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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
(Mark One)

☑ |  | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|  | For the quarterly period ended | March 31, 2021 |

or

☐ |  | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|  | For the transition period from to

Commission file number 001-35721
DELEK LOGISTICS PARTNERS, LP
(Exact name of registrant as specified in its charter)

Delaware |  | 45-5379027
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.)
7102 Commerce Way | Brentwood | Tennessee | 37027
(Address of principal executive offices) |  |  | (Zip Code)

(615) 771-6701
(Registrant’s telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class |  | Trading Symbol |  | Name of Each Exchange on Which Registered
Common Units Representing Limited Partnership Interests |  | DKL |  | New York Stock Exchange

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer | ☐ | Accelerated filer | ☑ | Non-accelerated filer | ☐ | Smaller reporting company | ☐ | Emerging growth company | ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑
At April 30, 2021, there were 43,443,336 common limited partner units outstanding.

Table of Contents
Delek Logistics Partners, LP
Quarterly Report on Form 10-Q
For the Quarterly Period Ended March 31, 2021

PART I. FINANCIAL INFORMATION | PART II. OTHER INFORMATION
3 | Item 1. Financial Statements (unaudited) | 48 | Item 1. Legal Proceedings
| 3 | Condensed Consolidated Balance Sheets |  |  |  |
| 4 | Condensed Consolidated Statements of Income and Comprehensive Income | 48 | Item 1A. Risk Factors
| 6 | Condensed Consolidated Statements of Partner's Equity (Deficit) |  |  |  |
| 5 | Condensed Consolidated Statements of Cash Flows | 48 | Item 6. Exhibits
| 7 | Notes to Condensed Consolidated Financial Statements |  |  |  |
|  | 7 | Note 1 - Organization and Basis of Presentation | 49 | Signatures
|  | 8 | Note 2 - Acquisitions |  |  |  |
|  | 9 | Note 3 - Related Party Transactions |  |  |  |
|  | 11 | Note 4 - Revenues |  |  |  |
|  | 13 | Note 5 - Net Income Per Unit |  |  |  |
|  | 14 | Note 6 - Inventory |  |  |  |
|  | 14 | Note 7 - Long-Term Obligations |  |  |  |
|  | 15 | Note 8 - Equity |  |  |  |
|  | 17 | Note 9 - Equity Based Compensation |  |  |  |
|  | 17 | Note 10 - Equity Method Investments |  |  |  |
|  | 19 | Note 11 - Segments |  |  |  |
|  | 20 | Note 12 - Income Taxes |  |  |  |
|  | 20 | Note 13 - Commitments and Contingencies |  |  |  |
|  | 21 | Note 14 - Leases |  |  |  |
|  | 22 | Note 15 - Subsequent Events |  |  |  |
23 | Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations |  |  |  |
| 33 | Summary of Financial and Other Information |  |  |  |
| 35 | Results of Operations |  |  |  |
|  | 35 | Consolidated |  |  |  |
|  | 38 | Pipelines and Transportation |  |  |  |
|  | 40 | Wholesale Marketing and Terminalling |  |  |  |
| 43 | Liquidity and Capital Resources |  |  |  |
47 | Item 3. Quantitative and Qualitative Disclosures about Market Risk |  |  |  |
47 | Item 4. Controls and Procedures |  |  |  |

2 |

Financial Statements
Part I - FINANCIAL INFORMATION
Item 1. Financial Statements
Delek Logistics Partners, LP
Condensed Consolidated Balance Sheets (Unaudited)
(in thousands, except unit and per unit data)

| March 31, 2021 |  | December 31, 2020
ASSETS |  |  |
Current assets: |  |  |
Cash and cash equivalents | $ | 13,377 |  |  | $ | 4,243 |
Accounts receivable | 12,322 |  |  | 15,676 |
Accounts receivable from related parties | — |  |  | 5,932 |
Inventory | 1,867 |  |  | 3,127 |
Other current assets | 525 |  |  | 331 |
Total current assets | 28,091 |  |  | 29,309 |
Property, plant and equipment: |  |  |
Property, plant and equipment | 699,552 |  |  | 692,282 |
Less: accumulated depreciation | (237,495) |  |  | (227,470) |
Property, plant and equipment, net | 462,057 |  |  | 464,812 |
Equity method investments | 251,448 |  |  | 253,675 |
Operating lease right-of-use assets | 24,804 |  |  | 24,199 |
Goodwill | 12,203 |  |  | 12,203 |
Marketing Contract Intangible, net | 121,985 |  |  | 123,788 |
Rights-of-way | 36,791 |  |  | 36,316 |
Other non-current assets | 11,491 |  |  | 12,115 |
Total assets | $ | 948,870 |  |  | $ | 956,417 |
LIABILITIES AND DEFICIT |  |  |
Current liabilities: |  |  |
Accounts payable | $ | 4,155 |  |  | $ | 6,659 |
Accounts payable to related parties | 4,546 |  |  | — |
Interest payable | 6,627 |  |  | 2,452 |
Excise and other taxes payable | 3,637 |  |  | 4,969 |
Current portion of operating lease liabilities | 8,446 |  |  | 8,691 |
Accrued expenses and other current liabilities | 5,355 |  |  | 5,529 |
Total current liabilities | 32,766 |  |  | 28,300 |
Non-current liabilities: |  |  |
Long-term debt | 983,436 |  |  | 992,291 |
Asset retirement obligations | 6,130 |  |  | 6,015 |
Deferred tax liabilities | 681 |  |  | 616 |
Operating lease liabilities, net of current portion | 16,292 |  |  | 15,418 |
Other non-current liabilities | 20,955 |  |  | 22,078 |
Total non-current liabilities | 1,027,494 |  |  | 1,036,418 |
Equity (Deficit): |  |  |
Common unitholders - public; 8,697,468 units issued and outstanding at March 31, 2021 (8,697,468 at December 31, 2020) | 164,100 |  |  | 164,614 |
Common unitholders - Delek Holdings; 34,745,868 units issued and outstanding at March 31, 2021 (34,745,868 at December 31, 2020) | (275,490) |  |  | (272,915) |
Total deficit | (111,390) |  |  | (108,301) |
Total liabilities and deficit | $ | 948,870 |  |  | $ | 956,417 |

See accompanying notes to the condensed consolidated financial statements

3 |

Financial Statements
Delek Logistics Partners, LP
Condensed Consolidated Statements of Income and Comprehensive Income (Unaudited)
(in thousands, except unit and per unit data)

|  |  | Three months ended
|  |  | March 31,
|  |  |  |  | 2021 |  | 2020
Net revenues: |  |  |  |  |  |  |
Affiliates (1) |  |  |  |  | $ | 96,194 |  |  | $ | 106,699 |
Third party |  |  |  |  | 56,719 |  |  | 56,702 |
Net revenues |  |  |  |  | 152,913 |  |  | 163,401 |
Cost of sales: |  |  |  |  |  |  |
Cost of materials and other |  |  |  |  | 81,171 |  |  | 101,293 |
Operating expenses (excluding depreciation and amortization presented below) |  |  |  |  | 13,495 |  |  | 13,954 |
Depreciation and amortization |  |  |  |  | 10,247 |  |  | 5,803 |
Total cost of sales |  |  |  |  | 104,913 |  |  | 121,050 |
Operating expenses related to wholesale business (excluding depreciation and amortization presented below) |  |  |  |  | 561 |  |  | 790 |
General and administrative expenses |  |  |  |  | 4,860 |  |  | 6,130 |
Depreciation and amortization |  |  |  |  | 492 |  |  | 496 |
Other operating income, net |  |  |  |  | (83) |  |  | (107) |
Total operating costs and expenses |  |  |  |  | 110,743 |  |  | 128,359 |
Operating income |  |  |  |  | 42,170 |  |  | 35,042 |
Interest expense, net |  |  |  |  | 9,737 |  |  | 11,824 |
Income from equity method investments |  |  |  |  | (4,049) |  |  | (5,553) |
Other expense, net |  |  |  |  | 31 |  |  | — |
Total non-operating expenses, net |  |  |  |  | 5,719 |  |  | 6,271 |
Income before income tax expense |  |  |  |  | 36,451 |  |  | 28,771 |
Income tax expense |  |  |  |  | 184 |  |  | 975 |
Net income attributable to partners |  |  |  |  | $ | 36,267 |  |  | $ | 27,796 |
Comprehensive income attributable to partners |  |  |  |  | $ | 36,267 |  |  | $ | 27,796 |
Less: General partner's interest in net income, including incentive distribution rights (2) |  |  |  |  | — |  |  | 9,077 |
Limited partners' interest in net income |  |  |  |  | $ | 36,267 |  |  | $ | 18,719 |
Net income per limited partner unit: |  |  |  |  |  |  |
Common units - basic |  |  |  |  | $ | 0.83 |  |  | $ | 0.76 |
Common units - diluted |  |  |  |  | $ | 0.83 |  |  | $ | 0.76 |
Weighted average limited partner units outstanding: |  |  |  |  |  |  |
Common units - basic |  |  |  |  | 43,443,336 |  |  | 24,480,570 |
Common units - diluted |  |  |  |  | 43,449,059 |  |  | 24,485,336 |
Cash distributions per limited partner unit |  |  |  |  | $ | 0.920 |  |  | $ | 0.890 |

(1) See Note 3 for a description of our material affiliate revenue transactions.
(2) See Note 3 for a description of the IDR Restructuring Transaction.
See accompanying notes to the condensed consolidated financial statements

4 |

Financial Statements
Delek Logistics Partners, LP
Condensed Consolidated Statements of Partners' Equity (Deficit) (Unaudited)
(in thousands)

| Common - Public |  | Common - Delek Holdings |  | Total
Balance at December 31, 2020 | $ | 164,614 |  |  | $ | (272,915) |  |  | $ | (108,301) |
Cash distributions | (7,914) |  |  | (31,619) |  |  | (39,533) |
Net income attributable to partners | 7,261 |  |  | 29,006 |  |  | 36,267 |
Other | 139 |  |  | 38 |  |  | 177 |
Balance at March 31, 2021 | $ | 164,100 |  |  | $ | (275,490) |  |  | $ | (111,390) |

| Common - Public |  | Common - Delek Holdings |  | General Partner |  | Total
Balance at December 31, 2019 | $ | 164,436 |  |  | $ | (310,513) |  |  | $ | (5,042) |  |  | $ | (151,119) |
Cash distributions | (8,081) |  |  | (13,535) |  |  | (9,017) |  |  | (30,633) |
General partner units issued to maintain 2% interest | — |  |  | — |  |  | 6 |  |  | 6 |
Net income attributable to partners | 6,652 |  |  | 12,067 |  |  | 9,077 |  |  | 27,796 |
Delek Holdings unit purchases | (4,979) |  |  | 4,979 |  |  | — |  |  | — |
Issuance of units in connection with the Big Spring Gathering Assets Acquisition | — |  |  | 107,323 |  |  | 2,190 |  |  | 109,513 |
Other | 304 |  |  | $ | (264) |  |  | $ | 1 |  |  | 41 |
Balance at March 31, 2020 | $ | 158,332 |  |  | $ | (199,943) |  |  | $ | (2,785) |  |  | $ | (44,396) |

See accompanying notes to the condensed consolidated financial statements

5 |

Financial Statements
Delek Logistics Partners, LP
Condensed Consolidated Statements of Cash Flows (Unaudited)
(in thousands)

| Three Months Ended March 31,
| 2021 |  | 2020
Cash flows from operating activities: |  |  |
Net income | $ | 36,267 |  |  | $ | 27,796 |
Adjustments to reconcile net income to net cash provided by operating activities: |  |  |
Depreciation and amortization | 10,739 |  |  | 6,299 |
Non-cash lease expense | 2,018 |  |  | 274 |
Amortization of customer contract intangible assets | 1,803 |  |  | 1,803 |
Amortization of deferred revenue | (538) |  |  | (473) |
Amortization of deferred financing costs and debt discount | 625 |  |  | 574 |
Accretion of asset retirement obligations | 115 |  |  | 107 |
Income from equity method investments | (4,049) |  |  | (5,553) |
Dividends from equity method investments | 3,730 |  |  | 4,913 |
Gain on asset disposals | (83) |  |  | (107) |
Deferred income taxes | 65 |  |  | 812 |
Other non-cash adjustments | 177 |  |  | 43 |
Changes in assets and liabilities: |  |  |
Accounts receivable | 3,354 |  |  | 812 |
Inventories and other current assets | 1,020 |  |  | 8,762 |
Accounts payable and other current liabilities | (390) |  |  | (4,692) |
Accounts receivable/payable to related parties | 7,359 |  |  | (6,823) |
Non-current assets and liabilities, net | (480) |  |  | 287 |
Net cash provided by operating activities | 61,732 |  |  | 34,834 |
Cash flows from investing activities: |  |  |
Asset acquisitions from Delek Holdings, net of assumed liabilities | — |  |  | (100,000) |
Purchases of property, plant and equipment | (6,119) |  |  | (4,164) |
Proceeds from sales of property, plant and equipment | 83 |  |  | 107 |
Purchases of intangible assets | (474) |  |  | — |
Distributions from equity method investments | 3,924 |  |  | 110 |
Equity method investment contributions | (1,379) |  |  | (8,229) |
Net cash used in investing activities | (3,965) |  |  | (112,176) |
Cash flows from financing activities: |  |  |
Proceeds from issuance of additional units to maintain 2% General Partner interest | — |  |  | 6 |
Distributions to general partner | — |  |  | (9,017) |
Distributions to common unitholders - public | (7,914) |  |  | (8,081) |
Distributions to common unitholders - Delek Holdings | (31,619) |  |  | (13,535) |
Proceeds from revolving credit facility | 77,500 |  |  | 261,400 |
Payments on revolving credit facility | (86,600) |  |  | (154,800) |
Net cash (used in) provided by financing activities | (48,633) |  |  | 75,973 |
Net (decrease) increase in cash and cash equivalents | 9,134 |  |  | (1,369) |
Cash and cash equivalents at the beginning of the period | 4,243 |  |  | 5,545 |
Cash and cash equivalents at the end of the period | $ | 13,377 |  |  | $ | 4,176 |
Supplemental disclosures of cash flow information: |  |  |
Cash paid during the period for: |  |  |
Interest | $ | 4,937 |  |  | $ | 6,903 |
Income taxes | $ | — |  |  | $ | 3 |
Non-cash investing activities: |  |  |
Increase in accrued capital expenditures in accounts payable/receivable related parties | $ | 3,119 |  |  | $ | — |
Decrease in accrued capital expenditures | $ | (1,439) |  |  | $ | (1,220) |
Equity issuance to Delek Holdings unitholders in connection with Big Spring Gathering Assets Acquisition | $ | — |  |  | $ | 109,513 |
Non-cash financing activities: |  |  |
Non-cash lease liability arising from obtaining right of use assets during the period | $ | 2,623 |  |  | $ | — |

See accompanying notes to the condensed consolidated financial statements

6 |

Notes to Condensed Consolidated Financial Statements (Unaudited)
Note 1 - Organization and Basis of Presentation
As used in this report, the terms "Delek Logistics Partners, LP," the "Partnership," "we," "us," or "our" may refer to Delek Logistics Partners, LP, one or more of its consolidated subsidiaries or all of them taken as a whole.
The Partnership is a Delaware limited partnership formed in April 2012 by Delek US Holdings, Inc. ("Delek Holdings") and its subsidiary Delek Logistics GP, LLC, our general partner (our "general partner").
Effective August 13, 2020, the Partnership closed the transaction contemplated by a definitive exchange agreement with the general partner to eliminate all of the incentive distribution rights ("IDRs") held by the general partner and convert the 2% general partner interest into a non-economic general partner interest, all in exchange for 14.0 million newly issued common limited partner units and $45.0 million in cash ("IDR Restructuring Transaction"). Refer to Note 3 - Related Party Transactions for further information, Note 5 - Net Income per Unit for more information on how these transactions impact our earnings per unit calculations, and Note 8 - Equity for additional information on the impact to our equity accounts.
Effective May 1, 2020, the Partnership, through its wholly-owned subsidiary DKL Transportation, LLC, acquired Delek Trucking, LLC consisting of certain leased and owned tractors and trailers and related assets (the "Trucking Assets") from Delek Holdings, such transaction the "Trucking Assets Acquisition." See Note 2 for further information.
In addition, effective March 31, 2020, the Partnership, through its wholly-owned subsidiary DKL Permian Gathering, LLC, acquired from Delek Holdings a crude oil gathering system located in Howard, Borden and Martin Counties, Texas (the "Big Spring Gathering System"), and certain related assets, such transaction the "Big Spring Gathering Assets Acquisition." See Note 2 for further information.
Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with U.S. generally accepted accounting principles ("GAAP") have been condensed or omitted, although management believes that the disclosures herein are adequate to make the financial information presented not misleading. Our unaudited condensed consolidated financial statements have been prepared in conformity with U.S. GAAP applied on a consistent basis with those of the annual audited financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2020 (our "Annual Report on Form 10-K"), filed with the U.S. Securities and Exchange Commission (the "SEC") on March 1, 2021 and in accordance with the rules and regulations of the SEC. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto for the year ended December 31, 2020 included in our Annual Report on Form 10-K.
All adjustments necessary for a fair presentation of the financial position and the results of operations for the interim periods presented have been included. All intercompany accounts and transactions have been eliminated. Such intercompany transactions do not include those with Delek Holdings or our general partner, which are presented as related parties in these accompanying condensed consolidated financial statements. All adjustments are of a normal, recurring nature. Operating results for the interim period should not be viewed as representative of results that may be expected for any future interim period or for the full year.
Reclassifications
Certain immaterial reclassifications have been made to prior period presentation in order to conform to the current period presentation.
Risks and Uncertainties Arising from the COVID-19 Pandemic
The on-going impact of the COVID-19 outbreak and its development into a pandemic in March 2020 (the “COVID-19 Pandemic” or the “Pandemic”), the restrictions imposed to prevent its spread, the challenges with the vaccination rollout, and the spread of new variants of the virus, continue to cause significant economic disruption globally, including in the U.S. and specific geographic areas where we operate. Compared to the prior year, the first quarter of 2021 has witnessed economic recovery trends including a resumption of flights by major airlines and increased motor vehicle use. This has in turn resulted in increased demand for, thus also the market prices of, crude oil and certain products, particularly refined petroleum products that we receive revenue for the transportation and storage services we provide and an increase in demand and sales volumes in our wholesale marketing business. As of March 31, 2021 there is continued uncertainty about the duration and future impact of the COVID-19 Pandemic.
Our business model, which includes executing minimum volume commitment contracts with our major customers, to an extent, cushioned us from the impact of the COVID-19 Pandemic in 2020 and during the first quarter of 2021. Uncertainties related to the impact of the COVID-19 Pandemic and other events exist that could impact our future results of operations and financial position, the nature of which and the extent to which are currently unknown. To the extent these uncertainties have been identified and are believed to have an impact on our current period results of operations or financial position based on the requirements for assessing such financial statement impact under GAAP, we have considered them in the preparation of our financial statements as of and for the three months ended March 31, 2021.

