Financial Data and Key Metrics Changes - The company reported approximately $120 million in quarterly adjusted EBITDA, an increase from $102 million in the same period of 2024, indicating a year-over-year growth of approximately 17.6% [12] - Distributable cash flow as adjusted was $73 million, with a DCF coverage ratio of approximately 1.22 times, expected to rise as growth projects contribute to results [13] - The full-year EBITDA guidance remains between $480 million to $520 million [12][15] Business Line Data and Key Metrics Changes - For the Gathering and Processing segment, adjusted EBITDA was $78 million compared to $55 million in 2024, primarily due to acquisitions [13] - Wholesale Marketing and Terminalling adjusted EBITDA decreased to $23 million from $30 million in the prior year, attributed to last summer's agreements [13] - Storage and transportation adjusted EBITDA remained stable at $17 million, while investments in pipeline joint ventures contributed $11 million, up from $8 million in 2024 [13] Market Data and Key Metrics Changes - The company is focused on enhancing its competitive position in both Midland and Delaware Basins through water acquisitions and increased dedication [5] - The integration of two water gathering systems is progressing well, expected to enhance crude and water offerings in specific counties [11] Company Strategy and Development Direction - The company aims to strengthen its position as a premier full-service provider in the Permian Basin, with ongoing efforts in acid gas injection and sour gas handling capabilities [4][5] - The successful commissioning of the new Libbey plant is expected to fill to capacity in 2025, contributing to future growth [4][8] - The company intends to remain prudent in managing leverage and coverage while rewarding stakeholders through leading distributions, with a recent increase to $1.115 per unit [6] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving the EBITDA guidance despite commodity price volatility, citing strong relationships with producers and low breakeven costs in the area [36][38] - The company is optimistic about the uptick in crude volumes for Q3, indicating a strong start to the second half of the year [37] Other Important Information - The capital expenditures for the second quarter were approximately $119 million, with $115 million allocated to growth projects, including the completion of the Libbey II gas processing plant [15] - The company has increased its liquidity by $700 million through a high-yield notes offering, bringing total availability to over $1 billion [12] Q&A Session Summary Question: Trends in processing plant volumes and potential expansions - Management confirmed that the commissioning of the plant was completed on time and is currently flowing gas, expecting to reach full capacity by year-end [20][21] Question: Competitive environment for sour gas treating capacity - Management acknowledged the recent asset transactions in the Delaware Basin and emphasized their comprehensive strategy around natural gas, which includes gathering, treating, and processing [24][26] Question: M&A opportunities and market outlook - Management stated that any M&A activity would need to be free cash flow accretive and align with their strategy, while also being open to both acquisition and divestiture opportunities [32][34] Question: Producer plans and guidance outlook - Management reiterated confidence in their guidance, citing strong relationships with producers and favorable conditions in the Permian Basin [36][38]

Delek US Holdings (DK) Operations and Strategy - Delek Logistics (DKL) reported a record quarter, with run-rate cash flow improvements of $120 million in 2Q'25[11] - DK raised its EOP target to $130-170 million in cash flow improvements[11] - DK returned ~$150 million to shareholders through buybacks and dividends over the last 12 months, representing an approximate 12% yield[11] - DKL is on track to deliver 2025 EBITDA guidance of $480-520 million[11] - DK's value creation journey is tied to EOP (efficiency and optimization plan), SOTP (sum of the parts), and SREs (small refinery exemptions)[14] EOP (Efficiency and Optimization Plan) Progress - EOP aims to improve DK's profitability and free cash flow at constant margins[21] - DK is confident in reaching $130 – 170 million in run-rate cash flow improvements in 2H'2025[21] - Approximately $30 million of cash improvements were realized in 2Q'25 due to EOP initiatives[11, 25] - El Dorado refinery saw ~$1.45/Bbl of EOP improvements in its gross margin during the second quarter[28] Financial Performance - Adjusted EBITDA for 2Q'25 was $170.2 million[47, 52] - Capital expenditures for 2025 YTD totaled $297 million, with $97 million in Refining and $191 million in Logistics[56] - Delek US, excluding DKL net debt, was $275.2 million as of June 30, 2025[59]

