Delek Logistics Partners LP

Consolidated Results of Operations — Comparison of the three and nine months ended September 30, 2024 compared to the three and nine months ended September 30, 2023

Net revenues decreased by $61.8 million, or 22.4%, in the third quarter of 2024 compared to the third quarter of 2023, primarily driven by the following:

•decreased revenue of $36.2 million in our West Texas marketing operations primarily driven by decreases in volumes sold, a decrease in average sales prices per gallon and decrease in RINs revenue:

◦the volumes of gasoline and diesel sold decreased by 4.7 million and 0.5 million gallons, respectively;

◦the average sales prices per gallon of gasoline and diesel sold decreased by $0.42 and $0.71 per gallon, respectively;

◦RINs revenue decreased from $3.5 million in the third quarter of 2023 to $1.3 million in the third quarter of 2024, due to decrease in RINs prices; and

•decreased revenue of $13.3 million and $8.3 million in our gathering and processing and storage and transportation segments, respectively due to recording certain throughput and storage fees as interest income under sales-type lease accounting that were previously recorded as revenue in the prior year period.

Net revenues decreased by $35.5 million, or 4.6%, in the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023. The decrease was primarily driven by the following:

•decreased revenue of $28.7 million in our West Texas marketing operations primarily driven by a decrease in average sales prices per gallon and decrease in RINs revenue, partially offset by increases in volumes sold:

◦the average sales prices per gallon of gasoline and diesel sold decreased by $0.33 and $0.36 per gallon, respectively;

◦RINs revenue decreased from $9.1 million in the nine months ended September 30, 2023 to $3.7 million in the nine months ended September 30, 2024, due to decrease in RINs prices; and

•decreased revenue of $10.4 million and $8.6 million in our gathering and processing and storage and transportation segments, respectively due to recording certain throughput and storage fees as interest income under sales-type lease accounting that were previously recorded as revenue in the prior year period; and

•partially offset by increase in terminalling and marketing revenue primarily due to increased volumes and rate increases.

Cost of materials and other decreased by $33.1 million, or 22.0%, in the third quarter of 2024 compared to the third quarter of 2023, primarily driven by the following:

•decreased costs of materials and other of $29.4 million in our West Texas marketing operations primarily driven by decreases in the volumes and average cost per gallon of gasoline and diesel sold:

◦the volumes of gasoline and diesel sold decreased by 4.7 million and 0.5 million gallons, respectively; and

◦the average cost per gallon of gasoline and diesel sold decreased by $0.23 per gallon and $0.73 per gallon, respectively.

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Cost of materials and other decreased by $25.6 million, or 6.3%, in the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023, primarily driven by

•decreased costs of materials and other of $13.2 million in our West Texas marketing operations primarily driven by decreased costs per gallon, partially offset by increases in the average volumes of gasoline and diesel sold:

◦the average cost per gallon of gasoline and diesel sold decreased by $0.20 per gallon and $0.31 per gallon, respectively;

◦the volumes of gasoline and diesel sold increased by 2.9 million and 3.4 million gallons, respectively; and

•decrease of $8.0 million in our gathering and processing segment driven primarily by lower natural gas costs.

Operating expenses decreased by $5.1 million, or 15.4%, in the third quarter of 2024 compared to the third quarter of 2023, primarily driven by a decrease in outside services.

Operating expenses increased by $2.8 million, or 3.2%, in the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023, primarily driven by an increase in contract services.

General and Administrative Expenses

General and administrative expenses increased by $10.2 million, or 183.9%, in the third quarter of 2024 compared to the third quarter of 2023, primarily driven by the following:

•transaction costs associated with the H2O Acquisition, W2W Investment acquisition, and amendments of certain agreements with Delek Holdings of $8.7 million; and

•increase in insurance expense primarily related to H2O.