7 |

Notes to Condensed Consolidated Financial Statements (Unaudited)
New Accounting Pronouncements Adopted During 2021
ASU 2019-12, Simplifying the Accounting for Income Taxes
In December 2019, the Financial Accounting Standards Board (the “FASB”) issued guidance intended to simplify various aspects related to accounting for income taxes, eliminate certain exceptions within Accounting Standards Codification ("ASC") 740 and clarify certain aspects of the current guidance to promote consistency among reporting entities. The pronouncement is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 2020, with early adoption permitted. We adopted this guidance prospectively on January 1, 2021. The adoption of this guidance did not have a material impact on our business, financial condition or results of operations.
ASU 2020-01, Investments—Equity Securities (Topic 321), Investments—Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815)—Clarifying the Interactions between Topic 321, Topic 323, and Topic 815
In January 2020, the FASB issued ASU 2020-01 which is intended to clarify interactions between the guidance to account for certain equity securities under Topics 321, 323 and 815, and improve current GAAP by reducing diversity in practice and increasing comparability of accounting. The pronouncement is effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2020, and early adoption is permitted. We adopted this guidance prospectively on January 1, 2021. The adoption of this guidance did not have a material impact on our business, financial condition or results of operations.
Accounting Pronouncements Not Yet Adopted
ASU 2020-04, Facilitation of the Effects of Reference Rate Reform on Financial Reporting (Topic 848)
In March 2020, the FASB issued an amendment which is intended to provide temporary optional expedients and exceptions to GAAP guidance on contracts, hedge accounting and other transactions affected by the expected market transition from the London Interbank Offered Rate ("LIBOR") and other interbank rates. This guidance is effective for all entities any time beginning on March 12, 2020 through December 31, 2022 and may be applied from the beginning of an interim period that includes the issuance date of the ASU. The Partnership is evaluating the impact of this guidance but does not currently expect that adopting this new guidance will have a material impact on its condensed consolidated financial statements and related disclosures.
Note 2 - Acquisitions
Trucking Assets Acquisition
Effective May 1, 2020, the Partnership, through its wholly-owned subsidiary DKL Transportation, LLC, acquired Delek Trucking, LLC consisting of certain leased and owned tractors and trailers and related assets from Delek Holdings. The total consideration is subject to certain post-closing adjustments and was approximately $48.0 million in cash. We financed this acquisition with a combination of cash on hand and borrowings under the DKL Credit Facility (as defined in Note 7).
The Trucking Assets are recorded in our pipelines and transportation segment and include approximately 150 trucks and trailers, which are primarily leased or owned, respectively.
In connection with the closing of the transaction, Delek Holdings, the Partnership and various of their respective subsidiaries entered into a Transportation Services Agreement (the “Trucking Assets TSA Agreement”). Under the Trucking Assets TSA Agreement, the Partnership will gather, coordinate pickup of, transport and deliver petroleum products for Delek Holdings, as well as provide ancillary services as requested. The transaction and related agreements were approved by the Conflicts Committee of the Partnership's general partner, which is comprised solely of independent directors. See Note 3 for more detailed descriptions of these agreements.
The Trucking Assets Acquisition was considered a transaction between entities under common control. Accordingly, the Trucking Assets were recorded at amounts based on Delek Holdings' historical carrying value as of the acquisition date. The carrying value of the Trucking Assets as of the acquisition date was $13.3 million, consisting of $0.5 million of owned assets and a $12.8 million right of use asset for leased assets. The right of use asset offsets with an equivalent operating lease liability. Prior periods have not been recast as these assets do not constitute a business in accordance with Accounting Standard Update 2017-01, Clarifying the Definition of a Business ("ASU 2017-01"). We capitalized approximately $0.3 million of acquisition costs related to the Trucking Assets Acquisition.
Big Spring Gathering Assets Acquisition
Effective March 31, 2020, the Partnership, through its wholly-owned subsidiary DKL Permian Gathering, LLC, acquired the Big Spring Gathering Assets from Delek Holdings, located in Howard, Borden and Martin Counties, Texas. The total consideration was subject to certain post-closing adjustments and was comprised of $100.0 million in cash and 5.0 million common units representing limited partner interest in us. We financed the cash component of this acquisition with borrowings from the DKL Credit Facility (as defined in Note 7).

8 |

Notes to Condensed Consolidated Financial Statements (Unaudited)
The Big Spring Gathering Assets are recorded in our pipelines and transportation segment and include:
•Crude oil pipelines;
•Approximately 200 miles of gathering systems;
•Approximately 65 Tank battery connections;
•Terminals (total storage of approximately 650,000 bbls); and
•Applicable rights-of-way.
In connection with the closing of the transaction, Delek Holdings, the Partnership and various of their respective subsidiaries entered into a Throughput and Deficiency Agreement (the “Big Spring T&D Agreement”). Under the Big Spring T&D Agreement, the Partnership will operate and maintain the Big Spring Gathering Assets connecting Delek Holdings' interests in and to certain crude oil with the Partnership's Big Spring, Texas terminal and provide gathering, transportation and other related services with respect to any and all crude produced from shipper’s and certain other producers’ respective interests for delivery at the Big Spring Terminal. The transaction and related agreements were approved by the Conflicts Committee of the Partnership's general partner, which is comprised solely of independent directors. See Note 3 for more detailed descriptions of these agreements.
The Big Spring Gathering Assets Acquisition was considered a transaction between entities under common control. Accordingly, the Big Spring Gathering Assets were recorded at amounts based on Delek Holdings' historical carrying value as of the acquisition date. The carrying value of the Big Spring Gathering Assets as of the acquisition date was $209.5 million. Pursuant to the common control guidance, the 5.0 million units issued (which had a closing market price of $9.10 per unit on the transaction date) were recorded in equity at $109.5 million, representing the net carrying value of the Big Spring Gathering Assets purchased of $209.5 million less the $100.0 million cash consideration. Prior periods have not been recast as these assets do not constitute a business in accordance with ASU 2017-01. We capitalized approximately $0.7 million of acquisition costs related to the Big Spring Gathering Assets Acquisition.
Note 3 - Related Party Transactions
Commercial Agreements
The Partnership has a number of long-term, fee-based commercial agreements with 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. Most of these agreements have an initial term ranging from five to ten years, which may be extended for various renewal terms at the option of Delek Holdings. In November 2017, Delek Holdings opted to renew certain of these agreements for subsequent five-year terms expiring in November 2022. In the case of our marketing agreement with Delek Holdings with respect to the Tyler Refinery, the initial term was extended through 2026. Effective fourth quarter of 2018, the term of certain of our agreements with Delek Holdings were further extended pursuant to the requirements of the amended and restated DKL Credit Facility (as defined in Note 7). The fees under each agreement are payable to us monthly by Delek Holdings or certain third parties to whom Delek Holdings has assigned certain of its rights and are generally subject to increase or decrease on July 1 of each year, by the amount of any change in various inflation-based indices, including the Federal Energy Regulatory Commission (the "FERC") oil pipeline index or various iterations of the consumer price index ("CPI") and the producer price index ("PPI"); provided, however, that in no event will the fees be adjusted below the amount initially set forth in the applicable agreement. In most circumstances, if Delek Holdings or the applicable third party assignee fails to meet or exceed the minimum volume or throughput commitment during any calendar quarter, Delek Holdings, and not any third party assignee, will be required to make a quarterly shortfall payment to us equal to the volume of the shortfall multiplied by the applicable fee, subject to certain exceptions as specified in the applicable agreement. With the exception of the Big Spring T&D Agreement executed in March 2020, carry-over of any volumes or revenue in excess of such commitment to any subsequent quarter is not permitted.
Under each of these agreements, we are required to maintain the capabilities of our pipelines and terminals, such that Delek Holdings may throughput and/or store, as the case may be, specified volumes of crude oil, intermediate and refined products. To the extent that Delek Holdings is prevented by our failure to maintain such capacities from throughputting or storing such specified volumes for more than 30 days per year, Delek Holdings' minimum throughput commitment will be reduced proportionately and prorated for the portion of the quarter during which the specified throughput capacity was unavailable, and/or the storage fee will be reduced, prorated for the portion of the month during which the specified storage capacity was unavailable. Such reduction would occur even if actual throughput or storage amounts were below the minimum volume commitment levels.
See our Annual Report on Form 10-K for a more complete description of our material commercial agreements and other agreements with Delek Holdings.

9 |

Notes to Condensed Consolidated Financial Statements (Unaudited)
Other Agreements with Delek Holdings
In addition to the commercial agreements described above, the Partnership has entered into the following agreements with Delek Holdings:
Omnibus Agreement
The Partnership entered into an omnibus agreement with Delek Holdings, Delek Logistics Operating, LLC, Lion Oil Company and certain of the Partnership's and Delek Holdings' other subsidiaries on November 7, 2012, which has been amended from time to time in connection with acquisitions from Delek Holdings (collectively, as amended, the "Omnibus Agreement"). The Omnibus Agreement governs the provision of certain operational services and reimbursement obligations, among other matters, between the Partnership and Delek Holdings, and obligates us to pay an annual fee of $4.7 million to Delek Holdings for its provision of centralized corporate services to the Partnership.
Pursuant to the terms of the Omnibus Agreement, we are reimbursed by Delek Holdings for certain capital expenditures. There were no reimbursements by Delek Holdings during the three months ended March 31, 2021 During the three months ended March 31, 2020, we were reimbursed by Delek Holdings for certain capital expenditures in the amount of $0.6 million. These amounts are recorded in other long-term liabilities and are amortized to revenue over the life of the underlying revenue agreement corresponding to the asset. Ad ditionally, we are reimbursed or indemnified, as the case may be, for costs incurred in excess of certain amounts related to certain asset failures, pursuant to the terms of the Omnibus Agreeme nt. As of March 31, 2021, we have recorded a nominal receivable from related parties for these matters for which we expect to be reimbursed. These reimbursements are recorded as reductions to operating expense. We were reimbursed a nominal amount for these matters during the both three months ended March 31, 2021 and 2020.
Other Transactions
The Partnership manages a long-term capital project on behalf of Delek Holdings pursuant to a construction management and operating agreement (the "DPG Management Agreement") for the construction of a 250-mile gathering system in the Permian Basin. The majority of the gathering system has been constructed, however, additional costs pertaining to a pipeline connection that was not acquired by the Partnership continue to be incurred and are still subject to the terms of the DPG Management Agreement. The Partnership is also considered the operator for the project and is responsible for oversight of the project design, procurement and construction of project segments and provides other related services. Pursuant to the terms of the DPG Management Agreement, the Partnership receives a monthly operating services fee and a construction services fee, which includes the Partnership's direct costs of managing the project plus an additional percentage fee of the construction costs of each project segment. The agreement extends through December 2022. Total fees paid to the Partnership were $0.4 million and $0.9 million for the three months ended March 31, 2021 and 2020, respectively, which are recorded in affiliate revenue in our condensed consolidated statements of income. Additionally, the Partnership incurs the costs in connection with the construction of the assets and is subsequently reimbursed by Delek Holdings. Amounts reimbursable by Delek Holdings are recorded in accounts receivable from related parties.
Unregistered Sale of Equity Securities
In connection with the Partnership's issuance of the common limited partner units under the Big Spring Gathering Assets Acquisition and in accordance with the Partnership's First Amended and Restated Agreement of Limited Partnership, as amended (the "Prior Partnership Agreement", as amended and restated by the Partnership's Second Amended and Restated Agreement of Limited Partnership (the "Partnership Agreement")), the Partnership issued general partner units to the general partner in an amount necessary to maintain its 2% general partner interest as defined in the Prior Partnership Agreement. The sale and issuance of the Additional Units (as defined below) and such general partner units in connection with the Big Spring Gathering Assets Acquisition is exempt from registration under Section 4(a)(2) of the Securities Act of 1933, as amended.
Additionally, in March 2020, Delek Marketing & Supply, LLC ("Delek Marketing"), a wholly owned subsidiary of Delek Holdings, repurchased 451,822 common limited partner units from an unaffiliated investor pursuant to a Common Unit Purchase Agreement between Delek Marketing and such investor. The purchase price of the units amounted to approximately $5.0 million. As a result of the transaction, Delek Holdings' ownership in our outstanding limited partner units increased to 64.5% from 62.6%. Delek Holdings' ownership in our common limited partner units was further increased to 70.5% as a result of the issuance of 5.0 million common limited partner units (the “Additional Units”) in connection with the Big Spring Gathering Assets Acquisition described above.
In August 2020, Delek Holdings' ownership in our common limited partner units was further increased to approximately 80.0% in connection with the IDR Restructuring Transaction, where the Partnership issued 14.0 million of the Partnership's newly issued common limited partner units to Delek Holdings.
Amendment No. 2 to the First Amended and Restated Agreement of Limited Partnership of Delek Logistics Partners, LP
On March 31, 2020, in connection with the completion of the Big Spring Gathering Assets Acquisition, the Board of the general partner adopted Amendment No. 2 (“Amendment No. 2”) to the Prior Partnership Agreement, effective upon adoption. Amendment No. 2 amended the Prior Partnership Agreement to provide for a waiver of distributions in respect of the IDRs for General Partner Additional Units ("GP

10 |

Notes to Condensed Consolidated Financial Statements (Unaudited)
Additional Units") associated with the 5.0 million Additional Units for at least two years, through at least the distribution for the quarter ending March 31, 2022 (the “IDR Waiver”). The IDR Waiver essentially reduced the distribution made to the holders of the IDRs during this period, as the holders would not receive a share of the distribution made on the GP Additional Units. The IDRs were eliminated in the IDR Restructuring Transaction on August 13, 2020.
Conversion of GP Economic Interest and Elimination of IDRs
On August 13, 2020, we closed the transaction contemplated by a definitive exchange agreement with Delek Holdings to eliminate all of the IDRs held by the general partner and convert the 2% general partner economic interest into a non-economic general partner interest, all in exchange for 14.0 million of the Partnership's newly issued common limited partner units and $45.0 million cash. Contemporaneously, Delek Holdings purchased a 5.2% ownership interest in our general partner from certain affiliates who were also members of our general partner's management and board of directors. Delek Holdings now owns a 100% interest in the general partner and owns approximately 34.7 million common limited partner units, representing approximately 80% of the Partnership's outstanding common limited partner units. To implement the transaction, our Prior Partnership Agreement was amended and restated.
Summary of Transactions
Revenues from affiliates consist primarily of revenues from gathering, transportation, storage, offloading, Renewable Identification Numbers ("RINs"), wholesale marketing and products terminalling services provided primarily to Delek Holdings based on regulated tariff rates or contractually based fees and product sales. Affiliate operating expenses are primarily comprised of amounts we reimburse Delek Holdings, or our general partner, as the case may be, for the services provided to us under the Partnership Agreement. These expenses could also include reimbursement and indemnification amounts from Delek Holdings, as provided under the Omnibus Agreement. Additionally, the Partnership is required to reimburse Delek Holdings for direct or allocated costs and expenses incurred by Delek Holdings on behalf of the Partnership and for charges Delek Holdings incurred for the management and operation of our logistics assets, including an annual fee for various centralized corporate services, which are included in general and administrative expenses. In addition to these transactions, we purchase refined products and bulk biofuels from Delek Holdings, the costs of which are included in cost of materials and other.
A summary of revenue, purchases from affiliates and expense transactions with Delek Holdings and its affiliates are as follows (in thousands):

|  |  | Three Months Ended March 31,
|  |  |  |  | 2021 |  | 2020
Revenues |  |  |  |  | $ | 96,194 |  |  | $ | 106,699 |
Purchases from Affiliates |  |  |  |  | $ | 65,815 |  |  | $ | 80,763 |
Operating and maintenance expenses |  |  |  |  | $ | 10,084 |  |  | $ | 12,757 |
General and administrative expenses |  |  |  |  | $ | 2,119 |  |  | $ | 3,369 |

Quarterly Cash Distributions
Prior to August 13, 2020, our common and general partner unitholders and the holders of IDRs were entitled to receive quarterly distributions of available cash as determined by the board of directors of our general partner in accordance with the terms and provisions of our Prior Partnership Agreement. Pursuant to the IDR Restructuring Transaction on August 13, 2020, the general partner will no longer receive any cash distributions. In February 2021, we paid quarterly cash distributions of $39.5 million, of which $31.6 million were paid to Delek Holdings. In February 2020, we paid quarterly cash distributions of $30.6 million, of which $22.6 million were paid to Delek Holdings and our general partner. On April 29, 2021, our board of directors declared a quarterly cash distribution totaling $40.0 million, based on the available cash as of the date of determination for the end of the first quarter of 2021, payable on May 14, 2021, of which $32.0 million is expected to be paid to Delek Holdings.
Note 4 - Revenues
We generate revenue by charging fees for gathering, transporting, offloading and storing crude oil; for storing intermediate products and feed stocks; for distributing, transporting and storing refined products; for marketing refined products output of Delek Holdings' Tyler and Big Spring refineries; and for wholesale marketing in the West Texas area. A significant portion of our revenue is derived from long-term commercial agreements with Delek Holdings, which provide for annual fee adjustments for increases or decreases in the CPI, PPI or the FERC index (refer to Note 3 for a more detailed description of these agreements). In addition to the services we provide to Delek Holdings, we also generate substantial revenue from crude oil, intermediate and refined products transportation services for, and terminalling and marketing services to, third parties primarily in Texas, New Mexico, Tennessee and Arkansas. Certain of these services