[Executive Summary & Highlights](index=1&type=section&id=Executive%20Summary%20%26%20Highlights) Delek Logistics reported strong Q2 2025 performance, marked by operational achievements, financial growth, and increased distributions [President's Commentary](index=1&type=section&id=President%27s%20Commentary) President highlighted strong Q2 2025 execution, Libby 2 completion, and reaffirmed full-year Adjusted EBITDA guidance of **$480 million** to **$520 million** - Completed construction of new Libby 2 plant and several crude & water gathering projects, expanding processing capacity for producer customers in Lea County, New Mexico[3](index=3&type=chunk)[9](index=9&type=chunk) - Achieved **50th consecutive increase** in distribution, with expectations for continued future increases[3](index=3&type=chunk)[9](index=9&type=chunk) - Expressed increasing confidence in full-year Adjusted EBITDA guidance of **$480 million** to **$520 million**[3](index=3&type=chunk)[9](index=9&type=chunk) - Making progress on adding AGI & sour gas treating capabilities at the Libby Complex and plans to further expand overall processing capacity[3](index=3&type=chunk) [Key Financial Highlights](index=1&type=section&id=Key%20Financial%20Highlights) Delek Logistics reported strong Q2 2025 financial performance with significant year-over-year growth in Adjusted EBITDA and operating cash flow Q2 2025 Key Financial Highlights | Metric | Q2 2025 | Q2 2024 | | :-------------------------------- | :------ | :------ | | Net Income | $44.6 million | $41.1 million | | Reported Adjusted EBITDA | $120.9 million | $102.4 million | | Net Cash Provided by Operating Activities | $107.4 million | $87.6 million | | Distributable Cash Flow, as adjusted | $72.5 million | $67.8 million | | Diluted EPS | $0.83 | $0.87 | | Quarterly Cash Distribution per unit | $1.115 | $1.090 | | Distribution Increase (YoY) | 2.3% | - | | Distribution Increase (QoQ) | 0.5% | - | - Reported Adjusted EBITDA of **$120.9 million**, up **18%** year over year[9](index=9&type=chunk) - Successfully executed **$700.0 million** debt offering maturing in June 2033, improving total liquidity to over **$1 billion** and reinforcing growth efforts as an independent company[9](index=9&type=chunk) [Distribution and Liquidity](index=1&type=section&id=Distribution%20and%20Liquidity) Delek Logistics declared a higher Q2 2025 cash distribution, marking its 50th consecutive increase, while maintaining healthy liquidity Q2 2025 Distribution and Liquidity | Metric | Value | | :-------------------------------- | :---------------- | | Q2 2025 Quarterly Cash Distribution per unit | $1.115 | | Increase from Q1 2025 | 0.5% | | Increase from Q2 2024 | 2.3% | | Total Debt (as of June 30, 2025) | ~$2.2 billion | | Cash (as of June 30, 2025) | $1.4 million | | Leverage Ratio (as of June 30, 2025) | ~4.32x | | Additional Borrowing Capacity | $1.1 billion (under $1.2 billion facility) | [Consolidated Financial Performance](index=1&type=section&id=Consolidated%20Financial%20Performance) Q2 2025 consolidated performance showed increased net income and Adjusted EBITDA, driven by strong operational cash flow despite non-recurring costs [Net Income and EPS](index=1&type=section&id=Net%20Income%20and%20EPS) Net income increased for Q2 2025, while diluted EPS slightly decreased, primarily due to transaction costs Net Income and EPS (Q2 2025 vs Q2 2024) | Metric | Q2 2025 | Q2 2024 | | :-------------------------------- | :------ | :------ | | Net Income | $44.6 million | $41.1 million | | Diluted EPS | $0.83 | $0.87 | | Transaction Costs (Q2 2025) | $2.5 million | - | - Net income for Q2 2025 included **$2.5 million** of transaction costs[4](index=4&type=chunk) [EBITDA and Adjusted EBITDA](index=1&type=section&id=EBITDA%20and%20Adjusted%20EBITDA) Reported EBITDA decreased in Q2 2025, but Adjusted EBITDA significantly increased year-over-year, reflecting acquisitions and adjustments EBITDA and Adjusted EBITDA (Q2 2025 vs Q2 2024) | Metric | Q2 2025 | Q2 2024 | | :-------------------------------- | :------ | :------ | | EBITDA | $90.1 million | $102.4 million | | Adjusted EBITDA | $120.9 million | $102.4 million | | Transaction Costs (Q2 2025) | $2.5 million | - | | DPG Inventory Impact (Q2 2025) | $0.9 million | - | | Sales-type Lease Accounting Impacts (Q2 2025) | $27.4 million | - | [Cash Flow from Operations](index=1&type=section&id=Cash%20Flow%20from%20Operations) Net cash provided by operating activities and distributable cash flow, as adjusted, both significantly increased in Q2 2025 Cash Flow from Operations (Q2 2025 vs Q2 2024) | Metric | Q2 2025 | Q2 2024 | | :-------------------------------- | :------ | :------ | | Net Cash Provided by Operating Activities | $107.4 million | $87.6 million | | Distributable Cash Flow, as adjusted | $72.5 million | $67.8 million | [Segment Operating Results](index=1&type=section&id=Segment%20Operating%20Results) Segment results show strong growth in Gathering and Processing, stable Storage and Transportation, and increased pipeline joint venture income [Consolidated Adjusted EBITDA Overview](index=1&type=section&id=Consolidated%20Adjusted%20EBITDA%20Overview) Consolidated Adjusted EBITDA for Q2 2025 increased by **$18.5 million** year-over-year, driven by H2O Midstream, Gravity, and W2W dropdown Consolidated Adjusted EBITDA (Q2 2025 vs Q2 2024) | Metric | Q2 2025 | Q2 2024 | Change | | :---------------- | :------ | :------ | :----- | | Adjusted EBITDA | $120.9 million | $102.4 million | +$18.5 million | - Increase in Adjusted EBITDA reflects results from H2O Midstream and Gravity operations, W2W dropdown impacts, and increased wholesale margins[8](index=8&type=chunk) [Gathering and Processing Segment](index=1&type=section&id=Gathering%20and%20Processing%20Segment) The Gathering and Processing segment saw a substantial increase in Adjusted EBITDA for Q2 2025, primarily from Gravity and H2O Midstream acquisitions Gathering and Processing Segment Adjusted