”
Removed heading “Wink to Webster Pipeline Investment Acquisition”
Removed heading “Commercial Agreements with Delek Holdings”
Removed heading “Natural Gas Plant”
Removed heading “DKL Revolving Credit Facility”
Removed heading “Equity Offerings”
Removed heading “II.Focus on Growing Our Business through Acquisitions and Investments in Joint Ventures”
Removed heading “IV.Pursue Attractive Expansion and Construction Opportunities”
Removed heading “Equity Offerings”
Removed heading “Critical Accounting Estimates”
Largest changes
“For our 2023 annual goodwill impairment testing, our annual goodwill impairment testing was performed on a quantitative basis for our Delaware Gathering reporting unit during the fourth quarter of 2023. As part of our annual assessment, we recorded a $14.8 million impairment charge in the fourth quarter of 2023 related to our Delaware Gathering reporting unit within the gathering and processing segment, which brought the amount of goodwill recorded within this reporting unit to zero. …”see in full comparison
“In assessing the recoverability of goodwill, assumptions are made with respect to future business conditions and estimated expected future cash flows to determine the fair value of a reporting unit. We may consider inputs such as a market participant weighted average cost of capital ("WACC"), forecasted operating performance, volumes and capital expenditures, all of which are subject to significant judgment and estimates. …”see in full comparison
“We may also elect to perform a qualitative impairment assessment of goodwill balances. The qualitative assessment permits companies to assess whether it is more likely than not (i.e., a likelihood of greater than 50%) that the fair value of a reporting unit is less than its carrying amount. If a company concludes that, based on the qualitative assessment, it is more likely than not that the fair value of a reporting unit is less than its carrying amount, the company is required to perform the quantitative impairment test. …”see in full comparison
“At December 31, 2024, we had two reporting units with goodwill totaling approximately $12.2 million. For our 2024 annual goodwill impairment testing, we assessed qualitative factors such as macroeconomic conditions, industry considerations, cost factors, and reporting unit financial performance and determined it was not more likely than not that the fair value of our reporting units were less than the respective carrying value. Therefore, in accordance with GAAP, further testing was not required.”see in full comparison
“Goodwill in an acquisition represents the excess of the aggregate purchase price over the fair value of the identifiable net assets. Goodwill is reviewed at least annually for impairment, or more frequently if indicators of impairment exist, such as disruptions in our business, unexpected significant declines in operating results or a sustained market capitalization decline. Goodwill is evaluated for impairment by comparing the carrying amount of the reporting unit to its estimated fair value.”see in full comparison
“On July 1, 2024, 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 by approximately 1.3%, which was the amount of the change in the FERC oil pipeline index. The tariff on FERC regulated system acquired from Delaware Gathering was adjusted as of January 1, 2024, but adjustments under agreements already in place will be capped at 3.0%. …”see in full comparison
Full comparison: every changed paragraph (191)
On September 11, 2024, the Partnership acquired 100% of the limited liability company interests in H2O Midstream Intermediate, LLC, H2O Midstream Permian LLC, and H2O Midstream LLC ("H2O Midstream") from H2O Midstream Holdings, LLC (the “Seller"), related to the Seller’s water disposal and recycling operations, in the Midland Basin in Texas (the “H2O Midstream Acquisition”). See Note 3 to our consolidated financial statements included in Item 8, Financial Statements and Supplementary Data, of this Annual Report on Form 10-K.
On December 11, 2024, we entered into an agreement to acquire 100% of the limited liability company interests in Gravity Water Intermediate Holdings LLC ("Gravity") from Gravity Water Holdings LLC (the "Gravity Purchase Agreement") related to water disposal and recycling operations in the Permian Basin and the Bakken (the “Gravity Acquisition”). The Gravity Acquisition closed on January 2, 2025. See Note 3 to our consolidated financial statements included in Item 8, Financial Statements and Supplementary Data, of this Annual Report on Form 10-K.