General and administrative expenses increased by $7.0 million, or 35.4%, in the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023, primarily driven by the following:

•transaction costs associated with the H2O Acquisition, W2W Investment acquisition, and amendments of certain agreements with Delek Holdings of $8.7 million;

•increase in insurance expense primarily due to H2O Acquisition; and

•partially offset by decreases in lease expense and contract services.

Depreciation and Amortization

Depreciation and amortization decreased by $3.4 million, or 13.8%, in the third quarter of 2024 compared to the third quarter of 2023, primarily due to the derecognition of fixed assets in connection with the recognition of sales-type leases in the third quarter of 2024.

Depreciation and amortization increased by $2.5 million, or 3.6%, in the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023, primarily driven by the following:

•the derecognition of fixed assets in connection with the recognition of sales-type leases in the third quarter of 2024; and

•depreciation associated with new projects in-serviced during the period.

Other operating income, net

Other operating income, net decreased by $0.4 million, or 76.2%, in the third quarter of 2024 compared to the third quarter of 2023.

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Other operating income, net increased by $0.5 million, or 60.9%, in the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023, primarily driven by the following:

•increase in gain on disposal of assets of $6.0 million, predominantly due to $8.3 million in condemnation proceeds received in the second quarter of 2024; and

•partially offset by $5.4 million related to settlement of payment dispute.

Interest Income

Interest income increased by $23.5 million, or 100.0%, in the third quarter of 2024 compared to the third quarter of 2023, primarily driven by income from certain of our commercial agreements with Delek Holdings that met the criteria to be accounted for as sales-type leases during the third quarter of 2024.

Interest income increased by $23.5 million, or 100.0%, in the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023, primarily driven by income from certain of our commercial agreements with Delek Holdings that met the criteria to be accounted for as sales-type leases during the third quarter of 2024.

Interest Expense

Interest expense decreased by $0.1 million, or 0.3%, in the third quarter of 2024 compared to the third quarter of 2023.

Interest expense decreased by $8.0 million, or 7.6%, in the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023, primarily driven by the following:

•debt extinguishment costs of $3.6 million associated with the payoff of the DKL Term Loan Facility and the 2025 Notes with proceeds from the 2029 Notes issued in March 2024;

•interest associated with the 2029 Notes issued in the first quarter of 2024; and

•partially offset by a decrease in interest associated with the DKL Revolving Facility due to lower average outstanding borrowings.

Results from Equity Method Investments

Income from equity method investments increased by $6.3 million, or 67.8%, in the third quarter of 2024 compared to the third quarter of 2023, primarily due to the W2W Investment, which was acquired on August 5, 2024, and contributed income of $6.4 million during the period.

Income from equity method investments increased by $9.1 million, or 39.6%, in the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023, primarily due to the W2W Investment, which was acquired on August 5, 2024, and contributed income of $6.4 million during the period and increases in throughput at two of our joint ventures that were negatively impacted by the turnaround at the Tyler Refinery in prior year.

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Operating Segments

Gathering and Processing Segment

The following tables and discussion present the results of operations and certain operating statistics of the gathering and processing segment for the three and nine months ended September 30, 2024 and 2023:

(1) bpd - average barrels per day.

(2)Mcfd - average thousand cubic feet per day.

(3) 2024 volumes include volumes from September 11, 2024 through September 30, 2024.

Operational comparison of the three and nine months ended September 30, 2024 compared to the three and nine months ended September 30, 2023:

Net revenues for the gathering and processing segment decreased by $13.3 million, or 14.0%, in the third quarter of 2024 compared to the third quarter of 2023, primarily due to recording certain throughput fees as interest income under sales-type lease accounting that were previously recorded as revenue in the prior year period.

Net revenues for the gathering and processing segment decreased by $10.4 million, or 3.7%, in the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023, primarily due to recording certain throughput fees as interest income under sales-type lease accounting that were previously recorded as revenue in the prior year period.

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Cost of materials and other for the gathering and processing segment decreased by $0.6 million, or 3.0%, in the third quarter of 2024 compared to the third quarter of 2023.