EBITDA (Q2 2025 vs Q2 2024) | Metric | Q2 2025 | Q2 2024 | | :---------------- | :------ | :------ | | Adjusted EBITDA | $78.0 million | $54.7 million | - The increase was primarily due to incremental EBITDA from the Gravity and H2O Midstream acquisitions[10](index=10&type=chunk) [Wholesale Marketing and Terminalling Segment](index=2&type=section&id=Wholesale%20Marketing%20and%20Terminalling%20Segment) Adjusted EBITDA for Wholesale Marketing and Terminalling decreased in Q2 2025 due to Big Spring marketing agreement assignment Wholesale Marketing and Terminalling Segment Adjusted EBITDA (Q2 2025 vs Q2 2024) | Metric | Q2 2025 | Q2 2024 | | :---------------- | :------ | :------ | | Adjusted EBITDA | $23.3 million | $30.2 million | - Decrease primarily due to assignment of Big Spring refinery marketing agreement to Delek Holdings, partially offset by an increase in wholesale margins[11](index=11&type=chunk) [Storage and Transportation Segment](index=2&type=section&id=Storage%20and%20Transportation%20Segment) The Storage and Transportation segment maintained stable Adjusted EBITDA performance in Q2 2025, showing minimal year-over-year change Storage and Transportation Segment Adjusted EBITDA (Q2 2025 vs Q2 2024) | Metric | Q2 2025 | Q2 2024 | | :---------------- | :------ | :------ | | Adjusted EBITDA | $16.9 million | $16.8 million | [Investments in Pipeline Joint Ventures Segment](index=2&type=section&id=Investments%20in%20Pipeline%20Joint%20Ventures%20Segment) Income from equity method investments for Q2 2025 increased, primarily due to the impacts of the W2W dropdown Income from Equity Method Investments (Q2 2025 vs Q2 2024) | Metric | Q2 2025 | Q2 2024 | | :-------------------------------- | :------ | :------ | | Income from Equity Method Investments | $10.5 million | $7.9 million | - The increase was primarily due to the impacts of the W2W dropdown[13](index=13&type=chunk) [Corporate Segment](index=2&type=section&id=Corporate%20Segment) The Corporate segment reported a slightly larger Adjusted EBITDA loss in Q2 2025 compared to Q2 2024 Corporate Segment Adjusted EBITDA (Q2 2025 vs Q2 2024) | Metric | Q2 2025 | Q2 2024 | | :---------------- | :------ | :------ | | Adjusted EBITDA | ($7.9 million) | ($7.1 million) | [Recent Developments & Accounting Notes](index=4&type=section&id=Recent%20Developments%20%26%20Accounting%20Notes) Recent developments include the DPG dropdown and reclassification of certain embedded leases to sales-type leases impacting revenue recognition [DPG Dropdown](index=4&type=section&id=DPG%20Dropdown) Delek Holdings transferred its Delek Permian Gathering business to the Partnership, involving crude oil purchase obligations and receivable cancellation - Delek Holdings transferred the Delek Permian Gathering purchasing and blending business to the Partnership on **May 1, 2025**[21](index=21&type=chunk) - The Partnership assumed Delek Holdings' rights and obligations for crude oil purchases under certain contracts related to the Midland Gathering System[21](index=21&type=chunk) - Line fill inventory amounting to **$6.9 million** was transferred to the Partnership[21](index=21&type=chunk) - Total consideration included the cancellation of **$58.8 million** in existing receivables owed to the Partnership by Delek Holdings[21](index=21&type=chunk) [Sales-Type Leases](index=4&type=section&id=Sales-Type%20Leases) Renewed commercial agreements reclassified certain embedded leases as sales-type, shifting minimum volume commitment recording from revenues to interest income - Renewed and amended commercial agreements in **Q3 2024** required reassessment of embedded leases under ASC 842, Leases[22](index=22&type=chunk) - Certain agreements now meet criteria for sales-type lease accounting[22](index=22&type=chunk) - Portions of minimum volume commitments are now recorded as interest income and a reduction in net investment in leases, rather than as revenues (as they were under operating leases)[22](index=22&type=chunk) [Non-GAAP Financial Measures](index=4&type=section&id=Non-GAAP%20Financial%20Measures) Delek Logistics uses non-GAAP measures like EBITDA and Distributable Cash Flow to assess performance and liquidity, acknowledging limitations [Definitions of Non-GAAP Measures](index=4&type=section&id=Definitions%20of%20Non-GAAP%20Measures) Delek Logistics utilizes non-GAAP measures such as EBITDA, Adjusted EBITDA, and Distributable Cash Flow to provide additional insights into performance - **EBITDA:** Net income before interest, income taxes, depreciation, and amortization (including customer contract intangibles)[25](index=25&type=chunk) - **Adjusted EBITDA:** EBITDA adjusted for significant, infrequently occurring transaction costs and throughput/storage fees from sales-type lease accounting[25](index=25&type=chunk) - **Distributable Cash Flow:** Net cash flow from operating activities adjusted for changes in assets/liabilities, maintenance capital expenditures, sales-type lease receipts, and other non-cash adjustments[25](index=25&type=chunk) - **Distributable Cash Flow, as adjusted:** Distributable cash flow adjusted to exclude significant, infrequently occurring transaction costs[25](index=25&type=chunk) [Management's Use and Limitations](index=4&type=section&id=Management%27s%20Use%20and%20Limitations) Management uses non-GAAP measures to assess performance and cash flow, but acknowledges their limitations and potential lack