11 |

Notes to Condensed Consolidated Financial Statements (Unaudited)
are provided pursuant to contractual agreements with third parties. Payment terms require customers to pay shortly after delivery and do not contain significant financing components.
The majority of our commercial agreements with Delek Holdings meet the definition of a lease because: (1) performance of the contracts is dependent on specified property, plant or equipment and (2) it is remote that one or more parties other than Delek Holdings will take more than a minor amount of the output associated with the specified property, plant or equipment. As part of our adoption of ASC 842, Leases ("ASC 842"), we applied the permitted practical expedient to not separate lease and non-lease components under the predominance principle to designated asset classes associated with the provision of logistics services. We have determined that the predominant component of the related agreements currently in effect is the lease component. Therefore, the combined component is accounted for under the applicable lease accounting guidance. Of our $462.1 million net property, plant, and equipment balance as of March 31, 2021, $339.2 million is subject to operating leases under our commercial agreements. These agreements do not include options for the lessee to purchase our leasing equipment, nor do they include any material residual value guarantees or material restrictive covenants.
The following table represents a disaggregation of revenue for each reportable segment for the periods indicated (in thousands):

|  | Three Months Ended March 31, 2021
|  | Pipelines and Transportation |  | Wholesale Marketing and Terminalling |  | Consolidated
Service Revenue - Third Party |  | $ | 1,927 |  |  | $ | 82 |  |  | $ | 2,009 |
Service Revenue - Affiliate (1) |  | 1,224 |  |  | 8,082 |  |  | 9,306 |
Product Revenue - Third Party |  | — |  |  | 54,710 |  |  | 54,710 |
Product Revenue - Affiliate |  | — |  |  | 16,387 |  |  | 16,387 |
Lease Revenue - Affiliate |  | 61,824 |  |  | 8,677 |  |  | 70,501 |
Total Revenue |  | $ | 64,975 |  |  | $ | 87,938 |  |  | $ | 152,913 |

(1) Net of $1.8 million of amortization expense for the three months ended March 31, 2021, related to a customer contract intangible asset recorded in the wholesale marketing and terminalling segment.

|  | Three Months Ended March 31, 2020
|  | Pipelines and Transportation |  | Wholesale Marketing and Terminalling |  | Consolidated
Service Revenue - Third Party |  | $ | 9,465 |  |  | $ | 191 |  |  | $ | 9,656 |
Service Revenue - Affiliate (1) |  | 4,888 |  |  | 7,982 |  |  | 12,870 |
Product Revenue - Third Party |  | — |  |  | 47,046 |  |  | 47,046 |
Product Revenue - Affiliate |  | — |  |  | 51,503 |  |  | 51,503 |
Lease Revenue - Affiliate |  | 33,614 |  |  | 8,712 |  |  | 42,326 |
Total Revenue |  | $ | 47,967 |  |  | $ | 115,434 |  |  | $ | 163,401 |

(1) Net of $1.8 million of amortization expense for the three months ended March 31, 2020, related to a customer contract intangible asset recorded in the wholesale marketing and terminalling segment.

As of March 31, 2021, we expect to recognize $1.5 billion in lease revenues related to our unfulfilled performance obligations pertaining to the minimum volume commitments and capacity utilization under the non-cancelable terms of our commercial agreements with Delek Holdings. Most of these agreements have an initial term ranging from five to ten years, which may be extended for various renewal terms. We disclose information about remaining performance obligations that have original expected durations of greater than one year.
Our unfulfilled performance obligations as of March 31, 2021 were as follows (in thousands):

Remainder of 2021 |  | 202,154 |
2022 |  | 250,145 |
2023 |  | 241,631 |
2024 |  | 166,697 |
2025 and thereafter |  | $ | 618,965 |
Total expected revenue on remaining performance obligations |  | $ | 1,479,592 |

12 |

Notes to Condensed Consolidated Financial Statements (Unaudited)
Note 5 - Net Income Per Unit
Basic net income per unit applicable to limited partners is computed by dividing limited partners' interest in net income by the weighted-average number of outstanding common units. Prior to August 13, 2020, we had more than one class of participating securities and used the two class method to calculate the net income per unit applicable to the limited partners. The classes of participating units prior to August 13, 2020 consisted of limited partner units, general partner units and IDRs. Pursuant to the IDR Restructuring Transaction, the IDRs were eliminated and the 2% general partner economic interest was converted to a non-economic general partner interest. Effective August 13, 2020, the common limited partner units are the only participating security for cash distributions. Refer to Note 8 - Equity for a discussion of the elimination of the IDRs and conversion of the 2% general partner economic interest effective August 13, 2020.
The two-class method was based on the weighted-average number of common units outstanding during the period. Basic net income per unit applicable to limited partners was computed by dividing limited partners’ interest in net income, after deducting our general partner’s 2% interest and IDRs, by the weighted-average number of outstanding common units. Our net income was allocated to our general partner and limited partners in accordance with their respective partnership percentages after giving effect to priority income allocations for IDRs, which were held by our general partner pursuant to our Prior Partnership Agreement. Earnings in excess of distributions were allocated to our general partner and limited partners based on their respective ownership interests. The IDRs were paid following the close of each quarter.
As discussed in Note 3 - Related Party Transactions, pursuant to Amendment No. 2 to the Prior Partnership Agreement, an agreement was reached for a waiver of distributions in respect of the IDRs for the GP Additional Units associated with the 5.0 million Additional Units issued in connection with the Big Spring Gathering Assets Acquisition for at least two years, through at least the distribution for the quarter ending March 31, 2022. The IDR Waiver essentially reduced the distribution made to the holders of the IDRs during this period, as the holders would not receive a share of the distribution made on the GP Additional Units. An additional waiver letter was signed that waived all of the distributions for the first quarter of 2020 on the Additional Units with respect to base distributions and the IDRs. Refer to Note 3 for additional details. Subsequently, the IDRs were eliminated in the IDR Restructuring Transaction on August 13, 2020.
Diluted net income per unit applicable to common limited partners includes the effects of potentially dilutive units on our common units. As of March 31, 2021, the only potentially dilutive units outstanding consist of unvested phantom units.

13 |

Notes to Condensed Consolidated Financial Statements (Unaudited)
Our distributions earned with respect to a given period are declared subsequent to quarter end. Therefore, the table below represents total cash distributions applicable to the period in which the distributions are earned. The expected date of distribution for the distributions earned during the period ended March 31, 2021 is May 14, 2021. Payments made to our unitholders are determined in relation to actual distributions declared and are not based on the net income allocations used in the calculation of net income per unit. The calculation of net income per unit is as follows (dollars in thousands, except units and per unit amounts):

|  |  | Three Months Ended March 31,
|  |  |  |  | 2021 |  | 2020
Net income attributable to partners |  |  |  |  | $ | 36,267 |  |  | $ | 27,796 |
Less: General partner's distribution (including IDRs) (1) |  |  |  |  | — |  |  | 9,139 |
Less: Limited partners' distribution |  |  |  |  | 39,968 |  |  | 21,739 |
Earnings in excess (deficit) of distributions |  |  |  |  | $ | (3,701) |  |  | $ | (3,082) |
General partner's earnings: |  |  |  |  |  |  |
Distributions (including IDRs) (1) |  |  |  |  | $ | — |  |  | $ | 9,139 |
Allocation of earnings in excess (deficit) of distributions |  |  |  |  | — |  |  | (62) |
Total general partner's earnings |  |  |  |  | $ | — |  |  | $ | 9,077 |
Limited partners' earnings on common units: |  |  |  |  |  |  |
Distributions |  |  |  |  | $ | 39,968 |  |  | $ | 21,739 |
Allocation of earnings in excess (deficit) of distributions |  |  |  |  | (3,701) |  |  | (3,020) |
Total limited partners' earnings on common units |  |  |  |  | $ | 36,267 |  |  | $ | 18,719 |
Weighted average limited partner units outstanding: |  |  |  |  |  |  |
Common units - basic |  |  |  |  | 43,443,336 |  |  | 24,480,570 |
Common units - diluted |  |  |  |  | 43,449,059 |  |  | 24,485,336 |
Net income per limited partner unit: |  |  |  |  |  |  |
Common units - basic |  |  |  |  | $ | 0.83 |  |  | $ | 0.76 |
Common units - diluted (2) |  |  |  |  | $ | 0.83 |  |  | $ | 0.76 |

(1) Prior to August 13, 2020, general partner distributions (including IDRs) consisted of the 2.0% general partner interest and IDRs, which represented the right of the general partner to receive increasing percentages of quarterly distributions of available cash from operating surplus in excess of 0.43125 per unit per quarter. In connection with the IDR Restructuring Transaction on August 13, 2020, the IDRs were eliminated and the general partner interest became a non-economic general partner interest. See Note 8 for further discussion related to IDRs.
(2) There were no outstanding common units excluded from the diluted earnings per unit calculation for the three months ended March 31, 2021 and 2020.

Note 6 - Inventory
Inventories consisted of $1.9 million and $3.1 million of refined petroleum products as of March 31, 2021 and December 31, 2020, each of which are net of lower of cost or net realizable value reserve of a nominal amount. Inventory is stated at the lower of cost or net realizable value, with cost determined on a first-in, first-out basis. We recognize lower of cost or net realizable value charges as a component of cost of materials and other in the consolidated statements of income and comprehensive income.
Note 7 - Long-Term Obligations
DKL Credit Facility
On September 28, 2018, the Partnership entered into a third amended and restated senior secured revolving credit agreement (hereafter, the "DKL Credit Facility") with Fifth Third Bank ("Fifth Third"), as administrative agent, and a syndicate of lenders with total lender commitments of $850.0 million. The DKL Credit Facility contains a dual currency borrowing tranche that permits draw downs in U.S. or Canadian dollars. The DKL Credit Facility also contains an accordion feature whereby the Partnership can increase the size of the credit facility to an aggregate of $1.0 billion, subject to receiving increased or new commitments from lenders and the satisfaction of certain other conditions precedent.
The obligations under the DKL Credit Facility remain secured by first priority liens on substantially all of the Partnership's and its subsidiaries' tangible and intangible assets.

14 |

Notes to Condensed Consolidated Financial Statements (Unaudited)
In connection with the IDR Restructuring Transaction, the Partnership entered into a First Amendment to the DKL Credit Facility (the "First Amendment") which, among other things, permitted the exchange of the IDRs and the general partner interest in the Partnership for the non-economic general partner interest, the newly issued limited partner interests in the Partnership, plus $45.0 million in cash. The First Amendment also modified the total leverage and senior leverage ratios (as defined in the DKL Credit Facility) calculations to reduce the total funded debt (as defined in the DKL Credit Facility) component thereof by the total amount of unrestricted consolidated cash and cash equivalents on the balance sheet of the Partnership and its subsidiaries up to $20.0 million.
The DKL Credit Facility has a maturity date of September 28, 2023. Borrowings denominated in U.S. dollars bear interest at either a U.S. dollar prime rate, plus an applicable margin, or the LIBOR, plus an applicable margin, at the election of the borrowers. Borrowings denominated in Canadian dollars bear interest at either a Canadian dollar prime rate, plus an applicable margin, or the Canadian Dealer Offered Rate, plus an applicable margin, at the election of the borrowers.
The applicable margin in each case and the fee payable for any unused revolving commitments vary based upon the Partnership's most recent total leverage ratio calculation delivered to the lenders, as called for and defined under the terms of the DKL Credit Facility. At March 31, 2021, the weighted average interest rate for our borrowings under the facility was approximately 2.45%. Additionally, the DKL Credit Facility requires us to pay a leverage ratio dependent quarterly fee on the average unused revolving commitment. As of March 31, 2021, this fee was 0.35% per year.
As of March 31, 2021, we had $737.5 million of outstanding borrowings under the DKL Credit Facility, with no letters of credit in place. Unused credit commitments under the DKL Credit Facility as of March 31, 2021 were $112.5 million.
6.750% Senior Notes Due 2025
On May 23, 2017, the Partnership and Delek Logistics Finance Corp., a Delaware corporation and a wholly-owned subsidiary of the Partnership (“Finance Corp.” and together with the Partnership, the “Issuers”), issued $250.0 million in aggregate principal amount of 6.75% senior notes due 2025 (the “2025 Notes”) at a discount. The 2025 Notes are general unsecured senior obligations of the Issuers. The 2025 Notes are unconditionally guaranteed jointly and severally on a senior unsecured basis by the Partnership's existing subsidiaries (other than Finance Corp., the "Guarantors") and will be unconditionally guaranteed on the same basis by certain of the Partnership’s future subsidiaries. The 2025 Notes rank equal in right of payme nt with all existing and future senior indebtedness of the Issuers, and senior in right of payment to any future subordinated indebtedness of the Issuers. Interest on the 2025 Notes is payable semi-annually in arrears on each May 15 and November 15, commencing November 15, 2017.
Th e Issuers may, subject to certain conditions and limitations, redeem all or part of the 2025 Notes at a redemption price of 105.063% of the redeemed principal during the twelve-month period beginning on May 15, 2020, 103.375% for the twelve-month period beginning on May 15, 2021, 101.688% for the twelve-month period beginning on May 15, 2022 and 100.00% beginning on May 15, 2023 and thereafter, plus accrued and unpaid interest, if any. In the event of a change of control, accompanied or followed by a ratings downgrade within a certain period of time, subject to certain conditions and limitations, the Issuers will be obligated to make an offer for the purchase of the 2025 Notes from holders at a price equal to 101% of the principal amount thereof, plus accrued and unpaid interest.
On April 25, 2018, we made an offer to exchange the 2025 Notes and the related guarantees that were validly tendered and not validly withdrawn for an equal principal amount of exchange notes that are freely tradeable, as required under the terms of the original indenture. The terms of the exchange notes that were issued in May 2018 as a result of the exchange (also referred to as the "2025 Notes") are substantially identical to the terms of the original 2025 Notes.
As of March 31, 2021, we had $250.0 million in outstanding principal amount of the 2025 Notes. As of March 31, 2021, the effective interest rate related to the 2025 Notes was approximately 7.25%.
Outstanding borrowings under the 2025 Notes are net of deferred financing costs and debt discount of $3.1 million and $1.0 million, respectively, as of March 31, 2021, and $3.3 million and $1.0 million, respectively, as of December 31, 2020.
Note 8 - Equity
We had 8,697,468 common limited partner units held by the public outstanding as of March 31, 2021. Additionally, as of March 31, 2021, Delek Holdings owned an 80.0% limited partner interest in us, consisting of 34,745,868 common limited partner units. Effective August 13, 2020, the Partnership closed on the IDR Restructuring Transaction, and contemporaneous with this transaction, Delek Holdings purchased a 5.2% ownership interest in our general partner from certain affiliates, who were also members of our general partner's management and board of directors, at fair market value. Delek Holdings now owns 100% of the outstanding ownership interest in our general partner. As part of this transaction, we expensed approximately $1.1 million of transaction costs.
In August 2020, we filed a shelf registration statement with the SEC, which subsequently became effective, for the proposed re-sale or other disposition from time to time by Delek Holdings of up to 14.0 million of our common limited partner units. As of March 31, 2021, we

15 |

Notes to Condensed Consolidated Financial Statements (Unaudited)
had not sold any securities under this shelf registration statement and we will not receive any proceeds from the sale of securities by Delek Holdings.
Equity Activity
There were no changes in the number of common limited partner units outstanding from December 31, 2020 through March 31, 2021.
Issuance of Additional Securities
Our Partnership Agreement authorizes us to issue an unlimited number of additional partnership securities for the consideration and on the terms and conditions determined by our general partner without the approval of the unitholders. Costs associated with the issuance of securities are allocated to all unitholders' capital accounts based on their ownership interest at the time of issuance.
Allocations of Net Income
Our Partnership Agreement contains provisions for the allocation of net income and loss to the unitholders. For purposes of maintaining partner capital accounts, the Partnership Agreement specifies that items of income and loss shall be allocated among the partners in accordance with their respective percentage interest. Prior to August 13, 2020, normal allocations were made according to percentage interests after giving effect to priority income allocations in an amount equal to incentive cash distributions allocated 100% to our general partner. Effective August 13, 2020, the IDRs were eliminated and the 2% general partner economic interest was converted to a non-economic general partner interest that no longer receives cash distributions.
The following table presents the allocation of the general partner's interest in net income (in thousands, except percentage of ownership interest):

|  |  | Three Months Ended March 31,
|  |  |  |  | 2021 |  | 2020
Net income attributable to partners |  |  |  |  | $ | 36,267 |  |  | $ | 27,796 |
Less: General partner's IDRs |  |  |  |  | — |  |  | (8,695) |
Net income available to partners |  |  |  |  | $ | 36,267 |  |  | $ | 19,101 |
General partner's ownership interest |  |  |  |  | — | % |  | 2.0 | %
General partner's allocated interest in net income |  |  |  |  | — |  |  | $ | 382 |
General partner's IDRs |  |  |  |  | — |  |  | 8,695 |
Total general partner's interest in net income |  |  |  |  | $ | — |  |  | $ | 9,077 |

Incentive Distribution Rights ("IDRs")
Effective August 13, 2020, the Partnership closed on the IDR Restructuring Transaction and the general partner no longer receives any cash distributions. Prior to August 13, 2020, our general partner was entitled to 2.0% of all quarterly distributions. Our general partner had the right, but not the obligation, to contribute up to a proportionate amount of capital to us to maintain its current general partner interest. Our general partner held IDRs that entitled it to receive increasing percentages, up to a maximum of 48.0%, of the cash we distributed from operating surplus (as defined in our Prior Partnership Agreement) in excess of $0.43125 per unit per quarter. The maximum distribution was 48.0% and did not include any distributions that our general partner or its affiliates may have received on common or general partner units that it owns. As of August 12, 2020, the IDRs held by our general partner were entitled to receive the maximum distribution.
Pursuant to Amendment No. 2 to the Prior Partnership Agreement, prior to the IDR Restructuring Transaction, an agreement was reached for a waiver of distributions in respect of the IDRs associated with the 5.0 million Additional Units for at least two years, through at least the distribution for the quarter ending March 31, 2022 (the "IDR Waiver"). The IDR Waiver essentially reduced the distribution made to the holders of the IDRs during this period, as the holders would not receive a share of the distribution made on the Additional Units. An additional waiver letter was signed that waived all of the distributions for the first quarter of 2020 on the Additional Units with respect to base distributions and the IDRs. Refer to Note 3 for additional details.
Cash Distributions
Our Partnership Agreement sets forth the calculation to be used to determine the amount and priority of available cash distributions that our limited partner unitholders will receive. The cash distributions for periods before August 13, 2020 include distributions to the 2% general partner interest which was converted to a non-economic general partner interest and IDRs which were permanently eliminated. Our distributions earned with respect to a given period are declared subsequent to quarter end.