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 majoritysignificant potion 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 the Tyler Refinery, the El Dorado Refinery and the Big Spring Refinery.
During the year ended December 31, 2025, we made significant strides in our commitment to being a full-suite crude, gas and water midstream services provider in the Permian Basin, in addition to diversifying our customer base to include more third-party customers. On May 1, 2025, we entered into a series of agreements with Delek Holdings which, among other things, allowed us to assume all of Delek Holdings’ rights and obligations to purchase crude oil under certain contracts associated with our existing Midland Gathering System.
In January 2025, the Partnership closed the Gravity Acquisition which includes integrated full-cycle water systems in the Midland Basin, in addition to water gathering, and transportation assets in the Bakken, and along with our H2O Midstream Acquisition, provides a strong opportunity for integrated crude and water services to its customers. These transactions significantly enhance our competitive position in the Midland basin and serve to further our economic separation from our sponsor and contribute to an increase in third party revenue.
During the year ended December 31, 2024, we made significant strides in our commitment to being a full suite crude, gas and water midstream services provider in the Permian Basin, in addition to diversifying our customer base to include more third-party customers. We successfully closed the H2O Midstream Acquisition that expands our gathering footprint in the Midland sub-basin of the Permian, and extended our product offering of wastewater processing and disposal. In addition, in January 2025, the Partnership closed the Gravity Acquisition which includes integrated full-cycle water systems in the Midland Basin, in addition to produced water gathering, and transportation assets in the Bakken, and along with our H2O Midstream Acquisition, provide a strong opportunity for integrated crude and water services to its customers.
As producers continue to ramp up production within the Permian Basin, the Partnership is well positioned to continue to add value through our gathering and processing services as we have expanded our dedicated crude acreage in our Midland Gathering system. Additionally, in the Delaware Basin, we are expanding our natural gas processing capabilities by constructing a new natural gas processing plant and adding AGI and sour gas processing capabilities. Our positioning allows our customersCurrently, the abilitygas toplant controlis qualityin its initial phase of operation, and addswe optionalityforesee toit placeincreasing barrelsthroughput inthroughout a variety of markets.2026.
In June 2025, we successfully completed a debt issuance raising $700 million, enhancing our liquidity to over $1.0 billion. Our disciplined approach to cost control, coupled with a focus on margin enhancements, supported earnings before interest, taxes, depreciation and amortization ("EBITDA") growth and improved cash flow, while our capital deployment remained aligned with our strategic priorities. This strengthened financial position empowers us to advance our strategy of organic growth while also exploring attractive opportunities for bolt-on acquisitions. Our positioning allows our customers the ability to control quality and adds optionality to place barrels in a variety of markets.
The Partnership also acquired from Delek Holdings a joint venture with an indirect interest in the Wink to Webster Pipeline. Through our joint venture projects, we have increased our supply network to take advantage of growth opportunities in expanding markets and added additional flexibility which has delivered realized value through the Partnership system.
As a result of these efforts, the Partnership saw a $16.4$33.8 million increase in net income during the year ended December 31, 2024,2025, as compared to the prior year period. Our EBITDA (asincreased defined in "Non GAAP Measures" section below) decreased $23.4$32.9 million in 20242025 as compared to 2023.2024. ThisThese decreaseincreases isare largelyprimarily attributable to earnings achieved by our H2O and Gravity acquisitions, partially offset by a decrease due to change in classification of certain of our commercial agreements with Delek, which meet the criteria to be classified as sales-type leases. As such, certain throughput and storage fees that were previously recorded as revenue are now recorded as interest income under sales-type lease accounting. Our gathering and processing segment saw a $7.7$52.4 million increase in segment EBITDA.EBITDA, largely due to the H2O Midstream and Gravity acquisitions. Our wholesale marketing and terminalling segment saw a $14.8 million decrease inand segment EBITDA.and Ourour storage and transportation segment saw a $15.5 million decreasedeceases in segment EBITDA.EBITDA of $28.8 million and $22.5 million, respectively, largely due to the aforementioned sales-type lease accounting. Segment EBITDA for our investments in pipeline joint ventures increased by $11.9$29.1 million with the acquisition of the investment in Wink to Webster Holdings, LLC (the "W2W Investment") from Delek Holdings. See the “Results of Operations” section below for further discussion.