of comparability - Non-GAAP measures are used to assess operating segment performance, evaluate past performance, and prospects for the future[23](index=23&type=chunk) - They help assess operating performance compared to peers, ability to generate cash flow for distributions, incur and service debt, fund capital expenditures, and evaluate investment opportunities[25](index=25&type=chunk) - Non-GAAP measures should not be considered alternatives to GAAP measures (net income, operating income, cash flow from operating activities) and have limitations due to exclusions and potential lack of comparability with other partnerships[24](index=24&type=chunk) [Financial Statements](index=6&type=section&id=Financial%20Statements) The financial statements present consolidated balance sheets, income statements, and cash flows, reflecting Q2 2025 changes in assets, liabilities, and cash generation [Consolidated Balance Sheets](index=6&type=section&id=Consolidated%20Balance%20Sheets) The consolidated balance sheet shows a significant increase in total assets and liabilities from December 2024 to June 2025 Consolidated Balance Sheet Highlights (in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :------------ | :---------------- | | Total Current Assets | $409,847 | $145,892 | | Property, Plant and Equipment, net | $1,403,842 | $1,064,321 | | Total Assets | $2,752,889 | $2,041,559 | | Total Current Liabilities | $442,604 | $88,778 | | Long-term Debt, net of current portion | $2,211,426 | $1,875,397 | | Total Liabilities | $2,720,898 | $2,006,031 | | Total Equity | $31,991 | $35,528 | [Consolidated Statement of Income and Comprehensive Income](index=7&type=section&id=Consolidated%20Statement%20of%20Income%20and%20Comprehensive%20Income) For Q2 2025, net revenues decreased, while net income increased due to lower non-operating expenses, despite declining operating income Consolidated Statement of Income Highlights (in thousands, except per unit data) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | | Net Revenues | $246,350 | $264,628 | | Total Operating Costs and Expenses | $193,914 | $196,167 | | Operating Income | $52,436 | $68,461 | | Total Non-Operating Expenses, net | $7,617 | $27,346 | | Net Income | $44,574 | $41,058 | | Diluted Net Income Per Unit | $0.83 | $0.87 | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operating activities increased in Q2 2025, while investing activities saw higher cash usage, and financing shifted to net cash provision Condensed Consolidated Statements of Cash Flows Highlights (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | | Net Cash Provided by Operating Activities | $107,423 | $87,639 | | Net Cash Used in Investing Activities | ($112,916) | ($5,560) | | Net Cash Provided by (Used in) Financing Activities | $4,822 | ($86,640) | | Net (Decrease) Increase in Cash and Cash Equivalents | ($671) | ($4,561) | | Cash and Cash Equivalents at End of Period | $1,436 | $5,111 | [Reconciliation of Non-GAAP Measures](index=8&type=section&id=Reconciliation%20of%20Non-GAAP%20Measures) This section reconciles net income to EBITDA and Adjusted EBITDA, and details Distributable Cash Flow and its coverage ratio, highlighting adjustments [Reconciliation of Net Income to EBITDA](index=8&type=section&id=Reconciliation%20of%20Net%20Income%20to%20EBITDA) Reported EBITDA decreased in Q2 2025, but Adjusted EBITDA significantly increased due to adjustments for sales-type leases and transaction costs Reconciliation of Net Income to EBITDA (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | | Net Income | $44,574 | $41,058 | | Add: Income tax expense | $245 | $57 | | Add: Depreciation and amortization | $27,097 | $24,207 | | Add: Amortization of marketing contract intangible | — | $1,802 | | Add: Interest expense, net | $18,173 | $35,268 | | **EBITDA** | **$90,089** | **$102,392** | | Add: Throughput and storage fees for sales-type leases | $27,406 | — | | Add: DPG Inventory Impact | $900 | — | | Add: Transaction costs | $2,496 | — | | **Adjusted EBITDA** | **$120,891** | **$102,392** | [Distributable Cash Flow and Coverage Ratio](index=8&type=section&id=Distributable%20Cash%20Flow%20and%20Coverage%20Ratio) Distributable Cash Flow and DCF, as adjusted, both increased in Q2 2025, though coverage ratios slightly decreased due to higher partner distributions Distributable Cash Flow and Coverage Ratio (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | | Net Cash Provided by Operating Activities | $107,423 | $87,639 | | **Distributable Cash Flow** | **$70,038** | **$67,809** | | Transaction costs | $2,496 | — | | **Distributable Cash Flow, as adjusted** | **$72,534** | **$67,809** | | Distributions to partners of Delek Logistics, LP | $59,612 | $51,263 | | Distributable cash flow coverage ratio | 1.17x | 1.32x | | Distributable cash flow coverage ratio, as adjusted | 1.22x | 1.32x | [Segment Financial and Operating Data](index=10&type=section&id=Segment%20Financial%20and%20Operating%20Data) This section provides detailed segment financial performance, capital spending, and operating data, highlighting growth and changes [Segment Financial Performance (Adjusted EBITDA, Revenue)](index=10&type=section&id=Segment%20Financial%20Performance%20%28Adjusted%20EBITDA%2C%20Revenue%29) Gathering and Processing showed strong growth in Q2 2025 revenue and Adjusted EBITDA, while Wholesale Marketing and Terminalling declined Segment Total Revenue (in thousands) | Segment | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | | Gathering and Processing | $117,767 | $92,643 | | Wholesale Marketing and Terminalling | $104,615 | $135,600 | | Storage and Transportation | $23,968 | $36,385 | | Consolidated Total Revenue | $246,350 | $264,628 | Segment Adjusted EBITDA (in thousands) | Segment | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | | Gathering and Processing | $77,984 | $54,680 | | Wholesale Marketing and Terminalling | $23,307 | $30,205 | | Storage and Transportation | $16,928 | $16,752 | | Investments in Pipeline Joint Ventures | $10,536 | $7,882 | | Corporate and Other | ($7,864) | ($7,127) | | Consolidated Adjusted EBITDA | $120,891 | $102,392 | [Segment Capital Spending](index=12&type=section&id=Segment%20Capital%20Spending) Consolidated capital spending significantly increased in Q2 2025, primarily driven by a substantial rise in growth capital in Gathering and Processing Segment Capital Spending (in thousands) | Segment / Type | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | | **Gathering and Processing** | | | | Sustaining capital spending | $2,627 | $171 | | Growth capital spending | $114,591 | $7,180 | | *Segment capital spending* | *$117,218* | *$7,351* | | **Wholesale Marketing and Terminalling** | | | | Sustaining capital spending | $65 | $6 | | *Segment capital spending* | *$65* | *$105* | | **Storage and Transportation** | | | | Regulatory capital spending | $799 | $322 | | Sustaining capital spending | $1,107 | $2,409 | | *Segment capital spending* | *$1,906* | *$2,731* | | **Consolidated Total Capital Spending** | **$119,189** | **$10,187** | [Segment Operating Data (Throughputs)](index=12&type=section&id=Segment%20Operating%20Data%20%28Throughputs%29) Gathering and Processing saw mixed throughputs with growth in Crude Oil Gathering, while Wholesale Marketing declined in Big Spring due to contract assignment Gathering and Processing Segment Throughputs (average bpd, except Mcfd) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | | Crude pipelines (non-gathered) | 71,220 | 73,320 | | East Texas Crude Logistics System | 33,101 | 23,259 | | Midland Gathering System | 207,183 | 206,933 | | Natural Gas Gathering and Processing (Mcfd) | 60,940 | 76,237 | | Crude Oil Gathering | 137,167 | 123,927 | | Water Disposal and Recycling | 116,504 | 116,499 | | Midland Water Gathering System (Water Disposal and Recycling) | 600,891 | — | Wholesale Marketing and Terminalling Segment Throughputs (average bpd) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | | East Texas - Tyler Refinery sales volumes | 67,516 | 71,082 | | Big Spring marketing throughputs | — | 81,422 | | West Texas marketing throughputs | 10,757 | 11,381 | | West Texas gross margin per barrel | $4.12 | $2.99 | | Terminalling throughputs | 150,971 | 159,260 | - Big Spring marketing agreement terminated on **August 5, 2024**, upon assignment to Delek Holdings, resulting in **zero throughputs** for Q2 2025[34](index=34&type=chunk) [Additional Information](index=2&type=section&id=Additional%20Information) This section provides conference call details, an overview of Delek Logistics, safe harbor provisions, and investor relations contact information [Conference Call Information](index=2&type=section&id=Conference%20Call%20Information) Delek Logistics scheduled a conference call for August 6, 2025, to discuss Q2 2025 results, with live access and archived replay available - Conference call to discuss Q2 2025 results held on **Wednesday, August 6, 2025**, at **11:30 a.m. Central Time**[15](index=15&type=chunk) - Investors can listen live and access an archived replay for **90 days** on www.DelekLogistics.com[15](index=15&type=chunk) [About Delek Logistics Partners, LP](index=2&type=section&id=About%20Delek%20Logistics%20Partners%2C%20LP) Delek Logistics is a midstream energy MLP providing various services primarily in the Permian and Delaware Basins, with Delek US Holdings as a key partner - Delek Logistics is a midstream energy master limited partnership headquartered in Brentwood, Tennessee[16](index=16&type=chunk) - Provides gathering, pipeline, transportation, storage, wholesale marketing, terminalling, and water disposal/recycling services[16](index=16&type=chunk) - Operations are primarily in and around the Permian Basin, Delaware Basin, and other select Gulf Coast regions[16](index=16&type=chunk) - Delek US Holdings, Inc. owns the general partner interest, a majority limited partner interest, and is a significant customer[16](index=16&type=chunk) [Safe Harbor Provisions Regarding Forward-Looking Statements](index=3&type=section&id=Safe%20Harbor%20Provisions%20Regarding%20Forward-Looking%20Statements) The press release contains forward-looking statements subject to risks and uncertainties, not guarantees of future performance, with no obligation to update - Statements concerning future results, performance, prospects, opportunities, plans, actions, and events are forward-looking statements[17](index=17&type=chunk) - Key factors that may affect these statements include reliance on Delek US revenue, political/regulatory developments, operational hazards, ability to realize cost reductions, market conditions, acquisition risks, and exposure to Permian Basin crude oil[18](index=18&type=chunk) - Forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties that could cause actual results to differ materially[19](index=19&type=chunk)[20](index=20&type=chunk) - Delek Logistics undertakes no obligation to update or revise any forward-looking statements, except as required by applicable law or regulation[20](index=20&type=chunk) [Investor Relations and Media Contact](index=14&type=section&id=Investor%20Relations%20and%20Media%20Contact) Contact information for investor relations and media inquiries is provided, along with links to Delek Logistics' website and social media - Investor Relations and Media/Public Affairs Contact: investor.relations@delekus.com[35](index=35&type=chunk) - Information available on www.deleklogistics.com, investor relations webpage, news webpage, and X account (@DelekLogistics)[35](index=35&type=chunk)