16 |

Notes to Condensed Consolidated Financial Statements (Unaudited)
The table below summarizes the quarterly distributions related to our quarterly financial results:

Quarter Ended |  | Total Quarterly Distribution Per Limited Partner Unit |  | Total Cash Distribution (in thousands) |  | Date of Distribution |  | Unitholders Record Date
March 31, 2020 |  | $ | 0.890 |  |  | $ | 30,878 |  |  | May 12, 2020 |  | May 5, 2020
June 30, 2020 |  | $ | 0.900 |  |  | $ | 35,969 |  |  | August 12, 2020 |  | August 7, 2020
September 30, 2020 |  | $ | 0.905 |  |  | $ | 39,308 |  |  | November 12, 2020 |  | November 6, 2020
December 31, 2020 |  | $ | 0.910 |  |  | $ | 39,533 |  |  | February 9, 2021 |  | February 2, 2021
March 31, 2021 |  | $ | 0.920 |  |  | $ | 39,968 |  |  | May 14, 2021 (1) |  | May 10, 2021

(1) Expected date of distribution.

The allocations of total quarterly cash distributions made to limited partners for the three months ended March 31, 2021 and 2020 are set forth in the table below. Distributions earned with respect to a given period are declared subsequent to quarter end. Therefore, the table below presents total cash distributions applicable to the period in which the distributions are earned (in thousands, except per unit amounts):

|  |  | Three Months Ended March 31,
|  |  |  |  | 2021 |  | 2020
General partner's distributions: |  |  |  |  |  |  |
General partner's distributions |  |  |  |  | $ | — |  |  | $ | 444 |
General partner's IDRs |  |  |  |  | — |  |  | 8,695 |
Total general partner's distributions |  |  |  |  | — |  |  | 9,139 |
Limited partners' distributions: |  |  |  |  |  |  |
Common limited partners' distributions |  |  |  |  | 39,968 |  |  | 21,739 |
Total cash distributions |  |  |  |  | $ | 39,968 |  |  | $ | 30,878 |
Cash distributions per limited partner unit |  |  |  |  | $ | 0.920 |  |  | $ | 0.890 |

Note 9 - Equity Based Compensation
The Delek Logistics GP, LLC 2012 Long-Term Incentive Plan (the "LTIP") was adopted by the Delek Logistics GP, LLC board of directors in connection with the completion of our initial public offering in November 2012. The LTIP is administered by the Conflicts Committee of the board of directors. Equity-based compensation expense is included in general and administrative expenses in the accompanying condensed consolidated statements of income and comprehensive income and is immaterial for the three months ended March 31, 2021 and 2020.
Note 10 - Equity Method Investments
In May 2019, the Partnership, through its wholly owned indirect subsidiary DKL Pipeline, LLC (“DKL Pipeline”), entered into a Contribution and Subscription Agreement (the “Contribution Agreement”) with Plains Pipeline, L.P. (“Plains”) and Red River Pipeline Company LLC (“Red River”). Pursuant to the Contribution Agreement, DKL Pipeline contributed $124.7 million, substantially all of which was financed by borrowings under the DKL Credit Facility, to Red River in exchange for a 33% membership interest in Red River and DKL Pipeline’s admission as a member of Red River. In addition, we contributed $0.4 million of startup capital pursuant to the Amended and Restated Limited Liability Company Agreement. During the third quarter of 2020, Red River, which owns a crude oil pipeline running from Cushing, Oklahoma to Longview, Texas, completed a planned expansion project to increase the pipeline capacity and commenced operations on the completed expansion project on October 1, 2020. We contributed $3.5 million related to such expansion project in May 2019. During the three months ended March 31, 2021, we made additional capital contributions totaling $1.4 million based on capital calls received.

17 |

Notes to Condensed Consolidated Financial Statements (Unaudited)
Summarized unaudited financial information for Red River on a 100% basis is shown below (in thousands):

| March 31, 2021 |  | December 31, 2020
Current Assets | $ | 8,441 |  |  | $ | 13,488 |
Non-current Assets | $ | 410,772 |  |  | $ | 413,259 |
Current liabilities | $ | 10,093 |  |  | $ | 7,789 |

|  |  | Three Months Ended March 31,
|  |  |  |  | 2021 |  | 2020
Revenues |  |  |  |  | $ | 9,043 |  |  | $ | 10,096 |
Gross profit |  |  |  |  | $ | 3,625 |  |  | $ | 5,887 |
Operating income |  |  |  |  | $ | 3,439 |  |  | $ | 5,697 |
Net income |  |  |  |  | $ | 3,439 |  |  | $ | 5,721 |

We have two joint ventures that have constructed separate crude oil pipeline systems and related ancillary assets, which are serving third parties and subsidiaries of Delek Holdings. We own a 50% membership interest in the entity formed with an affiliate of Plains All American Pipeline, L.P. ("CP LLC") to operate one of these pipeline systems (the "Caddo Pipeline") and a 33% membership interest in the entity formed with Rangeland Energy II, LLC ("Rangeland Energy") to operate the other pipeline system (the "Rio Pipeline"). During 2018, Rangeland Energy was acquired by Andeavor and the legal entity in which we have an equity investment became Andeavor Logistics Rio Pipeline LLC ("Andeavor Logistics").
Combined summarized unaudited financial information for these two equity method investees on a 100% basis is shown below (in thousands):

| March 31, 2021 |  | December 31, 2020
Current assets | $ | 22,879 |  |  | $ | 20,763 |
Non-current assets | $ | 251,121 |  |  | $ | 253,862 |
Current liabilities | $ | 4,995 |  |  | $ | 1,496 |

|  |  | Three Months Ended March 31,
|  |  |  |  | 2021 |  | 2020
Revenues |  |  |  |  | $ | 9,626 |  |  | $ | 15,447 |
Gross profit |  |  |  |  | $ | 4,966 |  |  | $ | 10,636 |
Operating income |  |  |  |  | $ | 4,478 |  |  | $ | 10,140 |
Net Income |  |  |  |  | $ | 4,179 |  |  | $ | 10,158 |

The Partnership's investments in these three entities were financed through a combination of cash from operations and borrowings under the DKL Credit Facility. As of March 31, 2021 and December 31, 2020, the Partnership's investment balance in these joint ventures was $251.4 million and $253.7 million, respectively.
We do not consolidate any part of the assets or liabilities or operating results of our equity method investees. Our share of net income or loss of the investees will increase or decrease, as applicable, the carrying value of our investments in unconsolidated affiliates. With respect to our equity method investments, we determined that these entities do not represent variable interest entities and consolidation is not required. We have the ability to exercise significant influence over each of these joint ventures through our participation in the management committees, which make all significant decisions. However, since all significant decisions require the consent of the other investor(s) without regard to economic interest, we have determined that we have joint control and have applied the equity method of accounting. Our investment in these joint ventures is reflected in our pipelines and transportation segment.

18 |

Notes to Condensed Consolidated Financial Statements (Unaudited)
Note 11 - Segment Data
We aggregate our operating segments into two reportable segments: (i) pipelines and transportation and (ii) wholesale marketing and terminalling:
•The assets and investments reported in the pipeline and transportation segment provide crude oil gathering and crude oil, intermediate and refined products transportation and storage services to Delek Holdings' refining operations and independent third parties.
•The wholesale marketing and terminalling segment provides marketing services for the refined products output of the Delek Holdings' refineries, engages in wholesale activity at our terminals and terminals owned by third parties, whereby we purchase light product for sale and exchange to third parties, and provides terminalling services at our refined products terminals to independent third parties and Delek Holdings.
Our operating segments adhere to the accounting policies used for our consolidated financial statements. Our operating segments are managed separately because each segment requires different industry knowledge, technology and marketing strategies. Decisions concerning the allocation of resources and assessment of operating performance are made based on this segmentation. Management measures the operating performance of each of its reportable segments based on segment contribution margin. Segment contribution margin is defined as net revenues less cost of materials and other and operating expenses, excluding depreciation and amortization.
The following is a summary of business segment operating performance as measured by contribution margin for the periods indicated:

(in thousands) |  |  | Three Months Ended March 31,
|  |  |  |  | 2021 |  | 2020
Pipelines and Transportation |  |  |  |  |  |  |
Net revenues: |  |  |  |  |  |  |
Affiliate |  |  |  |  | $ | 63,048 |  |  | $ | 38,502 |
Third party |  |  |  |  | 1,927 |  |  | 9,465 |
Total pipelines and transportation |  |  |  |  | 64,975 |  |  | 47,967 |
Cost of materials and other |  |  |  |  | 13,079 |  |  | 6,098 |
Operating expenses (excluding depreciation and amortization) |  |  |  |  | 10,172 |  |  | 11,456 |
Segment contribution margin |  |  |  |  | $ | 41,724 |  |  | $ | 30,413 |
Capital spending |  |  |  |  | $ | 5,845 |  |  | $ | 445 |
Wholesale Marketing and Terminalling |  |  |  |  |  |  |
Net revenues: |  |  |  |  |  |  |
Affiliate (1) |  |  |  |  | $ | 33,146 |  |  | $ | 68,197 |
Third party |  |  |  |  | 54,792 |  |  | 47,237 |
Total wholesale marketing and terminalling |  |  |  |  | 87,938 |  |  | 115,434 |
Cost of materials and other |  |  |  |  | 68,092 |  |  | 95,195 |
Operating expenses (excluding depreciation and amortization) |  |  |  |  | 3,884 |  |  | 3,288 |
Segment contribution margin |  |  |  |  | $ | 15,962 |  |  | $ | 16,951 |
Capital spending |  |  |  |  | $ | 1,954 |  |  | $ | 2,583 |
Consolidated |  |  |  |  |  |  |
Net revenues: |  |  |  |  |  |  |
Affiliate |  |  |  |  | $ | 96,194 |  |  | $ | 106,699 |
Third party |  |  |  |  | 56,719 |  |  | 56,702 |
Total Consolidated |  |  |  |  | 152,913 |  |  | 163,401 |
Cost of materials and other |  |  |  |  | 81,171 |  |  | 101,293 |
Operating expenses (excluding depreciation and amortization presented below) |  |  |  |  | 14,056 |  |  | 14,744 |
Contribution margin |  |  |  |  | 57,686 |  |  | 47,364 |
General and administrative expenses |  |  |  |  | 4,860 |  |  | 6,130 |
Depreciation and amortization |  |  |  |  | 10,739 |  |  | 6,299 |
Other operating income, net |  |  |  |  | (83) |  |  | (107) |
Operating income |  |  |  |  | $ | 42,170 |  |  | $ | 35,042 |
Capital spending |  |  |  |  | $ | 7,799 |  |  | $ | 3,028 |

(1) Affiliate revenue for the wholesale marketing and terminalling segment is presented net of amortization expense pertaining to the Marketing Contract Intangible Acquisition. See Note 3 for additional information.

19 |

Notes to Condensed Consolidated Financial Statements (Unaudited)
The following table summarizes the total assets for each segment as of March 31, 2021 and December 31, 2020 (in thousands). Assets for each segment include property, plant and equipment, equity method investments, intangible assets and inventory.

| March 31, 2021 |  | December 31, 2020
Pipelines and transportation | $ | 705,262 |  |  | $ | 723,317 |
Wholesale marketing and terminalling | 217,384 |  |  | 206,918 |
Other | 26,224 |  |  | 26,182 |
Total assets | $ | 948,870 |  |  | $ | 956,417 |

Property, plant and equipment and accumulated depreciation as of March 31, 2021 and depreciation expense by reporting segment for the three months ended March 31, 2021 were as follows (in thousands):

| Pipelines and Transportation |  | Wholesale Marketing and Terminalling |  | Consolidated
Property, plant and equipment | $ | 586,119 |  |  | $ | 113,433 |  |  | $ | 699,552 |
Less: accumulated depreciation | (184,318) |  |  | (53,177) |  |  | (237,495) |
Property, plant and equipment, net | $ | 401,801 |  |  | $ | 60,256 |  |  | $ | 462,057 |
Depreciation expense for the three months ended March 31, 2021 | $ | 8,827 |  |  | $ | 1,912 |  |  | $ | 10,739 |

In accordance with ASC 360, Property, Plant & Equipment, we evaluate the realizability of property, plant and equipment as events occur that might indicate potential impairment. There were no indicators of impairment of our property, plant and equipment as of March 31, 2021.
Note 12 - Income Taxes
For tax purposes, each partner of the Partnership is required to take into account its share of income, gain, loss and deduction in computing its federal and state income tax liabilities, regardless of whether cash distributions are made to such partner by the Partnership. The taxable income reportable to each partner takes into account differences between the tax basis and fair market value of our assets, financial reporting bases of assets and liabilities, the acquisition price of such partner's units and the taxable income allocation requirements under our Partnership Agreement.
The Partnership is not a taxable entity for federal income tax purposes. While most states do not impose an entity level tax on partnership income, the Partnership is subject to entity level tax in both Tennessee and Texas.
Note 13 - Commitments and Contingencies
Litigation
In the ordinary conduct of our business, we are from time to time subject to lawsuits, investigations and claims, including environmental claims and employee-related matters. Although we cannot predict with certainty the ultimate resolution of lawsuits, investigations and claims asserted against us, including civil penalties or other enforcement actions, we do not believe that any currently pending legal proceeding or proceedings to which we are a party will have a material adverse effect on our financial statements. See "Crude Oil and Other Releases" below for discussion of an enforcement action
Environmental, Health and Safety
We are subject to extensive federal, state and local environmental and safety laws and regulations enforced by various agencies, including the Environmental Protection Agency (the "EPA"), the United States Department of Transportation, the Occupational Safety and Health Administration, as well as numerous state, regional and local environmental, safety and pipeline agencies. These laws and regulations govern the discharge of materials into the environment, waste management practices and pollution prevention measures, as well as the safe operation of our pipelines and the safety of our workers and the public. Numerous permits or other authorizations are required under these laws and regulations for the operation of our terminals, pipelines, saltwells, trucks and related operations, and may be subject to revocation, modification and renewal.
These laws and permits raise potential exposure to future claims and lawsuits involving environmental and safety matters, which could include soil and water contamination, air pollution, personal injury and property damage allegedly caused by substances which we handled, used, released or disposed of, transported, or that relate to pre-existing conditions for which we have assumed responsibility. We believe that our current operations are in substantial compliance with existing environmental and safety requirements. However, there

20 |

Notes to Condensed Consolidated Financial Statements (Unaudited)
have been and we expect that there will continue to be ongoing discussions about environmental and safety matters between us and federal and state authorities, including notices of violations, citations and other enforcement actions, some of which have resulted or may result in changes to operating procedures and in capital expenditures. While it is often difficult to quantify future environmental or safety related expenditures, we anticipate that continuing capital investments and changes in operating procedures will be required to comply with existing and new requirements, as well as evolving interpretations and more strict enforcement of existing laws and regulations.
Releases of hydrocarbons or hazardous substances into the environment could, to the extent the event is not insured, or is not a reimbursable event under the Omnibus Agreement, subject us to substantial expenses, including costs to respond to, contain and remediate a release, to comply with applicable laws and regulations and to resolve claims by third parties for personal injury, property damage or natural resources damages.
Crude Oil and Other Releases
We have experienced several crude oil and other releases involving our assets. There were no material releases that occurred during the three months ended March 31, 2021. For releases that occurred in prior years, we have received regulatory closure or a majority of the cleanup and remediation efforts are substantially complete. We expect regulatory closure in 2021 for the release sites that have not yet received it and do not anticipate material costs associated with any fines or penalties or to complete activities that may be needed to achieve regulatory closure.
Regulatory authorities could require additional remediation based on the results of our remediation efforts. We may incur additional expenses as a result of further scrutiny by regulatory authorities and continued compliance with laws and regulations to which our assets are subject. As of March 31, 2021, we have accrued $0.3 million for remediation and other such matters related to these releases.
On October 3, 2019, a release of diesel fuel involving one of our pipelines occurred near Sulphur Springs, Texas (the "Sulphur Springs Release"). Cleanup operations and site maintenance and remediation on this release have been substantially completed where such costs incurred totaled $7.1 million during 2019 and $0.5 million during 2020. During the three months ended March 31, 2021, we incurred a nominal amount of additional costs related to final clean-up of this release. Ground water monitoring wells were installed in the third quarter of 2020 and will be monitored quarterly until the site is closed. Additionally, in the third quarter of 2020 we conducted creek bed sediment sampling and the results indicated no issues with the groundwater. In the fourth quarter of 2020 we submitted an actual property assessment report that assessed site conditions and recommends closure of the site. Closure of the site was approved in the first quarter of 2021. The ground water monitoring wells are scheduled to be removed in the second quarter of 2021. We filed suit in January 2020 against a third party contractor, seeking damages related to this release; two related actions were filed in November and December 2020 by and against the contractor's insurance company seeking judgments related to insurance coverage. We have not received notification that any legal action with respect to fines and penalties will be pursued by the regulatory agencies.
Expenses incurred for the remediation of these crude oil and other releases are included in operating expenses in our condensed consolidated statements of income and comprehensive income. The majority of our releases have been subsequently reimbursed by Delek Holdings pursuant to the terms of the Omnibus Agreement, with the exception of the Sulphur Springs Release above as it is not covered under the Omnibus Agreement. Reimbursements are recorded as a reduction to operating expense. We do not believe the total costs associated with these events, whether alone or in the aggregate, including any fines or penalties and net of available insurance, indemnification or reimbursement, will have a material adverse effect upon our business, financial condition or results of operations.
During the three months ended March 31, 2021 and 2020, we recorded $0.1 million and a nominal amount of crude oil and other releases remediation expenses, net of reimbursable costs, respectively.
Note 14 - Leases
We lease certain pipeline and transportation equipment. Leases with an initial term of 12 months or less are not recorded on the balance sheet; we recognize lease expense for these leases on a straight-line basis over the lease term.
Our leases do not have any outstanding renewal options. Certain leases also include options to purchase the leased equipment.
Certain of our lease agreements include rates based on equipment usage and others include rate inflationary indices based increases. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants.