The near termnear-term economic outlook still has some uncertainty with the introduction of widespread tariffs by the U.S., geopolitical instability and commodity market volatility. The uncertainty surrounding trade negotiations and the potential for further expansion of tariffs have contributed to increased market and commodity volatility and potential economic downturns. That said, we are well positioned to manage through an economic downturn because of built-in recessionary protections which include minimum volume commitments on throughput and dedicated acreage agreements. Additionally, the Partnership has embraced opportunities to enhance our environmental stewardship. It is expected that renewables, other than hydrocarbons, will continue to grow as a percentage of total energy consumption; however, a material reduction in the reliance on oil and gas for energy consumption is unlikely in the near term. Therefore, we expect that liquid transportation fuels will continue to be in high demand, and we expect to continue to leverage the strength of our cash flows and balance sheet in order to continue maximizing unitholder returns and the long-term prospects for return on investment.
Other 2024 Developments
On July 1, 2025, the tariffs on certain of our FERC regulated pipelines and the throughput fees and storage fees under certain of our agreements with Delek Holdings and third parties that are subject to adjustments using FERC indexing increased 2.0%. Under certain of our agreements with Delek Holdings and third parties, the fees that are subject to adjustments using the consumer price index increased 2.6% and the fees that are subject to adjustments using the producer price index increased approximately 1.4%. These adjustments allow us to maintain compliance with FERC regulations as well as to ensure that our results are reflective of current market conditions.
2033 Notes
On June 30, 2025, the Partnership sold $700.0 million in aggregate principal amount of 7.375% senior notes due 2033 (the "2033 Notes") at par. Net proceeds were used to repay a portion of the outstanding borrowing under the DKL Revolving Facility.
Delek Permian Gathering Dropdown
On May 1, 2025, Delek Holdings transferred the Delek Permian Gathering purchasing and blending activities to the Partnership (the "DPG Dropdown”). In connection with the DPG Dropdown, the Partnership will assume all of Delek Holdings’ rights and obligations to purchase crude oil under certain contracts associated with the Partnership’s existing Midland Gathering System. Total consideration included the cancellation of $58.8 million in existing receivables owed by Delek Holdings.
Agreements with Delek Holdings
On May 1, 2025, the Partnership entered into an agreement to terminate, in its entirety, the East Texas Marketing Agreement effective as of January 1, 2026.
On May 1, 2025, in connection with the DPG Dropdown, the Partnership amended and restated a throughput agreement with Delek Holdings for the El Dorado rail facility (the “Throughput Agreement”), which includes a minimum volume commitment for refined products until the termination of the Throughput Agreement, which occurred at the closing of the El Dorado Purchase (as defined below). Additionally, on May 1, 2025, in connection with the DPG Dropdown, the Partnership and Delek Holdings, entered into an asset purchase agreement (the “El Dorado Purchase Agreement”), whereby Delek Holdings will purchase the related El Dorado rail facility assets from the Partnership for cash consideration of $25.0 million (the “El Dorado Purchase”). The El Dorado Purchase closed effective January 1, 2026.
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 and the El Dorado Terminal Sale are expected to close on April 1, 2026 and October 1, 2027, respectively, in each case subject to the satisfaction of customary closing conditions.
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.
On May 1, 2025, we entered into an amended and restated Omnibus Agreement with Delek Holdings that provides for an increase in the Administrative Fee (as defined therein), which will be phased in over the two years beginning July 1, 2025 and a binding obligation for both parties to enter into transition services agreements in the event of a change in control.