Financial Performance & Shareholder Returns - Delek US Holdings' market capitalization was $2.9 billion as of February 23, 2018 [5] - The company repurchased $118.8 million of stock from November 2017 to February 23, 2018 and approved a new $150 million authorization [5] - The regular quarterly dividend was increased by 33% to $0.20 per share from $0.15 per share [5] - Delek US had $931.8 million in cash and $1,465.6 million in debt as of December 31, 2017 [5] Strategic Initiatives & Synergies - The acquisition of Alon USA Energy closed on July 1, 2017, to purchase the remaining 53% [5] - The purchase of the remaining 18.4% of Alon USA Energy Partners LP units closed on February 7, 2018 [5] - The company expects to achieve run-rate synergies of approximately $105-$120 million in 2018 from the DK/ALJ combination, increased from the original target of $85-$105 million [39] - As of December 31, 2017, $89 million of annualized synergies had been captured [39] Logistics & Asset Optimization - The Big Spring Logistics assets dropdown to DKL is expected to close in March 2018, with an expected annualized EBITDA of $40.2 million [64, 65] - The Paline Pipeline expansion was completed in early March 2018, increasing capacity to 42,000 bpd from 35,000 bpd, with an $8 million estimated annualized EBITDA uplift [64] - A definitive agreement to sell West Coast terminals for $75 million in cash was announced on February 12, 2018 [8, 55]

Strategy and Operations - DKL's strategy focuses on operational excellence, continuous optimization, strategic growth, and financial strength in the Permian Basin[14, 16, 17, 18] - The company aims to increase third-party cash flows to become a strong independent midstream company[21] - DKL is uniquely positioned to capitalize on Delaware natural gas production growth, particularly in sour gas handling[24, 36] - The company is expanding the Libby Complex Gas Plant to enhance its competitive position in the Northern Lea County through Acid Gas Injection (AGI) capabilities, targeting over 20% cash-on-cash returns[32, 36] Financial Performance and Outlook - DKL's adjusted EBITDA is projected to be between $480 million and $520 million in 2025[64] - The company expects to maintain a distribution coverage ratio of approximately 130% by the end of 2025 and anticipates continued distribution growth[64] - In 2024, DKL's adjusted EBITDA was $418 million, up from $385 million in 2023, representing a CAGR of 135% from 2021 to 2025E[63] - DKL's distribution per unit has consistently increased, reaching $4365 in 2024[63] Acquisitions and Joint Ventures - DKL acquired Gravity Water Holdings LLC on January 2, 2025, for $2093 million in cash and 2175209 DKL common units[57] - DKL owns a 156% interest in the Wink to Webster crude pipeline system, enhancing fee-based earnings and distributable cash flow[48, 70] - The company has ownership interests in joint venture assets like RIO Pipeline (33%), Caddo Pipeline (50%), and Red River Pipeline (33%), supporting its crude value chain[46, 47, 48]

Core Viewpoint - Companies like AGNC Investment, Annaly Capital Management, and Delek Logistics Partners are identified as "monster dividend stocks" with yields exceeding 10%, making them attractive for generating passive income [1]. Group 1: AGNC Investment - AGNC Investment offers a dividend yield of over 16%, significantly higher than the S&P 500's yield of less than 1.5% [3]. - As a REIT, AGNC is required to distribute at least 90% of its taxable net income as dividends, contributing to its high yield [4]. - The company utilizes leverage to enhance returns, with potential returns in the low 20% range, but this strategy carries risks during market downturns [5]. Group 2: Annaly Capital Management - Annaly Capital Management, another mortgage REIT, has a dividend yield approaching 15% and has recently increased its dividend due to improved earnings [7]. - The REIT invests primarily in Agency MBS and has also ventured into higher-risk residential credit investments and mortgage servicing rights [6][8]. - Historical performance shows that Annaly has had to cut dividends in the past due to declining earnings, indicating a higher risk-reward profile [8]. Group 3: Delek Logistics Partners - Delek Logistics Partners operates as a master limited partnership (MLP) with a dividend yield of nearly 10.5%, the highest in the energy midstream sector [10]. - The MLP has consistently raised its distribution for 49 consecutive quarters, with a 3.7% increase over the past year [10]. - Its business model is supported by stable cash flows from long-term contracts, and it is diversifying its earnings by reducing reliance on its parent company [11].