21 |

Notes to Condensed Consolidated Financial Statements (Unaudited)
The following table presents additional information related to our operating leases in accordance ASC 842:

|  |  | Three Months Ended March 31,
(in thousands) |  |  |  |  | 2021 |  | 2020
Lease Cost (1) |  |  |  |  |  |  |
Operating lease cost |  |  |  |  | $ | 2,744 |  |  | $ | 600 |
Short-term lease cost (2) |  |  |  |  | 147 |  |  | 320 |
Variable lease costs |  |  |  |  | — |  |  | 212 |
Total lease cost |  |  |  |  | $ | 2,891 |  |  | $ | 1,132 |
Other Information (1) |  |  |  |  |  |  |
Cash paid for amounts included in the measurement of lease liabilities |  |  |  |  |  |  |
Operating cash flows from operating leases |  |  |  |  | $ | (2,744) |  |  | $ | (600) |
Leased assets obtained in exchange for new operating lease liabilities |  |  |  |  | $ | 2,623 |  |  | $ | — |
|  |  |  |  | March 31, 2021 |  | March 31, 2020
Weighted-average remaining lease term (years) for operating leases |  |  |  |  | 3.5 |  | 3.8
Weighted-average discount rate (3) operating leases |  |  |  |  | 5.9 | % |  | 7.3 | %
Weighted-average remaining lease term (years) for financing lease |  |  |  |  | 2.7 |  | 0.0
Weighted-average discount rate (3) financing lease |  |  |  |  | 1.8 | % |  | — | %

(1) Includes an immaterial amount of financing lease cost.
(2) Includes an immaterial amount of variable lease cost.
(3) Our discount rate is primarily based on our incremental borrowing rate in accordance with ASC 842.

Note 15 - Subsequent Events
Distribution Declaration
On April 29, 2021, our general partner's board of directors declared a quarterly cash distribution of $0.920 per unit, payable on May 14, 2021, to unitholders of record on May 10, 2021.
Exclusivity Supply Agreement
In May 2021, we executed a strategic exclusivity supply agreement with Baker Petrolite LLC (an affiliate of Baker Hughes Company) ("Baker"), for the supply of chemicals to meet IMO regulations through blending competencies utilizing proprietary intellectual property. The agreement has a 5-year initial term and a 5-year extension option. Terms of the agreement are intended to incentivize a cooperative arrangement relating to strategic blending activities to be operated by the Partnership, and provide for profit sharing opportunities through a variable price structure. Annual minimum requirements under the contract are nominal and may be applied towards purchases.

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Management's Discussion and Analysis
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Management’s Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") is management’s analysis of our financial performance and of significant trends that may affect our future performance. The MD&A should be read in conjunction with our condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q and in the Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission ("SEC") on March 1, 2021 (the "Annual Report on Form 10-K"). Those statements in the MD&A that are not historical in nature should be deemed forward-looking statements that are inherently uncertain. See "Forward-Looking Statements" below for a discussion of the factors that could cause actual results to differ materially from those projected in these statements.
Unless otherwise noted or the context requires otherwise, references in this report to "Delek Logistics Partners, LP," the "Partnership," "we," "us," "our," or like terms, may refer to Delek Logistics Partners, LP, one or more of its consolidated subsidiaries or all of them taken as a whole. Unless otherwise noted or the context requires otherwise, references in this report to "Delek Holdings" refer collectively to Delek US Holdings, Inc. and any of its subsidiaries, other than the Partnership and its subsidiaries and its general partner.
Effective August 13, 2020, the Partnership closed the transaction contemplated by a definitive exchange agreement with the general partner to eliminate all of the incentive distribution rights ("IDRs") held by the general partner, such transaction the "IDR Restructuring Transaction." See Note 3 of the accompanying condensed consolidated financial statements for further information.
Effective May 1, 2020, the Partnership, through its wholly-owned subsidiary DKL Transportation, LLC, acquired Delek Trucking, LLC consisting of certain leased and owned tractors and trailers and related assets (the "Trucking Assets") from Delek Holdings, such transaction the "Trucking Assets Acquisition." See Note 2 of the accompanying condensed consolidated financial statements for further information.
Effective March 31, 2020, the Partnership, through its wholly-owned subsidiary DKL Permian Gathering, LLC, acquired from Delek Holdings a crude oil gathering system located in Howard, Borden and Martin Counties, Texas (the "Big Spring Gathering Assets"), and certain related assets, such transaction the "Big Spring Gathering Assets Acquisition." See Note 2 of the accompanying condensed consolidated financial statements for further information.
The Partnership announces material information to the public about the Partnership, its products and services and other matters through a variety of means, including filings with the Securities and Exchange Commission, press releases, public conference calls, the Partnership's website (www.deleklogistics.com), the investor relations section of the website (ir.deleklogistics.com), the news section of its website (www.deleklogistics.com/news), and/or social media, including its Twitter account (@DelekUSLogistics). The Partnership encourages investors and others to review the information it makes public in these locations, as such information could be deemed to be material information. Please note that this list may be updated from time to time.
Forward-Looking Statements
This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (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 COVID-19 Pandemic and 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, 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,” “predicts,” “potential,” “continue,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates,” “appears,” “projects” and similar expressions, as well as statements in future tense, identify forward-looking statements.
Forward-looking statements should not be read as a guarantee of future performance or results, and will not necessarily be accurate indications of the times at, or by, which such performance or results will be achieved. Forward-looking information is based on information available at the time and/or management’s good faith belief with respect to future events, and is subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in the statements. Important factors that, individually or in the aggregate, could cause such differences include, but are not limited to:
•our substantial dependence on Delek Holdings or its assignees and their support of and respective ability to pay us under our commercial agreements;

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Management's Discussion and Analysis
•our future coverage, leverage, financial flexibility and growth, and our ability to improve performance and achieve distribution growth at any level or at all;
•Delek Holdings' future growth, financial performance, share repurchases, crude oil supply pricing and flexibility and product distribution;
•industry dynamics, including Permian Basin growth, ownership concentration, efficiencies and takeaway capacity;
•the age and condition of our assets and operating hazards and other risks incidental to transporting, storing and gathering crude oil, intermediate and refined products, including, but not limited to, costs, penalties, regulatory or legal actions and other effects related to spills, releases and tank failures;
•changes in insurance markets impacting costs and the level and types of coverage available;
•the timing and extent of changes in commodity prices and demand for refined products and the impact of the COVID-19 Pandemic on such demand;
•the wholesale marketing margins we are able to obtain and the number of barrels of product we are able to purchase and sell in our West Texas wholesale business;
•the suspension, reduction or termination of Delek Holdings' or its assignees' or third-party's obligations under our commercial agreements including the duration, fees or terms thereof;
•the results of our investments in joint ventures;
•the ability to secure commercial agreements with Delek Holdings or third parties upon expiration of existing agreements;
•the possibility of inefficiencies, curtailments, or shutdowns in refinery operations or pipelines, whether due to infection in the workforce or in response to reductions in demand as a result of the COVID-19 Pandemic;
•disruptions due to equipment interruption or failure, or other events, including terrorism, sabotage or cyber attacks, at our facilities, Delek Holdings’ facilities or third-party facilities on which our business is dependent;
•changes in the availability and cost of capital of debt and equity financing;
•our reliance on information technology systems in our day-to-day operations;
•changes in general economic conditions, including uncertainty regarding the timing, pace and extent of economic recovery in the United States due to the COVID-19 Pandemic;
•the effects of existing and future laws and governmental regulations, including, but not limited to, the rules and regulations promulgated by the Federal Energy Regulatory Commission ("FERC") and state commissions and those relating to environmental protection, pipeline integrity and safety as well as current and future restrictions on commercial and economic activities in response to the COVID-19 Pandemic;
•competitive conditions in our industry;
•actions taken by our customers and competitors;
•the demand for crude oil, refined products and transportation and storage services;
•our ability to successfully implement our business plan;
•inability to complete growth projects on time and on budget;
•our ability to successfully integrate acquired businesses;
•disruptions due to acts of God, including natural disasters, weather-related delays, casualty losses and other matters beyond our control;
•severe weather patterns, such as freezing conditions, might cause damage to our pipelines, terminal facilities and other assets and could impact our operating results through increased costs and/or loss of revenue;
•changes in the price of RINs could affect our results of operations;
•future decisions by OPEC+ regarding production and pricing and disputes between OPEC+ regarding such;
•changes or volatility in interest and inflation rates;
•labor relations;
•large customer defaults;
•changes in tax status and regulations;

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Management's Discussion and Analysis
•the effects of future litigation; and
•other factors discussed elsewhere in this Quarterly Report on Form 10-Q and in our Annual Report on Form 10-K.
Many of the foregoing risks and uncertainties are, and will be, exacerbated by the COVID-19 Pandemic and any worsening of the global business and economic environment. In light of these risks, uncertainties and assumptions, our actual results of operations and execution of our business strategy could differ materially from those expressed in, or implied by, the forward-looking statements, and you should not place undue reliance upon them. In addition, past financial and/or operating performance is not necessarily a reliable indicator of future performance, and you should not use our historical performance to anticipate results or future period trends. We can give no assurances that any of the events anticipated by the forward-looking statements will occur or, if any of them do, what impact they will have on our results of operations and financial condition.
All forward-looking statements included in this report are based on information available to us on the date of this report. We undertake no obligation to revise or update any forward-looking statements as a result of new information, future events or otherwise.

Business Overview

The Partnership primarily owns and operates crude oil, intermediate and refined products logistics and marketing assets. We gather, transport, offload and store crude oil and intermediate products and market, distribute, transport and store refined products primarily in select regions of the southeastern United States and Texas for Delek Holdings and third parties. A substantial majority 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 Tyler, El Dorado and Big Spring refineries.
The Partnership is not a taxable entity for federal income tax purposes or the income taxes of those states that follow the federal income tax treatment of partnerships. Instead, for purposes of such income taxes, each partner of the Partnership is required to take into account its share of items of income, gain, loss and deduction in computing its federal and state income tax liabilities, regardless of whether cash distributions are made to such partner by the Partnership. The taxable income reportable to each partner takes into account differences between the tax basis and the fair market value of our assets and financial reporting bases of assets and liabilities, the acquisition price of the partner's units and the taxable income allocation requirements under the Partnership's Second Amended and Restated Agreement of Limited Partnership (the "Partnership Agreement").
The on-going impact of the COVID-19 Pandemic, the restrictions imposed to prevent its spread, the challenges with the vaccination rollout, and the spread of new variants of the virus, continue to cause significant economic disruption globally, including in the U.S. and specific geographic areas where we operate. Compared to the prior year, the first quarter of 2021 has witnessed economic recovery trends including resumption of flights by major airlines and increased motor vehicle use, as the government continues to ramp up the vaccination rollout. This has in turn resulted in increased demand for, thus also the market prices of, crude oil and certain products, particularly refined petroleum products that we receive revenue for the transportation and storage services we provide and an increase in demand and sales volumes in our wholesale marketing business. As of March 31, 2021, there is continued uncertainty about the duration and future impact of the COVID-19 Pandemic. Additionally, increased infection rates could impact our logistics operations, particularly in high-infection states, if our employees are personally affected by the illness, both through direct infection and quarantine procedures.
In February 2021, our operations and those of our customers were temporarily impacted by the severe freezing weather, which affected certain regions around the country including areas where we operate. Our customers’ volumes were significantly impacted by the prolonged freezing conditions that occurred, resulting in lower throughput in our pipeline and transportation operations. In addition, the freezing conditions led to significant increases to energy prices resulting in increases to the related expenses. Severe weather patterns such as the freezing conditions might cause damage to our pipelines, terminal facilities and other assets and could impact our operating results through additional costs and/or loss of revenue.
During the three months ended March 31, 2021, both our West Texas wholesale marketing business and many of our pipeline and transportation customers experienced an increase in demand and pricing due to the resumption of some economic activities as discussed above. The impact of this positive trend was netted by the reduced volumes during the severe freezing conditions experienced in February 2021 as discussed above. Our pipelines and transportation revenue streams were largely protected by minimum volume commitments under existing throughput contracts with customers during the current and prior periods, but continued pressure on our customers could present risks to our existing and new business opportunities as well as on collectability on our receivables. Our management continues to monitor the COVID-19 infections in the communities around our company locations, the impact on our operations and whether there is a need to update our remote policies and quarantine protocols. We continue to be exposed to risk from our suppliers and customers who are facing similar challenges.
To the extent that uncertainties related to the COVID-19 Pandemic have been identified and are believed to have an impact on our current period results of operations or financial position based on the requirements for assessing such financial statement impact under U.S. generally accepted accounting principles, we have considered them in the preparation of our condensed consolidated financial statements as of and for the three months ended March 31, 2021, which are included in Item 1. of this Quarterly Report on Form 10-Q.

25 |

Management's Discussion and Analysis
Other uncertainties related to the impact of the COVID-19 Pandemic and other events may exist that have not been identified, and could impact our future results of operations and financial position, the nature of which and the extent to which are currently unknown. The U.S. Federal Government's passage and/or enactment of additional stimulus and relief measures, may impact the extent to which the risk underlying these uncertainties are realized.
In addition, management continues to actively respond to the impact of the COVID-19 Pandemic and other events on our business. Such efforts include (but are not limited to) the following:
•Reducing planned capital expenditures for 2021;
•Identifying alternative financing solutions to enhance our access to sources of liquidity;
•Enacting cost reduction measures across the organization, including reducing contract services, reducing overtime and reducing or eliminating non-critical travel which serves the dual purpose of also complying with recommendations made by the state and federal governments because of the COVID-19 Pandemic;
•Implementing regular site cleaning and disinfecting procedures;
•Adopting remote working where possible. Where on-site operations are required, appropriate safety precautions taken; and
•Working with our employees to implement other site-specific precautionary measures to reduce the risk of exposure.
The extent to which our future results are affected by the COVID-19 Pandemic will depend on various factors and consequences beyond our control, such as the duration and scope of the Pandemic; additional actions by businesses and governments in response to the COVID-19 Pandemic; and the speed and effectiveness of responses to combat the virus. The COVID-19 Pandemic, and the volatile regional and global economic conditions stemming from the Pandemic, could also exacerbate the risk factors identified in this Quarterly Report on Form 10-Q and our Annual Report on Form 10-K. The COVID-19 Pandemic may also materially adversely affect our results in a manner that is either not currently known or that we do not currently consider to be a significant risk to our business.
See also 'Risk Factors' in Part I, Item 1A. of our Annual Report on Form 10-K for further discussion of risks associated with the COVID-19 Pandemic.
Our Reporting Segments and Assets
Our business consists of two reportable segments:

Pipelines and Transportation

The assets and investments in our pipelines and transportation segment consist of pipelines, tanks, offloading facilities, trucks and ancillary assets, which provide crude oil gathering and crude oil, intermediate and refined products transportation and storage services primarily in support of Delek Holdings' refining operations in Tyler, Texas, El Dorado, Arkansas and Big Spring, Texas. Additionally, the assets in this segment provide crude oil transportation services to certain third parties. In providing these services, we do not take ownership of the products or crude oil that we transport or store. Therefore, we are not directly exposed to changes in commodity prices with respect to this operating segment.