Unit Repurchase
On February 24, 2025, the Partnership and Delek Holdings entered into a Common Unit Purchase Agreement (the “Common Unit Purchase Agreement”) whereby the Partnership may repurchase common units from time to time from Delek Holdings in one or more transactions for an aggregate purchase price of up to $150.0 million through December 31, 2026 (each such repurchase, a “Repurchase”). During the year ended December 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 year ended December 31, 2024. As of December 31, 2025, there was $140.0 million of authorization remaining under the Common Unit Repurchase Agreement.
On DecemberJanuary 11,2, 2024,2025, we entered into theacquired Gravity Purchase Agreementand related to water disposal and recycling operations in the Permian Basin and the Bakken for total consideration of $301.2$300.8 million. The purchase price was comprised of $209.3 million in cash and 2,175,209 of common units. UponThis executiontransaction further enhances our position as full service (crude, natural gas and water) provider in the Permian basin. The acquisition is synergistic to our recent acquisition of theH2O GravityMidstream Purchaseand Agreement,supplements weour madeintegrated acrude cashand depositproduced ofwater $22.8gathering million,and recordeddisposal offering in other current assets on the consolidatedMidland balance sheets, which was credited to the sale upon a successful closing. The Gravity Acquisition closed on January 2, 2025.Basin.
H2O Midstream Acquisition
On September 11, 2024, the Partnership closed the H2O Midstream Acquisition, in which we acquired water disposal and recycling operations, in the Midland Basin in Texas (the "Midland Water Gathering System") for total consideration of $229.7 million, subject to customary adjustments under the Purchase Agreement for net working capital and indebtedness. The purchase price is comprised of approximately $159.7 million in cash and $70.0 million of preferred equity.
Wink to Webster Pipeline Investment Acquisition
On August 5, 2024, the Partnership acquired Permian Pipeline Holdings, LLC, which holds 50% equity interests in Wink to Webster Holdings, LLC ("W2W Holdings"), (the "W2W Investment") from a wholly owned subsidiary of Delek Holdings. 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. 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. Total consideration was comprised of $83.9 million in cash (including $2.7 million post-closing adjustment), forgiveness of a $60.0 million receivable from Delek Holdings and 2,300,000 of common units representing limited partnership interest in us.
Commercial Agreements with Delek Holdings
On August 5, 2024, the Partnership amended and extended expired, or soon to be expired, commercial agreements with subsidiaries of 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. These agreements have an initial term of five to seven years, with the ability to extend for an additional five years at Delek Holdings' option. In addition, certain of these contracts have rate adjustments to be phased in over 2025 and 2026. The amendments required the embedded leases within these agreements to be reassessed under Accounting Standards Codification 842, Leases. As a result of these lease assessments, certain leases were reclassified from operating leases to sales-type leases.
In addition, the Partnership entered into an assignment agreement with Delek Holdings. As a result of these agreements with Delek Holdings, we redeemed 2,500,000 common units representing limited partnership interest in us held by Delek Holdings to assign the Big Spring Refinery Marketing Agreement to Delek Holdings. We also entered into an amended and restated Omnibus Agreement with Delek Holdings that provides Delek Holdings an option to purchase certain critical assets from us at market value during the period beginning upon any change in control or sale of substantially all assets involving us and extending (i) in the case of a transaction involving a third party, for six months following closing, and (ii) for any other transaction for four years following closing.
Natural Gas Plant
In the second quarter of 2024, the Partnership made the final investment decision to build a new natural gas processing plant adjacent to its plant in the Permian Basin. The plant is expected to have a capacity of approximately 110 MMcf/d (as defined below) and aims to meet the rising demand for natural gas in the region. We have engaged specialists to oversee the process, including permits, equipment procurement, and construction. Financial projections estimate an annual EBITDA of approximately $40 million, considering increased production, cost savings, and market conditions.
Additionally, in December 2024, the Partnership announced the development of permitted AGI capabilities at the new plant. The sour natural gas treating and acid gas injection capability is enabled by our two existing AGI well permits and amine unit currently under construction. We expect these projects will be completed in the second half of 2025.