Cost of materials and other for the gathering and processing segment decreased by $8.0 million, or 12.2%, in the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023, driven primarily by lower natural gas costs.

Operating expenses for the gathering and processing segment decreased by $2.4 million, or 11.4%, in the third quarter of 2024 compared to the third quarter of 2023.

Operating expenses for the gathering and processing segment increased by $2.0 million, or 3.7%, in the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023, primarily driven by an increase in contract services.

EBITDA

EBITDA decreased by $10.5 million, or 19.9%, in the third quarter of 2024 compared to the third quarter of 2023, primarily driven by lower revenue related to sales-type lease accounting.

EBITDA decreased by $6.2 million, or 3.8%, in the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023 primarily driven by lower revenue related to sales-type lease accounting, partially offset by lower natural gas costs.

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Wholesale Marketing and Terminalling Segment

The following tables and discussion present the results of operations and certain operating statistics of the wholesale marketing and terminalling segment for the three and nine months ended September 30, 2024 and 2023:

(1)Excludes jet fuel and petroleum coke.

(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 nine months ended September 30, 2024 compared to the three and nine months ended September 30, 2023:

Net revenues for the wholesale marketing and terminalling segment decreased by $40.2 million, or 27.3%, in the third quarter of 2024 compared to the third quarter of 2023, driven primarily by the following:

•decreased revenue of $36.2 million in our West Texas marketing operations primarily driven by decreases in volumes sold, a decrease in average sales prices per gallon and decrease in RINs revenue:

◦the volumes of gasoline and diesel sold decreased by 4.7 million and 0.5 million gallons, respectively;

◦the average sales prices per gallon of gasoline and diesel sold decreased by $0.42 and $0.71 per gallon, respectively; and

◦RINs revenue decreased from $3.5 million in the third quarter of 2023 to $1.3 million in the third quarter of 2024, due to decrease in RINs prices; and

◦decrease due to recording certain throughput fees as interest income under sales-type lease accounting that were previously recorded as revenue in the prior year period.

Net revenues for the wholesale marketing and terminalling segment decreased by $16.4 million, or 4.3%, in the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023, primarily driven by the following:

•decreased revenue of $28.7 million in our West Texas marketing operations primarily driven by a decrease in average sales prices per gallon and decrease in RINs revenue, partially offset by increases in volumes sold:

◦the average sales prices per gallon of gasoline and diesel sold decreased by $0.33 and $0.36 per gallon, respectively;

◦RINs revenue decreased from $9.1 million in the nine months ended September 30, 2023 to $3.7 million in the nine months ended September 30, 2024, due to decrease in RINs prices; and

•decrease due to recording certain throughput fees as interest income under sales-type lease accounting that were previously recorded as revenue in the prior year period; and

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•partially offset by increase in terminalling and marketing revenue primarily due to increased volumes and rate increases.

The following charts show summaries of the average sales prices per gallon of gasoline and diesel and refined products volume impacting our West Texas operations for the three and nine months ended September 30, 2024 and 2023.

Cost of materials and other for the wholesale marketing and terminalling segment decreased by $31.9 million, or 27.5%, in the third quarter of 2024 compared to the third quarter of 2023, driven primarily by the following:

•decreased costs of materials and other of $29.4 million in our West Texas marketing operations primarily driven by decreases in volumes and average cost per gallon of gasoline and diesel sold:

◦the volumes of gasoline and diesel sold decreased by 4.7 million and 0.5 million gallons, respectively; and

◦the average cost per gallon of gasoline and diesel sold decreased by $0.23 per gallon and $0.73 per gallon, respectively.

Cost of materials and other for the wholesale marketing and terminalling segment decreased by $12.5 million, or 4.3%, in the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023, primarily driven by the following:

•decreased costs of materials and other of $13.2 million in our West Texas marketing operations primarily driven by decreased costs per gallon, partially offset by increases in the average volumes of gasoline and diesel sold:

◦the average cost per gallon of gasoline and diesel sold decreased by $0.20 per gallon and $0.31 per gallon, respectively; and

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The following chart shows a summary of the average prices per gallon of gasoline and diesel purchased in our West Texas operations for the three and nine months ended September 30, 2024 and 2023. Refer to the Refined Products Volume - Gallons chart above for a summary of volumes impacting our West Texas operations.