Group 1 - The core investment thesis for Delek US Holdings (NYSE: DK) revolves around its significant stake in Delek Logistics Partners (DKL), which is a midstream play [1] - The investment strategy has been focused on deep value and the sum of parts analysis, indicating that the market may undervalue the company's assets [1] Group 2 - The author has been contributing to investment analysis since 2011, emphasizing a value-oriented approach rather than growth [1]

Acquisitions and Investments - The Partnership acquired 100% of Gravity Water Intermediate Holdings LLC for water disposal and recycling operations in the Permian Basin and Bakken on January 2, 2025[111]. - Gravity Acquisition completed on January 2, 2025, for a total consideration of $300.8 million, consisting of $209.3 million in cash and 2,175,209 common units, enhancing the company's position in the Permian Basin[130]. - The Delek Permian Gathering Dropdown on May 1, 2025, involved the transfer of the purchasing and blending business, with total consideration including the cancellation of $58.8 million in existing receivables owed by Delek Holdings[130]. - The El Dorado Purchase Agreement, executed on May 1, 2025, involves Delek Holdings purchasing assets for cash consideration of $25.0 million, set to close on January 1, 2026[132]. - The partnership is focused on pursuing attractive expansion opportunities in the Permian Basin, particularly in crude, natural gas, and water services[141]. Financial Performance - The Partnership reported a $6.4 million increase in net income for the three months ended March 31, 2025, compared to the prior year period[124]. - EBITDA decreased by $16.0 million in 2025 compared to 2024, primarily due to a change in classification of certain commercial agreements[124]. - EBITDA for the three months ended March 31, 2025, was reported at $85.5 million, compared to $101.5 million for the same period in 2024[153]. - Net revenues for Q1 2025 decreased by $2.1 million, or 0.9%, compared to Q1 2024, totaling $249.93 million[160]. - EBITDA for Q1 2025 was $85.49 million, a decrease of $16.01 million, or 15.8%, from $101.50 million in Q1 2024[158]. - Distributable cash flow increased to $71.71 million in Q1 2025, up from $67.99 million in Q1 2024, representing a growth of 5.0%[155]. Segment Performance - The gathering and processing segment saw a $10.2 million increase in segment EBITDA, largely due to the H2O Midstream and Gravity acquisitions[124]. - The wholesale marketing and terminalling segment experienced a $12.0 million decrease in segment EBITDA[124]. - The storage and transportation segment reported a $13.7 million decrease in segment EBITDA[124]. - The gathering and processing segment saw net revenues rise by $22.7 million, or 23.7%, in Q1 2025, largely due to contributions from H2O Midstream and Gravity operations[170]. - Net revenues for the wholesale marketing and terminalling segment decreased by $12.6 million, or 10.5%, to $106.7 million in Q1 2025 compared to $119.3 million in Q1 2024[176]. - Net revenues for the storage and transportation segment decreased by $12.3 million, or 33.3%, to $24.6 million in Q1 2025 compared to $36.9 million in Q1 2024[185]. Expenses and Cash Flow - Operating expenses increased by $9.1 million, or 28.4%, in Q1 2025 compared to Q1 2024, driven by higher general and administrative expenses[161]. - General and administrative expenses surged by $4.0 million, or 82.3%, in Q1 2025, primarily due to transaction costs related to the Gravity Acquisition[161]. - Net cash provided by operating activities decreased by $12.3 million to $31.6 million in Q1 2025 compared to $43.9 million in Q1 2024[198]. - Net cash used in investing activities increased by $224.9 million to $234.8 million in Q1 2025, primarily due to the Gravity Acquisition for $181.2 million[199]. Debt and Liquidity - Total liquidity as of March 31, 2025, amounted to $447.0 million, consisting of $444.9 million in unused credit commitments and $2.1 million in cash[192]. - Total indebtedness as of March 31, 2025, was $2,155.1 million, reflecting an increase of $269.7 million compared to December 31, 2024[203]. - The outstanding floating rate borrowings totaled approximately $705.1 million as of March 31, 2025, exposing the company to interest rate risk[211]. - A hypothetical one percent change in interest rates would change interest expense by approximately $7.1 million annually[211]. Strategic Outlook - The economic outlook remains uncertain due to geopolitical instability and commodity market volatility, but the Partnership is positioned to manage through potential downturns[125]. - The company aims to achieve strong cash flow growth in 2025, driven by the expansion of the Libby gas processing plant and the integration of H2O Midstream and Gravity acquisitions[144]. - The partnership is prioritizing reducing its leverage ratio to enhance financial flexibility for pursuing growth opportunities[143]. - The partnership's long-term strategic objectives include increasing economic separation from Delek Holdings and enhancing third-party cash flow contributions[140]. Market and Regulatory Factors - Market trends indicate that fluctuations in crude oil and natural gas prices significantly impact operations, with long-term fee-based contracts mitigating short-term financial risks[147]. - Changes in commodity prices can significantly affect revenues and cash flows, impacting operating margins[210]. - Inflationary factors may adversely affect operating results, impacting gross margin and operating expenses[212]. - Regulatory maintenance projects are financed through cash generated from operations, ensuring compliance with environmental regulations[206]. Safety and Compliance - The company has successfully avoided lost time injuries for four years, demonstrating strong safety protocols and adherence to regulations[142].