On July 1, 2024, 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 by approximately 1.3%, which was the amount of the change in the FERC oil pipeline index. The tariff on FERC regulated system acquired from Delaware Gathering was adjusted as of January 1, 2024, but adjustments under agreements already in place will be capped at 3.0%. Under certain of our agreements with Delek Holdings and third parties, the fees that are subject to adjustments using the consumer price index increased 3.3% and the fees that are subject to adjustments using the producer price index increased approximately 0.8%. These adjustments allow us to maintain compliance with FERC regulations as well as to ensure that our results are reflective of current market conditions.
DKL Revolving Credit Facility
On March 29, 2024, the Partnership entered into a Fourth Amendment to the amended and restated senior secured revolving credit agreement (the "DKL Revolving Facility") which among other things increased the U.S. Revolving Credit Commitments (as defined in the DKL Credit Facility) by an amount equal to $100.0 million resulting in aggregate lender commitments under the DKL Revolving Credit Facility in an amount of $1,150.0 million, including up to $146.9 million for letters of credit and $31.9 million in swing line loans. This facility has a maturity date of October 13, 2027.
2029 Notes
On March 13, 2024, the Partnership sold $650.0 million in aggregate principal amount of 8.625% Senior Notes due 2029 (the “2029 Notes”), at par. Net proceeds were used to redeem the 2025 Notes including accrued interest, pay off the DKL Term Loan Facility including accrued interest and to repay a portion of the outstanding borrowings under the DKL Revolving Facility.
On April 17, 2024, the Partnership sold $200.0 million in aggregate principal amount of additional 8.625% senior notes due 2029 at 101.25% and on August 16, 2024, the Partnership sold $200.0 million in aggregate principal amount of additional 8.625% senior notes due 2029, at 103.25% (collectively, the "Additional 2029 Notes"). The Additional 2029 Notes were issued under the same indenture as the 2029 Notes and formed a part of the same series of notes as the 2029 Notes. The net proceeds were used to repay a portion of the outstanding borrowings under the DKL Revolving Facility.
Equity Offerings
On March 12, 2024, the Partnership completed a public offering of its common units in which it sold 3,584,416 common units (including an overallotment option of 467,532 common units) to the underwriters of the offering at a price to the public of $38.50 per unit. The proceeds received from this offering (net of underwriting discounts, commissions and expenses) were $132.2 million and were used to repay a portion of the outstanding borrowings under the DKL Revolving Facility. Underwriting discounts totaled $5.5 million.
On October 10, 2024, the Partnership completed a public offering of its common units in which it sold 4,423,075 common units (including an overallotment option of 576,922 common units) to the underwriters of the offering at a price to the public of $39.00 per unit. The net proceeds received from this offering (net of underwriting discounts, commissions and expenses) were $165.6 million and were used to redeem the Preferred Units and repay a portion of the outstanding borrowings under the DKL Revolving Facility. Underwriting discounts totaled $6.6 million.
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 servesserve 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. 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 this operating segment. The combination of these operational assets provides a comprehensive, integrated midstream service offering to producers and customers.
The corporate and other segment primarily consists of general and administrative expenses not allocated to a reportable segment, interest expense and depreciation and amortization. When applicable, it may also contain operating segments that are not reportable and do not meet the criteria for aggregation with any of our existing reportable segments.
The Partnership’s Long-Term Strategic Objectives have been focused on providing a competitive yield and growing our distribution while maintaining healthy coverage and leverage ratios. To that end, we are focused on growing our asset base through a slew of accretive growth opportunities we are seeing in our areas of operation. We are supplementing our organic growth opportunities by accretive bolt-on acquisitions which enhance our full suite services offering to our customers. A secondary benefit of growing our contribution of third-party cash flows is to continue to increase our economic separation withfrom our sponsor Delek USAHoldings and to progress deconsolidation.