Operating expenses for the wholesale marketing and terminalling segment decreased by $1.6 million, or 31.1%, in the third quarter of 2024 compared to the third quarter of 2023, driven primarily by a decrease in outside service costs.

Operating expenses for the wholesale marketing and terminalling segment decreased by $2.9 million, or 21.6%, in the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023, driven primarily by a decrease in outside service costs.

EBITDA

EBITDA decreased by $7.9 million, or 28.0%, in the third quarter of 2024 compared to the third quarter of 2023, driven primarily by the following:

•a decline in wholesale margins partially due to lower RINs prices; and

•lower revenue related to sales-type lease accounting.

EBITDA decreased by $2.3 million, or 3.0%, in the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023, primarily driven by the following:

•a decline in wholesale margins partially due to lower RINs prices;

•lower revenue related to sales-type lease accounting; and

•partially offset by an increase in terminalling utilization.

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Storage and Transportation Segment

The following tables and discussion present the results of operations and certain operating statistics of the storage and transportation segment for the three and nine months ended September 30, 2024 and 2023:

Operation comparison of the three and nine months ended September 30, 2024 compared to the three and nine months ended September 30, 2023

Net revenues for the storage and transportation segment decreased by $8.3 million, or 24.4%, in the third quarter of 2024 compared to the third quarter of 2023, primarily due to recording certain storage fees as interest income under sales-type lease accounting that were previously recorded as revenue in the prior year period.

Net revenues for the storage and transportation segment decreased by $8.6 million, or 8.0%, in the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023, primarily due to recording certain storage fees as interest income under sales-type lease accounting that were previously recorded as revenue in the prior year period.

Cost of materials and other for the storage and transportation segment decreased by $0.7 million, or 4.6%, in the third quarter of 2024 compared to the third quarter of 2023 primarily due to decrease in trucking activity.

Cost of materials and other for the storage and transportation segment decreased by $8.2 million, or 16.4%, in the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023 primarily due to decrease in trucking activity.

Operating expenses for the storage and transportation segment increased by $1.6 million, or 52.7%, in the third quarter of 2024 compared to the third quarter of 2023, primarily due to an increase in contract services.

Operating expenses for the storage and transportation segment increased by $1.5 million, or 11.9%, in the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023, primarily due to an increase in contract services.

EBITDA

EBITDA decreased by $10.4 million, or 58.0%, in the third quarter of 2024 compared to the third quarter of 2023, primarily due to decrease in revenue related to sales-type lease accounting and an increase in outside services.

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EBITDA decreased by $3.9 million, or 8.4%, in the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023, primarily due to decrease in revenue associated with sales-type lease accounting and lower cost associated with decrease in trucking activity.

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Investments in Pipeline Joint Ventures Segment

The Investments in Pipeline Joint Ventures segment relates to strategic Joint Venture investments, accounted for as equity method investments, to support the Delek Holdings operations in terms of offering connection to takeaway pipelines, alternative crude supply sources and flow of high quality crude oil to the Delek Holdings refining system. As a result, Delek Holdings is a major shipper and customer on certain of the Joint Venture pipelines, with minimum volume commitment ("MVC") agreements, which cushion the Joint Venture entities during periods of low activity. The other Joint Venture owners are usually major shippers on the pipelines resulting in a majority of the revenue of the Joint Venture entities coming from MVC agreements with related entities.

Investments in pipeline joint ventures segment include the Partnership's joint ventures investments described in Note 9 of our condensed consolidated financial statements in Item 1. Financial Statements, of this Quarterly Report on Form 10-Q.

Refer to Consolidated Results of Operations above for details and discussion of the investments in pipeline joint ventures segment for the three and nine months ended September 30, 2024.