Financial Data and Key Metrics Changes - The company reported approximately $117 million in quarterly adjusted EBITDA, an increase from $102 million in the same period of 2024, indicating a strong performance [4][13] - Distributable cash flow as adjusted was $75 million, with a DCF coverage ratio of approximately 1.27 times, expected to rise throughout the year [13] - The capital program for the first quarter was approximately $72 million, with $52 million attributed to the construction of the Libbey II gas processing plant [15][16] Business Line Data and Key Metrics Changes - For the Gathering and Processing segment, adjusted EBITDA was $81 million compared to $50 million in Q1 2024, primarily due to acquisitions [14] - Wholesale marketing and terminalling adjusted EBITDA decreased to $18 million from $25 million, attributed to seasonal weather impacts [14] - Storage and transportation adjusted EBITDA was $14 million, down from $18 million, due to renegotiation impacts [14] - Investments in the pipeline joint venture segment contributed $10 million, up from $8 million in Q1 2024 [14] Market Data and Key Metrics Changes - The company is increasing its economic separation from DK, with third-party contributions to cash flow rising from 70% to around 80% on a pro forma basis [4][20] - The Delaware Basin is expected to continue growing, with the company maintaining a competitive position despite near-term crude price volatility [5][6] Company Strategy and Development Direction - The company is focused on enhancing its competitive position in the Midland and Delaware Basins through acquisitions and operational improvements [5][9] - The commissioning of the Libbey II gas plant is expected to add 100 million to 120 million cubic feet per day of incremental capacity [9][10] - The company aims to improve margins across operations while managing liquidity and leverage effectively [12][16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth potential of the Delaware Basin and the overall partnership, emphasizing prudent management of leverage and coverage [6][12] - The company anticipates continued value creation and growth in distributions moving forward [6][16] Other Important Information - The Board of Directors approved a 49th consecutive increase in the quarterly distribution to $1.11 per unit [6] - The company has authorization to buy back common units of up to $150 million from DK through 2026, with $10 million repurchased in Q1 [12] Q&A Session Summary Question: Details on intercompany agreements and optimization opportunities - Management clarified that the intercompany transaction involved cleaning up contracts and moving some midstream activities from DK to DKL, with no net material impact on EBITDA [20] Question: Customer feedback and contract mix in the current macro environment - Management reported stable volumes in the Midland Basin and increasing water volumes, indicating a strong customer base and competitive advantage [22][25] Question: CapEx and gas plant ramp-up - Management noted that CapEx was heavy in the first half, with limited material investment expected in the second half, and emphasized the importance of the Libbey II gas plant for meeting existing demand and supporting acreage growth [26][27]

Financial Data and Key Metrics Changes - Delek Logistics Partners reported approximately $117 million in quarterly adjusted EBITDA, an increase from $102 million in the same period of 2024, indicating a year-over-year growth of approximately 14.7% [4][13] - Distributable cash flow as adjusted was $75 million, with a DCF coverage ratio of approximately 1.27 times, expected to rise throughout the year [13] - The company is on track to deliver full-year EBITDA guidance of $480 million to $520 million [4][16] Business Line Data and Key Metrics Changes - Gathering and Processing segment adjusted EBITDA for the quarter was $81 million, up from $50 million in Q1 2024, reflecting a significant increase due to acquisitions [14] - Wholesale marketing and terminalling adjusted EBITDA decreased to $18 million from $25 million in the prior year, primarily due to seasonal weather impacts [14] - Storage and transportation adjusted EBITDA was $14 million, down from $18 million in Q1 2024, attributed to renegotiation impacts [14] - Investments in pipeline joint venture segment contributed $10 million, compared to $8 million in the same quarter of the previous year [14] Market Data and Key Metrics Changes - The company is enhancing its competitive position in the Midland Basin through intercompany transactions and acquisitions, increasing third-party contribution to cash flow from 70% to around 80% on a pro forma basis [4][20] - The Delaware Basin is expected to continue growing, with the company optimistic about its competitive position despite near-term crude price volatility [6] Company Strategy and Development Direction - The company is focused on increasing its economic separation from DK and enhancing its position as a full-service crude, natural gas, and water provider in the Permian Basin [4][5] - The commissioning of the Libbey II gas plant is expected to add 100 million to 120 million cubic feet per day of incremental capacity, with plans for future expansions [8][9] - The company aims to improve operational efficiency and margins across its operations [10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth potential of the Delaware Basin and the overall partnership, emphasizing prudent management of leverage and coverage [6][12] - The company is optimistic about the prospects of direct logistics and plans to continue its value creation path moving forward [6] Other Important Information - The Board of Directors approved a 49th consecutive increase in the quarterly distribution to $1.11 per unit [6] - The capital program for Q1 was approximately $72 million, with significant investments in the Libbey II gas processing plant [15][16] Q&A Session Summary Question: Details on intercompany agreements and optimization opportunities - Management clarified that the intercompany transaction involved cleaning up contracts and moving some midstream activities from DK to DKL, with no net material impact on EBITDA [20] Question: Customer feedback and contract mix in the current macro environment - Management reported stable volumes in the Midland Basin and increasing water volumes, indicating a strong customer base and competitive advantage [22][25] Question: CapEx and future growth plans - Management indicated limited direct commodity exposure with strong counterparties and forecasted an increase in produced water volumes despite volatility [25][26]