In service to these overarching Long-Term Strategic Objectives, as we began 2024,2025, we focused onprioritized the following Strategic Focus Areas:
I.GenerateI.Achieve StableStrong Cash Flow Growth
II.Pursue Attractive Expansion Opportunities
II.Focus on Growing Our Business through Acquisitions and Investments in Joint Ventures
IV.Pursue Attractive Expansion and Construction Opportunities
V.OptimizeIV.Optimize Our Existing Assets and Expand Our Customer Base
VI.ExpandV.Enhance our ESGCommitment Consciousnessto Sustainability and LowerMinimize our Carbon FootprintEmissions
We continue to believe that our strategic focus areas are the right ones.ones to support our long-term objectives. As such,part of our ongoing commitment to operational excellence, we continueconsistently toreview and refine our processes for evaluating risksrisk and returnsreturn whileevaluation processes, maintaining a keenclear eyefocus on our overarching Long-Term Strategic Objectives and our desiregoal to createof long-term operational sustainability. ToThe thatcontinued end,separation from our parent, growth in third-party cash flows, and improved asset quality at the Partnership are opening multiple growth opportunities. We are well positioned to build on the strong momentum established in 2025 as we move into 2026. With this in mind, our 2026 Strategic Focus Areas are as follows:
•Achieve Strong Cash Flow Growth. Building on the transformational progress made in 2025, 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 capabilities. The combined crude and water strategy in the Midland basin and the full-suite strategy in the Delaware Basin will be expanded through the completion of the sour gas handling, treating and acid gas injection infrastructure. Delek Logistics is set 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.
•Achieve Strong Cash Flow Growth. 2025 is likely to be a transformational year for Delek Logistics as it completes the expansion of the Libby gas processing plant and integrates two free cash flow accretive acquisitions in H2O Midstream and Gravity. The plant expansion and combined crude and water offerings in the Midland Basin are going to increase the Partnership's overall cash flow and improve our distribution coverage ratio.
•Pursue Attractive Expansion Opportunities. Continue to evaluate and pursue opportunities to grow our business through several organic growth opportunities and bolt-on acquisitions ◦Organic growth opportunities. The partnership iscontinues into the middle of pursuingpursue several attractive organic growth opportunities enabled by its advantageous position in the prolific Permian Basin. The gas plant expansion and addition of AGI and sour gas processing capabilities isare enabling several additional growth optionsopportunities for the Partnership in the Delaware Basin. In the Midland Basin combined crude and water offering is appealing for our customers and bringingbrings additional growth opportunities to our system. Delek logistics will also continue to look for attractive bolt-on acquisitions which are accretive to its free cash flow, EBITDA and leverage profiles.
◦Pursue Acquisitions. Delek logistics will also continue to look for attractive bolt-on acquisitions which are accretive to its free cash flow, EBITDA and leverage profiles.
What changed in the latest 10-Q
Risk Factors
No wording changes found in this section.
Full comparison: every changed paragraph (0)
Management's Discussion & Analysis (MD&A)
New heading “Contractual Rate Adjustments to Keep Pace with Inflation”
New heading “Cybersecurity Incident”
Largest changes
“Contractual Rate Adjustments to Keep Pace with Inflation”see in full comparison
“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%. …”see in full comparison
“The Partnership saw a $6.7 million decrease in net income during the three months ended March 31, 2026, as compared to the prior year period, primarily due to increase in depreciation associated with additional assets from our gas plant expansion and increase in interest expense associated with our debt issuance in the second quarter of 2025. Our EBITDA increased $2.7 million in 2026 as compared to 2025. Our gathering and processing segment saw a $2.7 million increase in segment EBITDA, largely due to increased crude activity in our Delaware Gathering operations. …”see in full comparison
“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. …”see in full comparison
“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.”see in full comparison
Full comparison: every changed paragraph (163)
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 H2Oacquisition Midstream andof Gravity acquisitions,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.