Wholesale Marketing and Terminalling

The assets in our wholesale marketing and terminalling segment consist of refined products terminals and pipelines in Texas, Tennessee, Arkansas and Oklahoma. We generate revenue in our wholesale marketing and terminalling segment by providing marketing services for the refined products output of the Tyler and Big Spring refineries, engaging in wholesale activity at our terminals in West Texas and at terminals owned by third parties, whereby we purchase light products for sale and exchange to third parties, and by providing terminalling services at our refined products terminals to independent third parties and Delek Holdings.
2021 Strategic Developments
Exclusivity Supply Agreement
In May 2021, we executed a strategic exclusivity supply agreement with Baker Petrolite LLC (an affiliate of Baker Hughes Company) ("Baker"), for the supply of chemicals to meet IMO regulations through blending competencies utilizing proprietary intellectual property.The agreement has a 5-year initial term and a 5-year extension option. Terms of the agreement are intended to incentivize a cooperative arrangement relating to strategic blending activities to be operated by the Partnership, and provides an exciting growth opportunity. See Note 15 to our accompanying condensed consolidated financial statements for additional information

26 |

Management's Discussion and Analysis
How We Generate Revenue
The Partnership generates revenue by charging fees to Delek Holdings and third parties for gathering, transporting, offloading and storing crude oil and for marketing, distributing, transporting, throughputting and storing intermediate and refined products. We also wholesale market refined products primarily in the West Texas market. A substantial majority of our contribution margin, which we define as net revenues less cost of materials and other and operating expenses, excluding depreciation and amortization, is derived from commercial agreements with Delek Holdings with initial terms ranging from five to ten years, which gives us a contractual revenue base that we believe enhances the stability of our cash flows. As more fully described below, our commercial agreements with Delek Holdings typically include minimum volume or throughput commitments by Delek Holdings, which we believe will provide a stable revenue stream in the future. The fees charged under our agreements with Delek Holdings and third parties are indexed to inflation-based indices. In addition, the rates charged with respect to our assets that are subject to inflation indexing may increase or decrease, typically on July 1 of each year, by the amount of any change in various inflation-based indices, including FERC, provided that in no event will the fees be adjusted below the amount initially set forth in the applicable agreement.
Commercial Agreements with Delek Holdings
The Partnership has a number of long-term, fee-based commercial agreements with Delek Holdings under which we provide various services, including crude oil gathering, crude oil, intermediate and refined products transportation and storage services, and marketing, terminalling and offloading services to Delek Holdings, and Delek Holdings commits to provide us with minimum monthly throughput volumes of crude oil, intermediate and refined products. Generally, these agreements include minimum quarterly volume, revenue or throughput commitments and have tariffs or fees indexed to inflation-based indices, provided that the tariffs or fees will not be decreased below the initial amount. See our Annual Report on Form 10-K filed with the SEC on March 1, 2021 for a discussion of our material commercial agreements with Delek Holdings.
Other Transactions
Starting in 2018, the Partnership manages a long-term capital project on behalf of Delek Holdings pursuant to a construction management and operating agreement (the "DPG Management Agreement") for the construction of a 250-mile gathering system in the Permian Basin (the "Delek Permian Gathering Project"). As of March 31, 2021, approximately 183 miles of the gathering system were completed and operational, however, additional costs pertaining to a pipeline connection that was not contributed to the Partnership continue to be incurred and are still subject to the terms of the DPG Management Agreement. The Partnership is also considered the operator for the project and is responsible for the oversight of the project design, procurement and construction of project segments and for providing other related services. See Note 3 to our accompanying condensed consolidated financial statements for additional information on the DPG Management Agreement.
How We Evaluate Our Operations
We use a variety of financial and operating metrics to analyze our segment performance. These metrics are significant factors in assessing our operating results and profitability and include:
(i)volumes (including pipeline throughput and terminal volumes);
(ii)contribution margin per barrel;
(iii)operating and maintenance expenses;
(iv)cost of materials and other; and
(v)EBITDA and distributable cash flow (as such terms are defined below).
Volumes
The amount of revenue we generate primarily depends on the volumes of crude oil and refined products that we handle in our pipeline, transportation, terminalling, storage and marketing operations. These volumes are primarily affected by the supply of and demand for crude oil, intermediate and refined products in the markets served directly or indirectly by our assets. Although Delek Holdings has committed to minimum volumes under certain of the commercial agreements, as described above, our results of operations will be impacted by:
•Delek Holdings' utilization of our assets in excess of its minimum volume commitments;
•our ability to identify and execute acquisitions and organic expansion projects, and capture incremental volume increases from Delek Holdings or third parties;
•our ability to increase throughput volumes at our refined products terminals and provide additional ancillary services at those terminals;
•our ability to identify and serve new customers in our marketing and trucking operations; and
•our ability to make connections to third-party facilities and pipelines.

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Management's Discussion and Analysis
Contribution Margin per Barrel
Because we do not allocate general and administrative expenses by segment, we measure the performance of our segments by the amount of contribution margin as generated in operations. Contribution margin is defined as net revenues less cost of materials and other and operating expenses, excluding depreciation and amortization.
For our wholesale marketing and terminalling segment, we also measure gross margin per barrel. Gross margin per barrel reflects the gross margin (net revenues less cost of materials and other) of the wholesale marketing operations divided by the number of barrels of refined products sold during the measurement period. Both contribution margin and gross margin per barrel can be affected by fluctuations in the prices and cost of gasoline, distillate fuel, ethanol and RINs. Historically, the profitability of our wholesale marketing operations has been affected by commodity price volatility, (specifically as it relates to changes in the price of refined products between the time we purchase such products from our suppliers and the time we sell the products to our wholesale customers), and the fluctuation in the value of RINs. Commodity price volatility may also impact our wholesale marketing operations when the selling price of refined products does not adjust as quickly as the purchase price. Our wholesale marketing gross margin may also be impacted by fixed price ethanol agreements that we enter into to fix the price we pay for ethanol.
Operating and Maintenance Expenses
We seek to maximize the profitability of our operations by effectively managing operating and maintenance expenses. These expenses include the costs associated with the operation of owned terminals and pipelines and terminalling expenses at third-party locations, excluding depreciation and amortization. These costs primarily include outside services, allocated employee costs, repairs and maintenance costs and energy and utility costs. Operating expenses related to the wholesale business are excluded from cost of sales because they primarily relate to costs associated with selling the products through our wholesale business. These expenses generally remain relatively stable across broad ranges of throughput volumes, but can fluctuate from period to period depending on the mix of activities performed during that period and the timing of these expenses. Additionally, compliance with federal, state and local laws and regulations relating to the protection of the environment, health and safety may require us to incur additional expenditures. We will seek to manage our maintenance expenditures on our pipelines and terminals by scheduling maintenance over time to avoid significant variability in our maintenance expenditures and minimize their impact on our cash flow.
Cost of Materials and Other
These costs include:

(i)all costs of purchased refined products in our wholesale marketing and terminalling segment, as well as additives and related transportation of such products; |  | (ii)costs associated with the operation of our trucking assets, which primarily include allocated employee costs and other costs related to fuel, truck leases and repairs and maintenance;
(iii)the cost of pipeline capacity leased from any third parties; and |  | (iv)gains and losses related to our commodity hedging activities.

Financing
The Partnership has declared its intent to make a cash distribution to its unitholders at a distribution rate of $0.920 per unit for the quarter ended March 31, 2021 ($3.680 per unit on an annualized basis). Our Partnership Agreement requires that the Partnership distribute all of its available cash (as defined in the Partnership Agreement) to its unitholders quarterly. As a result, the Partnership expects to fund future capital expenditures primarily from operating cash flows, borrowings under our DKL Credit Facility and any potential future issuances of equity and debt securities. See Note 8 to the accompanying condensed consolidated financial statements for a discussion of historic cash distributions.

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Management's Discussion and Analysis
Market Trends
Business Environment
Fluctuations in crude oil prices and the prices of related refined products impact our operations and the operations of other master limited partnerships in the midstream energy sector. In particular, crude oil prices and the prices of related refined 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.
During the first quarter of 2021, although the on-going COVID-19 Pandemic continues to negatively affect economic trends, signs of economic recovery are starting to show resulting in increases in consumption and demand for crude oil and refined products. Compared to the first quarter of 2020, where reduced demand for crude oil and refined products related to the COVID-19 Pandemic, combined with production increases from OPEC+, had led to a significant reduction in crude oil prices, crude oil prices during the first quarter of 2021 have been increasing. Commodity prices are showing signs of recovery and are expected to continue recovering in 2021 as the U.S. federal and state governments increase the rollout of vaccinations. The opening January 2021 price of oil (WTI Cushing) was $47.62 and reached the January 2021 high closing price of oil of $53.57 per barrel, which further increased to close at $59.16 per barrel on March 31, 2021. Oil prices reached a high of $66.09 on March 5, 2021. Due to the stabilization in oil prices, during the first quarter of 2021, we experienced improved margins in the West Texas area, and better throughput for our assets with improved gross margins, when compared to the first quarter of 2020. We believe we are strategically positioned, in these tougher market conditions to continue developing profitable growth projects that are needed to support future distribution growth in the midstream energy sector for the Partnership.
West Texas Marketing Operations
Overall demand for gathering and terminalling services in a particular area is generally driven by crude oil production in the area, which can be impacted by crude oil prices, refining economics and access to alternate delivery and transportation infrastructure. Additionally, volatility in crude oil, intermediate and refined products prices in the West Texas area and the value attributable to RINs can affect the results of our West Texas operations. For example, as discussed above, drilling activity and the prices of crude oil and related refined products increased in the first half of 2019 and in spite of a slight decrease in prices in the third quarter of 2019, demand for refined products from our West Texas operations to industries that support crude oil exploration and production began to rebound early in the first quarter of 2020. However due to the impact of the COVID-19 Pandemic there was lower demand and sales of refined products during the latter part of the first quarter of 2020 and remained largely depressed during most of 2020. In the first quarter of 2021, demand for and prices of crude oil and related refined products increased as economic activity began to recover due to the increase in vaccinations.
See the chart below for the high, low and average price per barrel of WTI crude oil for each of the quarterly periods in 2020 and for the three months ended March 31, 2021.

The volatility of refined products prices may impact our margin in the West Texas operations when the selling price of refined products does not adjust as quickly as the purchase price. See the charts below for the range of prices per gallon of gasoline and diesel for each of the quarterly periods in 2020 and for the three months ended March 31, 2021.

29 |

Management's Discussion and Analysis

Our West Texas operations can benefit from RINs that are generated by ethanol blending activities. As a result, changes in the price of RINs can affect our results of operations. The RINs we generate are sold primarily to Delek Holdings at market prices. We sold approximately $2.4 million and $0.8 million of RINs to Delek Holdings during the three months ended March 31, 2021 and 2020, respectively. See below for the high, low and average prices of RINs for each of the quarterly periods in 2020 and in the three months ended March 31, 2021.

30 |

Management's Discussion and Analysis

All of these factors are subject to change over time. As part of our overall business strategy, management considers aspects such as location, acquisition and expansion opportunities and factors impacting the utilization of the refineries (and therefore throughput volumes), which may impact our performance in the market.

31 |

Management's Discussion and Analysis
Contractual Obligations
There have been no material changes to our contractual obligations and commercial commitments during the three months ended March 31, 2021 from those disclosed in our Annual Report on Form 10-K.
Critical Accounting Policies
The preparation of our condensed consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosure of contingent assets and liabilities. The SEC has defined critical accounting policies as those that are both most important to the portrayal of our financial condition and results of operations and require our most difficult, complex or subjective judgments or estimates. Based on this definition and as further described in our Annual Report on Form 10-K, we believe our critical accounting policies include the following: (i) evaluating impairment for property, plant and equipment and intangibles, and (ii) evaluating potential impairment of goodwill.
Non-GAAP Measures
Our management uses certain "non-GAAP" operational measures to evaluate our operating segment performance and non-GAAP financial measures to evaluate past performance and prospects for the future to supplement our GAAP financial information presented in accordance with U.S. GAAP. These financial and operational non-GAAP measures are important factors in assessing our operating results and profitability and include:

•Earnings before interest, taxes, depreciation and amortization ("EBITDA") - calculated as net income before net interest expense, income tax expense, depreciation and amortization expense, including amortization of customer contract intangible assets, which is included as a component of net revenues in our accompanying condensed consolidated statements of income. |  | •Distributable cash flow - calculated as net cash flow from operating activities plus or minus changes in assets and liabilities, less maintenance capital expenditures net of reimbursements and other adjustments not expected to settle in cash. The Partnership believes this is an appropriate reflection of a liquidity measure by which users of its financial statements can assess its ability to generate cash.

EBITDA and distributable cash flow are non-U.S. GAAP supplemental financial measures that management and external users of our condensed consolidated financial statements, such as industry analysts, investors, lenders and rating agencies, may use to assess:
•our operating performance as compared to other publicly traded partnerships in the midstream energy industry, without regard to historical cost basis or, in the case of EBITDA, financing methods;
•the ability of our assets to generate sufficient cash flow to make distributions to our unitholders;
•our ability to incur and service debt and fund capital expenditures; and
•the viability of acquisitions and other capital expenditure projects and the returns on investment of various investment opportunities.
We believe that the presentation of EBITDA and distributable cash flow provide information useful to investors in assessing our financial condition and results of operations. EBITDA and distributable cash flow should not be considered alternatives to net income, operating income, cash flow from operating activities or any other measure of financial performance or liquidity presented in accordance with U.S. GAAP. EBITDA and distributable cash flow have important limitations as analytical tools because they exclude some, but not all, items that affect net income and net cash provided by operating activities. Additionally, because EBITDA and distributable cash flow may be defined differently by other partnerships in our industry, our definitions of EBITDA and distributable cash flow may not be comparable to similarly titled measures of other partnerships, thereby diminishing their utility. For a reconciliation of EBITDA and distributable cash flow to their most directly comparable financial measures calculated and presented in accordance with U.S. GAAP, please refer to "Results of Operations" below.

32 |

Management's Discussion and Analysis
Summary of Financial and Other Information
A discussion and analysis of the factors contributing to our results of operations is presented below. The financial statements, together with the following information, are intended to provide investors with a reasonable basis for assessing our historical operations, but should not serve as the only criteria for predicting our future performance.
The following table and discussion present a summary of our consolidated results of operations for the three months ended March 31, 2021 and 2020, including a reconciliation of net income to EBITDA and net cash flow provided by operating activities to distributable cash flow.
Statement of Operations Data (in thousands, except unit and per unit amounts)

|  |  | Three Months Ended March 31,
|  |  |  |  | 2021 |  | 2020
Net revenues: |  |  |  |  |  |  |
Pipelines and transportation |  |  |  |  | $ | 64,975 |  |  | $ | 47,967 |
Wholesale marketing and terminalling |  |  |  |  | 87,938 |  |  | 115,434 |
Total |  |  |  |  | 152,913 |  |  | 163,401 |
Operating costs and expenses: |  |  |  |  |  |  |
Cost of materials and other |  |  |  |  | 81,171 |  |  | 101,293 |
Operating expenses (excluding depreciation and amortization) |  |  |  |  | 14,056 |  |  | 14,744 |
General and administrative expenses |  |  |  |  | 4,860 |  |  | 6,130 |
Depreciation and amortization |  |  |  |  | 10,739 |  |  | 6,299 |
Other operating income, net |  |  |  |  | (83) |  |  | (107) |
Total operating costs and expenses |  |  |  |  | 110,743 |  |  | 128,359 |
Operating income |  |  |  |  | 42,170 |  |  | 35,042 |
Interest expense, net |  |  |  |  | 9,737 |  |  | 11,824 |
Income from equity method investments |  |  |  |  | (4,049) |  |  | (5,553) |
Other expense, net |  |  |  |  | 31 |  |  | — |
Total non-operating costs and expenses |  |  |  |  | 5,719 |  |  | 6,271 |
Income before income tax expense |  |  |  |  | 36,451 |  |  | 28,771 |
Income tax expense |  |  |  |  | 184 |  |  | 975 |
Net income attributable to partners |  |  |  |  | $ | 36,267 |  |  | $ | 27,796 |
Comprehensive income attributable to partners |  |  |  |  | $ | 36,267 |  |  | $ | 27,796 |
EBITDA(1) |  |  |  |  | $ | 58,730 |  |  | $ | 48,697 |
Less: General partner's interest in net income, including incentive distribution rights |  |  |  |  | — |  |  | 9,077 |
Limited partners' interest in net income |  |  |  |  | $ | 36,267 |  |  | $ | 18,719 |
Net income per limited partner unit: |  |  |  |  |  |  |
Common units - basic |  |  |  |  | $ | 0.83 |  |  | $ | 0.76 |
Common units - diluted |  |  |  |  | $ | 0.83 |  |  | $ | 0.76 |
Weighted average limited partner units outstanding: |  |  |  |  |  |  |
Common units - basic |  |  |  |  | 43,443,336 |  |  | 24,480,570 |
Common units - diluted |  |  |  |  | 43,449,059 |  |  | 24,485,336 |

(1) For a definition of EBITDA, please see "Non-GAAP Measures" above.

33 |

Management's Discussion and Analysis
Non-GAAP Reconciliations
The following table provides a reconciliation of EBITDA and distributable cash flow to the most directly comparable U.S. GAAP measure, or net income and net cash from operating activities, respectively.
Reconciliation of net income to EBITDA (in thousands)

|  |  | Three Months Ended March 31,
|  |  |  |  | 2021 |  | 2020
Net income |  |  |  |  | $ | 36,267 |  |  | $ | 27,796 |
Add: |  |  |  |  |  |  |
Income tax expense |  |  |  |  | 184 |  |  | 975 |
Depreciation and amortization |  |  |  |  | 10,739 |  |  | 6,299 |
Amortization of customer contract intangible assets |  |  |  |  | 1,803 |  |  | 1,803 |
Interest expense, net |  |  |  |  | 9,737 |  |  | 11,824 |
EBITDA (1) |  |  |  |  | $ | 58,730 |  |  | $ | 48,697 |

Reconciliation of net cash from operating activities to distributable cash flow (in thousands)

|  |  | Three Months Ended March 31,
|  |  |  |  | 2021 |  | 2020
Net cash provided by operating activities |  |  |  |  | $ | 61,732 |  |  | $ | 34,834 |
Changes in assets and liabilities |  |  |  |  | (10,863) |  |  | 1,654 |
Distributions from equity method investments in investing activities |  |  |  |  | 3,924 |  |  | 110 |
Non-cash lease expense |  |  |  |  | (2,018) |  |  | (274) |
Maintenance and regulatory capital expenditures (2) |  |  |  |  | (515) |  |  | (857) |
Reimbursement from Delek Holdings for capital expenditures (3) |  |  |  |  | 359 |  |  | 39 |
Accretion of asset retirement obligations |  |  |  |  | (115) |  |  | (107) |
Deferred income taxes |  |  |  |  | (65) |  |  | — |
Other operating income, net |  |  |  |  | 83 |  |  | 107 |
Distributable cash flow (1) |  |  |  |  | $ | 52,522 |  |  | $ | 35,506 |

(1) | For a definition of EBITDA and distributable cash flow, please see "Non-GAAP Measures" above.
(2) | Maintenance and regulatory capital expenditures represent cash expenditures (including expenditures for the addition or improvement to, or the replacement of, our capital assets, and for the acquisition of existing, or the construction or development of new, capital assets) made to maintain our long-term operating income or operating capacity. Examples of maintenance and regulatory capital expenditures are expenditures for the repair, refurbishment and replacement of pipelines and terminals, to maintain equipment reliability, integrity and safety and to address environmental laws and regulations.
(3) | For the three month periods ended March 31, 2021 and 2020, Delek Holdings reimbursed us for certain capital expenditures pursuant to the terms of the Omnibus Agreement (as defined in Note 3 to our accompanying condensed consolidated financial statements).

