Delek Logistics Partners, LP Q1 FY2025 earnings call

• Delek Logistics Partners had a record quarter with approximately $117 million in quarterly adjusted EBITDA and is on track for full year EBITDA guidance of $480 million to $520 million. - Announced an intercompany transaction increasing third party contribution to cash flow from 70% to around 80% pro forma. - Commissioning of Libby II gas plant in the Delaware Basin with 100-120 million 100 cubic feet per day incremental capacity, on track and with plans for future expansion. - Progress on acid gas injection and sour gas handling capabilities in the Libby Complex. - Acquisitions of H2O and Gravity exceeding expectations, integrating water gathering systems. - Board approved a 49th consecutive increase in quarterly distribution to $1.11 per unit. - First quarter capital expenditures were ~$72 million, with $52 million for Libby 2 gas plant construction including $15 million for future expansion.

For the Gathering and Processing segment, adjusted EBITDA in the first quarter of 2025 was $81 million compared to $50 million in the first quarter of 2024. Wholesale marketing and terminalling adjusted EBITDA was $18 million in Q1 2025 versus $25 million in the prior year. Storage and Transportation adjusted EBITDA in the quarter was $14 million compared with $18 million in Q1 2024. The pipeline joint venture segment contributed $10 million in Q1 2025 compared with $8 million in Q1 2024. The Gathering and Processing segment's increase was primarily due to the acquisitions of H2O and Gravity Midstream. Wholesale marketing and terminalling decrease was due to seasonal weather impacts. Storage and Transportation decrease was due to a renegotiation. Pipeline joint venture increase was due to a dropdown in August of last year.

• Full year EBITDA guidance remains $480 million to $520 million and Delek Logistics is on track to meet this. - Board approved a quarterly distribution increase to $1.11 per unit.

Q: Hoping to get more detail on intercompany agreements announced, whether assets changed hands or recontracting, and outlook for further deconsolidation.

A: The intercompany transaction cleaned up contracts between DK and DKL, moved refining related activities from DKL to DK and midstream related from DK to DKL, no net material impact to EBITDA of either entity, and helped increase DKL's third party EBITDA to ~80% pro forma; future deconsolidation steps could involve both internal and external opportunities but details weren't specified further.

Q: Follow-up on macro side, detail on customers on acreage and contract mix for water assets.

A: In Midland Basin, stable volume with strong customer base and produced water volumes forecasted to increase; contracts have limited direct commodity exposure with strong counterparties; water acquisitions are exceeding expectations with integration enhancing combined crude and water offering in certain counties.