•significant operational, investment or other changes required by existing or future environmental statutes and regulations, including international agreements and national or regional societal,societal legislation; and regulatory measures to limit or reduce greenhouse gas emissions;
During the threesix months ended MarchJune 31,30, 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 saw a $6.7 million decrease in net income during the three months ended March 31, 2026, as compared to the prior year period, primarily due to increase in depreciation associated with additional assets from our gas plant expansion and increase in interest expense associated with our debt issuance in the second quarter of 2025. Our EBITDA increased $2.7 million in 2026 as compared to 2025. Our gathering and processing segment saw a $2.7 million increase in segment EBITDA, largely due to increased crude activity in our Delaware Gathering operations. Our wholesale marketing and terminalling segment saw a decrease in segment EBITDA of $3.5 million primarily due to 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"). Our storage and transportation segment saw increase in segment EBITDA of $1.3 million primarily driven by lower transportation costs associated with trucking activity. Segment EBITDA for our investments in pipeline joint ventures increased by $1.5 million largely due to our investment in Wink to Webster Holdings, LLC ("W2W"). See the “Results of Operations” section below for further discussion.
The near-term economic outlook remains uncertain due to the introduction of widespread tariffs by the U.S., ongoing geopolitical instability—instability, including escalatingthe ongoing conflict involving Iran— and resulting disruptions to maritime transit through the Strait of Hormuz, and heightened commodity market volatility. Uncertainty surrounding trade negotiations, the potential for further expansion of tariffs,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‑basedfee-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.
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.
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.
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 quarterhalf 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 MarchJune 31,30, 2026. The total estimated project cost is approximately $60.0 million.
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.
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 slewrange of accretive growth opportunities we are seeing in our areas of operation. We are supplementing our organic growth opportunities by accretive bolt-on acquisitions which enhance our full-suite services offering to our customers. A secondary benefit of growing our contribution of third-party cash flows is to continue to increase our economic separation from our sponsor Delek Holdings and to progress deconsolidation.Holdings.
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 BasinBasin, 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.
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 impactsimpact 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.
Consolidated Results of Operations — Comparison of the three and six months ended MarchJune 31,30, 20262026, compared to the three and six months ended MarchJune 31,30, 2025
Net revenues increased by $47.5 million, or 19.0%, in the three months ended March 31, 2026, compared to the three months ended March 31, 2025. The increase was primarily driven by the following:
•increased revenue of $18.7 million in our West Texas marketing operations primarily driven by increase in average sales prices per gallon, volumes sold and RINs revenue:
◦the average sales prices per gallon of gasoline and diesel sold increased by $0.09 and $0.35 per gallon, respectively;
◦the average volumes of gasoline sold increased by 4.7 million gallons, while the average volumes of diesel sold decreased by 0.8 million gallons; and ◦RINs revenue increased $2.4 million due to increased RINs prices.
•increased revenue of $36.1 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 crude activity in our Delaware Gathering operations; and
•partially offsetting these increases was a decrease of $6.7 million associated with the termination of the East Texas Marketing Agreement.
Cost of materials and other increased by $39.6 million, or 30.7%, in the three months ended March 31, 2026, compared to the three months ended March 31, 2025, primarily driven by the following:
•an increase of $15.6 million in our West Texas marketing operations primarily driven by increase in average cost per gallon and volumes sold; and
•an increase of $26.0 million in our gathering and processing segment primarily associated with increased crude oil activity in our Delaware Gathering operations and the DPG Dropdown.
OperatingNet expensesrevenues increased by $6.1$138.4 million, or 14.8%,56.2%, in the threesecond monthsquarter endedof March 31, 2026,2026 compared to the threesecond monthsquarter ended March 31,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").
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 gathering and processing segment primarily associated with the DPG Dropdown and increased sales in our Delaware Gathering operations; and
•an increase of $5.4 million in outside services and $2.1 million in variable expenses; and
•partially offsetting these increases was a $2.2decrease of $13.4 million decreaseassociated inwith maintenancethe andtermination repairsof costs.the East Texas Marketing Agreement.
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.
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 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.