34 |

Management's Discussion and Analysis
Results of Operations
Consolidated Results of Operations — Comparison of the three months ended March 31, 2021 compared to the three months ended March 31, 2020
The table below presents a summary of our consolidated results of operations. The discussion immediately following presents the consolidated results of operations (in thousands):

Consolidated
|  |  | Three Months Ended March 31,
|  |  |  |  | 2021 |  | 2020
Net Revenues: |  |  |  |  |  |  |
Affiliates |  |  |  |  | $ | 96,194 |  |  | 106,699 |
Third-Party |  |  |  |  | 56,719 |  |  | 56,702 |
Total Consolidated |  |  |  |  | 152,913 |  |  | 163,401 |
Cost of materials and other |  |  |  |  | 81,171 |  |  | 101,293 |
Operating expenses (excluding depreciation and amortization presented below) |  |  |  |  | 14,056 |  |  | 14,744 |
Contribution margin |  |  |  |  | 57,686 |  |  | 47,364 |
General and administrative expenses |  |  |  |  | 4,860 |  |  | 6,130 |
Depreciation and amortization |  |  |  |  | 10,739 |  |  | 6,299 |
Other operating income, net |  |  |  |  | (83) |  |  | (107) |
Operating income |  |  |  |  | $ | 42,170 |  |  | $ | 35,042 |

Net Revenues
Q1 2021 vs. Q1 2020
Net revenues decreased by $10.5 million, or 6.4%, in the three months ended March 31, 2021 compared to the three months ended March 31, 2020, primarily driven by the following:
•decreases in the average volumes of gasoline and diesel sold partially offset by increases in the average sales prices per gallon of gasoline and diesel sold in our West Texas marketing operations:
◦the volume of gasoline and diesel sold decreased by 13.9 million gallons and 9.2 million gallons, respectively.
◦the average sales prices per gallon of gasoline and diesel sold increased by $0.24 per gallon and $0.12 per gallon, respectively.
•decreases in throughputs due to the impact of the severe freezing conditions that affected most of the regions where we operate resulting in lower volumes outside of contractual minimum volume commitments during the three months ended March 31, 2021 when compared to the three months ended March 31, 2020.
•decreases in throughputs at the Paline pipeline due to scheduled pipeline maintenance.
Such decreases were partially offset by the following:
•increased revenues associated with agreements executed in connection with the Big Spring Gathering System and Delek Trucking acquisitions, which were effective March 31, 2020 and May 1, 2020, respectively. See Note 2 of the condensed consolidated financial statements in Item 1. Financial Statements, for additional information.
•increased revenues at our Big Spring Refinery Crude Pipeline (the "BSR Crude Pipeline"), as a result of new contracts executed in the second quarter of 2020, during the three months ended March 31, 2021 when compared to the three months ended March 31, 2020.

Cost of Materials and Other
Q1 2021 vs. Q1 2020
Cost of materials and other decreased by $20.1 million, or 19.9%, in the three months ended March 31, 2021 compared to the three months ended March 31, 2020, primarily driven by the following:
•decreases in the average volumes of gasoline and diesel sold, partially offset by increases in the average cost per gallon of gasoline

35 |

Management's Discussion and Analysis
and diesel sold in our West Texas marketing operations:
◦the average volumes of gasoline and diesel sold decreased by 13.9 million gallons and 9.2 million gallons, respectively.
◦the average cost per gallon of gasoline and diesel sold increased by $0.27 per gallon and $0.10 per gallon, respectively.

Operating Expenses
Q1 2021 vs. Q1 2020
Operating expenses decreased by $0.7 million, or 4.7%, in the three months ended March 31, 2021 compared to the three months ended March 31, 2020, primarily driven by the following:
•decrease in employee and outside services costs due to measures implemented to respond to the COVID-19 Pandemic including delaying non-essential projects;
•lower operating costs associated with allocated contract services pertaining to certain of our assets;
•decreases in variable expenses such as maintenance and materials costs due to lower throughput; and
•partially offset by the increase in utility costs as a result of significantly higher energy costs during the February 2021 severe freezing conditions that affected most of the regions where we operate.

General and Administrative Expenses
Q1 2021 vs. Q1 2020
General and administrative expenses decreased by $1.3 million, or 20.7%, in the three months ended March 31, 2021 compared to the three months ended March 31, 2020, primarily driven by the following:
•decrease in legal and professional consulting fees due to fewer transactions undertaken by the Partnership compared to prior year; and
•decrease in employee and outside services costs due to measures implemented to respond to the COVID-19 Pandemic.

Depreciation and Amortization
Q1 2021 vs. Q1 2020
Depreciation and amortization increased by $4.4 million, or 70.5%, in the three months ended March 31, 2021 compared to the three months ended March 31, 2020, primarily driven by the following:
•addition of assets to our asset base as a result of the Trucking Assets Acquisition and the Big Spring Gathering Assets Acquisition.

Interest Expense
Q1 2021 vs. Q1 2020
During the three months ended March 31, 2021 we incurred $9.7 million of interest expense, compared to $11.8 million during the three months ended March 31, 2020, a decrease of $2.1 million, or 17.7%. This decrease was primarily driven by the following:
•lower floating interest rates applicable to the DKL Credit Facility; and
•partially offset by increased borrowings under the DKL Credit Facility as a result of our Big Spring Gathering Assets Acquisition, the Trucking Assets Acquisition and the IDR Restructuring Transaction.

Results from Equity Method Investments
Q1 2021 vs. Q1 2020
During the three months ended March 31, 2021 we recognized income of $4.0 million from equity method investments, compared to $5.6 million for the three months ended March 31, 2020, a decrease of $1.5 million, or 27.1%. This decrease was primarily driven by the following:

36 |

Management's Discussion and Analysis
•decrease in income from our equity method investments due to lower volumes as the impact of the February 2021 severe freezing conditions was pervasive across all of our equity method investments' pipeline systems;
•our equity method investments includes our investment in the Red River Pipeline Joint Venture and our investments in Andeavor Logistics and CP LLC (as defined in Note 10 of the accompanying condensed consolidated financial statements), which operate the Rio Pipeline and the Caddo Pipeline System, respectively.

37 |

Management's Discussion and Analysis
Operating Segments
We review operating results in two reportable segments: (i) pipelines and transportation and (ii) wholesale marketing and terminalling. Decisions concerning the allocation of resources and assessment of operating performance are made based on this segmentation. Management measures the operating performance of each reportable segment based on the segment contribution margin. Segment reporting is discussed in more detail in Note 11 to our accompanying condensed consolidated financial statements.

Segment contribution margin = Net revenues - Cost of materials and other - Operating expenses, excluding depreciation and amortization

Pipelines and Transportation Segment
Our pipelines and transportation segment assets provide crude oil gathering and crude oil, intermediate and refined products transportation and storage services to Delek Holdings and third parties. These assets include:
•the pipeline assets used to support Delek Holdings' El Dorado refinery (the "El Dorado Assets")
•the gathering system that supports transportation of crude oil to the El Dorado Refinery (the "El Dorado Gathering System")
•the Paline Pipeline System
•the East Texas Crude Logistics System
•the Tyler-Big Sandy Pipeline
•the El Dorado Tank Assets and El Dorado Rail Offloading Racks
•the Tyler Tank Assets and Tyler Crude Tank
•the Greenville-Mount Pleasant Pipeline and Greenville Storage Facility
•refined product pipeline capacity leased from Enterprise TE Products Pipeline Company ("Enterprise") that runs from El Dorado, Arkansas to our Memphis terminal and the Big Spring Pipeline
•pipelines and storage assets acquired in the Big Spring Logistic Assets Acquisition
•assets acquired in the Big Spring Gathering Assets Acquisition
•assets acquired in the Trucking Assets Acquisition
In addition to these operating systems, we own or lease 264 tractors and 353 trailers used to haul primarily crude oil and other products for related and third parties.
The following tables and discussion present the results of operations and certain operating statistics of the pipelines and transportation segment for the three months ended March 31, 2021 and 2020:

Pipelines and Transportation
|  |  | Three Months Ended March 31,
|  |  |  |  | 2021 |  | 2020
Net Revenues: |  |  |  |  |  |  |
Affiliates |  |  |  |  | $ | 63,048 |  |  | $ | 38,502 |
Third-Party |  |  |  |  | 1,927 |  |  | 9,465 |
Total Pipelines and Transportation |  |  |  |  | 64,975 |  |  | 47,967 |
Cost of materials and other |  |  |  |  | 13,079 |  |  | 6,098 |
Operating expenses (excluding depreciation and amortization presented below) |  |  |  |  | 10,172 |  |  | 11,456 |
Segment contribution margin |  |  |  |  | $ | 41,724 |  |  | $ | 30,413 |

Throughputs (average bpd)
|  |  | Three Months Ended March 31,
|  |  |  |  | 2021 |  | 2020
El Dorado Assets: |  |  |  |  |  |  |
Crude pipelines (non-gathered) |  |  |  |  | 44,118 |  |  | 55,471 |
Refined products pipelines to Enterprise Systems |  |  |  |  | 26,349 |  |  | 54,106 |
El Dorado Gathering System |  |  |  |  | 11,880 |  |  | 34,906 |
East Texas Crude Logistics System |  |  |  |  | 26,075 |  |  | 14,174 |
Big Spring Gathering System |  |  |  |  | 73,724 |  |  | — |
Plains Connection System |  |  |  |  | 108,361 |  |  | — |

38 |

Management's Discussion and Analysis
Comparison of the three months ended March 31, 2021 compared to the three months ended March 31, 2020
Net Revenues
Q1 2021 vs. Q1 2020
Net revenues for the pipelines and transportation segment increased by $17.0 million, or 35.5%, in the three months ended March 31, 2021 compared to the three months ended March 31, 2020, primarily driven by the following:
•increased revenues associated with agreements executed in connection with the Big Spring Gathering Assets Acquisition and the Trucking Assets Acquisition, which were effective March 31, 2020 and May 1, 2020, respectively. See Note 2 of the condensed consolidated financial statements in Item 1. Financial Statements, for additional information;
•increased revenues at our BSR Crude Pipeline, as a result of new contracts executed in the second quarter of 2020, during the three months ended March 31, 2021 when compared to the three months ended March 31, 2020; and
•partially offset by, decreases in throughputs due to the impact of the severe freezing conditions that affected most of the regions where we operate resulting in lower volumes outside of contractual minimum volume commitments and decreases in throughputs at the Paline pipeline due to scheduled pipeline maintenance during the three months ended March 31, 2021 when compared to the three months ended March 31, 2020.

Cost of Materials and Other
Q1 2021 vs. Q1 2020
Cost of materials and other for the pipelines and transportation segment increased by $7.0 million, or 114.5%, in the three months ended March 31, 2021 compared to the three months ended March 31, 2020, primarily driven by the following:
•increases in transportation costs related to our Trucking Assets due to the Trucking Asset Acquisition which was effective May 1, 2020; and
•increases in driver wages and benefits and fuel expense proportionate to increases in fees, insurance, supplies and maintenance expenses.

Operating Expenses
Q1 2021 vs. Q1 2020
Operating expenses for the pipelines and transportation segment decreased by $1.3 million, or 11.2%, in the three months ended March 31, 2021 compared to the three months ended March 31, 2020, primarily driven by the following:
•decreases in employee and outside services costs due to measures implemented to respond to the COVID-19 Pandemic including delaying non-essential projects; and
•partially offset by the increase in utility costs as a result of significantly higher energy costs during the February 2021 severe freezing conditions that affected most of the regions where we operate.

Contribution Margin
Q1 2021 vs. Q1 2020
Contribution margin for the pipelines and transportation segment increased by $11.3 million, or 37.2%, in the three months ended March 31, 2021 compared to the three months ended March 31, 2020, primarily driven by the following:
•increases in revenues associated with agreements executed in connection with the Big Spring Gathering Assets Acquisition, the Trucking Assets Acquisition and the BSR Crude Pipeline;
•decreases in operating expenses; and
•partially offset by the increase in cost of materials and other in connection with the Trucking Assets Acquisition.

39 |

Management's Discussion and Analysis
Wholesale Marketing and Terminalling Segment
We use our wholesale marketing and terminalling assets to generate revenue by providing wholesale marketing and terminalling services to Delek Holdings' refining operations and to independent third parties.
The tables and discussion below present the results of operations and certain operating statistics of the wholesale marketing and terminalling segment for the three months ended March 31, 2021 and 2020:

Wholesale Marketing and Terminalling
|  |  | Three Months Ended March 31,
|  |  |  |  | 2021 |  | 2020
Net Revenues: |  |  |  |  |  |  |
Affiliates |  |  |  |  | $ | 33,146 |  |  | $ | 68,197 |
Third-Party |  |  |  |  | 54,792 |  |  | 47,237 |
Total Wholesale Marketing and Terminalling |  |  |  |  | 87,938 |  |  | 115,434 |
Cost of materials and other |  |  |  |  | 68,092 |  |  | 95,195 |
Operating expenses (excluding depreciation and amortization presented below) |  |  |  |  | 3,884 |  |  | 3,288 |
Segment contribution margin |  |  |  |  | $ | 15,962 |  |  | $ | 16,951 |

Operating Information
|  |  | Three Months Ended March 31,
|  |  |  |  | 2021 |  | 2020
East Texas - Tyler Refinery sales volumes (average bpd) (1) |  |  |  |  | 71,963 |  |  | 72,650 |
Big Spring marketing throughputs (average bpd) |  |  |  |  | 72,927 |  |  | 66,386 |
West Texas marketing throughputs (average bpd) |  |  |  |  | 10,138 |  |  | 16,081 |
West Texas gross margin per barrel |  |  |  |  | $ | 3.42 |  |  | $ | 2.70 |
Terminalling throughputs (average bpd) (2) |  |  |  |  | 144,539 |  |  | 135,329 |

(1) | Excludes jet fuel and petroleum coke.
(2) | Consists of terminalling throughputs at our Tyler, Big Spring, Big Sandy and Mount Pleasant, Texas, El Dorado and North Little Rock, Arkansas and Memphis and Nashville, Tennessee terminals.

Comparison of the three months ended March 31, 2021 compared to the three months ended March 31, 2020
Net Revenues
Q1 2021 vs. Q1 2020
Net revenues for the wholesale marketing and terminalling segment decreased by $27.5 million, or 23.8%, in the three months ended March 31, 2021 compared to the three months ended March 31, 2020, primarily driven by the following:
•decreases in the average volumes of gasoline and diesel sold, partially offset by increases in the average sales prices per gallon of gasoline and diesel sold in our West Texas marketing operations:
◦the volume of gasoline and diesel sold decreased by 13.9 million gallons and 9.2 million gallons, respectively.
◦the average sales prices per gallon of gasoline and diesel sold increased by $0.24 per gallon and $0.12 per gallon, respectively.

40 |

Management's Discussion and Analysis
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.

Cost of Materials and Other
Q1 2021 vs. Q1 2020
Cost of materials and other for our wholesale marketing and terminalling segment decreased by $27.1 million, or 28.5%, in the three months ended March 31, 2021 compared to the three months ended March 31, 2020, primarily driven by the following:
•decreases in the average volumes of gasoline and diesel sold, partially offset by increases in the average cost per gallon of gasoline and diesel sold in our West Texas marketing operations:
◦the average volumes of gasoline and diesel sold decreased by 13.9 million gallons and 9.2 million gallons, respectively.
◦the average cost per gallon of gasoline and diesel sold increased by $0.27 per gallon and $0.10 per gallon, respectively.
The following chart shows a summary of the average prices per gallon of gasoline and diesel sold in our West Texas operations for the three months ended March 31, 2021 and 2020. Refer to the Refined Products Volume chart above for a summary of volumes impacting our West Texas operations.

41 |

Management's Discussion and Analysis
Operating Expenses
Q1 2021 vs. Q1 2020
Operating expenses increased by $0.6 million, or 18.1%, in the three months ended March 31, 2021 compared to the three months ended March 31, 2020, primarily driven by the following:
•increase in utility costs as a result of significantly higher energy costs during the February 2021 severe freezing conditions that affected most of the regions where we operate; and
•this increase partially offset by lower operating costs associated with allocated contract services pertaining to certain of our assets.

Contribution Margin
Q1 2021 vs. Q1 2020
•The decrease of $1.0 million, or 5.8%, in contribution margin for the three months ended March 31, 2021 compared to the three months ended March 31, 2020 was due to decreases in revenue netted off with decreases in cost of materials and other and operating expenses as described above.

42 |

Management's Discussion and Analysis
Liquidity and Capital Resources
We consider the following when assessing our liquidity and capital resources:

(i) cash generated from operations; | (iii) potential issuance of additional equity; and
(ii) borrowings under our revolving credit facility; | (iv) potential issuance of additional debt securities.