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 decreased by $4.6$5.7 million, or 51.8%,63.3%, in the threesecond monthsquarter endedof March 31, 2026,2026 compared to the threesecond monthsquarter ended March 31,of 2025, primarily driven by athe decrease in insurance expense.following:
•decrease in employee expenses of $2.0 million; and
•decrease in outside services of $2.4 million.
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;
DKL insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 5 Form 4 filings (5 insiders, 1 trade date, 15,000 shares, about $750.0K) and open-market sales in 0 filings. Net open-market shares: 15,000 (purchases minus sales); net value about $750.0K.Totals add up every open-market (code P and S) line in those filings, using the prices reported in the filings. Awards, option exercises, tax withholding and gifts are listed below but not counted.
| Trade date | Insider | Transaction | Shares | Price | Value |
|---|---|---|---|---|---|
| 2026-09-10 | Spiegel Reuven |
Shares withheld for tax | 743 | $57.00 | $42.4K |
| 2026-09-10 | Soreq Avigal |
Shares withheld for tax | 3,038 | $57.00 | $173.2K |
| 2026-09-10 | Wright Robert G. |
Shares withheld for tax | 229 | $57.00 | $13.1K |
| 2026-09-10 | Hobbs Mark Wayne |
Shares withheld for tax | 659 | $57.00 | $37.6K |
| 2026-08-13 | Soreq Avigal |
Open-market purchase | 2,500 | $50.00 | $125.0K |
| 2026-08-13 | Hobbs Mark Wayne |
Open-market purchase | 4,000 | $50.00 | $200.0K |
| 2026-08-13 | Spiegel Reuven |
Open-market purchase | 1,000 | $50.00 | $50.0K |
| 2026-08-13 | Wright Robert G. |
Open-market purchase | 1,500 | $50.00 | $75.0K |
| 2026-08-13 | Yemin Ezra Uzi |
Open-market purchase | 6,000 | $50.00 | $300.0K |
| 2026-06-10 | Green Frederec |
Grant/award | 2,476 | $52.49 | $130.0K |
| 2026-06-10 | Mcwatters Denise Clark |
Shares withheld for tax | 1,277 | $52.49 | $67.0K |
| 2026-06-10 | Spiegel Reuven |
Shares withheld for tax | 1,485 | $52.49 | $77.9K |
| 2026-06-10 | Soreq Avigal |
Shares withheld for tax | 1,646 | $52.49 | $86.4K |
| 2026-06-10 | Haddock Ron W |
Grant/award | 2,476 | $52.49 | $130.0K |
| 2026-06-10 | Brown Charles J Iii |
Grant/award | 2,476 | $52.49 | $130.0K |
| 2026-06-10 | Hobbs Mark Wayne |
Shares withheld for tax | 350 | $52.49 | $18.4K |
| 2026-06-10 | Gadd Eric D |
Grant/award | 2,476 | $52.49 | $130.0K |
| 2026-06-10 | Yemin Ezra Uzi |
Grant/award | 2,476 | $52.49 | $130.0K |
| 2026-06-10 | Kelly Gennifer F. |
Grant/award | 2,476 | $52.49 | $130.0K |
| 2026-06-10 | Green Frederec |
Grant/award | 2,476 | $1527.00 | $3.8M |
| 2026-06-10 | Brillon Sherri Anne |
Grant/award | 2,476 | $52.49 | $130.0K |
| 2026-06-10 | Wright Robert G. |
Shares withheld for tax | 74 | $52.49 | $3.9K |
| 2026-04-01 | Delek Us Holdings, Inc. |
Disposition to issuer | 359,372 | — | — |
| 2025-03-17 | Delek Us Holdings, Inc. |
Disposition to issuer | 243,075 | — | — |
Well-known investors holding DKL (13F)
| Investor | Quarter | Shares | Reported value | % of their 13F | Change vs prior quarter |
|---|---|---|---|---|---|
| Citadel Advisors (Ken Griffin) | 2026-06-30 | 70,654 | $3.6M | 0.0% | Added 295% |