At March 31, 2021 our total liquidity amounted to $125.9 million, comprised of $112.5 million in unused credit commitments under the DKL Credit Facility and $13.4 million in cash and cash equivalents. We have the ability to increase the DKL Credit Facility to $1.0 billion subject to receiving increased or new commitments from lenders and meeting certain requirements under the credit facility. Historically, we have generated adequate cash from operations to fund ongoing working capital requirements, pay quarterly cash distributions and operational capital expenditures, and we expect the same to continue in the foreseeable future. Other funding sources, including the issuance of additional debt securities, have been utilized to fund growth capital projects such as dropdowns. In addition, we have historically been able to source funding at rates that reflect market conditions, our financial position and our credit ratings. We continue to monitor market conditions, our financial position and our credit ratings and expect future funding sources to be at rates that are sustainable and profitable for the Partnership. However, there can be no assurances regarding the availability of any future financings or additional credit facilities or whether such financings or additional credit facilities can be made available on terms that are acceptable to us.
We believe we have sufficient financial resources from the above sources to meet our funding requirements in the next 12 months, including working capital requirements, quarterly cash distributions and capital expenditures. Nevertheless, our ability to satisfy working capital requirements, to service our debt obligations, to fund planned capital expenditures, or to pay distributions will depend upon future operating performance, which will be affected by prevailing economic conditions in the oil industry and other financial and business factors, including the current COVID-19 Pandemic and crude oil prices, some of which are beyond our control.
Our largest customer is Delek Holdings, a related party, with whom we have various commercial agreements. Delek Holdings has initiated several steps as part of a strategic plan to navigate the current volatile markets and preserve or enhance its liquidity, including re-negotiating and extending financing arrangements, temporary suspension of growth and non-essential projects, reductions in capital and operating expenditures, divesting of non-strategic and underperforming assets, suspension of its stock repurchases and dividends, and exploring other potential financing opportunities. We believe such actions will allow Delek Holdings to continue to honor its commercial agreements with us. In addition, we eliminated the IDRs which helped lower our cost of capital and preserve our liquidity.
We continuously review our liquidity and capital resources. If market conditions were to change, for instance due to a significant decline in crude oil prices or uncertainty created by the COVID-19 Pandemic, and our revenue was reduced significantly or operating costs were to increase significantly, our cash flows and liquidity could be reduced. Additionally, it could cause the rating agencies to lower our credit ratings. There are no ratings triggers that would accelerate the maturity of any borrowings under our debt agreements. Management continues to actively respond to the impact of the COVID-19 Pandemic to enhance our liquidity position. Such actions include reducing planned capital expenditures for 2021, seeking alternative financing solutions and enacting cost reduction measures. Refer to the Business Overview section of this MD&A for a complete discussion of the uncertainties identified by management and the actions taken to respond to the COVID-19 Pandemic.
We believe we were in compliance with the covenants in all our debt facilities as of March 31, 2021. After considering the current and potential effect of the significant decline in oil prices and uncertainty created by the COVID-19 Pandemic on our operations, we currently expect to remain in compliance with our debt covenants. See Note 7 to our accompanying condensed consolidated financial statements for a complete discussion of our third-party indebtedness.
Cash Distributions
On April 29, 2021, our board of directors declared a distribution of $0.920 per common unit (the "Distribution"), which equates to approximately $40.0 million per quarter, based on the number of common units expected to be outstanding as of May 10, 2021. The Distribution is expected to be paid on May 14, 2021 to common unitholders of record on May 10, 2021 and represents a 3.4% increase over the first quarter 2020 distribution. We have set a range for distribution growth guidance of $0.005 - $0.015 per unit each quarter for 2021. This increase in the distribution is consistent with our intent to maintain an attractive distribution growth profile over the long term. Although our Partnership Agreement requires that we distribute all of our available cash each quarter, we do not otherwise have a legal obligation to distribute any particular amount per common unit.

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Management's Discussion and Analysis
The table below summarizes the quarterly distributions related to our quarterly financial results:

Quarter Ended |  | Total Quarterly Distribution Per Limited Partner Unit |  | Total Quarterly Distribution Per Limited Partner Unit, Annualized |  | Total Cash Distribution, including general partner interest and IDRs (in thousands) |  | Date of Distribution |  | Unitholders Record Date
March 31, 2020 |  | $ | 0.890 |  |  | $ | 3.56 |  |  | $ | 30,878 |  |  | May 12, 2020 |  | May 5, 2020
June 30, 2020 |  | $ | 0.900 |  |  | $ | 3.60 |  |  | $ | 35,969 |  |  | August 12, 2020 |  | August 7, 2020
September 30, 2020 |  | $ | 0.905 |  |  | $ | 3.62 |  |  | $ | 39,308 |  |  | November 12, 2020 |  | November 6, 2020
December 31, 2020 |  | $ | 0.910 |  |  | $ | 3.64 |  |  | $ | 39,533 |  |  | February 9, 2021 |  | February 2, 2021
March 31, 2021 |  | $ | 0.920 |  |  | $ | 3.68 |  |  | $ | 39,968 |  |  | May 14, 2021 (1) |  | May 10, 2021

(1)Expected date of distribution.

Cash Flows
The following table sets forth a summary of our consolidated cash flows for the three months ended March 31, 2021 and 2020 (in thousands):

| Three Months Ended March 31,
| 2021 |  | 2020
Net cash provided by operating activities | $ | 61,732 |  |  | $ | 34,834 |
Net cash used in investing activities | (3,965) |  |  | (112,176) |
Net cash (used in) provided by financing activities | (48,633) |  |  | 75,973 |
Net increase in cash and cash equivalents | $ | 9,134 |  |  | $ | (1,369) |

Operating Activities
Net cash provided by operating activities was $61.7 million for the three months ended March 31, 2021, compared to $34.8 million for the three months ended March 31, 2020, resulting in a $26.9 million increase in net cash provided by operating activities. The cash receipts from customer activities decreased by $8.0 million and cash payments to suppliers and for allocations from Delek Holdings for salaries decreased by $34.1 million. In addition, cash dividends received from equity method investments decreased by $1.2 million and cash paid for debt interest decreased by $2.0 million.
Investing Activities
Net cash used in investing activities decreased by $108.2 million during the three months ended March 31, 2021 compared to the three months ended March 31, 2020. The decrease in cash used in investing activities was primarily due to lower contributions to equity method investments and no acquisitions during the three months ended March 31, 2021 compared to the three months ended March 31, 2020. We disbursed $1.4 million in additional contributions to our equity method investments during the three months ended March 31, 2021 compared to $8.2 million during the three months ended March 31, 2020.The Big Spring Gathering Assets Acquisition, effective on March 31, 2020, was partially financed with cash from drawdown of the DKL Credit Facility amounting to $100.0 million which was recorded in investing activities. Transaction costs paid amounting to $1.0 million were capitalized for the Big Spring Gathering Assets Acquisition. There was no asset acquisition during the three months ended March 31, 2021. In addition there were additions to property, plant and equipment amounting to $6.1 million and distributions from equity method investments amounting $3.9 million during the three months ended March 31, 2021 compared to additions to property, plant and equipment amounting to $4.2 million and distributions from equity method investments amounting to $0.1 million during the three months ended March 31, 2020.
Financing Activities
Net cash provided by financing activities decreased $124.6 million during the three months ended March 31, 2021 compared to the three months ended March 31, 2020. The decrease in cash provided by financing activities was primarily due to the decrease in net proceeds under the revolving credit facility (defined below). We repaid $9.1 million under the revolving credit facility during the three months ended March 31, 2021, compared to net proceeds of $106.6 million under the revolving credit facility during the three months ended March 31, 2020. In addition, we paid quarterly cash distributions totaling $39.5 million during the three months ended March 31, 2021, compared to quarterly cash distributions totaling $30.6 million during the three months ended March 31, 2020.

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Management's Discussion and Analysis
The sources of cash during the three months ended March 31, 2020 primarily consisted of the $100.0 million drawdown under the DKL Credit Facility to part-finance the Big Spring Gathering Assets Acquisition. The Big Spring Gathering Assets Acquisition was also financed by the issuance of 5.0 million units to Delek US Energy, Inc. (a wholly owned subsidiary of Delek Holdings).
Debt Overview
As of March 31, 2021, we had total indebtedness of $983.4 million comprised of $737.5 million under the amended and restated senior secured revolving agreement (the "DKL Credit Facility") and $245.9 million of 6.75% senior notes due 2025 (the “2025 Notes”), the latter net of deferred financing costs and original issue discount. Deferred financing costs and original issue discount on the 2025 Notes amounted to $3.1 million and $1.0 million, respectively. The decrease of $8.9 million in our long-term debt balance compared to the balance at December 31, 2020 resulted from the payments under the DKL Credit Facility during the three months ended March 31, 2021 partially offset by amortization of the deferred financing costs and original issuance discount under our 2025 Notes. As of March 31, 2021, our total indebtedness consisted of:
•An aggregate principal amount of $737.5 million under the DKL Credit Facility ("revolving credit facility"), due on September 28, 2023, with an average borrowing rate of 2.45%.
•An aggregate principal amount of $245.9 million, under the 2025 Notes (6.75% senior notes), due in 2025, with an effective interest rate of 7.25%.
We believe we were in compliance with the covenants in all our debt facilities as of March 31, 2021. See Note 7 to our accompanying condensed consolidated financial statements for a complete discussion of our third-party indebtedness.
Agreements Governing Certain Indebtedness of Delek Holdings
Although we are not contractually bound by and are not liable for Delek Holdings' debt under its credit arrangements, we are indirectly affected by certain prohibitions and limitations contained therein. Specifically, certain of Delek Holdings' credit arrangements require that Delek Holdings meet certain minimum covenant levels for (i) consolidated shareholders’ equity and (ii) a ratio of consolidated shareholders' equity to adjusted total assets. Delek Holdings, due to its majority ownership and control of our general partner, has the ability to prevent us from taking actions that would cause Delek Holdings to violate these and any other covenants in its credit arrangements or otherwise be in default under any of its credit arrangements. As a result we cannot assure you that such covenants will not impact our ability to use the full capacity under our revolving credit facility in the future. Delek Holdings' level of indebtedness, the terms of its borrowings and any future credit ratings could adversely affect our ability to grow our business, our ability to make cash distributions to our unitholders and our credit profile. Our current and future credit ratings may also be affected by Delek Holdings' level of indebtedness, financial performance and credit ratings.
Equity Units Overview
On August 13, 2020, we closed the IDR Restructuring Transaction. To effect this transaction, our partnership agreement was amended and restated. See Note 3 to our accompanying condensed consolidated financial statements for additional details.
In August 2020, we filed a shelf registration statement, which subsequently became effective, with the SEC for the proposed re-sale or disposition from time to time by Delek Holdings of up to 14.0 million common limited partner units representing limited partner interests in the Partnership. We will not sell any securities under this shelf registration statement and we will not receive any proceeds from the sale of the securities by Delek Holdings.
On March 31, 2020, we issued 5.0 million units to Delek Holdings as part of the consideration for the Big Spring Gathering Assets Acquisition. In connection with the issuance of these units and in accordance with the Partnership Agreement, we issued additional general partner units in an amount necessary to maintain the 2% general partner interest as defined in the Partnership Agreement.
Contemporaneous with the above issuance, the Board of the general partner waived distributions in respect of the IDRs associated with the 5.0 million Additional Units for at least two years, through at least the distribution for the quarter ending March 31, 2022 ("IDR Waiver"). The IDR Waiver essentially reduced the distribution made to the holders of the IDRs during this period, as the holders would not receive a share of the distribution made on the Additional Units. An additional waiver letter was signed that waived all of the distributions for the first quarter of 2020 on the Additional Units with respect to base distributions and the IDRs. The IDR Restructuring Transaction on August 13, 2020 permanently eliminated all of the IDRs. See Note 3 to our accompanying condensed consolidated financial statements for additional details.

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Management's Discussion and Analysis
Capital Spending
A key component of our long-term strategy is our capital expenditure program. The following table summarizes our actual capital expenditures for the three months ended March 31, 2021 and planned capital expenditures for the full year 2021 by segment and by major category (in thousands):

| Full Year 2021 Forecast |  | Three Months Ended March 31, 2021
Pipelines and Transportation
Regulatory (2) | $ | 4,839 |  |  | $ | 443 |
Maintenance (1) | 2,221 |  |  | 34 |
Discretionary projects (2) | 9,670 |  |  | 5,368 |
Pipelines and transportation segment total | $ | 16,730 |  |  | $ | 5,845 |
Wholesale Marketing and Terminalling
Regulatory (3) | $ | 3,559 |  |  | $ | 37 |
Maintenance (1) | 2,480 |  |  | 2 |
Discretionary (3) | 5,026 |  |  | 1,915 |
Wholesale marketing and terminalling segment total | $ | 11,065 |  |  | $ | 1,954 |
Total capital spending | $ | 27,795 |  |  | $ | 7,799 |

(1)Maintenance capital expenditures represent cash expenditures (including expenditures for the addition or improvement to, or the replacement of, our capital assets, and for the acquisition of existing, or the construction or development of new, capital assets) made to maintain our long-term operating income or operating capacity. Examples of maintenance capital expenditures are expenditures for the repair, refurbishment and replacement of pipelines, tanks and terminals, to maintain equipment reliability, integrity and safety and to address environmental laws and regulations. Delek Holdings has agreed to reimburse us with respect to certain assets it has transferred to us pursuant to the terms of the Omnibus Agreement (as defined in Note 3 to our accompanying condensed consolidated financial statements).
(2)The majority of the $4.8 million budgeted for regulatory projects in the pipelines and transportation segment is expected to be spent on certain of our pipelines to maintain their operational integrity. The majority of the $9.7 million for discretionary projects in the pipelines and transportation segment is expected to be spent on scheduled maintenance and improvements to certain of our tanks and development of our DPG assets. These expenditures have historically been and will continue to be financed through cash generated from operations.
(3)The majority of the $3.6 million and $5.0 million budgeted for regulatory and discretionary projects in the wholesale marketing and terminalling segment relates to scheduled maintenance and improvements on our terminalling tanks and racks at certain of our terminals. These expenditures have historically been and will continue to be financed through cash generated from operations.

The amount of our capital expenditure budget is subject to change due to unanticipated increases in the cost, scope and completion time for our capital projects. For example, we may experience increases in the cost of and/or timing to obtain necessary equipment required for our continued compliance with government regulations or to complete improvement projects. Additionally, the scope and cost of employee or contractor labor expense related to installation of that equipment could increase from our projections.
Off-Balance Sheet Arrangements
We have no off-balance sheet arrangements through the date of the filing of this Quarterly Report on Form 10-Q.

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Management's Discussion and Analysis
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Impact of Changing Prices
Our revenues and cash flows, as well as estimates of future cash flows, are sensitive to changes in commodity prices. Shifts in the cost of crude oil, the prices of refined products and the cost of ethanol can generate changes in the operating margin in our wholesale marketing and terminalling segment.
Interest Rate Risk
Debt that we incur under the DKL Credit Facility bears interest at floating rates and will expose us to interest rate risk. The annualized impact of a hypothetical one percent change in interest rates on our floating rate debt outstanding as of March 31, 2021 would be to change interest expense by approximately $7.4 million.
LIBOR Transition
LIBOR is a commonly used indicative measure of the average interest rate at which major global banks could borrow from one another. The United Kingdom’s Financial Conduct Authority, which regulates LIBOR, has publicly announced that it intends to discontinue the reporting of certain LIBOR rates after 2021, with a complete cessation for all USD LIBOR rates after June 2023. Certain of our agreements use LIBOR as a “benchmark” or “reference rate” for various terms. Some agreements contain an existing LIBOR alternative. Where there is not an alternative, we expect to replace the LIBOR benchmark with an alternative reference rate. While we do not expect the transition to an alternative rate to have a significant impact on our business or operations, it is possible that the move away from LIBOR could materially impact our borrowing costs on our variable rate indebtedness.
ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Our disclosure controls and procedures are designed to provide reasonable assurance that the information that we are required to disclose in reports we file under the Exchange Act is accumulated and appropriately communicated to management. We carried out an evaluation required by Rule 13a-15(b) of the Exchange Act, under the supervision and with the participation of our management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures at the end of the reporting period. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of the end of the reporting period.
There have been no changes in our internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Exchange Act Rules 13a-15 or 15d-15 that occurred during the first quarter of 2021 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Although most of our corporate employees have shifted to a remote working environment due to the COVID-19 Pandemic, we have not experienced a material impact to our internal control over financial reporting. We are continually monitoring and assessing the COVID-19 Pandemic to minimize the impact on the design and operating effectiveness of our internal controls.

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Other Information
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
In the ordinary conduct of our business, we are from time to time subject to lawsuits, investigations and claims, including, environmental claims and employee-related matters. Although we cannot predict with certainty the ultimate resolution of lawsuits, investigations and claims asserted against us, including civil penalties or other enforcement actions, we do not believe that any currently pending legal proceeding or proceedings to which we are a party will have a material adverse effect on our business, financial condition or results of operations. See Note 13 to our accompanying condensed consolidated financial statements, which is incorporated by reference in this Item 1, for additional information.
ITEM 1A. RISK FACTORS
There were no material changes during the first quarter of 2021 to the risk factors identified in the Partnership’s fiscal 2020 Annual Report on Form 10-K.
ITEM 6. EXHIBITS

Exhibit No. |  | Description
31.1 | # |  | Certification of Delek Logistics GP, LLC's Chief Executive Officer pursuant to Rule 13a-14(a)/15(d)-14(a) under the Securities Exchange Act of 1934, as amended.
31.2 | # |  | Certification of Delek Logistics GP, LLC's Chief Financial Officer pursuant to Rule 13a-14(a)/15(d)-14(a) under the Securities Exchange Act of 1934, as amended.
32.1 | ## |  | Certification of Delek Logistics GP, LLC's Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2 | ## |  | Certification of Delek Logistics GP, LLC's Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101 |  |  | The following materials from Delek Logistics Partners, LP's Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2021, formatted in Inline XBRL (eXtensible Business Reporting Language): (i) Condensed Consolidated Balance Sheets as of March 31, 2021 and December 31, 2020 (Unaudited), (ii) Condensed Consolidated Statements of Income and Comprehensive Income for the three months ended March 31, 2021 and 2020 (Unaudited), (iii) Condensed Consolidated Statement of Partners' Equity (Deficit) for the three months ended March 31, 2021 and 2020 (Unaudited), (iv) Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2021 and 2020 (Unaudited), and (v) Notes to Condensed Consolidated Financial Statements (Unaudited).
104 |  |  | The cover page from Delek Logistics Partners, LP's Quarterly Report on Form 10-Q for the quarter ended March 31, 2021, has been formatted in Inline XBRL.

# |  | Filed herewith
## |  | Furnished herewith

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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Delek Logistics Partners, LP
By: | Delek Logistics GP, LLC
| Its General Partner
By: | /s/ Ezra Uzi Yemin
| Ezra Uzi Yemin
| Chairman and Chief Executive Officer (Principal Executive Officer)
By: | /s/ Reuven Spiegel
| Reuven Spiegel
| Executive Vice President and Chief Financial Officer (Principal Financial Officer)

Dated: May 6, 2021

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